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Facts
The assessee had unsecured loans from Jai Kishan Dass Kirori Mal (Rs. 50 lakhs) and Sidh Prakash & Sons (Rs. 85 lakhs), which were added as unexplained cash credit. Additionally, an addition of Rs. 1,32,708/- was made for undisclosed receipts on which TDS was claimed.
Held
The Tribunal held that the additions for unsecured loans were explained by the submission of bank statements and account details, thus deleting the addition. For the second issue, the Tribunal estimated the income at 10% of the disputed receipt, directing the AO to recompute accordingly.
Key Issues
Whether the unsecured loans were adequately explained and whether the undisclosed receipts on which TDS was claimed should be treated as income.
Sections Cited
143(3), 68
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Income Tax Appellate Tribunal, CHANDIGARH BENCH: ‘B’: CHANDIGARH
Before: SHRI MAHAVIR SINGH & SHRI KRINWANT SAHAY
IN THE INCOME TAX APPELLATE TRIBUNAL (CHANDIGARH BENCH: ‘B’: CHANDIGARH) BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER ITA No:- 499/CHANDI/2024 (Assessment Year- 2017-18) Vinayak Steel, Deputy Commissioner of Pehowa. Vs. Income Tax, Kurukshetra. PAN No: AALFV7294A APPELLANT RESPONDENT Assessee by : Sh. Parikshit Aggarwal, CA and Ms. Shruti Khandelwal, Adv. Revenue by : Dr. Ranjit Kaur, Addl. CIT, Sr. DR . Date of Hearing : 02.01.2025 Date of Pronouncement : 20.01.2025 ORDER PER MAHAVIR SINGH, VP:
This appeal by assessee is arising out of the order of CIT(A), NFAC, Delhi, in appeal no. CIT(A), Karnal/10921/2019-20. Assessment was framed by ACIT /DCIT, Circle, KUK, under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for Assessment Year 2017-18 vide his order dated 30.12.2019.
ITA No.- 499/Del/2024 Vinayak Steel. 2. The first issue in this appeal of assessee is as regards to the order of CIT(A) confirming the addition of unsecured loan raised from Jai Kishan Dass Kirori Mal amounting to Rs. 50 lakh and Sidh Prakash & Sons amounting to Rs. 85 lakhs/-, as unexplained cash credit U/s 68 of the Act.
We have heard the rival contentions and gone through the facts and circumstance of the case. We noted that the AO made addition of cash credits numbering 13, in amount totalling to Rs. 2,85,79,891/-being unexplained cash credit u/s 68 of the Act as the assessee unable to prove the credit worthiness and genuineness of these transactions. Aggrieved, assessee preferred an appeal before the CIT(A).
The CIT(A) sustained the addition in the case of Jai Kishan Dass Kirori Mal amounting to Rs. 50 lakhs and in the case of Sidh Prakash & Sons amounting to Rs. 85 lakhs for the reasons that no supporting evidences were filed, such a PNB account and balance sheet evidencing the creditworthiness of the lenders. Aggrieved, the assessee is in appeal before the Tribunal.
Before us, the Ld. Counsel for the assessee, in regard to Jai Kishan Dass Kirori Mal, filed bank statement evidencing by cheque
ITA No.- 499/Del/2024 Vinayak Steel. dated 25.04.2016 for Rs. 30 lakhs vide RTGS- OW/ORBCH16116046744/ Vinayak Steels and another entry of Rs. 20 lakhs vide RTGS-OW/ORBCH16365097712/Vinayak Steels dated 30.12.2016. This amount is co-related by Ld. Counsel for the assessee, in the copy of account of Jai Kishan Dass Kirori Mal as well as the assessee’s copy of account, on very same date the amounts have been received. The assessee has filed complete CC account details of Jai Kishan Dass Kirori Mal, account no. 06025010000640, maintained with PNB Pehowa. The Ld. Counsel for the assessee stated that these entries are arising out of the CC account and these are not unexplained cash credit. Similarly, the assessee also filed the bank account details of Sidh Prakash & Sons and drew our attention to the balance sheet and entry list. The Ld. Counsel stated that this amount of Rs. 85 lakhs was received by account payee cheques of Central Bank of India’s CC account and these amounts were received on 20.12.2016 Rs. 50 lakhs and on 23.12.2016, Rs. 19 lakhs and balance sheet sum of Rs. 11 lakhs on 27.12.2016. The next amount of Rs. 5 lakhs was received on 7.3.2017. From perusal of bank account, it seems that these credit entries are received through CC accounts and these are reflected in cross entries of assessee as well as the accounts of Sidh Prakash & Page 3 of 6
ITA No.- 499/Del/2024 Vinayak Steel. Sons HUF. We find no infirmity in these explanations and the entry in regard to Sidh Prakash & Sons, Rs. 85 lakhs and entry of Rs. 50 lakhs received from Jai Kishan Dass Kirori Mal are explained. Hence, we delete the addition and allow the appeal of assessee on this issue.
5. The second issue in this appeal of the assessee is as regards the order of CIT(A) confirming the addition of Rs.1,32,708/- made by the AO on account of undisclosed receipts, on which TDS was claimed.
We have heard rival contentions and gone through facts and circumstances of the case. We noted that the AO found from the accounts of the assessee that the assessee has claimed TDS of Rs.2,650/- in its ITR on the payment received of Rs.1,32,708/- from Paradise Wires Limited. This was not disclosed in the ITR by the assessee. The AO added the same and CIT(A) also confirmed the same. We noted from the arguments of learned Counsel for the assessee that the assessee did not receive any amount or income of this nature from Paradise Wires Limited. He stated that the Page 4 of 6
ITA No.- 499/Del/2024 Vinayak Steel. Paradise Wires Limited has committee error by filing Form No.26AS. But, to substantiate the same, the assessee could not produce any evidence or the statement of account of Paradise Wires Limited that they have not paid this income of Rs.1,32,708/-. Finally, learned Counsel agreed that this amount, if received, of Rs.1,32,708/-, the same can be considered as contract income and percentage of profit can be applied. Hence, we estimate the income at 10% of the receipt of Rs.1,32,708/- and direct the AO to recompute the income accordingly.
In the result, appeal of the assessee is partly allowed.
Order pronounced in the Open Court on 20 .01.2025