ACIT - 18(3), MUMBAI vs. RAJESH HASTIMAL KACHHARA, MUMBAI

This is the appeal by the revenue against the order of the CIT(A) dated 11.1.2016 for the AY 2007-08. In the grounds, revenue questioned the correctness of the relief granted by the CIT(A) in connection with the addition of Rs 35 lakhs being the accommodation entries for cash credits obtained from Bhanwarlal Jain group cases.

Coming to the facts, during the assessment proceedings, AO noted that there is claim of loans in the FY 2006-07 taken of Rs 25 lakhs from Amit Diamonds and Rs 10 lakhs from Navkar India. Total loans works out to Rs 35 lalks. It is the allegation of the Revenue and the AO that the said entries constitutes accommodation entries and considered the background of the said concerns and eventually, AO made additions. In the process, AO rejected every document or confirmation or I T returns of the said M/s Amit Diamonds and M/s Navkar India. However, during the proceedings before the CIT(A), assesseee made various submissions. Apart from the documentary evidences, assessee furnished proof to demonstrate that the said loans constitute genuine ones and the said loans were also repaid to the said concerns. As per the discussion given in para 4 and its sub paragraphs, the CIT(A) granted relief and allowed the appeal of the assessee. 3. Before me, Ld DR for the revenue relied on the order of the AO and is critical about the order of the CIT(A) and the relief granted by him. Per contra, Ld AR for the assessee submitted that the relief granted by the CIT(A) is fair and reasonable. The fact of FAA appreciating the perfect documentation ie loan confirmations, repayments of the said loans, bank statements etc and the evidences furnished by the assessee before the revenue authorities was highlighted. 4. After hearing elaborate arguments of the parties and perusing the orders of the revenue, I find it relevant to peruse the conclusions of the FAA at para 4.2.3 of her order on these loan creditors and the documents. On perusal, I find that the CIT(A) find no inadequacy on the documentation ie the confirmation letters, bank statements, TDS details, affidavits, ledger extracts etc furnished by the assessee. She directed deleting of the said addition of Rs 35 lakhs. On perusal of the pages 285 and 315 (copies of the confirmation letters), I find, they are in order. AO has not brought anything incriminating about the said letters. Further, I find from the bank statements at page 287 and 317, the payments and repayments are made through the banking channels. The assessee also repaid the said loans of Rs 10 lakhs and Rs 25 lakhs on 3.4.2014 and 15.5.2014 respectively. There is no dispute on the fact of repayment of the loans to both parties by the assessee. In these factual circumstances and in the absence of any clinching incriminating material, I am of the view the order of the CIT(A) is fair and reasonable and it does not call for any interference. Accordingly, the grounds raised