ITO, WARD-2, JHARSUGUDA vs. SHRI JAYESH KUMAR JOSHI, JHARSUGUDA

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ITA 457/CTK/2019Status: DisposedITAT Cuttack11 June 2020AY 2010-113 pages
AI SummaryDismissed

What did the Tribunal hold?

The CIT(A) deleted the addition, holding that since the loans did not pertain to the financial year under consideration, no addition could be made. The Tribunal affirmed this deletion, finding no infirmity in the CIT(A)'s order.

What were the facts?

The Assessing Officer (AO) made an addition of Rs. 4,00,000/- on account of unexplained loans from Arun Kumar Tripathy and Pramod Kumar Tripathy. The assessee contended that these were old loans repaid during the financial year.

What were the issues?

Whether an addition can be made under Section 68 for loans that do not pertain to the financial year under assessment, even if confirmation is not filed.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CUTTACK ‘SMC’ BENCH, CUTTACK

Before: SHRI CHANDRA MOHAN GARG

For Respondent: Shri J.K.Lenka, DR

O R D E R This is an appeal filed by the revenue against the order of the CIT(A), Sambalpur dated 29.8.2019 for the assessment year 2010-2011.

2.

None appeared on behalf of respondent-assessee when the matter was called for hearing. Hence, I proceed to decide the appeal of the revenue qua- respondent assessee after hearing ld D.R. and on the basis of materials available on record.

3.

The only grievance of the revenue is that the ld CIT(A) is not justified in deleting the addition of Rs.4,00,000/- made u/s.68 of the Act.

4.

On perusal of appeal record, I observe that this appeal can be disposed of on the basis of material available on record and after hearing the submission of ld Departmental Representative (DR). Therefore, I proceed to decide the appeal.

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5.

I have heard submission of ld D.R. and perused the appeal record of the case. The brief facts of the case are that the assessee filed his return of Income for the A.Y. 2010-11 on dt. 20.01.2011, declaring a total income of Rs. 4,39,860/-.

The return was processed u/s 143(1) of the I.T Act, 1961 with income of Rs. 5,49,360/-. The case was selected for scrutiny assessment through CASS. During the course of scrutiny assessment, the assessee could not produce loan confirmation amounting to Rs. 4,00,000/- from Arun Kumar Tripathy and Pramod Kumar Tripathy. According to the assessee, the loan of Rs. 4,00,000/- is old loan and loan not taken during the F.Y. 2009-10. The loan was repaid on 31.03.2010.

The AO did not accept the contention of the assessee and disallowed the same holding that these loans are not genuine and made addition u/s.68 of the Act.

6.

On appeal, the ld CIT(A) deleted the addition of Rs.4,00,000/- as the loan credit does not belong to the F.Y. 2009-10, by observing as under: “6.1 In this ground, the appellant has contested the addition made by the assessing officer of Rs. 4,00,000/- on account of unexplained loan. According to the assessing officer, in the balance sheet of the appellant there are loans from Arun Kumar Tripathy and Pramod Tripathy of Rs. 4,00,000/- and these loans are not genuine. During the course of assessment proceedings the appellant explained that these are old loans and the repayment has been made on 31.03.2010. The relevant portion of the appellant's submission as recorded in the assessment order, is as below:

"Loan confirmation of Arun Kumar Tripathy : Both the loan creditors are brother and they are out of station, but for your kind information the Balance shown in the Balance sheet was brought forward from last financial year, and during the F.Y. 2009-10 on repayment of Rs. 4,00,000/-was made to Pramod Kumar Tripathy on dated 31.03.2010. My client will submit-the confirmation at an earliest. "

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6.2 I have carefully examined the assessment order. The submission of the appellant that the loan of Rs.4,00,000/- does not belong to the financial year under consideration has not been disputed by the AO. Since the credit does not belong to the financial year under consideration, no addition can be made even if the confirmation letter is not filed. Accordingly, the addition made by the AO of Rs.4,00,000/- is directed to be deleted. The ground of appeal is allowed.”

7. On careful consideration of the submissions of ld D.R., I find that the loan amount of Rs.4,00,000/- does not belong to the financial year under consideration and the assessee explained that these are old loans only and repayment has been made on 31.3.2010. In support of the repayment, the assessee has also filed confirmation from the loan creditors. Hence, I do not find any infirmity in the order of the ld CIT(A) in deleting the addition and, accordingly, I affirm the same.

8.

In the result, appeal of the revenue is dismissed.

Order pronounced on 12 /06/2020.

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