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Income Tax Appellate Tribunal, MUMBAI BENCH “D” MUMBAI
Before: SHRI OM PRAKASH KANT & MS. KAVITHA RAJAGOPAL
The captioned appeals by the assessee are directed against The captioned appeals by the assessee are directed against The captioned appeals by the assessee are directed against separate orders passed by the Ld. Commissioner of Income-tax separate orders passed by the Ld. Commissioner of Income separate orders passed by the Ld. Commissioner of Income (Appeals) – 52, Mumbai [in short ‘the Ld. CIT(A)’] for relevant 52, Mumbai [in short ‘the Ld. CIT(A)’] for relevant 52, Mumbai [in short ‘the Ld. CIT(A)’] for relevant assessment years. As identical issue assessment years. As identical issues are involved in these appeals involved in these appeals, therefore, same were heard together and disposed off by way of this therefore, same were heard together and disposed off by way of this therefore, same were heard together and disposed off by way of this consolidated order for convenience. consolidated order for convenience.
Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 3 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023 /Mum/2023 (Assessment Year 2014 (Assessment Year 2014-15)
First, we take up the for assessment we take up the for assessment we take up the ITA No. 4129/Mum/2023 for assessment year 2014-15 in the case of Rubberwala Holding and Infrastructure 15 in the case of Rubberwala Holding and Infrastructure 15 in the case of Rubberwala Holding and Infrastructure Ltd. The grounds raised by the assessee are reproduced as under: Ltd. The grounds raised by the assessee are reproduced as under: Ltd. The grounds raised by the assessee are reproduced as under:
1. On the facts and circumstances 1. On the facts and circumstances of the Appellant's case and in law of the Appellant's case and in law Id. CIT (A) erred in confirming the action of the Id. A.O. in ignoring the Id. CIT (A) erred in confirming the action of the Id. A.O. in ignoring the Id. CIT (A) erred in confirming the action of the Id. A.O. in ignoring the fact that the provisions of section 43CA were not applicable when fact that the provisions of section 43CA were not applicable when fact that the provisions of section 43CA were not applicable when allotment letters /agreement is made prior to 31.03.2013 and allotment letters /agreement is made prior to 31.03.2013 and allotment letters /agreement is made prior to 31.03.2013 and consideration is r consideration is received either in full or in part, for the reasons eceived either in full or in part, for the reasons mentioned in the impugned order or otherwise. mentioned in the impugned order or otherwise.
2. On the facts and circumstances of the Appellant's case and in law 2. On the facts and circumstances of the Appellant's case and in law 2. On the facts and circumstances of the Appellant's case and in law Id. CIT (A) erred in confirming the action of the Id. A.O. in making a Id. CIT (A) erred in confirming the action of the Id. A.O. in making a Id. CIT (A) erred in confirming the action of the Id. A.O. in making a disallowance of Rs. disallowance of Rs. 2,03,05,828/- u/s 43CA of the Act, for the u/s 43CA of the Act, for the reasons mentioned in the impugned order or otherwise. reasons mentioned in the impugned order or otherwise.
Briefly stated facts of the case are that the assessee filed Briefly stated facts of the case are that the assessee filed Briefly stated facts of the case are that the assessee filed return of income on 31.01.2015 declaring total income at return of income on 31.01.2015 declaring total income at return of income on 31.01.2015 declaring total income at Rs.2,94,10,450/-. The assessee was en . The assessee was engaged in the real estate gaged in the real estate activity of construction and development and sale of flats. The of construction and development and sale of flats. The of construction and development and sale of flats. The return of income filed by the assessee was selected for scrutiny and return of income filed by the assessee was selected for scrutiny and return of income filed by the assessee was selected for scrutiny and statutory notices under the Income statutory notices under the Income-tax Act, 1961 (in short ‘the Act’) tax Act, 1961 (in short ‘the Act’) were issued and complied wit were issued and complied with. The Assessing Office h. The Assessing Officer observed that certain properties sold by the assessee were registered under the sold by the assessee were registered under the sold by the assessee were registered under the year under consideration and the year under consideration and the sale consideration sale consideration of those properties shown in registered document shown in registered document was below the value which was below the value which was determined by the st was determined by the stamp duty value authorities. Accordingly, amp duty value authorities. Accordingly, the Assessing Officer invoked section 43CA of the Act and made the Assessing Officer invoked section 43CA of the Act and made the Assessing Officer invoked section 43CA of the Act and made addition for the difference amount between the stamp value as on addition for the difference amount between the stamp value as on addition for the difference amount between the stamp value as on Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 4 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023 the date of the allotment and the sale consideration agreed on the the date of the allotment and the sale consideration the date of the allotment and the sale consideration date of the allotmen date of the allotment and this manner, he made total addition of he made total addition of Rs.2,03,05,828/- in the assessment order passed u/s 143(3) of the in the assessment order passed u/s 143(3) of the in the assessment order passed u/s 143(3) of the Act on 28.12.2016.
On further appeal, the Ld. CIT(A) upheld the addition in view On further appeal, the Ld. CIT(A) upheld the addition in view On further appeal, the Ld. CIT(A) upheld the addition in view of decision of the Jaipur Bench of the Tribunal in the case of of decision of the Jaipur Bench of the Tribunal in the case of decision of the Jaipur Bench of the Tribunal in the case Spytech Builcon v. ACIT reported in (2021) 190 ITD 325 (Jaipur- Spytech Builcon v. ACIT reported in (2021) 190 ITD 325 (Jaipur Spytech Builcon v. ACIT reported in (2021) 190 ITD 325 (Jaipur Trib).
Aggrieved, the assessee is in appeal before the Tribunal by way the assessee is in appeal before the Tribunal by way the assessee is in appeal before the Tribunal by way of raising grounds as reproduced above. of raising grounds as reproduced above.
We have heard rival submission of the parties and perused the 6. We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. Before us, the Ld. counsel for the aterial on record. Before us, the Ld. counsel for the aterial on record. Before us, the Ld. counsel for the assessee submitted that in the case of the assessee sales have assessee submitted that in the case of the assessee sales have assessee submitted that in the case of the assessee sales have taken place in the year prior to assessment year 2013-14 and taken place in the year prior to assessment year 2013 taken place in the year prior to assessment year 2013 therefore, section 43CA of the Act which has been introduced w.e.f. therefore, section 43CA of the Act which has been introduced w.e.f. therefore, section 43CA of the Act which has been introduced w.e.f. assessment year 2014 year 2014-15 cannot be attracted. The Ld. counsel for 15 cannot be attracted. The Ld. counsel for the assessee relied on the decision of the Co the assessee relied on the decision of the Co-ordinate Bench of the ordinate Bench of the Bombay Tribunal in the case of Bombay Tribunal in the case of Spenta Enterprises dated Spenta Enterprises dated 27.01.2022 in ITA No. 2133/Mum/2019. The Ld. counsel also 27.01.2022 in ITA No. 2133/Mum/2019. The Ld. counsel also 27.01.2022 in ITA No. 2133/Mum/2019. The Ld. counsel also relied on the decision of the Co sion of the Co-ordinate Bench of the Jaipur ordinate Bench of the Jaipur Tribunal dated 16.07.2018 in the case of Tribunal dated 16.07.2018 in the case of Indexone Tradecone (P.) Indexone Tradecone (P.) Ltd. [2018] 97 taxmann.com 174 (Jaipur [2018] 97 taxmann.com 174 (Jaipur-Trib.). The Ld. counsel . The Ld. counsel
Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 5 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023 also relied on the decision of Hon’ble Bombay High Court in the also relied on the decision of Hon’ble Bombay High Court in the also relied on the decision of Hon’ble Bombay High Court in the case of PCIT v. Swananda Properties (P.) Ltd. [2019] 111 Swananda Properties (P.) Ltd. [2019] 111 Swananda Properties (P.) Ltd. [2019] 111 taxmann.com 94 (Bombay) taxmann.com 94 (Bombay). In the instant case the crucial issue in . In the instant case the crucial issue in dispute is whether section 43CA of the Act has to be invoked whether section 43CA of the Act has to be invoked in the whether section 43CA of the Act has to be invoked year in which property was registered or the year in which property year in which property was registered or the year in which property year in which property was registered or the year in which property was sold by the assessee. As far as assessee is concerned, the he assessee. As far as assessee is concerned, the he assessee. As far as assessee is concerned, the assessee has already entered into an agreement to sale and shown assessee has already entered into an agreement to sale and shown assessee has already entered into an agreement to sale and shown the corresponding sales in earlier years in its books of accounts. the corresponding sales in earlier years in its books of accounts. the corresponding sales in earlier years in its books of accounts. Therefore, the provisions of section 43CA of the Act has to be seen Therefore, the provisions of section 43CA of the Act has to be seen Therefore, the provisions of section 43CA of the Act has to be seen from the angle when the assessee has entered into its sales in its he angle when the assessee has entered into its sales in its he angle when the assessee has entered into its sales in its books of accounts and it cannot be construed to be treated effective books of accounts and it cannot be construed to be treated effective books of accounts and it cannot be construed to be treated effective in the year in which registration of the properties has taken place. the year in which registration of the properties has taken place. the year in which registration of the properties has taken place. The Co-ordinate Bench of the Tribunal in the case of Spen ordinate Bench of the Tribunal in the case of Spenta ordinate Bench of the Tribunal in the case of Spen Enterprises (supra) after considering held that in a situation where Enterprises (supra) after considering held that in a situation where Enterprises (supra) after considering held that in a situation where agreement to sale has entered into in year prior to assessment year agreement to sale has entered into in year prior to assessment year agreement to sale has entered into in year prior to assessment year 2014-15, the section 43CA of the Act cannot be invoked. The section 43CA of the Act cannot be invoked. The section 43CA of the Act cannot be invoked. The relevant finding of the Tribunal relevant finding of the Tribunal (supra) is reproduced is reproduced as under:
“9. Upon assessee's appeal, Ld.CIT(A) has held that he was of the Upon assessee's appeal, Ld.CIT(A) has held that he was of the Upon assessee's appeal, Ld.CIT(A) has held that he was of the opinion that invariably the stamp value date on registration has to be opinion that invariably the stamp value date on registration has to be opinion that invariably the stamp value date on registration has to be adopted and hence, hewas upholding the order of the AO. I find that adopted and hence, hewas upholding the order of the AO. I find that adopted and hence, hewas upholding the order of the AO. I find that this is quiet contrary to what the AO has this is quiet contrary to what the AO has held. AO has clearly accepted held. AO has clearly accepted the assessee's contentions that he is in agreement that ready recoker the assessee's contentions that he is in agreement that ready recoker the assessee's contentions that he is in agreement that ready recoker value on the date of allotment is being considered. Hence, the reason for value on the date of allotment is being considered. Hence, the reason for value on the date of allotment is being considered. Hence, the reason for Ld.CIT(A) in upholding the addition is not as per the facts on record. In Ld.CIT(A) in upholding the addition is not as per the facts on record. In Ld.CIT(A) in upholding the addition is not as per the facts on record. In any case, I note that this is assessees plea that section 43CA was e, I note that this is assessees plea that section 43CA was e, I note that this is assessees plea that section 43CA was introduced w.e.f. 01.04.2013 and the agreement under consideration introduced w.e.f. 01.04.2013 and the agreement under consideration introduced w.e.f. 01.04.2013 and the agreement under consideration were entered into prior to 31.03.2013. Further, this is assessees plea were entered into prior to 31.03.2013. Further, this is assessees plea were entered into prior to 31.03.2013. Further, this is assessees plea that difference is only 5% between the ready recoker rate that difference is only 5% between the ready recoker rate that difference is only 5% between the ready recoker rate and sale consideration. Hence, this is assessees plea that the same has to be consideration. Hence, this is assessees plea that the same has to be consideration. Hence, this is assessees plea that the same has to be Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 6 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023 ignored on the touchstone of ITAT, Mumbai decision in the case of ignored on the touchstone of ITAT, Mumbai decision in the case of ignored on the touchstone of ITAT, Mumbai decision in the case of Krishna Enterprises vs Krishna Enterprises vs. ACIT. I am of the considered opinion that the ACIT. I am of the considered opinion that the asessees succeeds on both the counts. asessees succeeds on both the counts. Hence, I set aside the orders of e, I set aside the orders of the authorities below and decide the issue in favour of the assessee. the authorities below and decide the issue in favour of the assessee. the authorities below and decide the issue in favour of the assessee.” 6.1 Further, the Co Further, the Co-ordinate Bench of the Tribunal in the case of ordinate Bench of the Tribunal in the case of Indexone Tradecone (P.) Ltd. (supra) Indexone Tradecone (P.) Ltd. (supra) held as under:
“13. In the present case, where the da 3. In the present case, where the date of agreement to sell in respect te of agreement to sell in respect of the two flats is 9.4.2007, which is much prior to the financial year of the two flats is 9.4.2007, which is much prior to the financial year of the two flats is 9.4.2007, which is much prior to the financial year relevant to assessment year 2014 relevant to assessment year 2014-15 when the provisions of section 15 when the provisions of section 43CA have become effective, there is no way the assessee would have 43CA have become effective, there is no way the assessee would have 43CA have become effective, there is no way the assessee would have foreseen these provisions at the time of entering into the agreement to provisions at the time of entering into the agreement to sell that it has to receive the consideration only by any mode other than sell that it has to receive the consideration only by any mode other than sell that it has to receive the consideration only by any mode other than cash. At the relevant point in time when it had entered into agreement At the relevant point in time when it had entered into agreement At the relevant point in time when it had entered into agreement to sell, there was no such requirement of receiving t to sell, there was no such requirement of receiving the whole of the he whole of the consideration in mode other than cash. Therefore, in order to make the consideration in mode other than cash. Therefore, in order to make the consideration in mode other than cash. Therefore, in order to make the provisions of sub provisions of sub-section (4) workable, in our view, the provisions of section (4) workable, in our view, the provisions of sub-section (4) would be applicable in respect of agreement to sell for section (4) would be applicable in respect of agreement to sell for section (4) would be applicable in respect of agreement to sell for transfer of an asset which transfer of an asset which has been executed on or after Ist April, 2013 has been executed on or after Ist April, 2013 and thus, not applicable in the instant case. and thus, not applicable in the instant case. The matter is accordingly The matter is accordingly remanded back to the file of the Id CIT(A) to remanded back to the file of the Id CIT(A) to determine the valuation of determine the valuation of the two properties in terms of sub the two properties in terms of sub-section (3) as on the date of section (3) as on the date of agreement to sell which is 9.4.2007 and where it is so determined that agreement to sell which is 9.4.2007 and where it is so determined that agreement to sell which is 9.4.2007 and where it is so determined that such valuation is higher than what has been declared by the assessee, such valuation is higher than what has been declared by the assessee, such valuation is higher than what has been declared by the assessee, the same can be brought to tax in the year under consideration. the same can be brought to tax in the year under consideration. the same can be brought to tax in the year under consideration.” 6.2 We note that the Tribunal in the case of M/s We note that the Tribunal in the case of M/s Spyteck Buildcon Spyteck Buildcon (supra) relied upon by the Ld. CIT(A) has not considered the (supra) relied upon by the Ld. CIT(A) has not considered the (supra) relied upon by the Ld. CIT(A) has not considered the decision of the Tribunal in the case of Indexone Tradecone (P.) Ltd. decision of the Tribunal in the case of Indexone Tradecone (P.) Ltd. decision of the Tribunal in the case of Indexone Tradecone (P.) Ltd. (supra), which is an earlier decision. Further, the Hon’ble Bombay an earlier decision. Further, the Hon’ble Bombay an earlier decision. Further, the Hon’ble Bombay High Court in the case of High Court in the case of Swananda Properties (P.) Ltd. (supra) held Swananda Properties (P.) Ltd. (supra) held that provisions of section 43CA are provisions of section 43CA are applicable prospectively and not applicable prospectively and not retrospectively. Since, the sale consideration in the case of the retrospectively. Since, the sale consideration in the case of the retrospectively. Since, the sale consideration in the case of the assessee have been assessee have been recorded in books of accounts in the earlier recorded in books of accounts in the earlier years, in our opinion provision of section 43CA of the Act cannot be opinion provision of section 43CA of the Act cannot be opinion provision of section 43CA of the Act cannot be Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 7 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023 upheld retrospectively upheld retrospectively. As far as contention of the Ld. Departmental s far as contention of the Ld. Departmental Representative (DR) that section 43CA(4) is concerned, we are of the Representative (DR) that section 43CA(4) is concerned Representative (DR) that section 43CA(4) is concerned opinion that sub-section will be applicable in the case of agre section will be applicable in the case of agre section will be applicable in the case of agreement to sale undertaken after 01.04.2014 and not in case of the to sale undertaken after 01.04.2014 and not in case of the to sale undertaken after 01.04.2014 and not in case of the agreement to sale enter in prior years. The grounds of appeal of the agreement to sale enter in prior years. The grounds of appeal of the agreement to sale enter in prior years. The grounds of appeal of the assessee are accordingly allowed. assessee are accordingly allowed.
(Assessment year 2017-18)
(Assessment year 2017 (Assessment year 2017 Now we take up ITA No. 4128/Mum/2023 for assessment year for assessment year 2017-18 in the case of Rubberwala Holding and Infrastructure Ltd. 18 in the case of Rubberwala Holding and Infrastructure Ltd. 18 in the case of Rubberwala Holding and Infrastructure Ltd. The relevant ground raised by the assessee The relevant ground raised by the assessee is reproduced as under: reproduced as under:
1. On the facts and circumstances of the Appellant's case and in On the facts and circumstances of the Appellant's case and in On the facts and circumstances of the Appellant's case and in law Id. CIT (A) erred in confirming the law Id. CIT (A) erred in confirming the action of the Id. A.O. in action of the Id. A.O. in disallowing payment of employees contribution of Provident fund disallowing payment of employees contribution of Provident fund disallowing payment of employees contribution of Provident fund and ESIC amounting to Rs. 2,83,050/ and ESIC amounting to Rs. 2,83,050/-, for the reasons , for the reasons mentioned in the impugned order or otherwise. mentioned in the impugned order or otherwise. 7.1 In the case issue In the case issue-in-dispute involved is regarding disallowanc dispute involved is regarding disallowance of delayed payment of employee of delayed payment of employee’s contribution to provident fund s contribution to provident fund(PF) and employee’s state insurance corporation amounting state insurance corporation amounting state insurance corporation amounting(ESIC) to Rs.2,83,050/-. The Ld. CIT(A) has upheld the disallowance in view . The Ld. CIT(A) has upheld the disallowance in view . The Ld. CIT(A) has upheld the disallowance in view of the decision of the Hon’ble Supreme Court in the case of of the decision of the Hon’ble Supreme Court in the case o of the decision of the Hon’ble Supreme Court in the case o Checkmate Services Pvt. Ltd. (supra). The relevant finding of the Ld. Checkmate Services Pvt. Ltd. (supra). The relevant finding of the Ld. Checkmate Services Pvt. Ltd. (supra). The relevant finding of the Ld. CIT(A) is reproduced as under: CIT(A) is reproduced as under:
“11. The appellant's argument that the issue cannot be a subject 11. The appellant's argument that the issue cannot be a subject 11. The appellant's argument that the issue cannot be a subject matter of disallowance is not acceptable in view of the decision of the matter of disallowance is not acceptable in view of the decision of the matter of disallowance is not acceptable in view of the decision of the Hon'ble Supreme Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd. vs. Court in the case of Checkmate Services (P) Ltd. vs.
Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 8 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023 CIT [2022] 143 taxmann.com 178 (SC) dated 12.10.2022. This issue CIT [2022] 143 taxmann.com 178 (SC) dated 12.10.2022. This issue CIT [2022] 143 taxmann.com 178 (SC) dated 12.10.2022. This issue stands settled now, and is no longer res integra. stands settled now, and is no longer res integra.
12. In the recent case of CC Engineers Pvt. Ltd. in ITA No.
In the recent case of CC Engineers Pvt. Ltd. in ITA No.
12. In the recent case of CC Engineers Pvt. Ltd. in dt. 698/Pun/2021 dt. 07.11.2022, the Hon'ble ITAT analysed the impact the Hon'ble ITAT analysed the impact of the decision of the Hon'ble Supreme Court in Checkmate Services (P) of the decision of the Hon'ble Supreme Court in Checkmate Services (P) of the decision of the Hon'ble Supreme Court in Checkmate Services (P) Ltd. referred above and held that the amount was to be added back. Ltd. referred above and held that the amount was to be added back. Ltd. referred above and held that the amount was to be added back.” 7.2 In view of the above, we do not find any infirmity in the order In view of the above, we do not find any infirmity in the order In view of the above, we do not find any infirmity in the order of the Ld. CIT(A). Accordingly CIT(A). Accordingly, we uphold the disallowance. The we uphold the disallowance. The grounds of appeal of the assessee are accordingly dismissed. grounds of appeal of the assessee are accordingly dismissed. grounds of appeal of the assessee are accordingly dismissed.
/Mum/2023 (Assessment year 2012 (Assessment year 2012-13) in the case of Now we take in the case of Now we take ITA No. 4019/Mum/2023 in the case of Rubberwalla Realty, Mumbai for assessment Rubberwalla Realty, Mumbai for assessment year 2012 year 2012-13. The grounds raised by the assessee are reproduced as under: grounds raised by the assessee are reproduced as under: grounds raised by the assessee are reproduced as under:
1. On the facts and circumstances of the Appellant's case and in law 1. On the facts and circumstances of the Appellant's case and in law 1. On the facts and circumstances of the Appellant's case and in law CIT (A) erred in confirming the action of the Id. A.O. in reopening the CIT (A) erred in confirming the action of the Id. A.O. in reopening the CIT (A) erred in confirming the action of the Id. A.O. in reopening the assessment u/s 147 by issue of notice u/ assessment u/s 147 by issue of notice u/s 148 of the Act dated s 148 of the Act dated 29.03.2016 which is bad in law. 29.03.2016 which is bad in law.
2. On the facts and circumstances of the Appellant's case and in law 2. On the facts and circumstances of the Appellant's case and in law 2. On the facts and circumstances of the Appellant's case and in law CIT (A) erred in confirming the action of the Id. A.O. in treating the CIT (A) erred in confirming the action of the Id. A.O. in treating the CIT (A) erred in confirming the action of the Id. A.O. in treating the unsecured loans from M/s. unsecured loans from M/s. Shree Bhairav Gems as accommodation as accommodation entries of Rs.5,00,000/ entries of Rs.5,00,000/- by invoking provisions of section 68 of the provisions of section 68 of the Act, for the reasons mentioned in the impugned order or otherwise. Act, for the reasons mentioned in the impugned order or otherwise. Act, for the reasons mentioned in the impugned order or otherwise.
3. On the facts and circumstances of the Appellant's case and in law 3. On the facts and circumstances of the Appellant's case and in law 3. On the facts and circumstances of the Appellant's case and in law CIT (A) erred in confirming the action of the Id. CIT (A) erred in confirming the action of the Id. A.O. in disallowing the A.O. in disallowing the interest amounting to Rs. 12,205/ interest amounting to Rs. 12,205/- paid with respect to the said loan, paid with respect to the said loan, for the reasons mentioned in the for the reasons mentioned in the impugned order or otherwise. impugned order or otherwise. 8.1 Briefly stated facts of the case are that the assessee filed Briefly stated facts of the case are that the assessee filed Briefly stated facts of the case are that the assessee filed return of income on 09.02.2013 dec return of income on 09.02.2013 declaring total income at Rs. Nil. laring total income at Rs. Nil. Subsequently, scrutiny assessment u/s 143(3) of the Act was Subsequently, scrutiny assessment u/s 143(3) of the Act Subsequently, scrutiny assessment u/s 143(3) of the Act
Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 9 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023 completed on 09.03.2015, wherein total income completed on 09.03.2015, wherein total income was was assessed at Rs. Nil. Subsequently, information was received from the Investigation Nil. Subsequently, information was received from the Investigation Nil. Subsequently, information was received from the Investigation Wing, Mumbai that survey action Wing, Mumbai that survey action u/s 133A was carried out at the u/s 133A was carried out at the premises of M/s Rubberwalla Housing and Infrastructure Ltd., premises of M/s Rubberwalla Housing and Infrastructure Ltd. premises of M/s Rubberwalla Housing and Infrastructure Ltd. wherein director of the Rubberwalla Housing and Infrastructure wherein director of the Rubberwalla Housing and Infrastructure wherein director of the Rubberwalla Housing and Infrastructure Ltd. namely Shri Tabrez Shaikh (who is a partner of the assessee) in Ltd. namely Shri Tabrez Shaikh (who is a partner of the assessee) in Ltd. namely Shri Tabrez Shaikh (who is a partner of the assessee) in his statement recorded on oath his statement recorded on oath u/s 131 of the Act admitted to have u/s 131 of the Act admitted to have taken accommodation entries of the unsecured loans from certain taken accommodation entries of the unsecured loans taken accommodation entries of the unsecured loans parties by his group concern parties by his group concerns including the assessee. In view of the including the assessee. In view of the information, in the reassessment proceedings, the Assessing Officer in the reassessment proceedings, the Assessing Officer in the reassessment proceedings, the Assessing Officer made addition amou made addition amounting to Rs.72,00,000/- in terms of section 68 in terms of section 68 of the Act in relation to four parties having details as under: of the Act in relation to four parties having details as under: of the Act in relation to four parties having details as under:
Sr. No. Name of Surat based concern providing Name of Surat based concern providing Amt. of accommodation entry Amt. of accommodation entry accommodation entries accommodation entries (Rs,) 1. M/s Shree Bhairav M/s Shree Bhairav Diamond Pvt. Ltd. 10,00,000 2. M/s Samta Exports Pvt. Ltd, M/s Samta Exports Pvt. Ltd, 37,00,000 3. M/s Dhankuber Exports Pvt. Ltd. M/s Dhankuber Exports Pvt. Ltd. 20,00,000 4. Shree Bhairav Gems Shree Bhairav Gems 5,00,000 Total 72,00,000 8.2 On further appeal, the Ld. CIT(A) deleted the addition except On further appeal, the Ld. CIT(A) deleted the addition except On further appeal, the Ld. CIT(A) deleted the addition except amount of Rs.5,00,000/ amount of Rs.5,00,000/- in respect of Shree Bhairav Diamond. The in respect of Shree Bhairav Diamond. The Ld. CIT(A) also upheld the disallowance of the interest of Ld. CIT(A) also upheld the disallowance of the interest of Ld. CIT(A) also upheld the disallowance of the interest of Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 10 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023 Rs.12,205/- paid to Shree Bhairav Gems. The relevant finding of paid to Shree Bhairav Gems. The relevant finding of paid to Shree Bhairav Gems. The relevant finding of the Ld. CIT(a) is reproduced as under: . CIT(a) is reproduced as under:
“9.3. The above findings substantiate that the appellant has been able 9.3. The above findings substantiate that the appellant has been able 9.3. The above findings substantiate that the appellant has been able to discharge its onus before the AO. As regards M/s Shree Bhairav to discharge its onus before the AO. As regards M/s Shree Bhairav to discharge its onus before the AO. As regards M/s Shree Bhairav Gems, the financials have not been furnished before the AO. In the Gems, the financials have not been furnished before the AO. In the Gems, the financials have not been furnished before the AO. In the case of M/s. Pratha case of M/s. Pratham Telecom India P Ltd vs DCIT dated 17.09.2018 m Telecom India P Ltd vs DCIT dated 17.09.2018 in of 2016, the Hon'ble jurisdictional HC has held that "The in of 2016, the Hon'ble jurisdictional HC has held that "The in ITA no.316 of 2016, the Hon'ble jurisdictional HC has held that "The assessee cannot simply provide some details such as Permanent assessee cannot simply provide some details such as Permanent assessee cannot simply provide some details such as Permanent Account Number, business address, the account Account Number, business address, the account Account Number, business address, the account which which was which was was maintained and a Ba maintained and a Bank Statement, or a Company's Master Data nk Statement, or a Company's Master Data maintained by the Registrar of Companies. maintained by the Registrar of Companies. The assessee is obliged to The assessee is obliged to explain the surrounding circumstances and the backdrop in which the explain the surrounding circumstances and the backdrop in which the explain the surrounding circumstances and the backdrop in which the transactions took place." It can be seen that the onus has not been transactions took place." It can be seen that the onus has not been transactions took place." It can be seen that the onus has not been discharged by the appellant before the AO as far as M/s Shree by the appellant before the AO as far as M/s Shree by the appellant before the AO as far as M/s Shree Bhairav Gems is concerned. Thus it cannot be stated that the Bhairav Gems is concerned. Thus it cannot be stated that the Bhairav Gems is concerned. Thus it cannot be stated that the creditworthiness of the transactions in creditworthiness of the transactions in respect of this lender has been respect of this lender has been proved before the AO. Hence, the addition of Rs. 5,00,000/ proved before the AO. Hence, the addition of Rs. 5,00,000/- - in respect of loans stated to be received from Shree Bhairav Gems is upheld. of loans stated to be received from Shree Bhairav Gems is upheld. of loans stated to be received from Shree Bhairav Gems is upheld. Rest of the addition is deleted. Rest of the addition is deleted. 9.4. I have perused the decision of the Hon'ble Tribunal relied in the 9.4. I have perused the decision of the Hon'ble Tribunal relied in the 9.4. I have perused the decision of the Hon'ble Tribunal relied in the case of one of the group company of the appellant, i.e. M/s. case of one of the group company of the appellant, i.e. M/s. case of one of the group company of the appellant, i.e. M/s. Rubberwala Rubberwala Hospitality Hospitality Pv Pvt. t. Ltd Ltd bearing bearing ITA ITA No. No. 299 299 & & 314/Mum/2020 dated 23.11.2021. It is well known that addition 314/Mum/2020 dated 23.11.2021. It is well known that addition 314/Mum/2020 dated 23.11.2021. It is well known that addition u/s.68 is based on facts and the ability to discharge onus. This is also u/s.68 is based on facts and the ability to discharge onus. This is also u/s.68 is based on facts and the ability to discharge onus. This is also evident from para 7 of the said order, evident from para 7 of the said order, "...and direct the AO to delete "...and direct the AO to delete the addition as the a the addition as the assessee has proved all the three ingredients of proved all the three ingredients of section 68 of the Act". In the instant case too, the facts have been section 68 of the Act". In the instant case too, the facts have been section 68 of the Act". In the instant case too, the facts have been appreciated based on the submission of the appellant, and decisions appreciated based on the submission of the appellant, and decisions appreciated based on the submission of the appellant, and decisions taken in the preceding paragraphs. No further discussion is required taken in the preceding paragraphs. No further discussion is required taken in the preceding paragraphs. No further discussion is required on this.” 8.3 Aggrieved with the disallowance of loan and interest in respect Aggrieved with the disallowance of loan and interest in respect Aggrieved with the disallowance of loan and interest in respect of Shree Bhairav Gems, the assessee is in appeal before the of Shree Bhairav Gems, the assessee is in appeal before the of Shree Bhairav Gems, the assessee is in appeal before the Tribunal by way of raising grounds as reproduced above. Tribunal by way of raising grounds as reproduced above. Tribunal by way of raising grounds as reproduced above.
8.4 As far as ground No. 2 and 3 of the appeal As far as ground No. 2 and 3 of the appeal are are concerned, the Ld. counsel submitted that the Ld. CIT(A) has merely sustained the Ld. counsel submitted that the Ld. CIT(A) has merely sustained the Ld. counsel submitted that the Ld. CIT(A) has merely sustained the disallowance for the reason that financial of Shree Bhairav Gems disallowance for the reason that financial of Shree disallowance for the reason that financial of Shree
Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 11 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023 were not submitted before the AO but same were duly filed before were not submitted before the AO but same were duly filed before were not submitted before the AO but same were duly filed before the Ld. CIT(A) which he did not consider. He further submitted that the Ld. CIT(A) which he did not consider. He further sub the Ld. CIT(A) which he did not consider. He further sub identical additions in respect of loan already paid in the case of identical additions in respect of loan already paid in the case of identical additions in respect of loan already paid in the case of group concern namely M/s Rubberwala Hospitality Pvt. Ltd. bearing group concern namely M/s Rubberwala Hospitality Pvt. Ltd. bearing group concern namely M/s Rubberwala Hospitality Pvt. Ltd. bearing & 314/Mum/2020 dated 23.11.2021 has been deleted & 314/Mum/2020 dated 23.11.2021 has been deleted ITA No. 299 & 314/Mum/2020 dated 23.11.2021 has been deleted by the Tribunal.
8.5 On the contrary, the Ld. DR relied on the order of the lower On the contrary, the Ld. DR relied on the order of the lower On the contrary, the Ld. DR relied on the order of the lower authorities.
8.6 We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. In our opinion, the Ld. CIT(A) has relevant material on record. In our opinion, the Ld. CIT(A) has relevant material on record. In our opinion, the Ld. CIT(A) has accepted the stand of the assessee in respect of three loan parties accepted the stand of the assessee in respect of th accepted the stand of the assessee in respect of th where also identical information was received also identical information was received. The . The only basis on which the Ld. CIT(A) the Ld. CIT(A) has sustained the disallowance is that the disallowance is that financial of said party were not filed before the Assessing Officer. financial of said party were not filed before the Assessing Officer. financial of said party were not filed before the Assessing Officer. Before us the ld Counsel for the assessee sub Before us the ld Counsel for the assessee submitted that one more mitted that one more opportunity might be provided to the assessee opportunity might be provided to the assessee for filing said documents. In view of above In view of above prayer of the assessee and in the prayer of the assessee and in the interest of substantial justice, interest of substantial justice, we set aside the finding of the Ld. we set aside the finding of the Ld. CIT(A) in respect of loan of Rs.5,00,000/ CIT(A) in respect of loan of Rs.5,00,000/- held as unexplained cash held as unexplained cash credit and interest disallowance at Rs.12,205/ credit and interest disallowance at Rs.12,205/- and restore the and restore the matter back to the file of the Assessing Officer to be decided afresh. matter back to the file of the Assessing Officer to be decided afresh matter back to the file of the Assessing Officer to be decided afresh The grounds No. 2 and 3 of the appeal of the assessee are The grounds No. 2 and 3 of the appeal of the assessee The grounds No. 2 and 3 of the appeal of the assessee
Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 12 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023 accordingly allowed for statistical for statistical purpose. Since, we have already . Since, we have already restored the grievance of the assessee on merit the grievance of the assessee on merit to the AO, the issue to the AO, the issue of adjudication of the validity of the assessment made u/s 147 of adjudication of the validity of the assessment made u/s 147 of adjudication of the validity of the assessment made u/s 147 of the Act raised by way of ground No. 1 is rendered academic and the Act raised by way of ground No. 1 is rendered academic and the Act raised by way of ground No. 1 is rendered academic and therefore, same is not req therefore, same is not required to be adjudicated at this stage and uired to be adjudicated at this stage and left open.
Now, we take we take up appeal of the assessee in of the assessee in Hilton Infrastructure, Mumbai for 3696/Mum/2023 in the case of Hilton Infrastructure, Mumbai for 3696/Mum/2023 in the case of Hilton Infrastructure, Mumbai for assessment 2011-12. The grounds raise 12. The grounds raised by the assessee are d by the assessee are reproduced as under: reproduced as under:
1. On the facts and circumstances of the Appellant's case and in law 1. On the facts and circumstances of the Appellant's case and in law 1. On the facts and circumstances of the Appellant's case and in law CIT (A) erred in confirming the action of the Id. A.O. erred in holding that CIT (A) erred in confirming the action of the Id. A.O. erred in holding that CIT (A) erred in confirming the action of the Id. A.O. erred in holding that the loan taken by the appellant from M/s. Pearl Enterprises and its the loan taken by the appellant from M/s. Pearl Enterprises and its the loan taken by the appellant from M/s. Pearl Enterprises and its repayment thereon is non repayment thereon is non-genuine, for the reasons mentioned in the genuine, for the reasons mentioned in the impugned order or otherwise. impugned order or otherwise.
2. On the facts and circumstances of the Appellant's case and in law 2. On the facts and circumstances of the Appellant's case and in law 2. On the facts and circumstances of the Appellant's case and in law CIT, (A) erred in confirming the action of the Id. A.O. erred in disallowed CIT, (A) erred in confirming the action of the Id. A.O. erred in disallowed CIT, (A) erred in confirming the action of the Id. A.O. erred in disallowed the interest amounting to Rs. 15,39,443/ mounting to Rs. 15,39,443/- paid on unsecured loan, for paid on unsecured loan, for the reasons mentioned in the impugned order or otherwise. the reasons mentioned in the impugned order or otherwise. 9.1 Briefly stated, facts of the case are that in the case the Briefly stated, facts of the case are that in the case the Briefly stated, facts of the case are that in the case the Assessing Officer vide his order dated 24.12.2018 vide his order dated 24.12.2018 made addition for made addition for received from M/s Pearl Enterprises held loan of Rs.1,37,84,370/ 1,37,84,370/- received from M/s Pearl Enterprises held to be unexplained cash credit in terms of section 68 of the Act. But to be unexplained cash credit in terms of section 68 of the Act. But to be unexplained cash credit in terms of section 68 of the Act. But the Ld. CIT(A) deleted the said additions as money was received in the Ld. CIT(A) deleted the said additions as money was received in the Ld. CIT(A) deleted the said additions as money was received in earlier year. The finding of the Ld. CIT(A) is reproduced as under: earlier year. The finding of the Ld. CIT(A) is reproduced as unde earlier year. The finding of the Ld. CIT(A) is reproduced as unde
Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 13 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023
“7.11. Thus, the essential ingredient for application of S.68 is that the 7.11. Thus, the essential ingredient for application of S.68 is that the 7.11. Thus, the essential ingredient for application of S.68 is that the moneys should have been received, i.e. credited. In the instant case, the moneys should have been received, i.e. credited. In the instant case, the moneys should have been received, i.e. credited. In the instant case, the part money have been repaid during the year. In my view, the part money have been repaid during the year. In my view, the part money have been repaid during the year. In my view, the provisions of S.68 cannot be applied on such provisions of S.68 cannot be applied on such repayment of loan. Hence, repayment of loan. Hence, notwithstanding my observations in the earlier paragraphs, the addition notwithstanding my observations in the earlier paragraphs, the addition notwithstanding my observations in the earlier paragraphs, the addition of Rs. 1,37,84,370/ of Rs. 1,37,84,370/- made u/s.68 stands deleted. This ground stands made u/s.68 stands deleted. This ground stands Allowed.” 9.2 However, the Ld. CIT(A) sustained the disallowance on the However, the Ld. CIT(A) sustained the disallowance on the However, the Ld. CIT(A) sustained the disallowance on the payment of interest expenditure amounting to Rs.15,39,433/ st expenditure amounting to Rs.15,39,433/ st expenditure amounting to Rs.15,39,433/- to said party. Aggrieved said party. Aggrieved, the assessee is in appeal before the Tribunal the assessee is in appeal before the Tribunal by way of raising grounds as reproduced above. by way of raising grounds as reproduced above.
9.3 We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused the relevant material on recor the relevant material on record. We find that the Ld. CIT(A) has not d. We find that the Ld. CIT(A) has not brought on record whether the corresponding addition in the brought on record whether the corresponding addition in the brought on record whether the corresponding addition in the relevant assessment year for the money received from M/s Pearl relevant assessment year for the money received from M/s Pearl relevant assessment year for the money received from M/s Pearl Enterprises was made in the hands of the assessee or not. Unless Enterprises was made in the hands of the assessee or not. Unless Enterprises was made in the hands of the assessee or not. Unless the credit from the said part the credit from the said party is held to be unexplained cash credit held to be unexplained cash credit no addition could have been made in no addition could have been made in respect of the interest the interest from said party. Accordingly, we set aside the finding of the Ld. CIT(A). said party. Accordingly, we set aside the finding of the Ld. CIT(A) said party. Accordingly, we set aside the finding of the Ld. CIT(A) the ground No. 1 and 2 of the appeal of the assessee are accordingly the ground No. 1 and 2 of the appeal of the assessee are accordingly the ground No. 1 and 2 of the appeal of the assessee are accordingly allowed.
(Assessment Year 2012 A No. 4018/Mum/2023 (Assessment Year 2012-13) A No. 4018/Mum/2023 (Assessment Year 2012
Now, we take up the up the in the case of in the case of Heks Infrastructure and Developers, Mumbai for assessment year Heks Infrastructure and Developers, Mumbai for assessment year Heks Infrastructure and Developers, Mumbai for assessment year
Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 14 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023 2012-13. The grounds raised by the assessee are reproduced as 13. The grounds raised by the assessee are reproduced as 13. The grounds raised by the assessee are reproduced as under:
On the facts a 1. On the facts and circumstances of Appellant's case and in law CIT nd circumstances of Appellant's case and in law CIT (A) erred in confirming the action of the Id. A.O. in reopening the (A) erred in confirming the action of the Id. A.O. in reopening the (A) erred in confirming the action of the Id. A.O. in reopening the assessment u/s 147 by issue of notice u/s 148 of the Act dated assessment u/s 147 by issue of notice u/s 148 of the Act dated assessment u/s 147 by issue of notice u/s 148 of the Act dated 30.11.2016 which is bad in law. 30.11.2016 which is bad in law.
2. On the facts and circumstances of Appe 2. On the facts and circumstances of Appellant's case and in law CIT llant's case and in law CIT (A) erred in confirming the action of the Id. A.O. in treating the (A) erred in confirming the action of the Id. A.O. in treating the (A) erred in confirming the action of the Id. A.O. in treating the unsecured loans taken by the appellant from M/s. Shree Bhairav unsecured loans taken by the appellant from M/s. Shree Bhairav unsecured loans taken by the appellant from M/s. Shree Bhairav Gems as non- -genuine, for the reasons mentioned in the impugned genuine, for the reasons mentioned in the impugned order or otherwise. order or otherwise.
3. On the facts 3. On the facts and circumstances of Appellant's case and in law CIT and circumstances of Appellant's case and in law CIT (A) erred in confirming the action of the Id. A. (A) erred in confirming the action of the Id. A.O. in making an addition O. in making an addition of Rs. 5,00,000/ 5,00,000/- on, account of unsecured loan taken by the on, account of unsecured loan taken by the appellant treating the same as unexplained cash credit u/s 68 of the appellant treating the same as unexplained cash credit u/s 68 of the appellant treating the same as unexplained cash credit u/s 68 of the Act, for the reasons mentioned in the impugned order or otherwise. Act, for the reasons mentioned in the impugned order or otherwise. Act, for the reasons mentioned in the impugned order or otherwise. 10.1 Briefly stated facts of the case are that the assessee filed Briefly stated facts of the case are that the assessee filed Briefly stated facts of the case are that the assessee filed return of income declaring Nil income on 31.08.2012. Subsequently return of income declaring Nil income on 31.08.2012. Subsequently return of income declaring Nil income on 31.08.2012. Subsequently on receipt of the information from the Director General of Income- on receipt of the information from the Director General on receipt of the information from the Director General tax (Inv.), Mumbai that assessee had taken bogus loan entries from tax (Inv.), Mumbai that assessee had taken bogus loan entries from tax (Inv.), Mumbai that assessee had taken bogus loan entries from group companies of Shri Pravee group companies of Shri Praveen Kumar Jain, the assessment was he assessment was reopened by way of issue of notice u/s 148 of the Act after reopened by way of issue of notice u/s 148 of the Act after reopened by way of issue of notice u/s 148 of the Act after recording reasons to believe recording reasons to believe that income escaped assessment. The assessment. The reassessment was completed on 30.11.2016 reassessment was completed on 30.11.2016, wherein addition wherein addition amounting to Rs.15,00,000/ amounting to Rs.15,00,000/- from loan received from M/s from loan received from M/s Karishma Diamonds Pvt. Ltd. Karishma Diamonds Pvt. Ltd. was made, whereas whereas in the reason recorded , it was shown to had been shown to had been received from the following received from the following three parties:
Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 15 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023
(a) Shree Bhairav Diamond Pvt. Ltd. Rs. 6,00,000/ (a) Shree Bhairav Diamond Pvt. Ltd. Rs. 6,00,000/-
(b) Shree Bhairav Gems, Rs. 5,00,000/ (b) Shree Bhairav Gems, Rs. 5,00,000/- &
(c) M/s Dhankuber Exports Pvt Ltd. Rs. 4,00,000/ (c) M/s Dhankuber Exports Pvt Ltd. Rs. 4,00,000/-.
10.2 The Ld. CIT(A) however deleted the addition in respect of two The Ld. CIT(A) however deleted the addition in respect of two The Ld. CIT(A) however deleted the addition in respect of two parties but sustained addition parties but sustained addition of Rs.5,00,000/- in respect of Shri in respect of Shri Bhairav Gems. The relevant finding of the Ld. CIT(A) is reproduced Bhairav Gems. The relevant finding of the Ld. CIT(A) is reproduced Bhairav Gems. The relevant finding of the Ld. CIT(A) is reproduced as under:
“8.2. As regards loan of Rs. 4,00,000/ 8.2. As regards loan of Rs. 4,00,000/- received from M/s Dhankuber received from M/s Dhankuber Exports Pvt Ltd., it is seen that the appellant has furnished copy of ITR Exports Pvt Ltd., it is seen that the appellant has furnished copy of ITR Exports Pvt Ltd., it is seen that the appellant has furnished copy of ITR acknowledgment, ledger confirmation, bank statement and balance cknowledgment, ledger confirmation, bank statement and balance cknowledgment, ledger confirmation, bank statement and balance sheet Thus, it can be concluded that the appellant has been able to sheet Thus, it can be concluded that the appellant has been able to sheet Thus, it can be concluded that the appellant has been able to adequately discharge the onus laid on it. Apart from the statement of adequately discharge the onus laid on it. Apart from the statement of adequately discharge the onus laid on it. Apart from the statement of Shri Gautam B Jain there is no other independent eviden Shri Gautam B Jain there is no other independent eviden Shri Gautam B Jain there is no other independent evidence to take a contrary view. Hence, this addition stands deleted. contrary view. Hence, this addition stands deleted. 8.3. As regards loan of Rs. 6,00,000/ 8.3. As regards loan of Rs. 6,00,000/- received from Shree Bhairav received from Shree Bhairav Diamond Pvt. Ltd. It is seen that the appellant has furnished copy of ITR Diamond Pvt. Ltd. It is seen that the appellant has furnished copy of ITR Diamond Pvt. Ltd. It is seen that the appellant has furnished copy of ITR acknowledgment, ledger confirmation, bank stateme acknowledgment, ledger confirmation, bank statement and balance nt and balance sheet. Thus, it can be held that the appellant has been able to sheet. Thus, it can be held that the appellant has been able to sheet. Thus, it can be held that the appellant has been able to adequately discharge the onus laid on it. Apart from the statement of adequately discharge the onus laid on it. Apart from the statement of adequately discharge the onus laid on it. Apart from the statement of Shri Gautam B Jain there is no other independent evidence to take a Shri Gautam B Jain there is no other independent evidence to take a Shri Gautam B Jain there is no other independent evidence to take a contrary view. Hence, this addition sta contrary view. Hence, this addition stands deleted. 8.4. The appellant has stated that Rs. 5,00,000/ 8.4. The appellant has stated that Rs. 5,00,000/- has been received has been received from Shree Bhairav Gems. The appellant has stated that it has from Shree Bhairav Gems. The appellant has stated that it has from Shree Bhairav Gems. The appellant has stated that it has furnished the copy of ITR acknowledgment and ledger confirmation. The furnished the copy of ITR acknowledgment and ledger confirmation. The furnished the copy of ITR acknowledgment and ledger confirmation. The financials are not submitted meaning financials are not submitted meaning thereby that the creditworthiness thereby that the creditworthiness does not stand established by the appellant. I find from the ledger does not stand established by the appellant. I find from the ledger does not stand established by the appellant. I find from the ledger confirmation and ITR that these supporting evidences are in respect confirmation and ITR that these supporting evidences are in respect confirmation and ITR that these supporting evidences are in respect of Shree Bhairav Gems. However, the balance sheet of the appellant Shree Bhairav Gems. However, the balance sheet of the appellant Shree Bhairav Gems. However, the balance sheet of the appellant shows outstanding l shows outstanding loans from Shree Bhairav Gems Pvt Ltd and not oans from Shree Bhairav Gems Pvt Ltd and not Shree Bhairav Gems. Shree Bhairav Gems. No evidence regarding the financial standing or No evidence regarding the financial standing or creditworthiness of the said party has been furnished. In the case of creditworthiness of the said party has been furnished. In the case of creditworthiness of the said party has been furnished. In the case of M/s. Pratham Telecom India P Ltd vs DCIT dated 17.09.2018 in ITA M/s. Pratham Telecom India P Ltd vs DCIT dated 17.09.2018 in ITA M/s. Pratham Telecom India P Ltd vs DCIT dated 17.09.2018 in of 2016, the Hon'ble jurisdictional HC has held that "The f 2016, the Hon'ble jurisdictional HC has held that "The f 2016, the Hon'ble jurisdictional HC has held that "The assessee cannot simply provide some details such as Permanent assessee cannot simply provide some details such as Permanent assessee cannot simply provide some details such as Permanent Account Number, business address, the account which was maintained Account Number, business address, the account which was maintained Account Number, business address, the account which was maintained and a Bank Statement, or a Company's Master Data maintained by the and a Bank Statement, or a Company's Master Data maintained by the and a Bank Statement, or a Company's Master Data maintained by the Registrar of Companies. The assessee is obliged to explain the istrar of Companies. The assessee is obliged to explain the istrar of Companies. The assessee is obliged to explain the Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 16 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023 surrounding circumstances and the backdrop in which the transactions surrounding circumstances and the backdrop in which the transactions surrounding circumstances and the backdrop in which the transactions took place." It can be seen that the same has not been done by the took place." It can be seen that the same has not been done by the took place." It can be seen that the same has not been done by the appellant before the AO. Hence, on a consideration of entire appellant before the AO. Hence, on a consideration of entire appellant before the AO. Hence, on a consideration of entire facts, it is obvious that the appellant has not discharged the onus laid on it. The obvious that the appellant has not discharged the onus laid on it. The obvious that the appellant has not discharged the onus laid on it. The addition of Rs. 5,00,000/ addition of Rs. 5,00,000/-stands confirmed. 8.5. I have perused the decision of the Hon'ble Tribunal relied in the 8.5. I have perused the decision of the Hon'ble Tribunal relied in the 8.5. I have perused the decision of the Hon'ble Tribunal relied in the case of one of the group company of the appellant, i.e. case of one of the group company of the appellant, i.e. M/s. Rubberwala M/s. Rubberwala Hospitality Pvt. Ltd bearing & 314/Mum/2020 dated Hospitality Pvt. Ltd bearing & 314/Mum/2020 dated Hospitality Pvt. Ltd bearing ITA No. 299 & 314/Mum/2020 dated 23.11.2021. It is well known that addition u/s.68 is based on facts and 23.11.2021. It is well known that addition u/s.68 is based on facts and 23.11.2021. It is well known that addition u/s.68 is based on facts and the ability to discharge onus. This is also evident from para 7 of the the ability to discharge onus. This is also evident from para 7 of the the ability to discharge onus. This is also evident from para 7 of the said order, "...and direct the AO t said order, "...and direct the AO to delete the addition as the assessee o delete the addition as the assessee has proved all the three ingredients of section 68 of the Act". In the has proved all the three ingredients of section 68 of the Act". In the has proved all the three ingredients of section 68 of the Act". In the instant case too, the facts have been appreciated based on the instant case too, the facts have been appreciated based on the instant case too, the facts have been appreciated based on the submission of the appellant, and decisions taken in the preceding submission of the appellant, and decisions taken in the preceding submission of the appellant, and decisions taken in the preceding paragraphs. No fur paragraphs. No further discussion is required on this.” 10.3 We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused the relevant material on record. Before us, the Ld. counsel of the the relevant material on record. Before us, the Ld. counsel of the the relevant material on record. Before us, the Ld. counsel of the assessee has challenged the reopening of assessment u/s 147 of assessee has challenged the reopening of assessment u/s 147 of assessee has challenged the reopening of assessment u/s 147 of the Act on the ground th the Act on the ground that the Assessing Officer has not applied his at the Assessing Officer has not applied his mind while recording the reasons to believe that income escaped mind while recording the reasons to believe that income escaped mind while recording the reasons to believe that income escaped assessment. The Ld. counsel submitted that the Assessing Officer assessment. The Ld. counsel submitted that the Assessing Officer assessment. The Ld. counsel submitted that the Assessing Officer has recorded that loan of Rs.15,00,000/ has recorded that loan of Rs.15,00,000/- was received from M/s was received from M/s Karishma Diamonds P Karishma Diamonds Pvt. Ltd., whereas on verification the Ld. CIT(A) whereas on verification the Ld. CIT(A) found that no such loan was received from M/s Karishma no such loan was received from M/s Karishma no such loan was received from M/s Karishma Diamonds Pvt. Ltd. during the year under consideration. The Ld. Diamonds Pvt. Ltd. during the year under consideration. The Ld. Diamonds Pvt. Ltd. during the year under consideration. The Ld. DR before us has also not DR before us has also not controverted this fact that no such this fact that no such amount was received from M amount was received from M/s Karishma Diamonds Pvt. Ltd. In our /s Karishma Diamonds Pvt. Ltd. In our opinion, no such loan was received from M/s Karishma Diamonds no such loan was received from M/s Karishma Diamonds no such loan was received from M/s Karishma Diamonds Pvt. Ltd. during the year under consideration. The reasons to Pvt. Ltd. during the year under consideration. The reasons to Pvt. Ltd. during the year under consideration. The reasons to believe recorded that income escaped assessment that income escaped assessment are are based purely
Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 17 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023 on non-application of the min application of the mind where he has not verified he has not verified that any such loan was received by the assessee. The Ld. CIT(A) has upheld such loan was received by the assessee. The Ld. CIT(A) has upheld such loan was received by the assessee. The Ld. CIT(A) has upheld the addition in respect of another party which was not mentioned in the addition in respect of another party which was not mentioned in the addition in respect of another party which was not mentioned in the reasons recorded by the Assessing Officer. In view of the the reasons recorded by the Assessing Officer. In view of the the reasons recorded by the Assessing Officer. In view of the reassessment proceedings cannot be sustained and same are proceedings cannot be sustained and same are proceedings cannot be sustained and same are quashed. Since reassessment proceeding has already been quashed quashed. Since reassessment proceeding has already been quashed quashed. Since reassessment proceeding has already been quashed by us no addition on merit could be sustained in the case of the by us no addition on merit could be sustained in the case of the by us no addition on merit could be sustained in the case of the assessee. Accordingly, the ground assessee. Accordingly, the grounds No. 1 to 3 of the appeal of the No. 1 to 3 of the appeal of the assessee are allowed. lowed.
(Assessment Year 2011-12)
(Assessment Year 2011 (Assessment Year 2011
Now, we take up appeal of the assessee in the case of we take up appeal of the assessee in the case of we take up appeal of the assessee in the case of Rubberwala Rubberwala Rubberwala Housing Housing Housing and and and Infrastructure Infrastructure Infrastructure Ltd. Ltd. Ltd. in in in ITA ITA ITA No. No. No. 4131/Mum/2023 for assessment year 2011 4131/Mum/2023 for assessment year 2011-12. In the case, the 12. In the case, the Assessing Officer made addit Assessing Officer made addition in his order dated 29.12.2018 ion in his order dated 29.12.2018 passed u/s 147 of the Act amounting to Rs.30,00,000/-. passed u/s 147 of the Act amounting to Rs.30,00,000/ passed u/s 147 of the Act amounting to Rs.30,00,000/ 11.1 On On On further further further appeal, appeal, appeal, the the the Ld. Ld. Ld. CIT(A) CIT(A) CIT(A) upheld upheld upheld the the the addition/disallowance observing as under: addition/disallowance observing as under:
“6.1. I have considered the facts of the case and submission of the 6.1. I have considered the facts of the case and submission of the 6.1. I have considered the facts of the case and submission of the appellant. According to the appellant, it has discharged its onus by ant. According to the appellant, it has discharged its onus by ant. According to the appellant, it has discharged its onus by furnishing copy of ITR acknowledgment, ledger confirmation and furnishing copy of ITR acknowledgment, ledger confirmation and furnishing copy of ITR acknowledgment, ledger confirmation and financial statement of M/s Nissim Traders Pvt. Ltd. Besides, the financial statement of M/s Nissim Traders Pvt. Ltd. Besides, the financial statement of M/s Nissim Traders Pvt. Ltd. Besides, the appellant has filed copies of its bank accounts to substantiate i appellant has filed copies of its bank accounts to substantiate i appellant has filed copies of its bank accounts to substantiate its claim that funds have been received in its bank account. However, the fact is that funds have been received in its bank account. However, the fact is that funds have been received in its bank account. However, the fact is that the AO had issued S.133(6) notice to M/s Nissim Traders Pvt. Ltd. that the AO had issued S.133(6) notice to M/s Nissim Traders Pvt. Ltd. that the AO had issued S.133(6) notice to M/s Nissim Traders Pvt. Ltd. which was not complied with. which was not complied with.
Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 18 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023
6.2. It may be noted that the appellant had availed loan from the same 6.2. It may be noted that the appellant had availed loan from the same 6.2. It may be noted that the appellant had availed loan from the same party during AY 2016 AY 2016-17 which was decided by this office vide its order 17 which was decided by this office vide its order dt. 31.07.2023. dt. 31.07.2023. "23.2. According to the AO, an analysis of the financials of the lender According to the AO, an analysis of the financials of the lender According to the AO, an analysis of the financials of the lender i.e. M/s Nissim Traders Pvt. Ltd. does not establish creditworthiness of i.e. M/s Nissim Traders Pvt. Ltd. does not establish creditworthiness of i.e. M/s Nissim Traders Pvt. Ltd. does not establish creditworthiness of the entity and genuinenes the entity and genuineness of the transactions. The AO issued 133(6) to s of the transactions. The AO issued 133(6) to the alleged lender which remained uncomplied with. Having considered the alleged lender which remained uncomplied with. Having considered the alleged lender which remained uncomplied with. Having considered the entire facts and reasoning given by the AO, I am of the view that the the entire facts and reasoning given by the AO, I am of the view that the the entire facts and reasoning given by the AO, I am of the view that the appellant has not been able to discharge its onus as regards S. appellant has not been able to discharge its onus as regards S. appellant has not been able to discharge its onus as regards S. 68 effectively. The addition stands CONFIRMED." effectively. The addition stands CONFIRMED." 6.3. Under these 6.3. Under these circumstances, and considering that the party is one circumstances, and considering that the party is one and the same, the addition stands CONFIRMED. same, the addition stands CONFIRMED.” 11.2 Before us, the Ld. counsel for the assessee submitted that Before us, the Ld. counsel for the assessee submitted that Before us, the Ld. counsel for the assessee submitted that addition has been sustained me addition has been sustained merely for the reason that notice u/s rely for the reason that notice u/s 133(6) of the Act were not complied with and Ld. counsel submitted 133(6) of the Act were not complied with and Ld. counsel submitted 133(6) of the Act were not complied with and Ld. counsel submitted that assessee is willing to provide current address of the said party that assessee is willing to provide current address of the said party that assessee is willing to provide current address of the said party to the Assessing Officer and necessary verification may be carried to the Assessing Officer and necessary verification may be carried to the Assessing Officer and necessary verification may be carried out by way of issue of notice u/s 133(6) of the Act on the new sue of notice u/s 133(6) of the Act on the new sue of notice u/s 133(6) of the Act on the new address. In view of the above facts and circumstances, we feel it address. In view of the above facts and circumstances address. In view of the above facts and circumstances appropriate to restore this issue back to the file of the Assessing appropriate to restore this issue back to the file of the Assessing appropriate to restore this issue back to the file of the Assessing Officer for deciding afresh afresh after carrying out inquiries out inquiries as deem fit in the facts and circumstances of the case. The grounds of appeal of facts and circumstances of the case. The grounds of appeal of facts and circumstances of the case. The grounds of appeal of the assessee are accordingly allowed for statistical purposes. the assessee are accordingly allowed for statistical purposes. the assessee are accordingly allowed for statistical purposes.
(Assessment Year 2011-12)
(Assessment Year 2011 (Assessment Year 2011 in the case of we take up ITA No. 4132/Mum/2023 in the case of we take up ITA No. 4132/Mum/2023 in the case of Rubberwala Rubberwala Housing Housing and and Infrastructure I nfrastructure Ltd., Ltd., Mumbai Mumbai for for Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 19 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023 assessment year 2011 assessment year 2011-12. The grounds raised by the assessee are 12. The grounds raised by the assessee are reproduced as under: reproduced as under:
1. On the facts and circumstances of the Appellant's case and in law 1. On the facts and circumstances of the Appellant's case and in law 1. On the facts and circumstances of the Appellant's case and in law Id. CIT (A) erred in confirming the action of the Id. A.O. in reopening Id. CIT (A) erred in confirming the action of the Id. A.O. in reopening Id. CIT (A) erred in confirming the action of the Id. A.O. in reopening the assessment u/s 147 by issue of notice u/s 148 of the Act dated the assessment u/s 147 by issue of notice u/s 148 of the Act dated the assessment u/s 147 by issue of notice u/s 148 of the Act dated 29.03.2016 which is bad in law. 29.03.2016 which is bad in law.
2. On the facts and circumstances of the Appellant's case and in law 2. On the facts and circumstances of the Appellant's case and in law 2. On the facts and circumstances of the Appellant's case and in law Id. CIT (A) erred in confirming the action of the Id. A.O. in making an Id. CIT (A) erred in confirming the action of the Id. A.O. in making an Id. CIT (A) erred in confirming the action of the Id. A.O. in making an addition of Rs. addition of Rs. 34,50,000/- on account of unsecured loan treating the on account of unsecured loan treating the same as unexplained cash credit by invoking the provisions of section same as unexplained cash credit by invoking the provisions of section same as unexplained cash credit by invoking the provisions of section 68 of the Act, for reasons mentioned in the impugned order or 68 of the Act, for reasons mentioned in the impugned order or 68 of the Act, for reasons mentioned in the impugned order or otherwise. 12.1 In the case also the unsecured loan received amountin In the case also the unsecured loan received amountin In the case also the unsecured loan received amounting to Rs.86,50,000/- by the assessee by the assessee was held by the Assessing Officer Assessing Officer as unexplained cash credit in terms of section 68 of the Act but the as unexplained cash credit in terms of section 68 of the Act but the as unexplained cash credit in terms of section 68 of the Act but the Ld. CIT(A) deleted the addition amounting to Rs.52,00,000/- but Ld. CIT(A) deleted the addition amounting to Rs.52,00,000/ Ld. CIT(A) deleted the addition amounting to Rs.52,00,000/ sustained addition amounting to Rs.5,00,000/ addition amounting to Rs.5,00,000/- from Sh from Shree Bhairav Diamond Pvt. Ltd. and Rs.29,50,000/ Diamond Pvt. Ltd. and Rs.29,50,000/- from M/s Shree Bhairav from M/s Shree Bhairav Gems. The relevant finding of the Ld. CIT(A) is reproduced as under: Gems. The relevant finding of the Ld. CIT(A) is reproduced as under: Gems. The relevant finding of the Ld. CIT(A) is reproduced as under:
“6.1. I have considered the facts of the case. The AO 6.1. I have considered the facts of the case. The AO 6.1. I have considered the facts of the case. The AO had made addition of Rs.86,50,000/ had made addition of Rs.86,50,000/- in respect of in respect of loans received from the following parties: ved from the following parties:- Name of concern Amount 1 Kush Gems Pvt. Ltd. 52,00,000 2 Shree Bhairav Diamond Pvt. 5,00,000 Ltd. 3 Shree Bhairav Gems 29,50,000 Total 86,50,000
Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 20 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023
6.2. Apparently these are concerns managed by 6.2. Apparently these are concerns managed by 6.2. Apparently these are concerns managed by Bhanwarlal Jain and are not genuine in nature. A Jain and are not genuine in nature. A Jain and are not genuine in nature. A survey was conducted at the premises of assessee on survey was conducted at the premises of assessee on 29.09.2014. During the survey, statement of Shri 29.09.2014. During the survey, statement of Shri 29.09.2014. During the survey, statement of Shri Tabrez Shaikh was recorded. He Tabrez Shaikh was recorded. He could not furnish the could not furnish the details of the loans at the time of survey so as to details of the loans at the time of survey so as to details of the loans at the time of survey so as to establish identity, genuineness and creditworthiness. entity, genuineness and creditworthiness. entity, genuineness and creditworthiness. Accordingly, he offered the peak balance for taxation. Accordingly, he offered the peak balance for taxation. 6.3 Shri Tabrez Shaikh subsequently filed an affidavit Shri Tabrez Shaikh subsequently filed an affidavit Shri Tabrez Shaikh subsequently filed an affidavit stating that he had erroneously disclosed the genuine stating that he had erroneously disclosed the genuine stating that he had erroneously disclosed the genuine transactions of loan amount as accommodation entri transactions of loan amount as accommodation entries es before the tax authorities, I concur with the AO that before the tax authorities, I concur with the AO that before the tax authorities, I concur with the AO that unless coercion is shown to have been exerted, the unless coercion is shown to have been exerted, the unless coercion is shown to have been exerted, the statement cannot be discarded. It is also noted that the statement cannot be discarded. It is also noted that the statement cannot be discarded. It is also noted that the retraction retraction retraction affidavit affidavit affidavit is is is dt. dt. dt. 29.09.2015 29.09.2015 29.09.2015 and and and was was was submitted much later to the department while submitted much later to the department while the the survey was conducted on 29.09.2014. Hence, this survey was conducted on 29.09.2014. Hence, this survey was conducted on 29.09.2014. Hence, this aspect of the argument of the appellant is rejected. aspect of the argument of the appellant is rejected. 6.4. At the same time in respect of addition of u/s 68, 6.4. At the same time in respect of addition of u/s 68, 6.4. At the same time in respect of addition of u/s 68, what one needs to see is whether the appellant is able what one needs to see is whether the appellant is able what one needs to see is whether the appellant is able discharge the onus placed as discharge the onus placed as regards identity, regards id entity, creditworthiness and genuineness. In the case of Manoj creditworthiness and genuineness. In the case of Manoj creditworthiness and genuineness. In the case of Manoj Agarwal, 113 ITD 377, DoJ: 25.07.2008, the Hon'ble Agarwal, 113 ITD 377, DoJ: 25.07.2008, the Hon'ble Agarwal, 113 ITD 377, DoJ: 25.07.2008, the Hon'ble ITAT Delhi (Special Bench) has interpreted the decision ITAT Delhi (Special Bench) has interpreted the decision ITAT Delhi (Special Bench) has interpreted the decision of Noorjehan and held as: "178... It is well of Noorjehan and held as: "178... It is well-settled that settled that under section 68 the burden under section 68 the burden keeps shifting from one keeps shifting from one side to the other depending upon the evidence side to the other depending upon the evidence side to the other depending upon the evidence adduced." In CIT vs N. R. Portfolio P Ltd. (2013) 214 adduced." In CIT vs N. R. Portfolio P Ltd. (2013) 214 adduced." In CIT vs N. R. Portfolio P Ltd. (2013) 214 Taxman 408 (Delhi HC), it was held by Taxman 408 (Delhi HC), it was held by Hon'ble Court Hon'ble Court that : "8.....the concept of "shifting onus" does not mean that : "8.....the concept of "shifting onus" does not mean that : "8.....the concept of "shifting onus" does not mean that once certain fac that once certain facts are provided, the assessee's ts are provided, the assessee's duties are over. If on verification, or during proceedings, duties are over. If on verification, or during proceedings, duties are over. If on verification, or during proceedings, the AO cannot contact the share applicants, or that the the AO cannot contact the share applicants, or that the the AO cannot contact the share applicants, or that the information becomes unverifiable, or there are further information becomes unverifiable, or there are further information becomes unverifiable, or there are further doubts in the pursuit of such details, the onus shift doubts in the pursuit of such details, the onus shift doubts in the pursuit of such details, the onus shifts back to the assessee. At that stage, if it falters, the back to the assessee. At that stage, if it falters, the back to the assessee. At that stage, if it falters, the consequence may well be an addition under Section consequence may well be an addition under Section consequence may well be an addition under Section 68". Hence notwithstanding the fact that the statement 68". Hence notwithstanding the fact that the statement 68". Hence notwithstanding the fact that the statement was given or retraction was made, the issue is was given or retraction was made, the issue is was given or retraction was made, the issue is examined independently on the basis of evidenc examined independently on the basis of evidences and es and Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 21 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023 whether the appellant has been able to adequately whether the appellant has been able to adequately whether the appellant has been able to adequately discharge its onus. discharge its onus. 6.4. As regards the loan from M/s Kush Gems Pvt. Ltd., 6.4. As regards the loan from M/s Kush Gems Pvt. Ltd., 6.4. As regards the loan from M/s Kush Gems Pvt. Ltd., I find that the appellant has furnished the following I find that the appellant has furnished the following I find that the appellant has furnished the following before the AO (a) Audited financial statements for the before the AO (a) Audited financial statements for the before the AO (a) Audited financial statements for the year ended 31.0 year ended 31.03.2011 (b) Confirmation of balance. It is 3.2011 (b) Confirmation of balance. It is further seen from the confirmation that interest of Rs. further seen from the confirmation that interest of Rs. further seen from the confirmation that interest of Rs. 56,244/- has been charged for the year. It is further has been charged for the year. It is further has been charged for the year. It is further seen that the appellant has also furnished copies of seen that the appellant has also furnished copies of seen that the appellant has also furnished copies of bank statement of M/s Kush Gems Pvt. Ltd. reflectin bank statement of M/s Kush Gems Pvt. Ltd. reflectin bank statement of M/s Kush Gems Pvt. Ltd. reflecting the loan transactions. The copy of ITR, Tax Audit Report the loan transactions. The copy of ITR, Tax Audit Report the loan transactions. The copy of ITR, Tax Audit Report and financials of the said party relevant to AY 2011 and financials of the said party relevant to AY 2011-12 12 have also been furnished. This is also evident from para have also been furnished. This is also evident from para have also been furnished. This is also evident from para 5 (i) at page 4 of the assessment order, where the AO 5 (i) at page 4 of the assessment order, where the AO 5 (i) at page 4 of the assessment order, where the AO has confirmed that these docum has confirmed that these documents were furnished. ents were furnished. Considering the totality of facts before me, I am of the Considering the totality of facts before me, I am of the Considering the totality of facts before me, I am of the view that the appellant has been able to discharge the view that the appellant has been able to discharge the view that the appellant has been able to discharge the onus laid before it as regards section 68. There is no onus laid before it as regards section 68. There is no onus laid before it as regards section 68. There is no other information which would warrant a different view. other information which would warrant a different view. other information which would warrant a different view. In the given In the given circumstances, the addition of Rs. circumstances, the addition of Rs. 52,00,000/- made in the case of M/s Kush Gems Pvt. made in the case of M/s Kush Gems Pvt. made in the case of M/s Kush Gems Pvt. Ltd. stands 6.5 As regards Rs. 5,00,000/ 6.5 As regards Rs. 5,00,000/- from M/s Shree Bhairav from M/s Shree Bhairav Diamond Pvt. Ltd.and Rs. 29,50,000/ Diamond Pvt. Ltd.and Rs. 29,50,000/- from M/s Shree from M/s Shree Bhairav Gems, the appellant has furnished the Bhairav Gems, the appellant has furnished the Bhairav Gems, the appellant has furnished the following: copy of ledger confirmation. Besides, the wing: copy of ledger confirmation. Besides, the wing: copy of ledger confirmation. Besides, the appellant has furnished copy of its bank account to appellant has furnished copy of its bank account to appellant has furnished copy of its bank account to substantiate its claim that funds having received from substantiate its claim that funds having received from substantiate its claim that funds having received from the the said said entities. entities. However, However, the the return return of of income/financials have not been furnished. In the case income/financials have not been furnished. In the case income/financials have not been furnished. In the case of M/s. Pratham Telecom India P Ltd vs DCIT dated Pratham Telecom India P Ltd vs DCIT dated Pratham Telecom India P Ltd vs DCIT dated 17.09.2018 in of 2016, the Hon'ble 17.09.2018 in of 2016, the Hon'ble 17.09.2018 in ITA no.316 of 2016, the Hon'ble jurisdictional HC has held that "The assessee cannot jurisdictional HC has held that "The assessee cannot jurisdictional HC has held that "The assessee cannot simply provide some details such as Permanent Account simply provide some details such as Permanent Account simply provide some details such as Permanent Account Number, business address, the account which was Number, business address, the account which was Number, business address, the account which was maintained and a Bank Statement, or a Company's d and a Bank Statement, or a Company's d and a Bank Statement, or a Company's Master Data maintained by the Registrar of Companies. Master Data maintained by the Registrar of Companies. Master Data maintained by the Registrar of Companies. The assessee is obliged to explain the surrounding The assessee is obliged to explain the surrounding The assessee is obliged to explain the surrounding circumstances circumstances circumstances and and and the the the backdrop backdrop backdrop in in in which which which the the the transactions took place." It can be seen that the onus transactions took place." It can be seen that the onus transactions took place." It can be seen that the onus has not been has not been completely discharged by the appellant completely discharged by the appellant before the AO as far as M/s Shree Bhairav Diamond before the AO as far as M/s Shree Bhairav Diamond before the AO as far as M/s Shree Bhairav Diamond
Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 22 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023
Pvt. Ltd. and M/s Shree Bhairav Gems are concerned. Pvt. Ltd. and M/s Shree Bhairav Gems are concerned. Pvt. Ltd. and M/s Shree Bhairav Gems are concerned. Thus it cannot be stated that the creditworthiness or Thus it cannot be stated that the creditworthiness or Thus it cannot be stated that the creditworthiness or genuineness of the genuineness of the transactions in respect of these transactions in respect of these lenders has been proved before the AO. Hence, the as been proved before the AO. Hence, the as been proved before the AO. Hence, the addition of Rs. 34,50,000/ addition of Rs. 34,50,000/- in respect of loans stated to in respect of loans stated to be received from M/s Shree Bhairav Diamond Pvt.Ltd. be received from M/s Shree Bhairav Diamond Pvt.Ltd. be received from M/s Shree Bhairav Diamond Pvt.Ltd. and M/s Shree Bhairav Gems is upheld. M/s Shree Bhairav Gems is upheld. 6.6. I have perused the decision of the Hon'ble Tribunal 6.6. I have perused the decision of the Hon'ble Tribunal 6.6. I have perused the decision of the Hon'ble Tribunal relied in the case of one of the group company of the the case of one of the group company of the the case of one of the group company of the appellant, i.e. M/s. Rubberwala Hospitality Pvt. Ltd appellant, i.e. M/s. Rubberwala Hospitality Pvt. Ltd appellant, i.e. M/s. Rubberwala Hospitality Pvt. Ltd bearing bearing bearing TA TA TA No. No. No. 299 299 299 & & & 314/Mum/2020 314/Mum/2020 314/Mum/2020 dated dated dated 23.11.2021. It is well known that addition u/s.68 is 23.11.2021. It is well known that addition u/s.68 is 23.11.2021. It is well known that addition u/s.68 is based on facts and the ability to discharge onus. This is based on facts and the ability to discharge onus. This is based on facts and the ability to discharge onus. This is also evident from para 7 of the said order, dent from para 7 of the said order, "...and direct "...and direct the AO to delete the addition as the assessee has the AO to delete the addition as the assessee has proved all the three ingredients of section 68 of the Act". proved all the three ingredients of section 68 of the Act". proved all the three ingredients of section 68 of the Act". In the instant case too, the facts have been appreciated In the instant case too, the facts have been appreciated In the instant case too, the facts have been appreciated based on the submission of the appella based on the submission of the appellant, and decisions nt, and decisions taken taken taken in in in the the the preceding preceding preceding paragraphs. paragraphs. paragraphs. No No No further further further discussion is required on this. discussion is required on this. 6.7. In effect addition of Rs. 52,00,000/ 6.7. In effect addition of Rs. 52,00,000/- is deleted, is deleted, while addition of Rs. 34,50,000/ while addition of Rs. 34,50,000/-is upheld.” 12.2 We note that identical addition in respect of loan from Shree We note that identical addition in respect of loan from Shree We note that identical addition in respect of loan from Shree Bhairav Gems has been Bhairav Gems has been restored by us to the file of the assessing to the file of the assessing officer while adjudicating appeal in in the while adjudicating appeal in in the while adjudicating appeal in ITA No. 4019/Mum/2023 in the case of Rubberwala Realty and therefore, following our finding the case of Rubberwala Realty and therefore, following our findin case of Rubberwala Realty and therefore, following our findin present additions are also present additions are also decided mutasis mutandis mutasis mutandis.
(Assessment Year 2012-13)
(Assessment Year 2012 (Assessment Year 2012 in the case of we take up ITA No. 4130/Mum/2023 in the case of we take up ITA No. 4130/Mum/2023 in the case of Rubberwala Rubberwala Rubberwala Housing Housing Housing and and and Infrastructure Infrastructure Infrastructure Ltd., Ltd., Ltd., Mumbai Mumbai Mumbai for for for Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 23 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023 assessment year 2012 assessment year 2012-13. The grounds raised by the assessee are ds raised by the assessee are reproduced as under: reproduced as under:
1. On the facts and circumstances of the Appellant's case and in law, the 1. On the facts and circumstances of the Appellant's case and in law, the 1. On the facts and circumstances of the Appellant's case and in law, the Id. CIT(A) erred in confirming the action of the Id. A.O. in alleging that the Id. CIT(A) erred in confirming the action of the Id. A.O. in alleging that the Id. CIT(A) erred in confirming the action of the Id. A.O. in alleging that the appellant had taken unsecured loans in the form of a appellant had taken unsecured loans in the form of accommodation ccommodation entries, treating the same as unexplained cash credit, for the reasons entries, treating the same as unexplained cash credit, for the reasons entries, treating the same as unexplained cash credit, for the reasons mentioned in the impugned order or otherwise. mentioned in the impugned order or otherwise.
2. On the facts and circumstances of the Appellant's case and in law, the 2. On the facts and circumstances of the Appellant's case and in law, the 2. On the facts and circumstances of the Appellant's case and in law, the Id. CIT(A) erred in disallowing the interest paid to Id. CIT(A) erred in disallowing the interest paid to M/s. A2 Jewels M/s. A2 Jewels amounting to Rs. 1,80,000/ amounting to Rs. 1,80,000/-, for the reasons mentioned in the impugned , for the reasons mentioned in the impugned order or otherwise. order or otherwise. 13.1 From the impugned order by the Ld. CIT(A) From the impugned order by the Ld. CIT(A), we find that said we find that said ground has not been adjudicated by the Ld. CIT(A) for the reason ground has not been adjudicated by the Ld. CIT(A) for the reason ground has not been adjudicated by the Ld. CIT(A) for the reason that no such ground was taken in the appeal. The relevant finding d was taken in the appeal. The relevant finding d was taken in the appeal. The relevant finding of the Ld. CIT(A) is reproduced as under: of the Ld. CIT(A) is reproduced as under:
“9. The appellant has made a written submission regarding disallowance 9. The appellant has made a written submission regarding disallowance 9. The appellant has made a written submission regarding disallowance of Rs. 1,80,000/ of Rs. 1,80,000/- being interest expenditure. It is seen that this issue being interest expenditure. It is seen that this issue also forms part of the also forms part of the statement of facts. However, no such ground has statement of facts. However, no such ground has been taken in the "grounds of appeal". Hence, no adjudication is required been taken in the "grounds of appeal". Hence, no adjudication is required been taken in the "grounds of appeal". Hence, no adjudication is required on this.” 13.2 We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. Since the Ld. CIT(A) has not relevant material on record. Since the Ld. CIT(A) has no relevant material on record. Since the Ld. CIT(A) has no adjudicated the ground adjudicated the ground, we set aside the finding of the Ld. CIT(A) we set aside the finding of the Ld. CIT(A) and restore the matter back to him with the direction to the and restore the matter back to him with the dir and restore the matter back to him with the dir assessee to raise said said ground specifically before the ld CIT(A) before the ld CIT(A). The ground of appeal of the assessee is accordingly allowed for ground of appeal of the assessee is accordingly allowed f ground of appeal of the assessee is accordingly allowed f statistical purposes.
Rubberwala Housing and Infrastructure Ltd., Rubberwala Housing and Infrastructure Ltd. 24 Rubberwala Realty, Hilton Infrastructure & Rubberwala Realty, Hilton Infrastructure & Heks Infrastructure and Developers Heks Infrastructure and Developers & 4132 Nos. 4129 & 4132, 4128 & 4131, 4130/MUM/2023, 4019/M/23, 3696/M/23 , 4019/M/23, 3696/M/23 & 4018/M/2023 & 4018/M/2023
In the result, the appeals of the assessee are In the result, the appeals of the assessee are In the result, the appeals of the assessee are allowed or dismissed indicated below: dismissed indicated below:
No. Name of Assessee Result Allowed Allowed 1. 4129/Mum/2023 4129/Mum/2023 Rubberwala Holding and (A.Y. 2014-15) Infrastructure Ltd. Dismissed Dismissed 2. 4128/Mum/2023 4128/Mum/2023 Rubberwala Holding and (A.Y. 2017-18) Infrastructure Ltd. Allowed Allowed 3. 4019/Mum/2023 4019/Mum/2023 Rubberwalla Realty (A.Y. 2012-13) 4. 3696/Mum/2023 3696/Mum/2023 Hilton Infrastructure Allowed Allowed (A.Y. 2011-12) 5. 4018/Mum/2023 4018/Mum/2023 Heks Infrastructure and Allowed Allowed (A.Y. 2012-13) Developers Allowed for statistical Allowed for statistical 6. 4131/Mum/2023 4131/Mum/2023 Rubberwala Housing and purposes purposes (A.Y. 2011-12) Infrastructure Ltd.
Dismissed Dismissed 4132/Mum/2023 4132/Mum/2023 Rubberwala Housing and (A.Y. 2011-12) Infrastructure Ltd. 8. 4130/Mum/2023 4130/Mum/2023 Rubberwala Housing and Allowed for statistical Allowed for statistical (A.Y. 2012-13) Infrastructure Ltd. purposes purposes
Order pronounced in the open Court on nounced in the open Court on 28/10/2024. /10/2024.