VIJAY PAL GARG,NEW DELHI vs. DCIT CENTRAL CIRCLE-5, NEW DELHI

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ITA 1291/DEL/2019Status: HeardITAT Delhi07 March 2023AY 2013-143 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order, finding that the assessee had not discharged the burden of proving the creditworthiness and genuineness of the unsecured loans from the four parties. The assessee's appeal was dismissed.

What were the facts?

The assessee is in appeal against an order upholding additions on account of unexplained unsecured loans from four parties. The Assessing Officer made additions on this ground, and the CIT(A) partly allowed the appeal, deleting some additions but confirming others.

What were the issues?

Whether the assessee had provided sufficient evidence to establish the genuineness and creditworthiness of unsecured loans received from certain parties.

Which sections of the Income-tax Act were involved?

Section 144,Section 143(3),Section 14A

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI

Before: SH. SHAMIM YAHYA & SH. ANUBHAV SHARMA

Hearing: 02.03.2023Pronounced: 07.03.2023

The appeal has been filed by the Assessee against order dated 31.01.2019 passed in appeal no. 127/2016-17 for assessment year 2013-14, by the Commissioner of Income Tax (Appeals)-24, New Delhi (hereinafter referred to as the First Appellate Authority or in short ‘Ld. F.A.A.’) in regard to the appeal before it arising out of assessment order dated 31.03.2016 u/s 144/143(3) of I.T. Act, 1961 (hereinafter referred to as ‘the Act’) passed by ACIT, Central Circle- 05, New Delhi (hereinafter referred as Ld. Assessing officer or in short Ld. AO).

./Del/2019 Vijay Pal Garg 2

2.

Heard.

3.

As the case was called for hearing, non – appeared for the assessee. The record shows that at earlier the notice is issued by registered post but received back to the report of the assessee has ‘left the given address’. No more notice is justified. 4. We have heard Arguments of Ld. DR who supported the findings of Ld. Tax Authorities below. 5. It can be appreciated that the return of assessee when processed u/s 143(1), notices were issued u/s 143(2) and thereupon as assessee failed to respond to the queries assessment order u/s 144/ 143(3) of the Act was passed making addition on account of disallowance of interest in respect of money allegedly borrowed for the purpose of the business or profession. Addition was made on account of unsecured loans as identity in creditworthiness of the borrowers would not justify and an addition u/s 14 read with rule 8D was made. The Ld. CIT(A) had deleted the addition u/s 14A read with rule 8D. It also allowed relief in part to the extent of 1,73,84,196/- against unexplained unsecured loans received by the assessee and has deleted the disallowance of interest following assessee’s own case judgment by the Tribunal for A.Y. 2011- 12. Thus, assessee is now is in appeal primarily challenging the order of Ld. CIT(A) in upholding additions on account of unsecured loans from four parties. 6. Giving thoughtful consideration to the matter on record, it can be observed that as with regard to four parties , Ld. CIT(A) had observed in para no. 5.5.5 as follows :- “5.5.5 It is observed that the appellant has furnished confirmation of the ledger account, copy of the acknowledgement of the return of income and its bank account in respect of the aforesaid four parties. The acknowledgement of return of income filed for Sh. Avinash Kanodia and Sh. Vikram Kanodia is not for the relevant assessment year and is for the AY 2014-15. Further in respect of M/s Jagat Overseas no ITR of that creditor is filed. The appellant ./Del/2019 Vijay Pal Garg 3

has not filed the bank statements of the aforesaid creditors to verify the creditworthiness of such creditors. The evidences filed by the appellant do not discharge the burden in respect of the creditworthiness and genuineness of the transaction. The jurisdictional High Court in the case of PCIT vs. Bikram Singh [2017] 399 ITR 407 (Delhi) has held that mere establishing the identity and the fact that the amounts have been transferred through cheque payments, does not by itself mean that the transactions are genuine. The appellant has not furnished any loan agreement with such parties nor has established the creditworthiness of such parties and hence the addition made by the AO in respect of the sum of Rs. 2,34,00,000/-received by the appellant from such parties is hereby confirmed. Thus the appellant gets relief of Rs. 1,73,84,196/- Hence Ground No. 3 of appeal is partly allowed.”

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