KONARK FIXTURES LTD( SUCCESSOR TO KALINGA FIXTURES PVT LTD),MUMBAI vs. DCIT CIRCLE-6(1)(2), MUMBAI

2. The brief facts of the case are that, the assessee company is engaged in business of manufacturing and has filed the return of income for the assessment year 2012-13 on 27/09/2012 disclosing a total income of Rs.1,21,67,790/- and the return of income was processed u/sec. 143(1) of the Act. Subsequently, the Assessing Officer (A.O) has received information from DGIT (inv) Mumbai that the assesse has obtained accommodation entries from Shri Vipul Vidur Bhatt group entities. Therefore, the AO has reason to believe that the income has escaped assessment and issued notice u/sec. 148 on 29/03/2017. In compliance to the notice, the assessee has filed the letter dated 03/08/2017 mentioning that the return of income filed earlier on 27/09/2012 may be treated as due compliance and the assessee was also provided reason reopening of assessment. Further notice u/sec 142 and u/sec142(1) of the act are issued, in compliance the Ld. AR of the assessee appear from time to time and submitted the details. The assessing officer has dealt on the facts of search and seizure operations u/sec. 132 of the act of Shri Vipul Vidur Bhatt (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) group entities and the AO found that the group is engaged in providing accommodation entries in the nature of bogus unsecured loans and the assessee has obtained aggregate unsecured loans of Rs. 1,05,12,704/- from two parties 1. M/s. P. Saji Textile Limited Rs. 52,55,983/- 2. M/s. Shipra Fabrics Pvt. Ltd. Rs.52,56,721. The AO has called for the details information to explain transactions and produce the unsecured loan creditors with supporting sources of funds and bank statement of the lenders. Further notice u/sec. 133(6) of the Act was issued on unsecured loans creditors and the AO has observed that these parties have not responded. Therefore, the AO considering the facts has provided opportunity to the assessee to establish the identity credit worthiness and genuineness of the loans unsecured loan creditors and a show caused notice was issued on 29/11/2017. In response to the show cause notice, the assessee has filed the details vide letter dated 05/12/2017 that the supporting confirmation of accounts, the affidavit confirming the transactions, bank statement of unsecured loan creditors income tax return acknowledgment and the assesse has repaid the unsecured loans obtained from two unsecured loan creditors in subsequent years and was confirmed by the parties. Whereas the AO was not satisfied with the explanations and the information and observed that the assesse has not satisfied the ingredients u/sec. 68 of the act and made addition of Rs. 1,05,12,704/- and also disallowed the claim of interest paid on unsecured loans u/sec. 37 of the Act of Rs. 5,69,622/- and (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) passed the order u/sec. 143(3) r.w.s. 147 of the act dated 13/12/2017.

3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal

, statement of facts and findings of the Assessing Officer and the written submission filed by the assesse and the CIT(A) has upheld the validity of the reassessment and confirmed the action of the assessing officer and dismissed the appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon'ble Tribunal.

4. At the time of hearing, the Ld. AR submitted that the CIT(A) has erred in confirming the addition of u/sec. 68 of the act and disallowance of interest u/sec. 37 of the act Act irrespective of the facts that the assessee has filed the details in respect of the loans and interest payable and submitted the confirmation of the loan creditors along with other details. Further, the Ld. AR submitted that the assesse maintains the regular books of accounts and has obtained unsecured loan from genuine creditors and they were repaid in the subsequent assessment years. Whereas, the assesse has furnished before the CIT(A),the confirmation of loans, bank statement of both the assessee and loan creditors, audited financial statements to substantiate the genuineness, identity and creditworthiness of the loan creditors. Further the A.O (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) relied on the statement of Shri Vipul Vidur Bhatt in the search and seizure u/sec132 of the Act conducted on his group entities which was retracted subsequently and hence addition of unsecured loans is bad in law. The Ld.AR supported the submissions on the disputed issues with the material evidences in the paper book and judicial decisions and prayed for allowing the appeal. Per Contra, the Ld. DR submitted that the AO has made enquiry and issued notice u/s 133(6) of the Act and there was no proper response from the parties and the Ld.DR supported the order of the CIT(A) 5. We heard the rival submissions and perused the material on record. The Ld. AR submitted that CIT(A) has erred in sustaining the addition of unsecured loans u/sec. 68 of the act of and interest component though the assesse has filed the requisite details before the assessing officer and first appellate authority. Further the Ld. AR mentioned that the assessing officer has made the addition of interest component which is already included on the accrual basis in the outstanding loans of the creditors and the A.O has made simultaneously made addition of interest, which is contrary to the provisions of the act. We find that before the Assessing Officer, the assessee has submitted information in respect of unsecured loan creditors and the A.O. has issued notice u/sec 133(6) of the Act and it was responded with the requisite details. On perusal of the assessment order, the (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) assessee has submitted the documentary evidences but the A.O has over looked the vital documents in respect of the sources filed by the assessee. The assessee has submitted the written submissions before the CIT(A) and the confirmation of loan creditors, PAN, Bank account details and the Income Tax returns. We find that the assessee has to satisfy the 3 ingredients with respect to identity, creditworthiness and genuineness of the transaction. The CIT(A) has discussed on the provisions of the Act but has confirmed the action of the A.O. We are of the opinion that the assessee has discharged its burden of proof in filling the documents. Whereas the CIT(A) has taken a different view and over looked the explanations of the assessee and sustained the additions of the A.O. Further the Ld. AR submitted that the net worth and revenue of these two loan creditor companies is high in comparison to the unsecured loans provided to the assesse in the F.Y.2012-13 and were repaid in the subsequent years. The Ld.AR emphasized on the supporting evidences filed in the paper book and further in the similar cases/ judicial decisions the Hon’ble Tribunal has accepted the facts of these unsecured loan creditors companies and has evaluated with regard to identity, genuineness and creditworthiness in decision making and granted relief. And the Ld. AR has relied on the judicial decisions.

(A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) 6.The Jurisdictional High Court of Bombay in the case of Pr. CIT Vs. M/s Chawla Interbild Construction Co Pvt Ltd (2018) of 2015 has observed as under:

“7. We find that the Assessing Officer while the assessment order has dis-allowed 40% of the total payments made on the basis of the payments made to 13 parties, who were not produced before him during the assessment proceedings. This on the ground that payments are not genuine. We are unable to understand on what basis the dis- allowance is made on the total payments, if at all it should have been restricted only to the amounts paid to the 13 persons who are not produced before the Assessing Officer. Be that as it may, we find that the respondent assessee had done everything to produce necessary evidence, which would indicate that the payments have been made to the parties concerned. The details furnished by the respondent assessee were sufficient for the Assessing Officer to take further steps if he still doubted the genuineness of the payments to examine whether or not the payment was genuine. The Assessing Officer on receipt of further information did not carry out the necessary enquiries on the basis of the PAN numbers, which were available with him to find out the genuineness of the parties. The CIT(A) as well as the Tribunal have correctly held that it is not possible for the assessee to compel the appearance of the parties before the Assessing Officer.

8. In the above circumstances, the view taken by the Tribunal is a and possible view in the facts of the present case. no substantial question of law arises for our consideration.

9. The appeal is dismissed. No order as to costs".

(A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) 7. The Honble Tribunal Vakharia Mumubai Vs ITO in & 1539/Mum/2023 dated 28.07.2023 for A.Y.2012-13 & 2013- 14 has considered the provisions, facts and the submissions of the asssessee on the unsecured loans and granted relief observing at Page 9 Para 9 of the order read as under :

“9. Heard the poalan and perused the material available on record. As per shalance sheet, as on 31st Marchvailable on Assessee has sablin the amount of Rs. 20,00,000/- and Rs. 50,000/- towards M/s. Santoshima/anand Rs. Vasudev respectively and also shown to have paid amount of Rsma 40,000/- and Rs. 60,000/ Prespective M/s. Santoshima and M/s. Vasudev. It is not in controversy that the Assessee had taken the said loans in the financial year 2010-11 (AY: 2011-12) which continued in the assessment year under consideration as well. During the course of assessment proceedings, the Assessee also submitted the following documents in order to substantiate its claim.

(i) The confirmation of loans. (ii) Acknowledgment of returns of income of loan parties. (iii) Copies of relevant pages of bank statements of loan parties.

(iv) Copies of bank statements of the Assessee, in which interest payments have been debited.

9.1 However, the Assessing Officer doubted and rejected the same while relying upon the statement of Mr. Vipul Vidur Bhatt, without providing copy of the his statement to the Assessee and even without affording any opportunity of cross examination of (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) Mr. Bhat. The Assessee in this case, has not only discharged its primary onus by establishing the identity of the parties etc., providing confirmation of loans, acknowledgment of return of income filed by the parties who have duly shown the amount of loan in their returns of income and banks statement of loan parties and the Assessee showing the transactions held, but also shown to have deducted TDS on the interest payment made to the parties, which also strengthen the genuineness of the claim of the Assessee. Therefore, on the basis of the general statement made by any 3rd party, without demolishing the case/claim of the Assessee, making of an addition is not logical.

9.2 We also observe as noted above that the loan of Rs. 20,50,000/- was taken by the Assessee from the said entities in 2010-11 (AY:2011-12) and during the year consideration, no such amount was found credited in the books of an Assessee maintained, if any and even otherwise the Assessee has claimed the he is not maintaining any books of account. It is a settled law that mere suspicion cannot takes place for the purpose of passing an order, in fact there must be something more than suspicion in support of an assessment. The Hon'ble Apex Court in the case of CIT us. P. Mohankala (Civil Appeal no. 2540 of 2007 decided on dated 15.05.2007) has clearly laid down the dictum "that there has to be credited amount in the books of account of the Assessee and such credit has to be sum during the previous year and the Assessee offers no explanation. In the instant case, it is a fact that neither the Assessee has received any cash nor paid any cash and there was no real cash credit during the year under consideration, therefore the amount in question as unexplained expenditure could not arise, hence on this count also, the provisions of section 68 is not applicable and therefore addition u/s. 68 of the Act is un-sustainable.

(A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) Consequently, we are inclined to delete the addition of Rs. 3 Lacs in total. Resultantly the instant appeal is allowed."

8. The coordinate bench of Honble Tribunal in the case of ITO Vs. M/s MJD Financial Services Pvt Ltd in dated 10-09-2020 for A.Y.2012-13 has considered the provisions and facts on the submissions of the asssessee and has upheld the order of the CIT(A) dismissing the revenue appeal observing at Page 5 Para 9 &10 of the order read as under:

“8. We have material the rival submissions of the parties and perused thees. The Lon record incluasions of the pallied upon by the partiesiding L. CIT (A) has ding the he addition made by the AO the Ao as deleted the ad any fact on record to established that cash wast introduced prior te advancing the dout to the assessee was introdus no evidence on record to shu of that the assessee and the cash to the loan creditors in lieu of loan received from them. fact that the unsecured loans under consideration have been It is an admitted repaid over a period of time under conslappellant has paid interest and deducted TDS there and ther the provisions of the Act.

Relying on the various decisions of the Courts and the Tribunal, the Ld. CIT (A) has held that the assessee has discharged its onus of proving genuineness of the transaction of furnishing the identity of the creditors and documents to prove the transactions. The Ld. CIT (A) has pointed out that no addition/disallowance can be made solely on the basis of statement made u/s 132 (4) of the Act without bringing any corroborative evidence on record. As pointed out by the Ld. counsel for the assessee, the "I" Bench of the Mumbai Tribunal (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) has decided the identical issue in favour of the assessee in the case of DCIT us. M/s Manba Finance Ltd. 1449, 1467/Mum/2017 for the AY 2013-14, 2011-12 and 2010-11. In the said case, survey action u/s 133A of the Act was conducted by DGIT (Inv.) Mumbai. During the course of survey, the books of account of the assessee were examined which revealed that the assessee had received unsecured loan and share application money from the concerned companies operated and controlled by Sh. Pravin Kumar Jain to the tune of Rs. 7,75,00,000/-. A survey was also conducted in the case of Mr. Rakesh Doshi, Proprietor Rakesh Doshi Associates. As per the revenue, Shri Doshi was the broker who arranged the loans and share capital money from the concerned company controlled by Pravin Kumar Jain. During the course of survey Mr. Rakesh Doshi in his statement admitted that he was an accommodation entry facilitator and he had arranged accommodation entry from various other companies which were not the part of company controlled Pravin Kumar Jain. The assessee had shown unsecured loans from such parties amounting to Rs. 1,25,00,000/-.

9. During the course of assessment proceedings, the assessee was asked to show cause as to why unsecured loan taken from the party should not be treated as unexplained cash credit u/s 68 of the Act. The assessee contended that it has submitted all the documents to prove the genuineness of the transaction. The assessee further requested that cross examination of Pravin Jain may be allowed. The assessee further submitted that Pravin Kumar Jain has retracted his earlier statement. So far as the loan amounting to Rs. 1,25,00,000/- from the other companies is concerned, the assessee submitted balance sheet of all the (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) company to show that the lending companies has enough reserves and share capital. The assessee further submitted that it has furnished the confirmation from the parties. However, the AO rejecting the contention of the assessee made addition of the said amount to the income of the assessee. In the first appeal, the Ld. CIT (A) deleted the addition on legal ground as well as on merits. The revenue challenged the action of the Ld. CIT (A) before the ITAT. The coordinate Bench of the Tribunal upheld the findings of the Ld. CIT (A) holding as under:-

"33. We have carefully considered the submissions and perused the records. We find that the first issue in this case relates to the addition of unsecured loan taken from corporate entities u/s. 68 of the Act. In this regard, it is noted that it is the claim of the assessee which has been found correct by the ld. CIT(A) that the assessee has duly paid interest on these loans, deducted TDS, filed the TDS return. The Id. CIT(A) has also found that this loans have been duly repaid.

1. Andaman Timber Industries u. C.C.E. (2015) 281 CTR 241 (SC) Wherein it is held:

(A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) Not allowing the assessee to cross examine the witnesses by the Adjudicating authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullify in as much as it amounted to violation of principles of Natural Justice because of which the assessee was adversely affected. The order was vacated.

2. Kishinchand Chellaram v. C.I.T. (1980) 1251TR 0713 (SC)

3.Ponkunnam Traders V. Addl. Ι.Τ.Ο. & Anr. (1972)831TR508(Ker)

4.ACIT V Tristar Jewellery Exports Pvt. Ltd. ITA/7593/MUM/2011 (Mumbai ITAT)

(i) Confirmation of the party who gave the loan.

(ii) Copy of Return of Income filed by them alongwith PAN No. of the loanees.

(iii) Copy of Balance Sheet, P/L Account alongwith all Schedules, (iv) Copy of Certificate of incorporation, original and the latest one.

(v) Copy of Bank Statement of the loanee from which the loan have been given to the assessee, as well as Repayment made if any by the assessee.

(A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) 38. The A.O. in this regard has doubted the creditworthiness of the corporate entities on the ground that they have taken loans and share capital and share premium from other corporate entities. In this regard, it is also noted that the A.O. has referred to the provision of section 68 of the Act. Section 68 and proviso thereto reads as under:

Cash credits.

Provided that where the assessee is company (not being a company in which the public are substantially interested)and the sum so credited consists of a share application money, share capital, share premium or any amount by whatever name called, any explanation offered such amour assessee-company shall be deemed to be not satisfactory, unless- (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory:

(A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) Provided further that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10.)

We may painfully refer to the decision of Hon'ble jurisdictional High Court which is also relevant in this case:

During the previous relevant to the subject Assessment Year the assessee had increased its share capital from Rs.2,50,000/to Rs.83.75 lakhs. During the assessment proceedings, the Assessing Officer noticed that the respondent had collected share premium to the extent of Rs.6.69 crores. Consequently he called upon the respondent to justify the charging of share (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) premium at Rs.190/per share. The respondent furnished the list of its shareholders, copy of the share application form, copy of share certificate and Form no.2 filed with the Registrar of Companies. The justification for charging share premium was on the basis of the future prospects of the business of the assessee. The Assessing Officer did not accept the explanation/justification of the respondent and invoked Section 68 of the Act to treat the amount of Rs.7.53 crores i.e. the aggregate of the issue price and the premium on the shares issued as unexplained cash credit within the meaning of Section 68 of the Act. This addition was deleted by the CIT(A) and the Tribunal. Before the High Court, the department contended that the proviso to Section 68 of the Act which was introduced with effect from 1st April, 2013 would apply in the facts of the present case even for A.Y. 2008-09. The basis of the above submission was that the de hors the proviso also the requirements as set out therein would have to be satisfied. HELD by the High Court dismissing the appeal:

(i) We find that the proviso to Section 68 of the Act has been introduced by the Finance Act 2012 with effect from 1st April, 2013. Thus it would be effective only from the Assessment Year 2013-14 onwards and not for the subject Assessment Year. In fact, before the Tribunal, it was not even the case of the Revenue that Section 68 of the Act as in force during the subject years has to be read/understood as though the proviso added subsequently effective only from 1st April, 2013 was its normal meaning. The Parliament did not introduce to proviso to Section 68 of the Act with retrospective effect nor does the proviso so introduced states that it was introduced "for removal of doubts" or that it is "declaratory". Therefore it is not open to give it retrospective effect, by proceeding on the basis that the addition (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) of the provise to Section 68 of the Act is immaterial and does not change the interpretation of Section 68 of the Act both before and after the adding of the proviso. In any view of the matter the three essential tests while confirming of the Act laid down by the pre the genuineness of the transaction, identity and the namelty of the investor have all been examined by the impugned order of the Tribunal and on facts it was found satisfied.

(ii) Further it was a submission on behalf of the Revenue that such large amount of share premium gives rise suspicion on the genuineness (identity) of the shareholders i.e. they are bogus. The Apex Court in CIT v/s. Lovely Exports (P)Ltd. 317 ITR 218 in the context to the pre-amended Section 68 of the Act has held that where the Revenue urges that the amount of share application money has been received from bogus shareholders then it is for the Income Tax Officer to proceed by reopening the assessment of such shareholders and assessing them to tax in accordance with law. It does not entitle the Revenue to add the same to the assessee's income as unexplained cash credit.

As noted in the ratio emanating from the decision of Hon'ble Jurisdictional High Court above, even if the source of funds of this corporate entities who have advanced loan to the company are considered suspicious in the context of pre- amended section 68, the addition can be considered in the hands of these companies and cannot be made in the hands of the assessee.

Even otherwise (as the proviso is applicable for A.Y. 2013-14) as rightly noted by the ld. CIT(A), the said proviso provides for an adverse inference if the assessee company providing those sums does not offer any explanation about the nature and source of sums. In this regard, it is noted that the A.O. has not made any enquiry from these corporate entities who have provided the (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) loan, not even notice u/s. 133(6) has been issued. In these circumstances, without making any enquiry, the A.O. cannot presume that the funds obtained by these corporate entities are bogus or they are assessee's own funds being circulated. In this regard, we note that in the identical situation, this tribunal in the case of Asst. CIT us. Shri Dilip Chimanlal Gandhi (in LT.A. No.7079/Mum/2016 vide order dated 01.08.2018) the ITAT has held as under:

“22. Upon careful consideration we note that in support of the explanation of the unsecured loans, the assessee submitted following details before the assessing officer:

I. PAN details of creditors II. Constitution and address of the creditors Particulars of income-tax returns filed by the creditors.

These show that the creditors are legitimate business entities, having the ability to advance the impugned loans to the appellant,)

IV. Confirmatory letters given by the creditors V. Audited financial accounts (including balance sheets) of the creditors [These show that the loans are duly reflected in the books of account of the creditors.] VI. Relevant bank statements of the creditors [These show that the loan amounts were paid through legitimate banking channels. Further these bank statements do not reflect any movement of cash, essential to hawala transactions.

(A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) 40. The above case law duly supports the proposition that no adverse inference can be drawn by the A.O. without making any enquiry in this regard. Even the ld. DR has tacitlyacknowledged this proposition when he submits that the id. Counsel of the assessee has mentioned that the A.O. has not issued notice u/s. 133(6) and summons u/s. 131 and has quoted the Hon'ble Delhi High Court decision in the case of CIT v/s Gangeshwari Metal Pvt. Ltd. (2013) 96 DTR (Del) 200 and other decisions. In this connection, the Id. DR has relied upon the decision of the Hon'ble Karnataka High Court in the case of Fidelity Business Services India Pvt. Ltd. (in dated 23/07/2018) for the proposition that if there is some lack of investigation, the ITAT is competent to set aside the matters.

10. As pointed out by the Ld. counsel for the assessee, the issue involved in the present case is fully covered in favour of the assessee by the decision of the T Bench of the Tribunal in the case of Dy. CIT vs. Manba Finance Ltd. (supra), for the AYs 2010-11, 2011-12 and 2013-14. In this case, the assessee has furnished documentary evidence including confirmation letters, bank statements, financial statements of the entities from whom, the assessee had obtained loans in question etc. Hence, in our (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) considered view, the assessee has discharged his onus of establishing the identity and the entities from lon question. The assessee has also established the genuineness of the question. The adducing necessary evidence. On the other hand the ha not brought any material on record to rebut the contention of the assesse. In our considered opinion, the findings of the Ld. CIT (A) are based on the established principles of law and in accordance with the decision of the coordinate Bench rendered in the case of DCIT vs. M/s Manba Finance Ltd. (group concern of the assessee company) discussed above. The order passed by the Ld. CIT (A) is well reasoned and supported by the law laid down by the Hon'ble Bombay High Court and the decisions of the coordinate Benches including the decision in the case of DCIT us. M/s Manba Finance Ltd. (supra) relied upon by the assessee. We therefore, uphold the decision of the Ld. CIT (A) and dismiss the appeal filed by the revenue. Accordingly, we direct the AO to delete the addition made by the AO on account of alleged bogus unsecured loans.

In the result, appeal filed by the revenue for assessment year 2012-2013 is dismissed"

“7.3 We have heard both the parties and perused the materials available addition of Rs.54.50 relating to Shri Vipul on record. In (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) this case, the AO made an lacs holding it as unaccounted money accommodation entries and rotating it in the bank account through these companies during the year. In first appeal, the Id. CIT(A) has confirmed the action of the AD. It is not imperative repeat the facts of the case as similar issue had been raised by the assessee in for the assessment year 2012-13 wherein the Ground No. 2 to 2.4 of the assessee has been allowed. Since the similar points are involved in the appeal of the assessee for the assessment year 2013-14, therefore, applying the same analogy, we feel that the Id. CIT(A) is not justified in confirming the action of the AO as to the addition of Rs.54.50 lacs in the case of the assessee company. Hence, the decision taken by us in Ground No. 2 to 2.4 of the assessee for the assessment year 2012-13, allowing the grounds of the assessee are reproduced as under:-' 4.5 We have heard both the parties and perused the materials available on record. Brief facts of the case are that the AO while making the assessment in the case of the assessee observed that during the year under consideration the assessee company had taken credit entries in the form of unsecured loan from the entities which are 27 M/S. NOBLE TRADELINK PVT LTD. VS ITO, WARD 1(5), JAIPUR managed by Shri Vipul Vidur Bhatt for providing accommodation entries and rotated unaccounted money of Rs.80 lacs in its bank through these companies. Thus the AO added unaccounted money of Rs. 80 lacs to the total income of the assessee company for the year under consideration and the ld. CIT(A) has confirmed the action of the AO. The Bench noted that if any sum is found credited in the books of account of the assessee then the assessee has to prove the identity and creditworthiness of the party from whom the amount is received and the genuineness of the transaction.

(A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) From the record, it is noted that identity of the creditor is established from the company master data downloaded from MCA Portal. The genuineness of the transaction is established from the confirmation of accounts, affidavit of Director of loan creditor companies and bank statement from where it can be seen that the transaction had been carried out through banking channel and the loan amount is repaid during the year itself. It is also noted from the records that the creditworthiness of the creditor is established from the balance sheet from where it can be seen that the net worth of of M/s Lukand Textiles Pvt. Ltd. is Rs.2.08 crores (PB 49), M/s P Saji Textiles Ltd. is Rs.3.09 crores (PB 79), M/s Sampada Chemicals Ltd. is Rs.10.20 crores (PB 114) and M/s Santoshima Tradelink Ltd. is Rs.45.78 crores (PB 139-140). Further the Directors of these companies in their affidavits have stated that source of funds for loan given to assessee is out of repayment of loan given to other parties. Thus, assessee has discharged its onus to establish the identity of creditors, genuineness of the transaction and creditworthiness of the creditors. The Id. AR of the assessee further submitted that having discharged its onus, it is the duty of the AO to disprove the evidence filed by the assessee. The AO except referring to the report of Investigation Wing has not brought any material on record to rebut the evidences filed by the assessee. It is not the case of lower authorities that in search of Mr. Vipul Vidur Bhatt any evidence is found that assessee has given any cash for taking the alleged accommodation entry. Had these loans were accommodation entries, the same would not have been repaid within such short duration. The Ld. CIT(A) has incorrectly held that assessee has not demonstrated that these entities are doing genuine business ignoring that the same is verifiable from the financial statements of these creditors and their return of income filed before him which otherwise is not the (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) onus of the assessee. The case laws and the report relied upon by the ld. DR are with reference 28 M/S. NOBLE TRADELINK PVT LTD. VS ITO, WARD 1(5), JAIPUR to the LTCG claimed exempt u/s 10(38) of the Act which are not relevant to the facts of the assessee's case where he took loan and also repaid during the same financial year. Hence, these case are of no help to the revenue. As against this, the ratio laid down by the assessee are squarely applicable to the facts of the assessee.

ITO vs Om Shanti Realtors (ITA No. 5615/Mum/2017 07003- 2019 wherein the Bench observed as under:-

7.After having gone through the facts of the present case and perusal of the documents and after hearing both parties andength we find that the assessee had already placed on record all the documentary evidence in order to show the identity and creditworthiness of the lender and genuineness of the transactions. We have perused the confirmation filed by the parties, copies of acknowledgement of return of income filed by the lenders for the year under consideration, copies of bank statement of lenders, which establish that the payment towards loans were received during the year under consideration. Therefore, the identity of the lender was not in dispute. We have also considered all the documents placed on record by the assessee in the shape of statement of accounts and documents to show that the transactions were carried out through banking channels and the confirmations which were filed in the form of ledger accounts which reflect that the assessee had received the amount through RTGS. All those documents prove the genuineness of the transactions. Now as far as creditworthiness of the lenders are concerned, we have perused the audited (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) accounts of the lenders which shows the creditworthiness of the lenders to grant loans and advances. Further, we also noticed upon the records that Id. CIT(A) had rightly pointed out in its order that the AO made the additions by holding that as the declared income by the respective loan creditors was less, therefore, they were not capable of lending. However, the AO ignored the fact that the lenders had substantial 29 M/S. NOBLE TRADELINK PVT LTD. VS ITO, WARD 1(5), JAIPUR turnover and had a very large basis of assets as is reflected in the respective balance sheet.

2. Pr. CIT, Udaipur vs Shubh Mines Pvt. Ltd. (DBITA No. 96/15 order dated 03-05-2016 (Raj. H.C.) wherein the Hon'ble Court observed at para 7.

"7. A bare perusal of the assessment order reveals that the AO has made the addition on suspicion which is based on the statements of third party Shri Aseem Kumar Gupta, admittedly, recorded in the back of the assessee. It has come on record that the share application money of Rs. 50,00,000/- was received from Moderate Credit Corporation Ltd., a listed company. It is not disputed before this court that the investment made was received by account payee cheque and the same was refunded by an account payee cheque when the company dropped its project. In the considered opinion of this court, in absence of any cogent evidence on record establishing that the money shown to have received as share application money, was as a matter of fact, unaccounted money belonging to the assessee company, the finding arrived at by the AO, which is based on suspicion, has rightly been held not sustainable in the eyes of law. Suffice it to say that the finding arrived at by the CIT (A), affirmed by the

3. Aravali Trading Co. vs ITO (2008) 8 DTR 199 (Raj) wherein the Hon'ble Court observed that ... Once the existence of the creditors is proved and such persons own the credits which are found in the books of the assessee, the assessee's onus stands discharged and the latter is not further required to prove the source from which the creditors could have acquired the money deposited with him either in terms of sec. 68 or on general principle. Merely because the depositors explanation about the sources of money was not acceptable to the AO, it cannot be presumed that the deposit made by the creditors is money belonging to assessee itself. If the creditors explanation about the source of deposits is not found to be acceptable, the investment owned by such persons may be subjected to proceedings for inclusion of the amounts as their income from undisclosed sources or if they are found benami the real owner can be brought to tax. In the absence of anything to establish that the sources of the creditors deposits flew from the assessee, the cash credits cannot be treated as unexplained income of the assessee." 30 M/S. NOBLE TRADELINK PVT LTD. VS ITO, WARD 1(5), JAIPUR 4. Kanhaialalaurt od us ACIT (2008) 8 DTR 38 (Raj) the Hon'ble Court observed that While it is the burden to furnish the explanation wherein assessee's relating to cash credits, the buressee's burdred does not extend beyond proving the asistence of the creditor and further proving that such creditor exins to have advanced the amount credited in the account of assessee. However, the burden does not go beyond to put the assessee under an obligation to further prove as to wherefrom the creditor has got or procured the money to be deposited or advanced to the (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) assessee. The explanation furnished by the creditor about the source from where he procured the money to be deposited or advanced to the assessee is not relevant for the purpose of rejecting the explanation furnished by the assessee and making additions of such deposits as income of the assessee from undisclosed sources by invoking section 68 unless it can be shown by the department that the source of such moneys come from the assessee himself or such source could be traced to the assessee itself. In the present case, while the existence of the creditor is not in doubt & he has admitted to have advance the loan to the assessee, the fact that the explanation furnished by the creditor about his source of such advancement has not been accepted by the revenue authority cannot lead to any presumption that the source of such advancement by creditor emanated from the assessee. Therefore, the addition in the income of the assessee as cash credit cannot be sustained."

5. Labchand Bohra vs ITO (2008) 219 CYR 571 (Raj) wherein the Hon'ble Court observed that Identity of the creditors having been established who have confirmed the credits by making statements on oath and the amounts having been advanced by account payee cheques, impugned addition in respect of the entries in the names of said creditors cannot be sustained. Capacity of the lender to advance money to the assessee is not a matter which could be required to be established by the assessee, as that would amount to calling upon him to establish source of the source"

In view of the above deliberations, the decisions relied on above, we find that disallowance made of Rs.80 lacs u/s 68 of the Act by the lower authorities has no merit and we do not concur with the findings of the Id. CIT(A) as the assessee has proved the (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) identity and creditworthiness of the party from whom the amount was received and genuineness of the transaction. Thus, the decision taken by us in 31 M/S. NOBLE TRADELINK PVT LTD. VS ITO, WARD 1(5), JAIPUR Ground No. 2 to 2.4 of the assessee in for the assessment year 2012-13 shall apply mutatis mutandis in Ground No. 2 to 2.4 of the assessee for the assessment year 2013-14 also. Thus Ground No. 2 to 2.4 of the assessee is allowed

8. In the result, both the appeals of the assessee are partly allowed."

10. The Ld.AR filed a chart with the details filed in the paper book in respect of these unsecured loan creditors dealt and relief was granted.

Sr. Judgement P. Saji Shipra No. Textiles Fabrics Ltd Pvt Ltd

1. Hon'ble Co-ordinate Yes Page 151- Bench of (Mumbai) ITAT 198 of the in the case of Veenapani Original Investment Pvt Ltd vs Paperbook. ITO 13(3)(1) [ITA No. 193/MUM/2024]

“5. We have heard both the parties and perused the records. Since the assessee has not challenged the re-opening of the assessment u/s 147 of the Act, ground no. I in both the appeals stands dismissed.

6. Coming to the merit of the additions sustained by the Ld. CIT(A), we note that the assessee is an individual, who is engaged in construction business, and has shown income from construction as well as rental income, commission/brokerage and short term capital gain from sale of land. The assessee had filed return of income showing total income of Rs.1,12,28,840/- which was processed u/s 143(1) of the Act. Later, on receipt of information from DDIT (Inv.), Mumbai, the case of the assessee was re-opened. The information was that during search conducted in the case of Shri Vipul Vidur Bhatt [and other related entities] in Feb, 2016, books pertaining to 347 paper companies were discovered; and he admitted that he was controlling these entities either as a Director or through his dummy Directors. And that he was mainly engaged in providing accommodation entries to beneficiaries. And since the assessee had shown to have transaction with two of the paper companies of Shri Vipul Bhat to the tune of Rs.1.17 cr., the AO asked the (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) assessee to prove the "nature and source" of Rs.1.17 cr. Pursuant to which, the assessee replied that he had taken loan of Rs.77 Lakhs from M/s. Shipra and Rs.40 Lakhs from M/s. Lunkad; and in order to prove the "nature and source" of the same, the assessee filed copy of return of income along with computation of income, Balance-Sheet, P & L Account, Audit Report, details of bank accounts, details of short term capital gains on sale of land/DRC, copy of confirmation from M/s. Shipra Fabrics Pvt Ltd and M/s. Lunkad Textile Pvt. Ltd. The AO issued notice u/s 133(6) of the Act to M/s. Shipra as well as M/s. Lunkad, which according to the AO did not elicit any reply from them though it was served upon them. Therefore, the AO was not satisfied with the aforesaid documents submitted by assessee to prove the nature & source of credit entries; and he conveyed to the assessee his desire to add the same u/s 68 of the Act by issuing show cause notice to the assessee wherein he pointed out that M/s. Shipra as well as M/s. Lunkad were entry providers controlled by Shri Vipul Vidur Bhatt who had admitted it u/s 132(4) of the Act and therefore, he did not accept the genuineness of the loan, which according to him, was nothing but bogus accommodation entry. However, the assessee brought to the notice of the AO that as per his information Shri Vipul Vidur Bhatt has retracted the statement given during search by filing an affidavit on 2nd Sep. 2016 wherein he has alleged duress/coercion by the search team for extracting the admission (of providing accommodation entry through his entities). And therefore, the assessee pleaded before AO that such statement of Shri Vipul Vidur Bhatt should not be used against him to draw adverse view regarding loan taken from two entities. However, according to Assessing Officer, the DDIT(Inv.) report did not mention about any retraction affidavit filed by Shri Vipul Vidur (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) Bhatt, therefore, the AO did not accept such a contention of the assessee. Moreover, the AO also noted that Shri Vipul Vidur Bhatt was a director of M/s. Shipra and his own dummy director Shri Deepak Raval was director of both the lender companies. Therefore, according to the AO, the assessee has not discharged the burden to prove the genuineness of the transaction, creditworthiness of the creditors and identity of the creditors in respect of credit entry to the tune of Rs.1.17 cr credited in his books. Therefore, he disbelieved the contention of the assessee that the nature of the amount in question was loan taken from these two entities and therefore, added the same (Rs.1.17 cr) u/s.68 of the Act, and also disallowed the interest paid to the tune of Rs.4.80 Lakhs. On appeal, the Ld. CIT(A) dismissed the appeal of the assessee. The main issue is regarding the nature and source of Rs.1.17 Crs. which the AO noted to have been credited in the books of the assessee and when called upon by the AO to prove the "nature and source" of the same, the assessee brought to his notice that nature of the amount was loan taken from two entities (i) M/s. Shipra (Rs.77 Lakhs) and (ii) M/s. Lunkad (Rs.40 Lakhs). In order to prove the identity of M/s. Shipra Fabrics Pvt. Ltd, the assessee filed the return of income of M/s. Shipra which is found placed at page no. 1 to 12 of PB, which reveals that the PAN of M/s. Shipra is AAACS5527M and that it is a Pvt. Ltd Company which falls in the jurisdiction of Central Circle-39, Mumbai and has shown gross total income of Rs.22,66,889/- in AY 2014-15. The Paper Book (PB) filed before us, reveals that loan amount of Rs.77 Lakhs has been received by assessee on 08.07.2013 through banking channel which is discerned from perusal of page no. 10 & 11 of PB. The bank statement of Bank of Baroda of the assessee company A/c 12460200000447 shows (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) that on 08.07.2013 an amount of Rs.77 Lakhs has been credited in the account of the assessee. The assessee has also filed the confirmation of the loan transaction from M/s. Shipra which is found placed at page no. 9 of the PB. And in order to prove the creditworthiness of the M/s. Shipra, the Ld. AR drew our attention to the balance-sheet of the ibid company as on 31.03.2014 which is found placed at page no. 13 of PB which reveals that it has share capital and reserves & surplus to the tune of Rs.3.42cr and it has given assessee loan of only Rs.77 Lakhs. Thus, according to the assessee, the creditworthiness of M/s. Shipra cannot be doubted; and according to assessee, by producing these material he has discharged the burden to prove nature & source of Rs 77 lakhs. Likewise, the assessee in order to prove the identity of the M/s. Lunkad Textile Pvt. Ltd filed the ITR acknowledgment of M/s. Lunkad which is found placed at page no. 26 of PB. We note that the PAN of that lender company is AAACL0757A; and this company is assessed under the jurisdiction of Central Circle-39, Mumbai; and has shown gross total income of Rs.10.26 Lakhs. And Rs.40 Lakhs has been given as loan to the assessee by M/s. Lunkad on 21.09.2023 through banking channel which fact is discernable from page no. 24 & 25 of PB wherein the bank statement of Bank of Baroda of M/s. Lunkad Textiles Pvt. Ltd is found placed in PB. The confirmation of lending money to the assessee is found from the confirmation given by M/s.Lunkad which is found placed at page no. 23 of PB. The Ld. AR drew our attention to the balance-sheet of the company as on 31.03.2014 which is found placed at page no. 27 of PB which reveals that M/s. Lunkad has own funds (Share Capital and Reserves and Surplus) to the tune of Rs.2.32 cr (and has lended Rs.40 Lakhs to the assessee). Thus, according to the Ld. AR M/s. Lunkad had sufficient creditworthiness to lend Rs.40 Lakhs to assessee. Thus, according to the Ld. AR, the (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) assessee has discharged the burden to prove the identity, creditworthiness and genuineness of the transaction to the tune of Rs 1.17 Cr. Moreover, it was also pointed out to the Ld. CIT(A)/AO that the TDS on the interest paid by assessee been duly deducted; and the loan has been repaid to M/s.Shipra on 24.10.2016 which fact is revealed from page no. 40 & 41 of PB. And M/s. Lunkad was re-paid the loan on 24.10.2016 which fact is revealed from perusal of page no. 37 & 38 of PB. Thus, according to the Ld. AR, the assessee has discharged the burden to prove the "nature and source" of the loan taken from M/s. Shipra as well as M/s. Lunkad. However, the AO was not satisfied with the documents filed by the assessee. According to the AO, Shri Vipul Vidur Bhatt had admitted during search that M/s. Shipra as well as M/s. Lunkad were his paper companies and were indulging providing accommodation entries. Even though, the assessee brought to the notice of the AO that Shri Vipul Vidur Bhatt has retracted the admission alleging duress and coercion on the part of the search team, the AO brushed it aside by pointing out that the DDIT (Inv.) report did not mention anything about the purported retraction. According to the AO, therefore loan shown by the assessee from these two concerns of Shri Vipul Vidur Bhatt were bogus transaction and therefore, he added the entire amount of Rs.1.17 cr u/s 68 of the Act and the interest expenditure to these entities to the tune of Rs.4.80 cr was disallowed/added, which action of the AO was confirmed by the Ld.CIT(A). We do not countenance the impugned action of the Ld.CIT(A) for the simple reason that the assessee has discharged the burden to prove the "nature and source" of the credit entries Rs.1.17 Crs. (from M/s.Shipra Fabrics Pvt. Ltd., Rs.77 lakhs and Rs.4 lakhs from M/s.Lunkad Textile Pvt. Ltd.) by adducing primary/relevant documents/material as discussed supra; and the AO has not been able to find fault with the (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) primary/relevant documents filed by the assessee to prove the "nature and source" of the credit entries. Once, the assessee has discharged the burden to prove prima- facie "nature and source" of the credit entries, onus shifted to the AO to rebut it with cogent evidence. In this case, the AO based on the statement of Shri Vipul Vidur Bhatt has disbelieved the transaction of loan taken from M/s.Shipra Fabrics Pvt. Ltd., and M/s.Lunkad Textile Pvt. Ltd., because, Shri Vipul Vidur Bhatt had admitted before the search team that these two entities were his paper companies. However, the assessee has brought to the notice of the AO as well as the Ld.CIT(A) that Shri Vipul Vidur Bhatt has retracted his statement by filing Affidavit alleging coercion and duress for eliciting such a statement. In such a scenario, the AO ought to have summoned Shri Vipul Vidur Bhatt and cross- examined him; and in that process ought to have elicited from him about the genuineness of the lenders viz M/s.Shipra Fabrics Pvt. Ltd. and M/s.Lunkad Textile Pvt. Ltd. i.e. whether these companies actually conducted any business or were only his paper companies engaged in providing accommodation entries. The AO, however, has not endeavored to take such a course of action and instead has brushed aside the Affidavit of retraction on the specious plea that the DDIT Investigation Report is silent about it. Such action of the AO cannot be accepted and since, the assessee has discharged his burden to prove the identity, creditworthiness and genuineness of the loan creditors, and the assessee has shown to have re-paid loan the loan in question (supra), the addition made u/s 68 of the Act cannot be sustained. Moreover, the only material on the basis of which Assessing Officer has taken adverse view against assessee was the untested statement of Shri Vipul Bhat, who admittedly has not been allowed to be cross-examined by assessee, so in view of retracted statement (Affidavit), it would be unsafe to draw (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) adverse view against assessee. Therefore, the additions made deserves to be deleted. For taking such a view, we rely on the decision of the jurisdictional High Court in the case of PCIT v. Paradise Inland Shipping (P.) Ltd., reported in [2017] 84 taxmann.com 58 (Bom.), and direct deletion of the addition to the tune of Rs 1.17 Cr. and it would be gainful to refer to the decision of the Hon'ble High Court in the case of PCIT v. Paradise Inland Shipping (P.) Ltd., as reproduced under:

"5. We have given our thoughtful considerations to the rival contentions of the learned Counsel and we have also gone through the records. The basic contention of the learned Counsel appearing for the Appellants revolves upon the stand taken by the Appellants whether the shareholders who have invested in the shares of the Respondents are fictitious or not. In this connection, the Respondents in support of their stand about the genuineness of the transaction entered into with such Companies has produced voluminous documents which, inter alia, have been noted at Para 3 of the Judgment of the CIT Appeals which reads thus: -

"The assessment is completed without rebutting the 550 page documents which are unflinching records of the companies. The list of documents submitted on 09.03.2015 are as follows:-

(a) Memorandum of Association and Article of Association (b) Certificate of Incorporation (c) Certificate of Commencement of Business (d) Acknowledgement of the Return of Income AY. 2008-09 (e) Affidavit of the Director confirming the investment (f) Application for allotment of shares (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) (g) Photocopy of the share certificate (h) Audited account and Directors report thereon including balance-sheet, Profit and Loss Account and Schedules for the year ended 31.03.2009. (i) audited account and Directors reports thereon including balance-sheet, Profit and Loss Account and schedules for the year ended 31.03.2010. (j) The Bank statement highlighting receipt of the amount by way of RTGS. (k) Banks certificate certifying the receipt of the amount through Banking channels."

6. On going through the documents which have been produced which are basically from the public offices, which maintain the records of the Companies. The documents also include assessment Orders for last three preceding years of such Companies.

8. The Apex Court in the case of Orissa Corpn. (P.) Ltd. (supra), has observed at Para 13 thus:-

"13. In this case the assessee had given the names and addresses of the alleged creditors. It was in the knowledge of the revenue that the said creditors were income tax assessees. Their index number was in the file of the revenue. The revenue, apart from issuing notices under S. 131 at the instance of the assessee, did not pursue the matter further. The revenue did not examine the source of income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the alleged loans. There was no effort made to pursue the so called alleged creditors. In those circumstances, the assessee could not do anything further. In the premises, if the Tribunal came to the conclusion that the assessee has discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion is based on some evidence on which a conclusion could be arrived at, no question of law as such arises."

9. This Court in the Judgments relied upon by the learned Counsel appearing for the Respondents, have come to the conclusion that once the Assessee has produced documentary evidence to establish the existence of such Companies, the burden would shift on the Revenue-Appellants herein to establish their case. In the present case, the Appellants are (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) seeking to rely upon the statements recorded of two persons who have admittedly not been subjected to cross examination. In such circumstances, the question of remanding the matter for re- examination of such persons, would not at all be justified. The Assessing Officer, if he so desired, ought to have allowed the Assessee to cross examine such persons in case the statements were to be relied upon in such proceedings. Apart from that, the voluminous documents produced by the Respondents cannot be discarded merely on the basis of two individuals who have given their statements contrary to such public documents.

12. Hence, the Appeal stands rejected."

7. In the light of the discussion (supra), we direct deletion of the addition made by the AO to the tune of Rs.1.17 Crs; and the interest expenditure claimed by assessee to the tune of Rs 4.80 (A.Y.: 2012-13) Konark Fixtures Ltd (Successor to Kalinga Fixtures Pvt Ltd) Lakhs given to the two entities in AY 2014-15 & Rs 10.53 Lakhs for AY 2015-16 after duly deducting TDS, need to be allowed; and thus, appeals of assessee deserves to be allowed, and we direct deletion of the additions/disallowances.

in favour of the assessee.

14. Since we have decided on the merits of the case, the grounds of appeal with respect to validity of re-assessment proceedings raised by the assessee becomes academic and are left open.

Order pronounced in the open court on 17.10.2024.