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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Ms. Annapurna Gupta & Shri T.R. Senthil Kumar
Bhavi Leasing & Finance The I.T.O., Ltd. 36/3 Sindhi Ward-1(1)(1), Vadodara Commercial Market Vs (Respondent) Sarangpur Darwaja, Ahmedabad PAN:AAACB9407F (Appellant) Appellant by : Shri Jaimin Shah, A.R. Respondent by : Shri R.R. Makwana, Sr.D.R. Date of hearing : 20-04-2022 Date of pronouncement : 29-04-2022 आदेश/ORDER PER : ANNAPURNA GUPTA, ACCOUNTANT MEMBER:-
The present appeal has been filed by the Assessee against the order passed by the Commissioner of Income Tax (Appeals)-1, Vadodara, (in short referred to as CIT(A)), dated 04-09-2020, u/s. 250(6) of the Income Tax Act, 1961(hereinafter referred to as the “Act”) pertaining to Assessment Year (A.Y) 2012-13.
The effective grounds of appeal raised by the Assessee read as under:
Page No 2 Bhavi Leasing & Finance Ltd. vs. ITO 1. That the assessment order passed by ITO Ward 1(1)(1), Baroda without having jurisdiction and sustained by Ld. CIT(A) is against the provision of law and therefore the order passed by Ld. A.O without jurisdiction may please be quashed.
2. That the Ld. CIT(A) has erred both in law and on facts while sustaining the disallowance of Rs. 15,00,000/- on account of unexplained credit is against the facts of the case of the appellant and therefore it requires to be deleted.
3. That the appellant has explained the amount received of Rs. 15,00,000/- during the year under consideration, However the Ld. CIT(A) has sustained the same is against the provision of law and against the natural justice, Therefore it requires to be deleted.
4. That the Ld. CIT(A) has sustained Rs. 2,500/- on account of Audit fees, which is a allowable expenditure as per Income Tax law on the basis of provision, however without appreciating the facts and circumstances of the case of the appellant the amount sustained is requires to be deleted.
2.1 The Ld.Counsel for the assessee made arguments only relating to the issue of addition made on account of alleged unsecured loan of Rs. 15 lacs received by the assessee remaining unexplained. Therefore only Ground no.2 &3 are being adjudicated by us. The remaining grounds No.1 & 4 are dismissed as not pressed.
2.2. Vis a Vis the issue of unsecured loan of Rs.15 lacs received by the assessee being added as unexplained, Ld. Counsel for the assessee pointed out that it had been explained to the authorities below that the amount Page No 3 Bhavi Leasing & Finance Ltd. vs. ITO received was not a fresh loan but in fact refund of loan earlier granted to two parties i.e. M/s. Girdharbhai K. Motiani and Mr. Rameshbhai K. Motiani. It was pointed out that it had been explained in detail with requisite evidences that the loans had been given to the said parties in preceding years out of which they had refunded 10 lakhs and Rs.5 lakhs in the impugned year as per the details submitted before us as under: BHAVI LEASING AND FINANCE LIMITED A.Y. 2012-13 Table Showing Paper Book Page No. Vis a Vis Entries of Girdharibhai K. Motiani From 2007-08 Sr. Date of Entry Payment or Cheque Amount of Ledger A/c in the Entry in the Entry in Bank No. in the Books Receipt in the No. cheque Books of Bhavi Passbook of Statement of of Bhavi Books of Bhavi Leasing & Fin. Girdharilal Bhavi Leasing & Motiani Fin [ Leasing Leasing & Fin. [PB Page No.] [ PB Pg.No. ] PB-Page No.] 1 23-02-2008 Payment 779326 1500000 22 33 41 2 23-02-2011 Receipt 541361 400000 23 34 42 3 10-03-2011 Receipt 483866 600000 23 34 42 4 19-11-2011 Receipt 483869 1000000 25 43 Table Showing Paper Book Page No. Vis a Vis Entries of Rameshbhai K. Motiani From 2007-08 Sr. Date of Entry Payment or Cheque Amount of Ledger A/c in the Entry in the Entry in Bank No. in the Books Receipt in the No. cheque Books of Bhavi Passbook of Statement of of Bhavi Books of Bhavi Leasing & Fin. Rameshbhai Bhavi Leasing & Leasing Leasing & Fin. .[PB Page No.] Motiani [ PB Fin [ PB Pg.No. ] Page No.] ' 1 06-07-2007 Payment 779311 500000 27 35 40 2 07-01-2008 Payment 779323 300000 27 36 41 3 21-02-2008 Payment 779324 1500000 27 37 41 Page No 4 Bhavi Leasing & Finance Ltd. vs. ITO 4 24-03-2011 Receipt 504454 300000 28 38 42 5 26-03-2011 Receipt 504455 5000JJQ, 28 38 42 30 6 03-12-2011 Receipt 504459 500000 39 43
But, it was contented by the Ld.Counsel for the assessee, that the lower authorities rejected this contention merely for the reason that it had been shown in the audited books of the assessee as fresh loan and not adjusted against the loan given to these parties in the earlier year.
Ld. Counsel for the assessee pointed out that it had also been demonstrated to the lower authorities that in the subsequent year, this error had been rectified by way of a journal entry. But despite doing so, the explanation of the assessee was not accepted solely for the reason that these amounts were reflected as fresh loan in the audited books of the assessee.
We do not subscribe with the findings of the Revenue authorities, for the simple reason, that as per their own logic and reasoning for rejecting the explanation of the assessee, being inconsistent with the audited books of accounts of the assessee showing the receipt as fresh loan, the explanation was justified being duly supported by the audited books for the subsequent year showing reversal of these amounts and adjustment against loans and advance given to them. This explanation of the assessee ought to have been accepted by the Revenue.
Page No 5 Bhavi Leasing & Finance Ltd. vs. ITO We therefore do not find any merit in the addition made on account of unexplained loan taken of Rs.15lacs in the impugned case and direct deletion of the same.
In effect, appeal of the Assessee is partly allowed.