SHRI. ARVIND AMARSINGH BAPNA ,MUMBAI vs. CIT (A)-39, , MUMBAI

Aforesaid appeal by assessee for Assessment Year (AY) 2013- 2014 contest the order of Ld. Commissioner of Income Tax (Appeals)- 39, Mumbai, Appeal No. CIT(A)-39/IT-10429/16-17 dated 17/12/2018 on following grounds: -

On the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals)-39, Mumbai has grossly erred in upholding the addition made by Ld. ITO by considering the amount ofRs.50,00,000/- as unexplained cash credit which was received by the assessee through banking channel as a loan in the nature of advance against property and the same was repaid through bank.

The learned Authorized Representative for Assessee (AR), Shri Ajay Singh, advanced arguments to submit that the unsecured loan of Rs.50 Lacs received from a firm namely M/s Sambhav Enterprises was received through banking channels and the aforesaid party was already assessed to Income Tax. Despite best efforts by assessee, the confirmation from the said party could not be obtained. Our attention has been drawn to the fact that the loan has ultimately been repaid by the assessee within a short span of time and therefore, the additions were not justified. The written submissions have also been filed along with various judicial pronouncements to support the arguments, which we have duly considered. The Ld. DR, Shri Michael Jerald, on the other hand, drawing attention to the order of lower authorities, submitted that the assessee miserably failed to prove the fulfilment of primary ingredients of Sec.68 and therefore, the additions were justified.

We have carefully considered the rival submissions and perused relevant material on record including documents placed in the paper- book in support of the unsecured loan. Our adjudication to the subject matter of appeal would be as given in succeeding paragraphs.

The material facts are that an assessment was framed u/s 143(3) on 18/03/2016 for the year under consideration wherein the assessee was saddled with an addition of unexplained cash credit u/s 68 for Rs.50 Lacs. The same stem from the fact that the assessee received

The assessee could merely submit PAN and address of the lender. The notice issued u/s 133(6) at the given address was returned back unserved by the postal authorities. The assessee could not provide the new address and failed to produce the lender. No confirmation of accounts could be filed. However, the assessee submitted that the loan was repaid in subsequent year and therefore, there would be no question of treating the same as unexplained cash credit. The said arguments could not find favor with Ld. AO who added the same to the income of the assessee u/s 68. 5. The Ld. CIT(A), upon perusal of case records for AY 2013-14 of the lender i.e. M/s Sambhav Enterprise noticed that the said party was not traceable and his assessment was framed on best judgement basis u/s 144 which would lead to a conclusion that the said party existed on paper only. Hence, the loan could not be treated as genuine loan transaction. The assessee failed to discharge the onus of proving the loan transaction. No interest was charged on the loan. Therefore, the additions were confirmed, against which the assessee is in further appeal before us.

Upon perusal of assessee’s bank statement, we find that the assessee has received an amount of Rs.50 Lacs from M/s Sambhav Enterprises on 20/06/2012. Out of the said amount, an amount of Rs.20 Lacs each has been transferred in the name of another entity i.e. M/s Bijoux Argent & the assessee Arvind Bapna whereas balance amount of Arvind Amarsingh Bapna Assessment Year :2013-14 Rs.10 Lacs have been transferred in the name of Pinky Bapna. The purpose of the loan and the circumstances in which the loan has been obtained has not been brought on record. Apparently, the same is not under any written agreement or understanding. So far as the repayment is concerned, the assessee has settled the said loan through the account of M/s Bijoux Argent on 08/04/2013 and it appears that there is no direct bank transfer by the assessee to the lender rather M/s Bijoux Argent has settled the said loan. No confirmation of M/s Bijoux Argent is on record. Therefore, the argument advanced by Ld. AR that the loan was repaid by the assessee, was not to be accepted. The various case laws being relied upon by Ld. AR would, therefore, have no applicability to the facts of the case.

Therefore, on the given facts and circumstances, we find that the initial onus casted on assessee in terms of Sec.68 has remained undischarged. The creditworthiness as well as the genuineness of the transactions remains unproved. Keeping in view the fact that the assessee is an individual and made efforts to trace the lender, we deem it fit to provide another opportunity to the assessee to prove the said credits in terms of Sec.

Therefore, the issue stand remitted back to the file of Ld. AO with a direction to the assessee to demonstrate fulfilment of primary ingredients of Sec.68 failing which Ld. AO shall be at liberty to re-adjudicate the same on the basis of material on record.

The appeal stands allowed for statistical purposes. Order pronounced in open court on 03rd December, 2020. (Amarjit Singh) (Manoj Kumar Aggarwal) "ाियक सद" / Judicial Member लेखा सद" / Accountant Member मुंबई Mumbai; िदनांक Dated : 03/12/2020 Sr.PS, Jaisy Varghese