ACIT, NEW DELHI vs. M/S NEXUS COMMOSALES PVT. LTD., KOLKATA

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ITA 5569/DEL/2016Status: DisposedITAT Delhi11 March 2022AY 2014-154 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the genuineness of the loan parties was not adequately proven by either the assessee or the revenue. Therefore, the matter was remanded to the Assessing Officer for fresh assessment.

What were the facts?

The Revenue appealed against the CIT(A)'s deletion of additions made by the AO concerning unexplained income, disallowed interest payments, and bogus expenses. These additions stemmed from a search and seizure operation on a group of companies, including the assessee.

What were the issues?

Whether the CIT(A) erred in deleting additions related to unexplained income, disallowed interest, and bogus expenses. The core issue is the genuineness of loan and share capital transactions.

Which sections of the Income-tax Act were involved?

Section 69A,Section 132

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI

Before: Sh. A. D. Jain, Vice-Dr. B. R. R. Kumar

For Respondent: Ms. Sarita Kumari, CIT DR
Hearing: 08.02.2022Pronounced: 11.03.2022

Heard together (2 matters)

ITA No. 6657/Del/2016
ITA No. 5569/Del/2016

Read from the judgment's own cause title. This page is filed under one of them.

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

1.

The present appeals have been filed by the Revenue against the orders of ld. CIT(A)-23, New Delhi dated 29.08.2016.

2.

In A.Y. 2014-15, following grounds have been raised by the Revenue:

“1. The order of Ld. CIT (A) is not correct in law and on facts.

2. On the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of Rs. 10,45,00,000/- made by AO on account of unexplained income u/s 69A of the I.T. Act, 1961.

3. On the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of Rs.75,45,451/- made by AO on account of disallowance of interest payment made to non-genuine parties.

& 6657/Del/2016 2 Nexus Commosales Pvt. Ltd.

4. On the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of Rs. 1,00,000/- made by AO on account of disallowance of non genuine expenses.”

3.

In A.Y. 2013-14, following grounds have been raised by the Revenue:

“1. The order of Ld. CIT (A) is not correct in law and on facts.

2. On the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of Rs.3,00,00,000/- made by AO on account of cash credit in the form of shares.

3. On the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of Rs. 14,97,50,000/- made by AO on account of unexplained share application money.

4. On the facts and circumstances of the case, the CIT (A) has erred in deleting the addition of Rs.2,00,000/- made by AO on account of bogus expenses.

5. On the facts and circumstances of the case, the Ld. CIT (A) has erred in law in its decision that AO for quashing the assessment order.

6. On the facts and circumstances of the case, the Ld. CIT (A) has erred in law in its decision that AO has not given sufficient opportunity to the assessee.”

4.

A search & seizure proceedings u/s 132 of the Income Tax Act, 1961 were conducted in the case of M/s Mauria Udog Ltd. and its group concerns and residential/factory premises of partners, directors and proprietors of the group on 07.08.2013. The assessee filed return of income on 13.09.2014 declaring total income of Rs.1,91,13,794/-. & 6657/Del/2016 3 Nexus Commosales Pvt. Ltd.

5.

The assessee is a group concerns of Mauria Group of companies. The assessee is engaged in trading of Soya Doc and Cattle Feed. During the year under consideration, the assessee company has received unsecured loans from the Kolkata based companies. The details are as under:

S.No. Name of the Companies Loan Amount(in Rs.) Interest payment 1. M/s Divya Sacfin Pvt. Ltd. 30,00,000 2,20,438 2. M/s PCJ Finvestored Pvt. Ltd. 20,00,000 1,44,000 3. M/s Pragya Commodities Pvt. Ltd. 1,75,00,000 12,67,397 4. M/s Samrat Finvestors Pvt. Ltd. 2,70,00,000 19,50,534 5. M/s Sri Narayan Mercaitiles Pvt. Ltd. 3,50,00,000 25,32,945 6. M/s Vicky Fincon Pvt. Ltd. 1,00,00,000 7,10,137 7. M/s Vidhan Sales Agencies Pvt. Ltd. 1,00,00,000 7,20,000

6.

The Assessing Officer after due enquiries made addition of the amount of unsecured loans along with interest holding that the identity, genuineness and creditworthiness of the loan parties has not been proved to the satisfaction.

7.

For the A.Y. 2013-14, the assessee received share capital from 8 companies to the tune of Rs.14.97 Crores and the AO made addition on protective basis in the hands of the assessee and in substantive basis in the hands of the 5 original shareholders. Further, the assessee has received an amount of Rs.3 crores from two entities namely, M/s SKP Commotrade and Siddheswari Vypar Ltd.

8.

The ld. CIT(A) deleted the addition holding that the AO could not establish the money trial and failed to bring on record any material evidence for his conclusion.

9.

We have gone through the order of the ld. CIT(A) and the Assessment Order. We find that the fact of the genuineness of the loan parties has neither proved from the side of the & 6657/Del/2016 4 Nexus Commosales Pvt. Ltd.

assessee nor from the part of the revenue in a proper way. Hence, we are of the considered view that no prejudice would be caused for any of the parties and deem it proper to remand the matter to the file of the Assessing Officer to complete the proceedings denovo as per the provisions of the Income Tax Act after duly affording an opportunity of the assessee.

10.

In the result, the appeals of the Revenue are allowed for statistical purpose. Order Pronounced in the Open Court on 11/03/2022.

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