Green Valley Homes Developers Pvt Ltd. Vs DCIT (ITAT Mumbai)
Summary: The assessee, engaged in construction and development of complexes including malls, challenged the order of the CIT(A)-48, Mumbai confirming an addition of Rs.5,99,00,000 under section 68 of the Income-tax Act, 1961 on peak-credit basis and disallowance of interest of Rs.1,25,43,806. The Assessing Officer had treated loans received from entities allegedly connected with Shri Praveen Kumar Jain and his group as accommodation entries, principally relying upon the Investigation Wing report and a statement of Shri Praveen Kumar Jain. The assessee contended that the loans were genuine and furnished extensive documentary evidence, including loan confirmations, PAN cards, income-tax return acknowledgements, audited financial statements, bank statements, ledger accounts, repayment details and evidence of TDS on interest.
It was also pointed out that the assessee’s name was not correctly reflected in the statement relied upon by the Assessing Officer, where the relevant entry appeared as “Green Valley Deve”, and that Shri Praveen Kumar Jain had subsequently retracted his statement. The Tribunal noted that the loans had been received through banking channels, that the lender companies were active on the MCA records, and that the loans and interest were subsequently repaid. It further observed that the Assessing Officer did not independently verify the transactions, issue notices to the creditors under sections 131 or 133(6), identify any defect in the voluminous documentary evidence, or provide an opportunity for cross-examination concerning the third-party statement.
