SHRI SULTAN ABDUL LALANI , ,MUMBAI vs. ITO, WARD, 23(3)(1), MUMBAI

All the appeals are based on the almost identical facts, except variation in amounts and having involved identical issues therefore for the sake of brevity, the same were heard together and are being disposed of by this composite order by taking into consideration the facts and circumstances and issues involved in as a lead case and result of the same would be applicable mutatis mutandis to all the three appeals under consideration.

Coming to the instant case, the Assessing Officer (AO) vide assessment order dated 30.05.2023 u/s 147 of the Act has made the addition of Rs.31,88,219/- on account of bogus loan entries u/s 68 of the Act.

The Assessee, being aggrieved, challenged the said addition before the Ld. Commissioner, who though recorded in the impugned order that the Assessee has opted for presumptive taxation scheme u/s 44AD of the Act, which exempts the Assessee from maintaining detailed books of account, however, by observing “that the confirmation letter did not address the discrepancies adequately and the bank statements and the ledger accounts filed by the Assessee in support of its claim also did not clearly distinguish between loans and sales transactions, further, the documents provided by the Assessee did not sufficiently refute the AO’s findings based on the income tax portal and Mr. Mehta’s statement which indicates an amount involved as bogus loan entry and not a genuine sale transaction” ultimately affirmed the addition by dismissing the appeal of the Assessee.

The Assessee being aggrieved is in appeal before this Court and has submitted that it has provided the relevant documents in order to substantiate its claim, however, the Ld. Commissioner without affording any opportunity to explain the documents and case, presumed contrary and therefore the order passed by the Ld. Commissioner is liable to be set aside.

On the contrary the Ld. DR supported the impugned order.

Having heard the parties and perused the material available on record and given thoughtful consideration to the orders passed by the authorities below, it is observed though the Ld. Commissioner recorded in the impugned order that the Assessee has submitted bank statement and other relevant documents such as ledger accounts etc. in support of its claim, however, the Ld. Commissioner affirmed the addition mainly on the reason “that the documents provided by the Assessee are insufficient and did not address the discrepancies adequately and the confirmation letter needed to be backed up with more details of the account transactions including specification about the goods sold, delivery dates and permission terms etc. and lack of such detail raised the doubt about the Assessee’s claim. Further, the documents submitted by the Assessee did not clearly distinguish between the loans and sale consideration”.

In the result, in view of judgment in all the appeals under consideration are allowed for statistical purposes.