VITAL CARE PRIVATE LIMITED,VADODARA vs. THE DY. CIT, CIRCLE-2(1)(1), VADODARA

This is an appeal filed against the order dated 24-02- 2025 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2014-15.

The grounds of appeal are as under:- “1) The assessing officer treated the amount of Rs. 42,00,000/- received from creditors as unexplained cash credits and added to the total income u/s 68 of the IT Act. The assessing officer believed that the assessee has failed to prove the identity, credit worthiness and genuineness of the transaction and could not substantiate the source of source of such transaction. The Vital Care Pvt. Ltd., A.Y. 2014-15 assessing officer treated the same as unexplained cash credits and added to the total income u/s 68 of the IT Act. Your Appellant submits the same is not justified and therefore be deleted. 2) The asseessing officer has further disallowed Rs. 8,17,535/- as proportionate interest on unsecured loan of Rs. 42,00,000/- stating that the assessee has paid interest on unexplained cash credits. Your Appellant submits the same is not justified and therefore be deleted. Your Appellant craves leave to add to, alter, to amend or to delete any or all the grounds of appeal.”

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

The ld. A.R. submitted that the identical issue has been decided by the Tribunal in assessee’s own case for assessment year 2013-14 being order dated 20-12- 2023 wherein the said depositor parties i.e. Aaheli Projects Pvt. Ltd and Berhampore Finance & Leasing Pvt. Ltd. have been taken into account.

The ld. D.R. relied upon the assessment order and the order of the CIT(A).

We have heard both the parties and perused all the relevant material available on record. The Assessing Officer as well as CIT(A) has relied upon the finding of the assessment year 2013-14 passed by the Assessing Officer in that relevant year in respect of Berhampore Finance and Leasing Pvt. Ltd. and Aaheli Projects Pvt. Ltd. The assessee has given the details related to Vital Care Pvt. Ltd., A.Y. 2014-15 confirmation of accounts, copy of bank statement, copy of ITR, acknowledgment, copy of ledger account of both the parties has also explained the genuineness and identity as well as creditworthiness in the assessment year 2013-14 as well as 2014-15. Thus, the addition made u/s. 68 does not sustain as the assessee has explained the unsecured loans before the Assessing Officer. Besides this, the assessee has paid the interest to the said parties has also explained and hence the same cannot be disallowed. The appeal of the assessee is allowed in the light of the decision of the Tribunal in assessee’s own case for assessment year 2013-14.

In the result, the appeal of the assessee is allowed.