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Income Tax Appellate Tribunal, DELHI ‘F’ BENCH,
Before: SHRI N.K. BILLAIYA, & MS. MADHUMITA ROY
PER N.K. BILLAIYA, ACCOUNTANT MEMBER,
This appeal by the Revenue is preferred against the order of the Commissioner of Income Tax [Appeals] - 12 New Delhi dated 22.09.2017 pertaining to Assessment Year 2014-15.
2. The solitary grievance of the Revenue is that the ld. CIT(A) erred in deleting the addition of Rs. 4,37,50,000/- made on account of unsecured loans.
Representatives of both the sides were heard at length. Case records carefully perused.
Briefly stated, the facts of the case are that during the assessment proceedings, the Assessing Officer noticed that the assessee has shown unsecured loans amounting to Rs. 5,95,49,722/- during the year under consideration out of loans amounting to Rs. 4,37,50,000/-.
The assessee was asked to explain the transaction in light of provisions of section 68 of the Income tax Act, 1961 [hereinafter referred to as 'The Act' for short].
The assessee filed detailed reply alongwith confirmation, copy of Income tax return and bank statement. The assessee has taken unsecured loan from the following parties:
Loan taken during the year Name of the S.No. Lender (In Rs.) Source of Income 1 Anjali Malani 5000000 Capital Gain &Interst Income Ramanand 2 10600000 Capital Gain & Interest Income Malani 3 Mamta Malani 19550000 Capital Gain &Interest Income Vijay Laxmi 4 4600000 Capital Gain & Interst Income Malani 5 Kailash Malani 4000000 Capital Gain & Interest income Total 4,37,50,000
After perusing the detailed submissions made by the assessee, observations of the Assessing Officer are as under:
Anjali Malani - The Assessee submitted copy of the income tax return and bank statement. The lender received the money from the sale of shares of M/s Dhan Leela Investment & Trading Company Pvt. Ltd., a penny stock company. She did not appear in response to a summons issued u/s 131 of the I.T. Act. The Assessing Officer observed that it was a fact that the black money of the Assessee routed through the family members.
Ramanand Malani - The Assessing Officer has given similar observations as given in the case of Ms. Anjali Malani, in respect of loans amounting to Rs. 1,06,00,000/- taken from this lender
3. Mamta Malani - The Appellant has shown loan of Rs. 1,95,50,000/- from this lender who is also one of the relatives. The Assessing Officer has given similar observations with respect to this transaction as in the case of Ms. Anjali Malani.
4. Vijay Laxmi Malani - The Assessee has shown loan of Rs.46,00,000/- from this lender. The observations of the Assessing Officer in respect of Ms. Vijay Laxmi Malani are similar to one given in the case of Ms. Anjali Malani.
5. Kailash Malani - The Appellant has shown unsecured loans of Rs.40,00,000/- from Sh. Kailash Malani. He is also a relative. The Assessing Officer’s observations are similar to that given in the case of Ms. Anjali Malani. Sh. Kailash Malani appeared the business or the reason for making the in' company whose shares were traded at Rs.3.4 per share.”
After referring to various judicial decisions, the Assessing Officer came to the conclusion that the assessee has not discharged the onus cast upon him u/s 68 of the Act and concluded the assessment proceedings after making addition of Rs. 4,37,50,000/-.
Assessment was assailed before the ld. CIT(A) and it was vehemently contended that the Assessing Officer has not made any adverse comments on the documents filed by the assessee. It was explained to the ld. CIT(A) that the loans have been advanced through banking channel and the loan creditors had sufficient balance in their respective bank accounts duly reflected in the bank statements filed by the assessee. It was also contended that all the loan creditors are assessed to tax from past many years.
After considering the submissions and evidences filed by the assessee, the ld. CIT(A) was convinced that the assessee has discharged the onus cast upon him by provisions of section 68 of the Act and deleted the addition.
We have carefully considered the orders of the authorities below.
We find that the Assessing Officer was of the firm belief that the loan creditors have given loans from the capital gains derived from sale of penny stock of M/s Dhan Leela Investment & Trading Co. Ltd. We further find that in same share, the assessee has also shown long term capital gain of Rs. 2,02,40,377/- which was disallowed by the Assessing Officer and confirmed by the ld. CIT(A). However, we find that the quarrel relating to the capital gains derived by the assessee has been settled under the Vivad Se Vishwas Scheme, 2020.
We find that similar disallowances were made in the hands of the family member of the assessee who claimed to have earned long term capital gain from sale of shares of M/s Dhan Leela Investment & Trading Co. Ltd and in all such cases, the quarrel has been settled under Vivad se Vishwas Scheme, 2020,
Coming to the facts of the five loan creditors, we find that each loan creditor had shown his/her source of income being capital gain from sale of shares of M/s Dhan Leela Investment & Trading Co. Ltd. We have been informed that the Assessing Officer of the depositors have added income received from sale of shares of M/s Dhan Leela Investment & Trading Co. Ltd which in itself proves the source of the five depositors who have lended the money to the assessee.
Once the source of the five loan creditors has been established, there should remain no allegation on the assessee within the four walls of section 68 of the Act. In our considered view, the assessee has successfully explained/proved the identity, genuineness of the transaction and the capacity of the depositors and has successfully discharged the initial onus cast upon him by provisions of section 68 of the Act. We, therefore, do not find any reason to interfere with the findings of the ld. CIT(A).
In the result, the appeal filed by the Revenue in is dismissed.
The order is pronounced in the open court on 12.08.2021 in the presence of both the rival representatives.