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Facts
The assessee, M/s Parwani Traders Pvt. Ltd., received a credit of ₹1,15,77,674/- recorded as loans. The Assessing Officer (AO) and CIT(A) treated this as unexplained cash credit under Section 68, citing the assessee's changing stand and alleged lack of proper confirmations. The assessee had submitted a tax auditor's corrigendum clarifying that the loans were mistakenly shown as sundry creditors and provided detailed lender information and confirmations.
Held
The Tribunal held that the assessee had discharged its onus under Section 68 by providing all necessary documents, clarifications, and confirmations for the loans, which were available to the lower authorities. It found that both the AO and CIT(A) failed to correctly appreciate the facts and evidence on record, leading to an incorrect addition.
Key Issues
Whether the addition of unsecured loans aggregating to ₹1,15,77,674/- as unexplained cash credit under Section 68 was justified when the assessee furnished detailed evidence and confirmations for the same.
Sections Cited
68, 142(1)
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Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 10.07.2024 for the AY 2018-19.
The only issue raised by the assessee in the various grounds of appeal is against the confirmation of addition of ₹1,15,77,674/- by the ld. CIT (A) as made by the ld. AO u/s 68 of the Act.
The facts in brief are that the assessee filed the return of income on 26.09.2018, declaring total income of ₹12,05,270/- which was revised on 28.02.2019 with the same income. Thereafter, the case of the assessee was selected for complete scrutiny for verification of
In the appellate proceedings, the ld. CIT (A) after taking into account the contention of the assessee noted that assessee had borrowed ₹1,15,77,674 from four parties during F.Y. 2017-18. The ld CIT(A) in the tabulated chart furnished by the assessee, the loans were to the tune of ₹85,08,174/- and not to ₹1,15,77,674/-. The ld. CIT (A) further noted that the assessee has filed the copies of ledger accounts of the parties from the books of M/s Zenstar Dealers P. Ltd., whereas the name of the assessee company is Zendar P. Ltd. and has not filed any confirmation from these parties who have given short term loans to the assessee and finally by relying on the decisions of PCIT vs. M/s NRA Iron and Steel Pvt. Ltd. dated 5th March, 2019 103 taxmann.com 48, held that the ld. AO has rightly added this amount to the income of the assessee.
After hearing the rival contentions and perusing the materials available on record, we find that in this case admittedly, the loans taken by the assessee from four parties aggregating to ₹1,15,77,674/-, the details whereof are available at page no.73 of the Paper Book. The said details contained the name of the lenders, PAN no., Addresses, opening balances, loans taken during the year, loans repaid during the year and closing balances. We note from that statement that all these details were before the authorities below and assessee has furnished all the documents qua the lenders along with confirmations which were also available in the Paper Book filed by the assessee. The loan conformations are available at page no.74 to 82. We note that the opening balance of unsecured loan was ₹48,42,300/-
The ld. DR on the other hand submitted that the assessee has not pursued its case before the lower authorities and therefore, the appeal may be restored to either of the authorities below.
However, considering the facts on record as available in the Paper Book and after taking into account the rival contentions, we are of the opinion that the assessee has discharged its onus as provided u/s 68 of the Act by filing all the documents, clarifications, corrigendum ,confirmations qua these loans and both the authorities below have failed to correctly appreciate the facts on record. Under these circumstances, we are inclined to set aside the order of ld. CIT (A) and direct the ld. AO to delete the addition. The appeal of the assessee is allowed.
Order pronounced in the open court on 15.01.2025.