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Facts
The Assessing Officer made an addition of Rs.69,95,000/- under Section 69/69A against the assessee for an alleged unexplained receipt from his father-in-law, Sh. Ashok Kumar Malhotra. The assessee contended that the amount represented repayment of past loans, mostly received through banking channels in the current and preceding assessment years.
Held
The Tribunal found that only Rs.27,50,000/- was received by the assessee in the current year through banking channels, and the allegation of cash receipt was largely incorrect, except for a minor amount in a preceding year. The assessee provided proper explanations, bank statements, and confirmations, thus the addition under Section 69/69A was not sustainable.
Key Issues
Whether the addition made by the Assessing Officer under Section 69/69A for alleged unexplained receipts, claimed by the assessee as loan repayment through banking channels, was sustainable.
Sections Cited
147, 144C(13), 144C, 69A, 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “D” NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI AVDHESH KUMAR MISHRA
आदेश /O R D E R
PER C.N. PRASAD, J.M.
This appeal is filed by the assessee against the final assessment order dated 30.01.2024 for the AY 2018-19 passed u/s 147 r.w.s 144C(13) of the Act pursuant to the directions of the DRP dated 08.12.2023 u/s 144C of the Act. Assessee challenged the order of the Assessing Officer in making an addition of Rs.69,95,000/- u/s 69A of the Act.
Brief facts are the Assessing Officer during the assessment proceedings noted that an amount of Rs.69,95,000/- was received by the assessee from Sh. Ashok Kumar Malhotra Prop. Corporate Solutions. The assessee explained that Sh. Ashok Kumar Malhotra is the father in law of the assessee and he had taken loans from the assessee earlier and part of which was repaid in the year under consideration. The A.O. did not believe the stand of the assessee and proposed an addition of Rs.69,95,000/- under section 69/69A of the Act.
The assessee filed objections before the DRP and in order to substantiate the funds received he filed the ledger account of Corporate Solutions, confirmation from Corporate Solutions and bank account showing both the outflow and inflow of the funds. DRP directed the Assessing Officer to take submissions of the assessee into account and then make addition only if required.
The Assessing' Officer considered the submissions and documents filed by the assessee and once again disagreeing with him, made the addition of Rs.69,95,000/- under section 69A of the Act. We observed that the main reason given by A.O. to make the addition was that “Though, a confirmation in this regard has been received from Sh. Ashok Kumar Malhotra but in the statement of 2 account it is observed that repayment to the assessee has been made in cash.” Accordingly the addition was repeated.
Ld. Counsel for the assessee, at the outset, submitted that only Rs.27,50,000/- has been received back by the assessee during the year under consideration and the rest of Rs.42,45,000/- has been received in the preceding assessment year. Therefore, it is contended that no addition once above Rs.27,50,000/- could be have been made in the assessment year under consideration.
Further against the main allegation that the cash has been received in the name of loan repayment by the assessee it is contended that it is factually incorrect as the assessee in fact has received the repayment through proper banking channel.
Ld. Counsel further submitted that the assessee had filed the following documents to prove the funds received:
(i) Confirmation from Sh. Ashok Kumar Malhotra PB Pg. 1
(ii) Ledger account of Corporate Solutions PB Pg. 2
(iii) Bank statement showing the outflow and inflow of funds PB Pg. 3-5 Ld. Counsel submitted that from the perusal of these documents it can be seen that the loans were given in by the assessee were all through banking channels and the amount received back in the year under consideration was also through banking channel. It is submitted that the addition be deleted.
Ld. DR strongly placed reliance on the orders of the authorities below.
Heard rival submissions, perused the orders of the authorities below and the paper book filed before us. On perusal of the confirmation which is placed at page 1 of the PB given by Shri Ashok Kumar Malhotra, Prop. of M/s Corporate Solutions, who is also the father in law of the assessee suggests that during the year under consideration the assessee received only an amount of Rs.27,50,000/- as repayment of loan. This is the only amount which was received by the assessee from Shri Ashok Kumar Malhotra as is evident from the bank statement of the assessee and therefore there cannot be any addition to the extent of Rs.69,95,000/- as was made by the Assessing Officer in the assessment order. We further noticed that the allegation by the AO that the assessee had received cash being the repayment of loan to the assessee is also factually incorrect. Perusal of the bank statement of the assessee show that the assessee had received Rs.45,000/- in cash into his bank account on 23.11.2016 which falls immediately in the preceding assessment year and during the assessment year under consideration i.e. 2018- 4 2019 there was no any cash receipt by the assessee in his bank account. Therefore, in our considered view the assessee has properly explained the transactions in his bank account with his father in law and also confirmations were filed. The addition made by the AO u/s 69/69A cannot be sustained. Thus, we direct the AO to delete the addition made u/s 69/69A of the Act.
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 28/05/2025