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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI RAJESH KUMAR, AM & SHRI AMARJIT SINGH, JM
O R D E R
PER AMARJIT SINGH, JM:
The revenue has filed the present appeal against the order dated 02.02.2018 passed by the Commissioner of Income Tax (Appeals) -45, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2013- 14.
The revenue has raised the following grounds: - "
1) The Ld. CIT(A) has erred in deleting the addition u/s 68 of the I. T. Act of Rs.1,19,00,000/- being loan received from M/s. Sach International when the credit worthiness of the creditor was not proved by the assessee. A.Y.2013-14
2. The Ld. CIT(A) erred in deleting the addition u/s 68 of the I. T. Act of Rs.30,00,000/- being capital introduced by a partner when the source of the introduction has not been adequately explained by the assessee.
3. In deleting the above additions the Ld. CIT(A) relied on additional evidences which were neither submitted by the assessee during the assessment proceedings nor during the remand proceedings.
4. The appellant prays that the order of the Ld. CIT(A) on the above ground be set aside and that of the AO be restored.
5. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary.”
3. The brief facts of the case are that the assessee filed its return of income on 25.09.2013 declaring total income to the tune of Rs.9,91,880/-. The return was processed u/s 143(1) of the Act. The case was selected for scrutiny under CASS. Notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. The assessee firm is engaged in the business of Import & Export of nay item/commodity. During the year under consideration, the assessee has shown the income from business & profession and income from other sources. On verification, it was found that the assessee has taken loan an amount of Rs.1,19,00,000/- from only one party viz: Sachs International, Gala No. C-15, High Tech Industrial Estate, Old Satpati Road, Village Aliyalik, Palghar, Thane-401404. To verify the claim, notice u/s 133(6) of the Act dated 31.07.2015 was issued which was returned with the remarks of “Incomplete address”/ party not found. Thereafter, the assessee was asked to prove the transaction, the assessee only filed the confirmation letter but failed to prove the genuineness of the transaction, therefore, an amount of Rs.1,19,00,000/- was added to the income of the assessee u/s 68 of the Act. One of the partners viz: M/s. Kamlesh N. Sheth, added an amount of Rs.36,38,684/- to 2 A.Y.2013-14 the capital account. He was asked to prove the genuineness of the claim but failed to prove the genuine of the claim, therefore, an amount of Rs.36,38,684/- was added u/s 68 of the I. T. Act as unexplained cash credit. The total income of the assessee was assessed to the tune of Rs.1,65,30,570/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who allowed the claim of the assessee, therefore, the revenue has filed the present appeal before us.
ISSUE NO. 1
Under this issue the revenue has challenged the deletion of addition in sum of Rs.1,19,00,000/- being loan received from M/s. Sach International u/s 68 of the Act. The Ld. Representative of the revenue has argued that the creditworthiness of M/s. Sach International was not proved on record but the CIT(A) has wrongly allowed the claim of the assessee, therefore, the finding of the CIT(A) is not justifiable, hence is liable to be set aside. However, on the other hand, the Ld. Representative of the assessee has strongly relied upon the order passed by the CIT(A) in question. Before going further, we deem it necessary to advert the finding of the CIT(A) on record.:-
4.4. I gone carefully gone through the assessment order, the submissions of the appellant, Remand Report of the AO and the rejoinder of the appellant. I have also perused the various judicial pronouncements vis-a-vis facts of the case. There was only one loan in the balance Sheet of the appellant which the AO wanted to verify. The appellant could not comply fully as the main partner was busy with business travels. I have verified the reasons with the evidences filed by the appellant. During the Remand Report the appellant has filed all the necessary details. If the AO wanted any other document, he could have called for the same and also heard the appellant. Having not done the same, raising fresh questions in the remand report is of no use. After 3 A.Y.2013-14 going through the documents filed, I am convinced that the appellant has discharged its burden to prove the identity genuineness and credit worthiness of M/s. Sach International. Accordingly, additions of Rs.1,19,00,000/- is deleted. This ground is allowed.
On appraisal of the above mentioned finding, we noticed that the assessee filed the confirmation from Sach International but further nowhere filed any other documents, therefore, the claim of the assessee was declined. The assessee moved an application before the CIT(A) u/s 46A for additional evidences. The assessee produced the copy of ledger account of M/s. Sach International for the period of 01.04.2012 to 31.03.2016 along with Bank-statement of the appellant. The evidence in connection with the repayment of the loan from Sach International was also produced which was fully paid during the F.Y.2015-16. The repayment entries were identifiable in the bank statements of both the parties. Anyhow the additional evidence was forwarded to the AO who also replied the same. The identity, genuineness and creditworthiness of Sach International was duly proved. Remand report also confirmed the transactions. Since sufficient evidence was given, therefore, we are of the view that the CIT(A) has rightly allowed the claim of the assessee. The finding given by CIT(A) is quite correct which is not liable to be interfere with at this appellate stage. Accordingly, this issue is decided in favour of the assessee against the revenue.
ISSUE NO.2 6. Under this issue the revenue has challenged the deletion of addition u/s 68 of the Act of Rs.30,00,000/- being capital introduced by a partner. The AO declined the claim of the assessee being no sufficient evidence was 4 A.Y.2013-14 produced. The Ld. Representative of the revenue has argued that the CIT(A) has wrongly allowed the claim specifically in the circumstances when the assessee failed to explain the source of the introduction of an amount of Rs.30,00,000/-. However, on the other hand, the Ld. Representative of the assessee has strongly relied upon the order passed by the CIT(A) in question. Before going further, we deem it necessary to advert the finding of the CIT(A) on record: -