Income Tax Appellate Tribunal - Raipur
Mahavir Infracon Pvt. Ltd., ... vs Dcit, Central-1, Raipur on 10 April, 2023
आयकर अपील य अ धकरण यायपीठ रायपरु म।
IN THE INCOME TAX APPELLATE TRIBUNAL,
RAIPUR BENCH, RAIPUR
BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER
AND
DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER
आयकर अपील सं. / IT(SS) A No. 1/RPR/2021
नधारण वष / Assessment Year : 2013-14
M/s. Mahavir Infracon Pvt. Ltd.
C/o. Sumeet Fabrics, Jaistambh Chowk,
Rajnandgaon (C.G.)-491 441
PAN : AAHCM7501J
.......अपीलाथ / Appellant
बनाम / V/s.
The Deputy Commissioner of Income Tax
Central-1, Raipur (C.G.)
...... यथ / Respondent
Assessee by : Shri Parasmal Jain, CA
Revenue by : None
सन
ु वाई क तार ख / Date of Hearing : 15.03.2023
घोषणा क तार ख / Date of Pronouncement : 10.04.2023
2
M/s. Mahavir Infracon Pvt. Ltd. Vs. DCIT, Central-1, Raipur
IT(SS)A No. 01/RPR/2021
आदे श / ORDER
PER RAVISH SOOD, JM:
The present appeal filed by the assessee company is directed against the order passed by CIT(Appeals)-3, Bhopal dated 15.07.2021, which in turn arises from the order passed by the A.O under Sec. 153C r.w.s 143(3) of the Income-tax Act, 1961 (in short 'the Act') dated 23.11.2017 for the assessment year 2013-14.
The assessee has assailed the impugned order on the following grounds of appeal before us:
"1. On the facts and in the circumstances of the case, the Learned CIT(A) has erred in passing the order wherein the addition made by the A.O. in the order passed u/s 143(3) r.w.s 153C has been sustained. The addition made by the A.O. is with reference to the addition made in the original assessment order passed u/s 143(3) of the Act and the same was already been deleted in the .first appeal. Therefore, the order passed by CIT- Appeal-III, Bhopal without verifying the status of the original appeal is unjustified, unwarranted and uncalled for.
2. On the facts and in circumstances of the case, the Learned CIT(A) has erred in sustaining the order of the A.O. whereas the addition made in the assessment order is beyond the scope of provision of section 153C of the Income Tax Act , i.e. without reflecting to any incriminating document found from third party premises. Therefore the sustaining the order passed by the A.O. is unjustified, unwarranted and uncalled for.
3 On the facts and in the circumstances of the case, the Learned CIT(A) has erred in sustaining the order of the A.O. where in the A.O. has erred in making addition of Rs.2,70,00,000/- being unexplained unsecured loan u/s.68 of the Income Tax Act, 1961. The addition made by the A.O and confirmed by the CIT(A) is unjustified, unwarranted and uncalled for.
4. The assessee reserves the right to add, amend or alter any grounds of appeal at any time of hearing."3
M/s. Mahavir Infracon Pvt. Ltd. Vs. DCIT, Central-1, Raipur IT(SS)A No. 01/RPR/2021
2. Succinctly stated, the assessee company had e-filed its return of income for A.Y.2013-14 on 31.10.2013, declaring an income of Rs.10,48,760/-. Original assessment was framed by the A.O vide his order passed u/s.143(3) dated 31.03.2016 determining the income of the assessee company at Rs.2,80,48,760/-
after treating the unsecured loans raised by the assessee from seven parties as unexplained cash credit u/s.68 of the Act, as under:
S. No. Name of the company Amount of loan
1. Apnapan Mercantile Pvt. Ltd. Rs.37,50,000/-
2. Bhimtal Nirmal Pvt. Ltd. Rs.50,00,000/-
3. Confident VinimayPvt. Ltd. Rs.25,00,000/-
4. Goodfaith Infra Pvt. Ltd. Rs.25,00,000/-
5. Star Land ProconPvt. Ltd. Rs.1,25,00,000/-
6. SuryakiranTradecomPvt. Ltd. Rs.25,00,000/-
7. Vinishar Commercial Pvt. Ltd. Rs.20,00,000/-
Total Rs.2,70,00,000/-
3. Search and seizure proceedings u/s.132 of the Act were conducted at the residential premises of "Bohra Group" on 11.03.2016. During the course of search proceedings at the premises of group entities certain sale agreements pertaining to the assessee company, viz. M/s. Mahavir Infracon Pvt. Ltd. were stated to have been found and seized. Notice u/s.153C of the Act dated 15.02.2017 was issued to 4 M/s. Mahavir Infracon Pvt. Ltd. Vs. DCIT, Central-1, Raipur IT(SS)A No. 01/RPR/2021 the assessee, inter alia, for the year under consideration i.e. A.Y.2013-14. In compliance, the assessee company filed its return of income on 15.03.2017 declaring its income as originally returned. Assessment was, thereafter, framed by the A.O vide order passed u/s.153C r.w.s. 143(3) dated 23.11.2017, wherein in order to keep the issue alive the addition of Rs.2.70 crore that was earlier made u/s.68 of the Act while framing the regular assessment vide order passed u/s.143(3) dated 31.03.2016 was sustained and the income of the assessee company was determined at Rs.2,80,48,760/-.
4. Original assessment that was made by the A.O vide his order passed u/s.143(3) dated 31.03.2016 was assailed by the assessee before the CIT(Appeals). The CIT(Appeals) vide his order passed in appeal No. CIT(A)-
II/RPR/A. No.312/16-17/2018-19 dated 27.04.2018 vacated the addition of Rs.2.70 crore made by the A.O u/s.68 of the Act and allowed the assessee's appeal.
5. The revenue being aggrieved with the order of the CIT(Appeals) wherein the addition of Rs.2.70 crore made by the A.O vide his order passed u/s.143(3) dated 31.03.2016 was vacated carried the matter in appeal before the Tribunal.
The Tribunal vide its order passed in ITA No.125/RPR/2018 dated 23.09.2022 upheld the order of the CIT(Appeals) and dismissed the appeal filed by the revenue.
5M/s. Mahavir Infracon Pvt. Ltd. Vs. DCIT, Central-1, Raipur IT(SS)A No. 01/RPR/2021
6. In the meantime, the addition of Rs.2.70 crore made by the A.O vide his order passed u/s.153C r.w.s. 143(3) dated 23.11.2017 was assailed by the assessee before the CIT(Appeals). On a perusal of the order of the CIT(Appeals), it transpires that he losing sight of the fact that the impugned addition of Rs.2.70 crore (supra) that was made by the A.O vide his order passed u/s.143(3) dated 31.03.2016 was vacated by his predecessor in appeal No. CIT(A)-II/RPR/A. No.312/16-17/2018-19 dated 27.04.2018, therein took a view to the contrary and upheld the said addition and dismissed the appeal.
7. The assessee being aggrieved with the order passed by the CIT(Appeals) dated 15.07.2021, which in turn arises from the order passed by the A.O u/s. 153C r.w.s. 143(3) dated 23.11.2017 has carried the mater in appeal before us.
8. The Ld. Authorized Representative (for short 'AR') for the assessee at the very outset submitted that the issue involved in the present appeal is squarely covered by the order passed by the Tribunal in the assessee's own case for the year under consideration i.e. A.Y.2013-14. It was submitted by the Ld. AR that the impugned addition of Rs.2.70 crore that was made by the A.O vide his order passed u/s.143(3) dated 31.03.2016 was vacated by the CIT(Appeals), and the latters order had thereafter been upheld by the Tribunal vide its order passed in ITA No.125/RPR/2018 dated 23.09.2022. In order to buttress his aforesaid claim the Ld. AR took us through the order passed by the Tribunal in ITA 6 M/s. Mahavir Infracon Pvt. Ltd. Vs. DCIT, Central-1, Raipur IT(SS)A No. 01/RPR/2021 No.125/RPR/2018 dated 23.09.2022, Page 21-41 of APB. To sum up, it was the claim of the Ld. AR that now when the order of the CIT(Appeals), dated 27.04.2018 vacating the impugned addition of Rs.2.70 crore (supra) made by the A.O vide his order passed 143(3) dated 31.03.2016 had thereafter been upheld by the Tribunal vide its order passed in ITA No.125/RPR/2018 dated 23.09.2022, therefore, the order passed by the CIT(Appeals) dated 15.07.2021, therein holding to the contrary and sustaining the said addition made by the A.O u/s.153C r.w.s.
143(3) dated 23.11.2017 was liable to be vacated.
9. As the Ld. Departmental Representative (for short 'DR') had neither put up an appearance before us nor moved any application seeking any adjournment in the present case, therefore, we are constrained to proceed with as per Rule 25 of the Income Tax Rules, 1962 and dispose off the appeal after hearing the assessee-
appellant and perusing the orders of the lower authorities.
10. We have heard the ld. AR and perused the orders of the lower authorities as well as the material available on record. Admittedly, it is a matter of fact borne from record that the A.O while framing the assessment vide his order passed u/s.153C r.w.s. 143(3) dated 23.11.2017, had merely in order to keep the issue alive repeated the addition u/s.68 of the Act of Rs.2.70 crore (supra) that was earlier made by his predecessor while framing the original assessment vide his order passed u/s.143(3) dated 31.03.2016. As stated by the Ld. AR and, rightly so, 7 M/s. Mahavir Infracon Pvt. Ltd. Vs. DCIT, Central-1, Raipur IT(SS)A No. 01/RPR/2021 it is an admitted fact that the impugned addition of Rs.2.70 crore (supra) was, thereafter, on appeal vacated by the CIT(Appeals) vide his order dated 27.04.2018 and his order had thereafter been upheld by the Tribunal vide its order passed in ITA No.125/RPR/2018 dated 23.09.2022. For the sake of clarity, the observations recorded by the Tribunal while vacating the addition of Rs.2.70 crore (supra) are culled out as under:
"6. We have heard the Ld. Authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the ld. AR to drive home his contentions.
7. Admittedly, it is a matter of fact borne from record that the assessee had during the year under consideration raised loans aggregating to Rs.3,07,50,000/-(approx.) from the aforementioned seven Kolkata based companies. At the very outset, we may herein observe that though the A.O had held the interest bearing loans in question that were raised by the assessee from the aforementioned parties as bogus, however, he had not drawn any adverse inferences as regards the interest that was claimed by the assessee company in its profit & loss account to have been paid to the said respective lenders @12% per annum during the year. On a perusal of the orders of the lower authorities, it transpires that as observed by the CIT(Appeals) and, rightly so, though the A.O had drawn adverse inferences based on his observation that the team which was constituted to carry out verifications about the authenticity of the loans that were claimed by the assessee to have been raised from aforementioned seven lender companies had reported that the whereabouts of the said companies could not be located, but there is no whisper in his order about any such report a/w. details of enquiries which were conducted by the said team and also the places that were visited by them as regards the aforesaid parties. Also, we find that it is a matter of fact borne from the record that though the assessee company in the course of the assessment proceedings had filed before the A.O substantial documentary evidence to substantiate the authenticity of the loan transactions in question, viz. companies master data, ledger accounts of the lender companies, bank account/statement of the assessee company, copies of returns of income of the lenders, audited financial statements of the lenders, sources out of which the lender 8 M/s. Mahavir Infracon Pvt. Ltd. Vs. DCIT, Central-1, Raipur IT(SS)A No. 01/RPR/2021 companies had advanced loans, confirmations of the lender companies, bank account statements of the lender companies, memorandum of association and article of association of the lender companies, but strangely no reference of the same is discernible from the order passed by the A.O. Also, as regards the creditworthiness of the aforementioned lender companies, the Ld. Authorized Representative (for short 'AR') for the assessee during the course of the hearing of the appeal had taken us through the financial statements of the respective lender companies, which as noticed by the CIT(Appeals) duly substantiated their creditworthiness for advancing the respective loans to the assessee company by observing as under:
"In the case of Apnapan Mercantile Pvt. Ltd, Kolkatta I observe that the revenue from operations has been declared at Rs.2,65,78,946/- plus other income of Rs.1,883,014/- totaling Rs.2,84,61,960/-. This company has given a loan of Rs.37.50 lakhs.
In the case of Bhimtal Nirman Pvt. Ltd. the revenue from operations is shown at Rs.18,308,671/- plus other income of Rs. 217,802/- totaling Rs.20,526,474/- out of which a loan of RS. 50,00,000/- has been given.
In the case of Confident Vinmay Pvt. Ltd the revenue from operations is shown at Rs.15,895,741/- plus other income of RS. 2,523,267/- totaling Rs.18,419,008/- out of which loan of Rs.25,00,000/- has been given.
In the case of Goodfaith Infra ventures Pvt. Ltd. the revenue from operations has been shown at Rs.4,115,478/- plus other income of Rs. 4,074,698/-and Rs.99,725/- totaling to Rs. 83,29,901/- out of which loan of Rs. 25,00,000/- has been given.
In the case of Star land Procon Pvt Ltd the revenue from sales has been shown at Rs.19,029,761/- plus interest income of Rs. 2,231,262/- totaling to Rs.21,261,023/- out of which a loan of Rs. 1.25 Crores has been given.
Coming to Suryakiran Tradecom Pvt. Ltd the turnover has been shown at Rs. 19.89 crores and loan given is of Rs.25,00,000/-
In the case of Vinsher Commercial Pvt. Ltd. the revenue from operations has been shown at Rs.23,165,442/- plus other income of Rs.17,272/- totaling Rs.23,182,714/- out of which loan of Rs. 20,00,000/- has been given."9
M/s. Mahavir Infracon Pvt. Ltd. Vs. DCIT, Central-1, Raipur IT(SS)A No. 01/RPR/2021 As observed by the CIT(Appeals) and, rightly so, the respective lenders had not only confirmed the loan transactions in question but had also substantiated the source of source i.e. the source out of which the respective loans were advanced by them. Admittedly, the bank accounts of the respective lenders though reveals credit of amounts through RTGS/transfers prior to advancing of the respective loans by them to the assessee company, but in case of neither of the lender company there is either any cash deposit prior to advancing of the respective loans, nor any of such receipt is found to be in the nature of an amount that was received by the lender company as an accommodation entry; or as an entity forming part of a chain of accommodation entry providers/operators. In our considered view, the mere allegation of the A.O that the advancing of the respective loans by the aforesaid lender companies was preceded by certain credits in their bank account by no means would at all suffice for drawing of adverse inferences as regards the authenticity of the loan transactions in question.
8. Be that as it may, we find that in case of majority of the lender companies the authenticity of the loan transactions have duly been substantiated by the assessee by placing on record details as regards the source out of which loans were advanced by them to the assessee company, which fact as is discernible from the records to which our attention was drawn by the Ld. AR are for the sake of clarity culled out as under:
( Apnapan Mercantile Pvt. Ltd.) Source of fund for F.Y.2012-13 (Bhimtal Nirmal Pvt. Ltd.) 10 M/s. Mahavir Infracon Pvt. Ltd. Vs. DCIT, Central-1, Raipur IT(SS)A No. 01/RPR/2021 E. Source of Fund : that the fund was received from Mr. Sachin Deshmukh towards refund of Loans:
Amount Name Address PAN
5000000/- Sachin
Deshmukh
(Goodfaith Infra Ventures Private Limited)
5. Source of Fund : that the money for loan given to M/s. Mahavir Infracom Pvt.
Ltd. was received from M/s. CoutnrywideTradecom Pvt. Ltd. against sale of shares:
Date Amount Name Address PAN
01-02-13 2500000/- Countrywide 62, Nalini AADCC0385J
TradecomPvt. Seth Road,
Ltd. Ground
Floor,
Kolkata-700
007
(Starland Procon Private Limited)
Source of Fund : That the fund was received from following:
9. As regards the remaining three lenders, viz. (i) Confident Vinimay Pvt. Ltd.; (ii) M/s. Surya Kiran Tradecon Pvt. Ltd.; and (iii) M/s. Winsher Commercial Pvt. Ltd., we find that though the supporting details as regards the source out of which loans were advanced by the lenders to the assessee company had been not filed by them, but a perusal of their respective confirmations a/w. bank 11 M/s. Mahavir Infracon Pvt. Ltd. Vs. DCIT, Central-1, Raipur IT(SS)A No. 01/RPR/2021 statements out of which loans were given by them to the assessee company reveals a similar set of facts. On a perusal of the bank accounts of all the aforementioned lender companies, it transpires that the respective amounts in question were advanced by the lender companies out of the funds which were received by them through RTGS/bank transfers and not by way of any cash deposits. No material had been placed on record by the A.O which would reveal that any amount credited in the bank account of either of the lender was in the nature of an amount received to facilitate providing of an accommodation entry. In fact, it is not even the case of the department before us that either of the aforementioned seven lender companies is a blacklisted company. Another aspect which duly substantiates the authenticity of the loan transactions in question is the fact that majority of amounts of the outstanding loans had been repaid by the assesee company through banking channels prior to selection of its case for scrutiny assessment vide notice issued u/s.143(2), dated 02.09.2014. The details of the repayment of the outstanding loans by the assessee company to the aforementioned lender companies is culled out as under:
Sr. No. Particulars Amount 1. Apnapan Mercantile Pvt. Ltd. Rs.38,72,364/-
Loan repaid (including interest) on 01.06.2013
2. BhimtalNirman Private Limited Rs.51,36,895/-
Loan repaid (including interest) on 31.03.2014 Note : The amount of Rs.8,63,105/- was in fact advanced by the assessee company to the aforementioned party during the year in which, thereafter was received back by the assessee in the succeeding year on 10.03.2015
3. Confident Vinimay Private Limited Loan repaid in two tranches (including interest)
(i) 25.11.2013 Rs. 14,00,000/-
(ii) 27.11.2013 Rs.13,11,094/-
Total Rs.27,11,094/-
4. Good Faith Infra Ventures Pvt. Ltd. Rs. 8,00,000/-
Loan repaid in three tranches (including interest) Rs.14,22,178/-
(i) 26.11.2013 Rs.5,00,000/-
(ii) 27.11.2013
(iii) 27.11.2013
Total Rs.27,22,178/-
12
M/s. Mahavir Infracon Pvt. Ltd. Vs. DCIT, Central-1, Raipur IT(SS)A No. 01/RPR/2021
5. Starland Procon Private Limited Loan repaid in six tranches (including interest)
(i) 18.06.2013 Rs.12,09,340/-
(ii) 13.07.2013 Rs.4,35,000/-
(iii) 27.08.2013 Rs.50,00,000/-
(iv) 30.08.2013 Rs.25,00,000/-
(v) 02.09.2013 Rs.25,00,000/-
(vi) 31.03.2014 Rs.15,00,000/-
Total Rs.1,31,44,340/-
Note : Balance amount of Rs.3,27,047/- was repaid in the succeeding year on 16.02.2015
6. Surya Kiran Trade Com. Rs.27,17,428/-
Loan repaid (including interest) on 23.11.2013 O n
7. Winsher Commercial Ltd. Rs.20,54,500/-
Loan repaid (including interest) on 29.04.2013 t h e basis of the aforesaid facts, we are of a strong conviction that the authenticity of the aforesaid loan transactions in question stands duly substantiated.
10. Apart from that, we concur with the view taken by the CIT(Appeals) that now when the assesee company had by placing on record irrefutable documentary evidences substantiated the identity and creditworthiness of the lender companies, as well as the genuineness of the loan transactions in question, therefore, as held by the Hon'ble High Court of Chhattisgarh in the case of Pawan Kumar Agrawal (supra) though the A.O remained under a statutory obligation to have carried out necessary verifications by exercising the powers vested with him u/s.133(6) or u/s.131 of the Act for disproving the assessee's claim of having raised genuine loans from the aforementioned parties, but we find that nothing had been done by the AO in the case before us. In fact, we would mince no words in observing that there had been no attempt on the part of the AO in even carrying out any exercise to dislodge the authenticity of the loan transactions in question. Also, our aforesaid view that in case the A.O had any doubts as regards the authenticity of the loan transactions under consideration then he ought to have exercised the powers vested with him u/s.131 of the Act and summoned the said lenders and made requisite enquiries from them is supported by the judgment of the Hon'ble High Court of Karnataka in the case of G. Shubha Devi Vs. ITO, 307 CTR 536 (Kar.).
13M/s. Mahavir Infracon Pvt. Ltd. Vs. DCIT, Central-1, Raipur IT(SS)A No. 01/RPR/2021
11. On the basis of our aforesaid deliberations, we concur with the view taken by the CIT(Appeals) that as not only the assessee had duly substantiated the authenticity of the transaction to the hilt on the basis of supporting corroborative documentary evidences, but it is also a fact to which we cannot be oblivion that the A.O in the present case before us had except for harping upon certain unsubstantiated allegations, had however, failed to placed on record any such material which would have refuted the authenticity of the documents that were placed on record by the assessee before him to drive home its claim of having raised genuine loans in question. In fact, we are pained to find that the A.O had not even thought it fit to refer to the material which was placed on record by the assessee in support of his aforesaid claim of having raised authentic loans from the aforementioned lenders. Accordingly, on the basis of our aforesaid observations, we, finding no infirmity in the view taken by the CIT(Appeals) who had rightly vacated the characterization of the loans of Rs 3,07,50,000/- raised by the assessee company from the aforementioned seven lenders as unexplained cash credits u/s.68 of the Act, uphold the same. Thus, the Grounds of appeal No.(s) 1 to 3 raised by the revenue are dismissed in terms of our aforesaid observation.
12. Resultantly, the appeal filed by the revenue is dismissed in terms of our aforesaid observations."
11. As the issue pertaining to the addition of Rs.2.70 crore (supra) as had been assailed by the assessee before us is squarely covered by the aforesaid order of the Tribunal in ITA No.125/RPR/2018, dated 23.09.2022, therefore, we respectfully follow the same. We, thus, in terms of our aforesaid observations, set-aside the order of the CIT(Appeals) and vacate the addition of Rs.2.70 crore (supra) made by the A.O vide his order passed u/s.153C r.w.s. 143(3) dated 23.11.2017.
14M/s. Mahavir Infracon Pvt. Ltd. Vs. DCIT, Central-1, Raipur IT(SS)A No. 01/RPR/2021
12. In the result, appeal of the assessee is allowed in terms of our aforesaid observations.
Order pronounced under rule 34(4) of the Appellate Tribunal Rules, 1963, by placing the details on the notice board.
Sd/- Sd/-
DR. DIPAK P. RIPOTE RAVISH SOOD
(ACCOUNTANT MEMBER) (JUDICIAL MEMBER)
रायपुर/ RAIPUR ; दनांक / Dated : 10th April, 2023 SB आदे श क त ल प अ े षत / Copy of the Order forwarded to :
1. अपीलाथ / The Appellant.
2. यथ / The Respondent.
3. The CIT(Appeals)-3, Bhopal
4. The Pr. CIT, Central, Bhopal
5. वभागीय त न ध, आयकर अपील य अ धकरण, रायपुर बच, रायपुर / DR, ITAT, Raipur Bench, Raipur.
5. गाड फ़ाइल / Guard File.
आदे शानुसार / BY ORDER, // True Copy // नजी स चव / Private Secretary आयकर अपील य अ धकरण, रायपरु / ITAT, Raipur.