J. K. Global Vs ITO (ITAT Mumbai)
The assessee filed three appeals before the Income Tax Appellate Tribunal (ITAT), Mumbai, challenging separate orders of the National Faceless Appeal Centre (NFAC) for Assessment Years 2010-11, 2011-12 and 2012-13. Since the facts and issues were identical, the Tribunal disposed of all three appeals through a common order. The dispute related to additions made under Section 68 in respect of unsecured loans received during the relevant years and the consequential disallowance of interest paid on those loans.
For AY 2010-11, the assessee had received an unsecured loan of ₹25 lakh from Ryan International, for AY 2011-12 a loan of ₹5 lakh from Casper Enterprises Pvt. Ltd., and for AY 2012-13 a loan of ₹20 lakh from Duke Business Pvt. Ltd. The Assessing Officer treated these loans as unexplained cash credits based on information received from the Directorate General of Income Tax (Investigation), Mumbai, indicating that Shri Pravin Kumar Jain operated a network of paper entities providing accommodation entries in the form of bogus unsecured loans, share capital and similar transactions. Statements recorded during search proceedings under Section 132(4) showed that Shri Pravin Kumar Jain admitted to controlling various concerns engaged in providing accommodation entries and acknowledged that the companies under his control carried on no genuine business activities.
