ACIT Vs Greenscape Developers Private Limited (ITAT Mumbai)
Section 68 Additions on ‘Accommodation Entry’ Theory Deleted: ITAT Finds AO Relied Only on Search Statements- Identity, Creditworthiness & Genuineness Proved— No Cash Trail, Strong Financials: ITAT Rejects Revenue’s 68 Theory- When AO Ignores Evidence, Additions Cannot Stand:
These eight Revenue appeals arose from additions u/s 68 & related interest disallowances across three assessees of the Greenscape Group. AO had treated unsecured loans received in various years as accommodation entries allegedly routed through concerns linked to Shri Pravin Kumar Jain based on statements recorded during search & survey. CIT(A) deleted the additions after examining complete documentary evidence. Revenue contested these deletions.
Tribunal first examined the lead case for AY 2012-13.AO had reopened assessment based on information that Assessee received Rs.12 crore of unsecured loans from entities linked to Pravin Jain. AO added Rs.12 crore; however, Assessee demonstrated (with reconciliation) that actual borrowings were Rs.8.50 crore. Assessee furnished ITR acknowledgements, CIN details, audited financials, & bank statements of all lender companies, establishing identity, creditworthiness & genuineness. Financial strength of each lender (e.g., Duke Business having Rs.92.35 crore reserves; Josh Trading Rs.13.56 crore; Atharv Business Rs.20.84 crore) was clearly shown in the table on page 10. Loans were given & repaid through banking channels with TDS on interest. AO conducted no independent enquiries u/s 133(6) & relied solely on search statements of Pravin Jain, without sharing the material or giving opportunity of cross-examination. CIT(A) also relied on earlier ITAT rulings where these same lending companies were accepted as genuine.
