Loading judgment…
Facts
The Assessing Officer (AO) made an addition of Rs.36.75 crores under Section 68 of the Income Tax Act for unexplained cash credits, as the assessee initially failed to provide details of loans. The assessee challenged this before the Ld. CIT(A), providing evidence. The Ld. CIT(A) sought a remand report from the AO, where the AO confirmed the genuineness and creditworthiness of the loans.
Held
Based on the AO's positive remand report, the Ld. CIT(A) deleted the addition made under Section 68. The Income Tax Appellate Tribunal (ITAT) upheld the Ld. CIT(A)'s order, finding no infirmity in the decision, as the AO had already accepted the genuineness of the loans in the remand proceedings. Consequently, the revenue's appeal and the assessee's cross-objection were dismissed.
Key Issues
Whether the Ld. CIT(A) was justified in deleting the addition made under Section 68 for unexplained cash credits, based on the Assessing Officer's favorable remand report confirming the genuineness of the loan transactions.
Sections Cited
68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “E” MUMBAI
Before: SHRI BR BASKARAN & SHRI RAJ KUMAR CHAUHAN
These cross appeals are directed against the order dated 21-09-2024 passed by Ld CIT(A), NFAC, Delhi and they relate to the assessment year
Hi Rock Construction Company Construction Company 2 & CO No. 1/Mum/2025 2017-18. The revenue is aggrieved by the decision of Ld CIT(A) in deleting 18. The revenue is aggrieved by the decision of Ld CIT(A) in deleting 18. The revenue is aggrieved by the decision of Ld CIT(A) in deleting the addition of Rs.36.75 crores made by the addition of Rs.36.75 crores made by the AO u/s 68 of the Act. The the AO u/s 68 of the Act. The assessee has filed appeal contending that the AO could not have filed the assessee has filed appeal contending that the AO could not have filed the assessee has filed appeal contending that the AO could not have filed the appeal after accepting the genuineness of the loans in the remand appeal after accepting the genuineness of the loans in the remand appeal after accepting the genuineness of the loans in the remand proceedings.
We heard the parties and perused the record. The AO noticed that 2. We heard the parties and perused the record. The AO noticed that 2. We heard the parties and perused the record. The AO noticed that the assessee had taken loans from various persons to the tune of Rs.36.75 assessee had taken loans from various persons to the tune of Rs.36.75 assessee had taken loans from various persons to the tune of Rs.36.75 crores. Since the assessee did not furnish details to prove those loans, the crores. Since the assessee did not furnish details to prove those loans, the crores. Since the assessee did not furnish details to prove those loans, the AO assessed the above said amount as unexplained cash credit u/s 68 of AO assessed the above said amount as unexplained cash credit u/s 68 of AO assessed the above said amount as unexplained cash credit u/s 68 of the Act. The assessee challenge the Act. The assessee challenged the same before the Ld CIT(A) and also d the same before the Ld CIT(A) and also furnished various evidences to prove the cash credits by way of loan. furnished various evidences to prove the cash credits by way of loan. furnished various evidences to prove the cash credits by way of loan. Hence, the Ld CIT(A) called for a remand report from the AO. In the remand Hence, the Ld CIT(A) called for a remand report from the AO. In the remand Hence, the Ld CIT(A) called for a remand report from the AO. In the remand proceedings, the AO examined the loans vis proceedings, the AO examined the loans vis-a-vis the evidences and r vis the evidences and reported that all the loans are proved. Based on the said remand report, the Ld that all the loans are proved. Based on the said remand report, the Ld that all the loans are proved. Based on the said remand report, the Ld CIT(A) deleted the addition. CIT(A) deleted the addition.
We notice that the Ld CIT(A) has extracted the following final 3. We notice that the Ld CIT(A) has extracted the following final 3. We notice that the Ld CIT(A) has extracted the following final observations made by the AO in the remand report: observations made by the AO in the remand report:- “….In the light of the above observations and the supplementary “….In the light of the above observations and the supplementary “….In the light of the above observations and the supplementary evidence provided by the assessee, it can be said that the assessee evidence provided by the assessee, it can be said that the assessee evidence provided by the assessee, it can be said that the assessee has discharged its onus to prove the identity, creditworthiness and has discharged its onus to prove the identity, creditworthiness and has discharged its onus to prove the identity, creditworthiness and genuineness…” Accordingly, the Ld CIT(A) held as unde Accordingly, the Ld CIT(A) held as under:- “6.3 In the remand report it is unequivocally and categorically stated “6.3 In the remand report it is unequivocally and categorically stated “6.3 In the remand report it is unequivocally and categorically stated that the source of loan received by the appellant has been found to be that the source of loan received by the appellant has been found to be that the source of loan received by the appellant has been found to be explained. Once the AO has given such an emphatic and conclusive explained. Once the AO has given such an emphatic and conclusive explained. Once the AO has given such an emphatic and conclusive finding there is no reason or basis to d finding there is no reason or basis to disagree from the Remand isagree from the Remand Report.
Hi Rock Construction Company Construction Company 3 & CO No. 1/Mum/2025 6.4 In view of the emphatic report given by the AO, duly approved 6.4 In view of the emphatic report given by the AO, duly approved 6.4 In view of the emphatic report given by the AO, duly approved and agreed to by the Range Head, accepting that the appellant has and agreed to by the Range Head, accepting that the appellant has and agreed to by the Range Head, accepting that the appellant has been able to successfully discharge its onus to prove the identity, been able to successfully discharge its onus to prove the identity, been able to successfully discharge its onus to prove the identity, creditworthiness and g creditworthiness and genuineness of the loan transactions, the enuineness of the loan transactions, the addition made u/s 68 of the IT Act amounting to Rs.36,74.97,222/ addition made u/s 68 of the IT Act amounting to Rs.36,74.97,222/ addition made u/s 68 of the IT Act amounting to Rs.36,74.97,222/- is deleted. In view of the discussion, these grounds of appeal of the deleted. In view of the discussion, these grounds of appeal of the deleted. In view of the discussion, these grounds of appeal of the appellant are allowed.” appellant are allowed.”
4. We notice that the impugned addition has been mad he impugned addition has been made by the AO in the e by the AO in the assessment proceedings for want of evidences. In the remand proceedings, assessment proceedings for want of evidences. In the remand proceedings, assessment proceedings for want of evidences. In the remand proceedings, the assessee has furnished all the documents to prove the loan amount the assessee has furnished all the documents to prove the loan amount the assessee has furnished all the documents to prove the loan amounts and hence the AO has categorically held that the assessee has discharged and hence the AO has categorically held that the assessee has discharged and hence the AO has categorically held that the assessee has discharged its burden to prove the loans in terms of sec.68 of the Act. We notice that the loans in terms of sec.68 of the Act. We notice that the loans in terms of sec.68 of the Act. We notice that the Ld CIT(A) has deleted the addition on the basis of the remand report the Ld CIT(A) has deleted the addition on the basis of the remand report the Ld CIT(A) has deleted the addition on the basis of the remand report so given by the AO. Accordingly, we are of the view that the AO should not Accordingly, we are of the view that the AO should not Accordingly, we are of the view that the AO should not have filed this appeal, after accepting the loans have filed this appeal, after accepting the loans in the remand report. in the remand report. Before us, no other material was placed to contradict the finding given by Before us, no other material was placed to contradict the finding given by Before us, no other material was placed to contradict the finding given by the AO in the remand report. Under these circumstances, we do not find the AO in the remand report. Under these circumstances, we do not find the AO in the remand report. Under these circumstances, we do not find any infirmity in the decision rendered by Ld CIT(A). Accordingly, we uphold any infirmity in the decision rendered by Ld CIT(A). Accordingly, we uphold any infirmity in the decision rendered by Ld CIT(A). Accordingly, we uphold his order.
5. The appeal of the assessee is only to support the order passed by Ld
5. The appeal of the assessee is only to support the order passed by Ld
5. The appeal of the assessee is only to support the order passed by Ld CIT(A). Hence it does not require separate adjudication. CIT(A). Hence it does not require separate adjudication.
6. In the result, the appeal of the revenue and the 6. In the result, the appeal of the revenue and the CO of the assessee is of the assessee is dismissed.