FACT ENTERPRISE LTD.,MUMBAI vs. DCIT 8 (1), MUMBAI

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ITA 1209/MUM/2019Status: DisposedITAT Mumbai21 September 2022AY 2012-134 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The tribunal held that the assessee failed to discharge its initial onus under Section 68 of the Act to prove the identity, creditworthiness, and genuineness of the transactions for the unsecured loans.

What were the facts?

The assessee company received unsecured loans of ₹ 101,604,738. For loans amounting to ₹ 46,710,000, the assessee only provided loan confirmations without PAN or other identifying details of the creditors.

What were the issues?

Whether the addition of unexplained cash credit under Section 68 is justified when the assessee fails to prove the identity, creditworthiness, and genuineness of the loan creditors.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

For Respondent: Shri. Nishant Somiya SR AR
Hearing: 21.09.2022Pronounced: 21.09.2022

PER PRASHANT MAHARISHI, AM: 01. This appeal is filed by assessee against the appellate order passed by the Commissioner of income tax (Appeals) – 16, Mumbai [the learned CIT (A)] dated 29th June, 2017 for A.Y. 2012–13, wherein the addition by the learned Assessing Officer of ₹ 46,710,000 under Section 68 of the Income-tax Act, 1961 (the Act) as unexplained cash credit is confirmed.

2.

The assessee is aggrieved with that order and has preferred the solitary ground that addition confirmed by the learned CIT (A) is not justified.

5.

Aggrieved assessee has preferred this appeal before us. Several opportunities were granted to the assessee. None appeared on behalf of the assessee neither request for adjournment was. In view of this, we do not have any other option but to dispose of the appeal of the assessee on the merits as per information available on record.

6.

The learned Departmental Representative heavily relied on the orders of the lower authorities and submitted that when the assessee has failed to discharge its initial onus under Section 68 of the Act, the lower authorities have confirmed the addition.

7.

We have carefully considered the contention raised by the learned Departmental Representative and perused the orders of the lower authorities. We find that with respect to four parties from whom assessee has taken loan of Rs 467,10,000/–, assessee could not discharge its initial onus of proving the identity and creditworthiness of those parties as well as the genuineness of the transactions. Therefore, as the sum was credited in the books of accounts during the year, the learned Assessing Officer made addition of the above sum under Section 68 of the Act. Before the learned CIT (A), nothing was produced and therefore the addition was confirmed. Thus, before the lower authorities only the confirmation without Permanent Account Number or any other information proving the identity, creditworthiness of those parties and genuineness

Order pronounced in the open court on 21.09.2022.

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