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"7.5. I have perused the aforesaid documents and found that the assessee has furnished all the relevant documents in support of the transactions entered with M/s. Divine Tradecom Pvt. Ltd. & M/s. Rowland Trexim Pvt. Ltd. to establish the identity, Page | 8 ITA Nos. 3039, 4038, 3117/MUM/2019, CO 46/MUM/2021 & CO 72/MUM/2020 Shri Khimji Karamshi Patel.; A.Y.2008-09,2014-15,2011-12 genuineness and creditworthiness of the lenders. During the course of hearing, the appellant stated that the unsecured loans taken from M/s Divine Tradecom Pvt Ltd through personal capacity as well as through proprietary concern M/s. Trishul Developers along-with interest were repaid back in the months of September and October 2011. On the contrary, it is seen that the AO has not pointed out any discrepancies or deficiencies in the evidences so filed except that the accumulated profits of the said entities are negative or just a meagre amount and that statements of certain parties reveal the nature of said transactions in the form of accommodation entry. 7.6 In its rebuttal, the assessee submits that mere low income cannot be the criteria to dislodge the creditworthiness of the lenders and that due consideration should be given to the net worth of the companies which is Rs. 24,29,03,235/- in case of M/s. Divine Tradecom Pvt. Ltd and Rs.27,94,00,737/- in case of M/s. Rowland Trexim Pvt. Ltd. for the year under consideration. I find merit in this contention of the assessee more so as the source of the lender companies have been examined by the revenue while reopening their case for the same year and accepting the genuineness of the investors therein. Thus, it is a case where the source of source of alleged loans cannot be doubted. In this very perspective, the allegation of the AO that the income of the lender companies in the year under consideration is very low without giving due consideration to the overall net worth of the companies which is already accepted by the revenue in the assessment is totally misplaced and unwarranted. Without prejudice, attention was also invited to the decision of the Hon'ble Delhi High Court in the case of CIT vs Vrindavan Farms Pvt Ltd (ITA No. 71/2015) in which the sole basis for the revenue to doubt the creditworthiness was the low income as reflected in the return of incomes. It affirmed the view of the ITAT that the AO had not undertaken any investigation of the veracity of the documents submitted to him by the assessee and wrongly Page | 9 ITA Nos. 3039, 4038, 3117/MUM/2019, CO 46/MUM/2021 & CO 72/MUM/2020 Shri Khimji Karamshi Patel.; A.Y.2008-09,2014-15,2011-12 completed the assessment only on the presumption of the low return of income.
During the course of search action certain loan books were also found and seized which were marked as Sr no 1 to 13 of Annexure A to Panchanama at 11.10.2014 Page 8 and 9 of the loan book Sr no 8 seized reflects loan transactions of by M/s Trishul Developers (prop Khimji Karamshi Patel) of Rs 2,52,28,964 /-and Rs 1.21,42,032/- with M/s Divine Tradecom Pvt Ltd and M/s Rowland Trexim Pvt Ltd. During the course of search in the said group it was found that the entities with whom the loans transactions are entered, namely M/s Divine Tradecom Pvt Ltd and M/s Rowland Trexim Pvt Ltd are Paper companies giving accommodation entries. The operator of the said companies, namely Shri Pradeep Poddar has given a statement u/s 131 that both the companies are Page | 26 ITA Nos. 3039, 4038, 3117/MUM/2019, CO 46/MUM/2021 & CO 72/MUM/2020 Shri Khimji Karamshi Patel.; A.Y.2008-09,2014-15,2011-12 shell companies and used for proving accommodation entries.
The above document Identified at Loan book no 8 of Annexure A to panchanama dt 11-10-2014 found and seized and the information contained therein pertains to M/s Trishul Developer prop Shri Khimj Karamshi Patel) and the same has a bearing on the determination of its total Income, In view of the above I am satisfied that the above seized document and the information contained therein found and seized at the premises of the assesse belong to M/s Trishul Developer (Prop Khimji K Patel) which is a person other than the person referred u/s 153A and has a bearing on determination of its total Income. Hence the above assessee M/s Trishul Developer (Prop Khimji k Patel becomes liable to be governed by section 153C. Since, the aforesaid Assessee becomes liable to be governed u/s 153 of the income tax Act, 1961, notice u/s 153C is issued in this case for A. Ys. 2009-10, 2010-11, 2011-12, 2012-13, 2013-14 and 2014-15."
The above document Identified at Loan book no 8 of Annexure A to panchanama dt 11-10-2014 found and seized and the information contained therein pertains to M/s Trishul Developer prop Shri Khimj Karamshi Patel) and the same has a bearing on the determination of its total Income, In view of the above I am satisfied that the above seized document and the information contained therein found and seized at the premises of the assesse belong to M/s Trishul Developer (Prop Khimji K Patel) which is a person other than the person referred u/s 153A and has a bearing on determination of its total Income. Hence the above assessee M/s Trishul Developer (Prop Khimji k Patel becomes liable to be governed by section 153C. Since, the aforesaid Assessee becomes liable to be governed u/s 153 of the income tax Act, 1961, notice u/s 153C is issued in this case for A. Ys. 2009-10, 2010-11, 2011-12, 2012- 13, 2013-14 and 2014-15."