ACIT 24(3), MUMBAI vs. RAMESH RAMSWARUPDAS JINDAL, MUMBAI

O R D E R

PER AMARJIT SINGH, JM:

1. "Whether on the facts and circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition made on account of unexplained unsecured loans of Rs.1,30,00,000/- and interest on unexplained unsecured loans of Rs.21,72,459/- for A.Y. 2012-13, without appreciating the fact that Shri Praveen Kumar Jain, in A.Y.2012-13 his statement recorded on oath u/s. 132(4) of the I.T. Act on 01- 10-2013 admitted that he is indulged in providing accommodation entries and also explained the complete modus operandi of providing such entries." 2. " Whether on the facts and circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition made on account of unexplained unsecured bans and interest on unexplained unsecured loans for AY. 2012-13 without appreciating the fact that in the statements recorded u/s. 132(4)/131 of the I.T. Act the directors/ proprietors of the related concerns who provided accommodation entries admitted that they were merely dummy directors and used to sign different papers for nominal consideration given by Shri Praveen Kumar Jain". 3. " Whether on the facts and circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition made on account of unexplained unsecured loans and interest on unexplained unsecured loans for A.Y. 2012-13 without appreciating the fact that it was established beyond doubt that Praveen Jain Group is indulged in providing accommodation entries in the nature of loans/advances/LTCG/sale/purchases." 4. "Whether on the facts and circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition made in A.Y.2012-13 on account of disallowance of loss on advances claimed by the assessee of Rs.53,57,232/- without appreciating the fact that in the instant case the debt has not become bad and the assessee had hopes of recovering the advances back through Court of law." 5. "The appellant prays that the order of the CIT(Appeals) on the above grounds be set aside and that of the AO be restored." 6. "The appellant craves leave to amend or alter any ground or to submit additional new ground which may be necessary."

3. Before discussing further, it is necessary to brought into notice of certain facts on record. In fact, the present appeal has been decided by the Hon’ble ITAT by virtue of order dated 15.11.2017. At the time of deciding the said appeal, the ground no.4 was not discussed and decided, therefore, the revenue moved an application to recall the matter and after the notice to A.Y.2012-13 the appellant, the appeal was recalled to the extent of adjudication of the issue no.4 in the appeal by virtue of order dated 09.05.2019. Now the case has come before us for hearing. The brief facts nowhere required to be repeated because the same has been narrated in the order passed by Hon’ble ITAT dated 15.11.2017. The AO declined the claim of Rs.53,57,232/- towards loss on advances given by the assessee. The CIT(A) allowed the claim of the assessee, therefore, the revenue has filed present appeal before us.

ISSUE NO. 4 4. Under this issue the revenue has challenged the allowance of the claim of the assessee in sum of Rs.53,57,232/- towards loss on advance given. The contention of the assessee is that the assessee gave the advances in sum of Rs.75 lacs to the party against which supplies were made. The supplier could not deliver goods against the balance moneys due to the financial crunch. The supplier submits cheques for the balance money which were bounced. The assessee filed the suit u/s 138 of the Negotiable Instrument Act which were pending before the court for the disposal. The AO declined the claim of the assessee on the basis of this fact that the assessee was not in the business of money lending because the assessee was in the business of trading in steel and other products. Subsequently, the assessee preferred an appeal before the CIT(A) who allowed the claim of the assessee. Before going further, we deem it necessary to advert the finding of the CIT(A) on record: - “ 24.2. HELD: I have carefully considered the facts of the case, impugned / Assessment Order--and-written submission of the appellant. I find force in the argument put-forth-by the appellant t the first place,