DEPUTY COMMISSIONER OF INCOME TAX-1(3)(1), MUMBAI, MUMBAI vs. SPS FINQUEST LIMITED, MUMBAI

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ITA 4367/MUM/2024Status: DisposedITAT Mumbai31 January 2025AY 2017-18Bench: CIT(A) challenging the above addition/disallowance made by the Assessing Officer. The CIT(A) allowed the appeal preferred by the Assessee and deleted the disallowance of INR.5,48,313/- made under Section 14A of the Act as well as the addition of INR.10,00,00,000/- made under Section 68 of the Act.1 pages

AI SummaryDismissed

Facts

The Revenue appealed the CIT(A)'s order, which had allowed the assessee's appeal against the Assessment Order. The Assessment Order had disallowed INR 5,48,313/- under Section 14A and added INR 10 Crore under Section 68 for an unsecured loan.

Held

The Tribunal held that the disallowance under Section 14A was not warranted as the assessee had sufficient interest-free own funds to cover investments. Regarding the addition under Section 68, the Tribunal found that the assessee had discharged its onus to prove the identity, genuineness, and creditworthiness of the loan creditor.

Key Issues

Whether the disallowance under Section 14A was justified despite sufficient own funds, and whether the addition under Section 68 for an unsecured loan was sustainable given the evidence of identity, genuineness, and creditworthiness of the lender.

Sections Cited

14A, 8D(2)(ii), 68, 143(3), 250, 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” BENCH, MUMBAI

Per Omkareshwar Chidara, Accountant Member (Concurring):

16.

While concurring with the Order of Hon’ble Judicial Member (Shri Rahul Chaudhary), the following observations are made by the undersigned:-

M/s. Lewis Alfa Agrotech Ltd. was issued a new Certificate of Incorporation (change of name) by ROC as Shri Vighnaharta Realty Pvt. Ltd. vide its order dated 4.3.2005. During the Assessment Year 2017-2018 hearing proceedings before the ITAT, it is observed that they are using both PANs of Lewis Alfa Agrotech Ltd. and Shri Vighnaharta Realty Pvt. Ltd., while filing returns of income in subsequent years. This is brought to the notice of Income Tax authorities, as no assessee can use both PANs simultaneously and one PAN had to be deactivated in the process of deduplication of PANs.

All the other observations of Hon’ble Judicial Member are concurred with pertaining to this case in the above captioned appeal Order.

17.

In result, the present appeal preferred by the Revenue is dismissed.

Order pronounced on 31.01.2025.