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Facts
The assessee, M/s Rajasthan Metals, appealed against the CIT(A)'s order for AY 2015-16, challenging the addition of Rs. 3,15,66,210/- as unexplained cash credit under Section 68 for unsecured loans. The assessee argued that it had provided all relevant documents for the loans and questioned the proper service of the Section 143(2) notice.
Held
The Tribunal dismissed the appeal, holding that merely filing documentary evidence does not discharge the assessee's onus to prove the genuineness of unsecured loans, especially when partners disowned knowledge of supporting details. It was also noted that the onus was on the assessee to prove any illegality in the service of the Section 143(2) notice, which they failed to do.
Key Issues
Whether the lower authorities correctly treated unsecured loans as unexplained cash credit under Section 68 due to failure to prove genuineness, and if there was any procedural irregularity in the service of the Section 143(2) notice.
Sections Cited
68, 143(2), 143(3)
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Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. Naveen Chandra
Asstt. Year : 2015-16 M/s Rajasthan Metals, Vs Income Tax Officer, B-69, Mansarovar Park, Ward-28(4), Delhi-110032 New Delhi-110002 (APPELLANT) (RESPONDENT) PAN No. AAPFR7089D Assessee by : Sh. Prince Mohan Sinha, Adv. Revenue by : Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing: 05.05.2025 Date of Pronouncement: 05.05.2025 ORDER
Per Satbeer Singh Godara, Judicial Member:
This assessee’s appeal for Assessment Year 2015-16, arises against the CIT(A)-38, New Delhi’s in case No. CIT(A), Delhi-38/10073/208-19 dated 22.03.2019, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”)
Heard both the parties at length. Case file perused.
The assessee’s sole substantive grievance canvassed herein seeks to reverse learned lower authorities’ action treating it’s unsecured loans received during the year amounting to Rs.3,15,66,210/- as unexplained cash credit u/s 68 in the course of assessment framed on 28.12.2017 and upheld in the lower appellate discussion. Learned counsel has Rajasthan Metals raised the assessee’s twin folded arguments. He firstly submits that the assessee had filed all the relevant details and evidence of the concerned parties M/s Amrti Enterprises, Soham Trading Co., Shiv Shakti Metals and Manglam International, involving varying sums along with all the documents thereof, before the lower authorities. Learned counsel second plea is that there is no indication in the lower authorities findings as to how and in what manner, section 143(2) notice had been issued and served to the assessee.
We find no merit in either of the assessee’s foregoing twin arguments. Learned departmental representative takes us to the CIT(A)’s discussion at page 5 in para 3.2 that the assessee’s partners Sh. Sharad Garg and Kishan Pal Singh had made it clear that they did not have any supportive evidence in explaining genuineness of the impugned unsecured loans as the said details had been kept with one Mr. Pankaj Jain (in jail). Ms. Hansra next refers to an alleged letter to the police authorities dated 04.08.2018 to this effect. Be that as it may, we are of the considered view that mere filing of documentary evidence not proving genuineness of the impugned unsecured loans, would not amount to the assessee having discharged it’s onus in light of Sumati Dayal vs. CIT (1995) 214 ITR 801 (SC), CIT Vs. Durga Prasad More (1971) 82 ITR 540 and PCIT vs. NRA Iron & Steel Pvt. Ltd. (2019) 412 ITR 161. More so, when the Rajasthan Metals assessee’s twin partners having equal share had disowned the same before learned departmental authorities. We thus, see no merit in the assessee’s instant and foremost argument which is hereby rejected in very terms.
Next comes the assessee’s second argument that there is no indication about the mode/manner of actual service of section 143(2) notice. A perusal of the assessment order dated 28.12.2017 in para itself suggests that the learned assessing authority has issued it’s corresponding section 143(2) notice dated 30.08.2016 to the assessee. That being the case, it is the assessee’s onus only to plead and prove any illegality therein which could be held as to have vitiated the assessment itself. We thus reject the assessee’s instant latter argument as well.