ITO - 13(1)(1), MUMBAI vs. NIRANWAL CREDIT AND HOLDING PVT. LTD., MUMBAI

PDF · subscribers
ITA 3642/MUM/2018Status: DisposedITAT Mumbai25 May 2022AY 2010-114 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the assessee failed to prove the creditworthiness of the lenders and the genuineness of the loan transactions. The CIT(A)'s order was set aside.

What were the facts?

The Revenue appealed against the deletion of an addition made under Section 68 of the Income Tax Act. The assessee had received unsecured loans from four parties totaling Rs. 20 crores and advanced these to other companies.

What were the issues?

Whether the assessee discharged its onus to prove the genuineness and creditworthiness of unsecured loan transactions under Section 68 of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “ B”, MUMBAI

Hearing: 25/05/2022Pronounced: 25/05/2022

The Income Tax Officer-13(1)(1), Room No.225, 2nd Floor, Aaykar Bhavan, M.K.Road, Mumbai – 400 020 ...... अपीलाथ�/Appellant बनाम Vs. M/s. Niranwal Credit and Holding Pvt. Ltd., Gala No.955, Patel Industrial Estate, Navpada Road, GassCompund, Oshiwara, Jogeshwari West, Mumbai 400 102. PAN:AAACN-4763-G ..... ��तवाद�/Respondent अपीलाथ� �वारा/ Appellant by :Dr. Mahesh Akhade ��तवाद� �वारा/Respondent by :None सुनवाई क� �त�थ/ Date of hearing : 25/05/2022 घोषणा क� �त�थ/ Date of pronouncement : 25/05/2022 आदेश/ORDER PER VIKAS AWASTHY, JM:

This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals) -21, Mumbai [in short ‘the CIT(A)] dated 28/02/2018, for the assessment year 2010-11.

2.

Notice of hearing of appeal was sent to the assessee/respondent through RPAD. The notice has not been received back unserved from Postal Authorities, therefore, deemed to be served. An examination of the file shows that one Mr. Sankalp Anil Sharma, Advocate has filed his Power of Attorney to represent the assessee /respondent. He appeared on one occasion. Thereafter, on some of the dates of hearing proxy Counsel for Mr. Sharma appeared and sought adjournments. On previous two occasions, none has represented the assessee nor any letter seeking adjournment has been filed. Since, this appeal is languishing since 2018, without there being any assistance from the respondent, we are taking up this appeal for adjudication with the assistance of ld. Departmental Representative and material available on record.

3.

The Revenue in appeal has assailed the findings of CIT(A) in deleting the addition made u/s. 68 of the Income Tax Act, 1961 [in short' 'the Act'].

4.

Dr. Mahesh Akhade representing the Department submitted that the assessee has taken unsecured loans from the following parties:

S.No. Name of party Amount 1. Aims Infrastructure Pvt. Ltd. 3,00,00,000 2. Pearl Infrastructure Pvt. Ltd. 4,00,00,000 3. Tropical Infrastructure Pvt. Ltd. 3,00,00,000 4. Sulabhya Engineering Pvt. Ltd. 10,00,00,000 Total 20,00,00,000 The assessee thereafter advanced these loans to Jaico Textiles Pvt. Ltd. and Doral Trading Pvt. Ltd. During assessment proceedings the assessee failed to discharge its onus in proving genuineness of the loan transactions and creditworthiness of the lenders. Consequently, the Assessing Officer made addition of Rs.20.00 crores u/s. 68 of the Act. The ld. Departmental Representative submitted that the CIT(A) has granted relief to the assessee by following the order of Tribunal in the case of Jaico Textiles Pvt. Ltd. for assessment year 2010-11. The facts in the present case are distinguishable, hence, the present appeal cannot be decided by merely following the findings of the Tribunal in the case of Jaico Textiles Pvt. Ltd. (supra).

5.

We have heard the submissions made by ld. Departmental Representative and have examined the orders of authorities below. In the impugned order the solitary issue raised by the Revenue is with regard to deleting of addition made u/s. 68 of the Act. We find that the CIT(A) in the impugned order has deleted the addition primarily following the decision of Tribunal in the case of Jaico Textiles Pvt. Ltd. for the assessment year 2010-11 decided on 28/09/2016. The issue in the case of Jaico Textiles Pvt. Ltd. and the present appeal is undoubtedly similar to the extent that the additions were made u/s. 68 of the Act. However, the issue has to be decided on the facts of each case. The CIT(A) in para 8.2 of the order has observed that the lenders had furnished confirmations regarding the loan. However, there is no other document which suggests that the lenders were having means to advance loan. Taking into consideration entirety of facts we are of the considered view that the assessee has failed to prove creditworthiness of the lenders and genuineness of the loan transactions. We find merit in the appeal by the Revenue. Accordingly, the same is allowed and impugned order is set aside.

6.

In the result, appeal by the Revenue is allowed.

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →