RAJENDER KUMAR BUDHIRAJA,NEW DELHI vs. ITO WARD-46(4), NEW DELHI

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ITA 9172/DEL/2019Status: DisposedITAT Delhi01 March 2023AY 2016-174 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had proved the identity, creditworthiness of the lender, and genuineness of the transaction, including the purpose, mode of payment, and repayment. Therefore, no addition under Section 68 was warranted.

What were the facts?

The assessee received Rs. 1,40,00,000/- from M/s Marvelous Beauty Pvt. Ltd. as an advance against a property sale. The assessee provided confirmation, ITR, and bank statements to the AO. However, the AO made an addition under Section 68, stating the assessee did not reply to a notice.

What were the issues?

Whether the addition made by the AO under Section 68 for unexplained cash credit is justified when the assessee has provided sufficient evidence to prove the genuineness of the transaction.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHIBENCH ‘F’, NEW DELHI

Before: Dr. B. R. R. KumarSh. Yogesh Kumar US

For Appellant: Smt. Rano Jain, Adv. &, Ms. Mansi Jain, Adv
Hearing: 07.12.2022Pronounced: 01.03.2023

Per Dr. B. R. R. Kumar, Accountant Member:

1.

The present appeal has been filed by the assessee against the order of ld. CIT(A)-16, New Delhi dated 11.10.2019.

2.

Following grounds have been raised by the assessee:

“1. On the facts and circumstances of the case, the order passed by the Learned CIT(A) is bad both in the eye of law and on facts.

2. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in sustaining the addition made by the AO of Rs.1,40,00,000/- under section 68 of the Act.

3.

On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the order passed by the A.O., despite the fact that the A.O. has no jurisdiction to travel

2 Rajender Kumar Budhiraja beyond the scope of Limited Scrutiny, without getting the prior approval of the prescribed authority.

4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition despite the assessee bringing all material and evidences on record to prove the source of amount.

5.

On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition despite the fact that the assessee being an individual, no books of accounts are maintained and as such no addition under section 68 is called for.” 3. The only issue involved in the case is an addition of Rs.1,40,00,000/- made by the Assessing Officer u/s 68 of the Income Tax Act, 1961 which has been confirmed by the ld. CIT(A).

4.

Facts pertinent to the adjudication of this issue are that while verifying the sources of investments made by the assessee during the year under consideration, the assessee explained to the AO that an amount of Rs.1,40,00,000/- was received from M/s Marvelous Beauty Pvt. Ltd. during the year under consideration. To prove this fact, the assessee filed the confirmation from M/s Marvelous Beauty Pvt. Ltd., the ITR of M/s Marvelous Beauty Pvt. Ltd. and also the bank statement explaining the corresponding loan entry. The AO requisitioned the assessee to prove the genuineness and creditworthiness of M/s Marvelous Beauty Pvt. Ltd., the loaner. The assessee submitted all the relevant documents through E-mail. However, the AO made the addition on the grounds that the assessee has not replied to notice dated 22.12.2018.

3 Rajender Kumar Budhiraja 5. Before the ld. CIT(A), the assessee filed application under Rule 46A and also submitted that all these documents were duly filed before the AO and also submitted that these documents if not treated not to have been submitted before the AO, the same may be considered as additional evidences.

6.

The ld. CIT(A) called for the remand report from the AO who stated that the sale agreement was not provided by the assessee and hence the receipts from the M/s Marvelous Beauty Pvt. Ltd. cannot be held to be genuine.

7.

Heard the arguments of both the parties and perused the material available on record.

8.

Before us, it was argued that the assessee had entered into a agreement to sell some property to M/s Marvelous Beauty Pvt. Ltd. during the year under consideration and as an advance against sale consideration an amount of Rs.1,40,00,000/- was received by the assessee. This transaction can be verified from the bank statement of the assessee and the corresponding entry in the bank statement of the lender. Since, the deal could not be materialized in the year under consideration, the amount was returned back by the assessee to M/s Marvelous Beauty Pvt. Ltd. All the confirmations, tax records are on record. The notice issued by the AO on the lender has also been duly served. The details of the property for sale has been mentioned from page 14 to 57 of the paper book which has been duly perused. The same has been ultimately sold also. Hence, we hold that the assessee has proved identity, creditworthiness of the lender and genuineness of the transactions, the purpose,

4 Rajender Kumar Budhiraja the mode of payment and also the mode of re-payment and the entire details thereof.

9.

Hence, we hold that in the facts and circumstances of the instant case, no addition u/s 68 is called for.

10.

In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 01/03/2023.

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