VIGNESHWARS CEMENT PVT. LTD.,KOLKATA vs. D.C.I.T.,CIRCLE-13(2), KOLKATA

The only issue raised by the assessee in the various grounds of appeal is against the confirmation of addition of Rs. 91,00,000/- by the Ld. CIT(A) which was made by the AO on account of unexplained cash credit u/s 68 of the Act.

Facts in brief are that the assessee filed return of income on 14.09.2018 declaring a loss of Rs. 1,06,56,996/- in response to notice u/s 148 of the Act.

In the appellate proceedings, the Ld. CIT(A) confirmed the order of AO by simply dismissing the appeal of the assessee by observing that the lender has very meager income during AY 2012-13 and claimed refunds out of total tax paid and thereafter by following the decision of Hon’ble Apex Court in the case of PCIT vs. NRA Iron & Steel Pvt. Ltd. in [2019] 412 ITR 161 (SC) the appeal of the assessee was dismissed.

After hearing the rival contentions and perusing the material on record, we find that the assessee filed all the details in respect of loan creditor such as name, address, PAN, bank statement, audited annual accounts etc. However, the notice issued u/s 133(6) of the Act to the loan creditor was not complied with. We note that the none of the authorities below have carried out any further investigation on the basis of evidences furnished by the assessee. We even note that the loan was repaid also by the assessee. Further the assessee has paid interest on the said loan after deducting tax at source. Under the circumstances, we are not in a position to agree with the conclusion drawn by the Ld. CIT(A) that the assessee has failed to discharge its onus to prove the Assessment Year: 2011-12 Vigneswara Cement Pvt. Ltd. transaction. In our opinion, the assessee has filed necessary documents qua the loan creditor as stated above and even the interest was paid after deduction of tax at source. The case of the assessee finds support from the decision of Hon’ble Supreme Court in the case of CIT v. Orissa Corporation (P) Ltd 159 ITR 78 (SC) wherein the Hon’ble Apex Court has held that where the assessee has filed all the documents then the AO is in a position to proceed further in the matter and addition cannot be made on the ground that the assessee has not proved identity and creditworthiness of the investor and genuineness of the transaction. In this case, we note that Section 133(6) was also served on the lender company and is not the duty of the assessee to get the said notice responded from the lender company. Moreover, the decision cited before us by the revenue in the case of NRA Iron & Steel Pvt. Ltd. (supra) is not applicable as in that case whereabout of the lenders were not traceable and in that context the Hon’ble Apex Court has held that the assessee has failed to prove identity, creditworthiness of the lender and genuineness of the transaction. Besides, the case was decided ex-parte by the Hon’ble Apex Court when no one turns up for attending the hearing. In view of the facts and circumstances and also ratio laid down in Orissa Corporation Ltd. (supra) we are inclined to set aside the order of Ld. CIT(A) and direct the AO to delete the addition.

In the result, the appeal of the assessee is allowed.