ACIT-24(1), MUMBAI vs. M/S DO IT COMPUTERS (JV), MUMBAI

Having heard rival submissions, our adjudication to the appeal would be as given in succeeding paragraphs.

Pursuant to receipt of certain information from investigation, the assessment was reopened by Ld. AO on the allegation that the assessee obtained bogus unsecured loans from following parties belonging to Shri Pravin Kumar Jain group: - Name of the lender PAN Amount Casper Enterprises P. Ltd AMC07955M 35,00,000 Casper Enterprises P. Ltd AAAC07955M 10,00,000 Josh Trading Co. P. Ltd AACCJ4233H 25,00,000 Sumukh Commercial P. Ltd AACCC7400M 40,00,000 Taj Impex ADPPJ3459C 10,00,000 Taj Impex ADPPJ3459C 10,00,000 Vanguard Jewels Ltd AAACV3480A 50,00,000 Total 1,80,00,000 Based on investigation findings, the above loans were added in assessee’s hand as unexplained cash credit u/s 68 of the Act. 4. The Ld. CIT(A) deleted the addition by finding that the aforesaid amounts were subject matter of settlement before Income Tax Settlement Commission (ITSC) and therefore, sustaining this addition would amount to double taxation. The relevant observations were as under: - 4.1.4 As a consequence of the search action on Pravin Kumar Jain Group, Sh. Paras Mehta brother of the JV Member - Computers Engineers - Proprietor Sh. Chetan Mehta accepted in his application before the Hon'ble Settlement Commission, that he had arranged to provide finance to his family members / entities controlled by the family. The appellant submitted that the various amounts mentioned by the AO in his Order have been considered in the peak working offered before the Hon. Settlement Commission and tax on the income so derived has been paid alongwith the application. It is only after the Department satisfies itself regarding the adequate tax payment that the application is accepted. The application has been thereafter accepted by the Hon. Settlement Commission vide its order dt. 30.9.2016. In view of the above the appellant pleaded that the loans taken by the appellant should not be treated as cash credit u/s 68 as that would amount to double taxation. 4.1.5 After considering all the facts and circumstances of the case as enumerated above I have come to the understanding that once the loans have been claimed by a family member who was responsible for sourcing the same and the due taxes have been declared and paid before the Hon'ble Settlement Commission, in such a scenario revisiting the appellant with the same set of loans as cash credit would not only be unfair and illogical but would, also tantamount to double taxation. Hence, in view of the same the AO is directed to delete the additions made u/s 68 after going through the correct figures claimed by the appellant. The Ground of appeal nos. 1 to 8 are hereby Allowed.