Bharti Lifestyle Pvt. Ltd. Vs ITO (ITAT Mumbai)
Summary: The ITAT Mumbai partly allowed Bharti Lifestyle Pvt. Ltd.’s five appeals for assessment years 2008-09, 2009-10, 2010-11, 2012-13 and 2014-15 arising from additions and related interest disallowances connected with alleged accommodation entries involving entities associated with Praveen Kumar Jain. The Tribunal upheld the reopening of assessments, holding that the investigation material and statements arising from the search of the entry provider furnished sufficient reason to believe that income had escaped assessment. However, on merits, it held that the Assessing Officer could not sustain additions merely by relying on the same investigation material used for reopening after the assessee had furnished documentary evidence concerning the identity, creditworthiness and genuineness of the lenders and transactions.
For the principal disputed additions, the assessee had furnished confirmations, ledger accounts, income-tax returns, audited financial statements, bank statements and other supporting material and had contended that the loans were received and repaid through banking channels. The Tribunal relied upon the coordinate-bench decision in Nisarg Life Space LLP and other decisions involving entities connected with the same alleged entry provider. It also referred to Sahakar Global Ltd., where additions were deleted in circumstances involving absence of cross-examination and non-furnishing of statements. The Tribunal observed that, after the assessee produced relevant evidence, the Assessing Officer did not make adequate further enquiries, including enquiries under Section 133(6), summon the relevant persons, or otherwise bring corroborative material on record to establish that the transactions were accommodation entries.
