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Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI
Before: Sh. Kul BharatDr. B. R. R. Kumar
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the Revenue against the order of ld. CIT(A)-XXV, New Delhi dated 18.09.2018.
Following grounds have been raised by the Revenue:
“1. Whether on the facts and circumstances and in law, the ld. CIT(A) erred in deleting the addition of Rs.6,69,35,387/- despite the fact that amount of Rs.73,70,000/-, Rs.1,55,88,000/- and Rs.4,39,77,387/- taken from M/s Dalmia Finances Pvt. Ltd., M/s WGF Financial Services Ltd. and M/s India Infoline Securities Pvt. Ltd. respectively were its trading liabilities, which ceased to exist and hence were taxable u/s 41(1) of the Income Tax Act, 1961.”
The assessee company is engaged in the business of trading and investment in shares. During the year under consideration, the assessee company has earned income from dividend and interest. The assessee filed return of income on 28.09.2014 declaring loss of Rs.1,29,394/-.
During the assessment proceedings, the Assessing Officer noted that the following amounts are shown a sundry creditor namely, Dalmia Finance Pvt. Ltd. amounting to Rs.73,70,000/-, WGF Financial Services Ltd. amounting to Rs.1,55,88,000/- and India Infoline Securities Pvt. Ltd. amounting to Rs.4,39,77,380/-. The Assessing Officer held that these creditors are static from the financial year 2012-13 (A.Y. 2013- 14) and owing to non-submission of details has added these amounts u/s 41(1) of the Income Tax Act, 1961.
The ld. CIT(A) observed that the creditors namely, Dalmia Finance Pvt. Ltd. and WGF Financial Services Ltd. have filed replies in response to notices issued u/s 133(6). With regard to Dalmia Finance Pvt. Ltd., the ld. CIT(A) held that these were loan transactions and not trade transactions and they were not subjected to P&L account. With regard to WGF Financial Services Ltd., it was found that the assessee has repaid an amount of Rs.1.46 Cr. during the F.Y. 2016-17. With regard to Infoline Securities Pvt. Ltd., it was submitted that the assessee ceased the liability of Rs.4.75 Cr. and credited the same to profit and loss account during the A.Y. 2018-19.
Thus, after going through the facts, it can be conveniently held that no addition is warranted with regard to WGF Financial Services Ltd. as the assessee has repaid the amounts in the subsequent years. Similarly, no addition is warranted in the case of Infoline Securities Pvt. Ltd. as the assessee has offered the same to tax in the subsequent year. With regard to Dalmia Finance Pvt. Ltd., the AO has not brought anything on record to prove that the amount has been infact seized to be a liability and also is not been a subject matter of P&L account and placing reliance on the judgment of Hon’ble Apex Court in Commissioner vs. Mahindra & Mahindra Ltd. 2018 (93) Taxmann.com 32, we decline to interfere with the order of the ld. CIT(A).
In the result, the appeal of the Revenue is dismissed. Order Pronounced in the Open Court on 31/10/2022.