THE ITO, WARD-2(1)(4), AHMEDABAD vs. M/S. MANDORA FINSERVE PVT. LTD, AHMEDABAD

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ITA 1234/AHD/2019Status: DisposedITAT Ahmedabad13 April 2022AY 2013-143 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s deletion of the addition, finding that the assessee had provided satisfactory evidence of the identity, creditworthiness, and genuineness of the transactions with the loan creditors.

What were the facts?

The Assessing Officer made an addition of Rs. 15,71,75,760/- under Section 68 of the IT Act, treating unsecured loans from three parties as unexplained income. The assessee provided details of these parties, including PAN, ITR, audited accounts, and bank statements.

What were the issues?

Whether the assessee provided sufficient evidence to explain unsecured loans under Section 68 of the IT Act, demonstrating identity, creditworthiness, and genuineness of the transactions.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH, AHMEDABAD

Before: Ms. SUCHITRA KAMBLE & SHRI WASEEM AHMED

For Appellant: Shri Vijay Kumar Jaiswal, CIT D.R
Hearing: 05.04.2022Pronounced: 13.04.2022

PER SUCHITRA KAMBLE, JUDICIAL MEMBER :

1.

This is an appeal filed by the Revenue against the order dated 09.05.2019 passed by the CIT(A)-2, Ahmedabad for the Assessment Year 2013-14.

2.

The grounds of appeal are as under :

“(1) The Ld. CIT(A) has erred in law and on facts in deleting the addition u/s. 68 of the IT Act.

3.

The assessee Company is engaged in the business of investment in shares and securities. The return of income was filed on 30.09.2013 declaring income at Rs.1,68,670/-. During the year under consideration the Assessing Officer observed that assessee Company has shown unsecured loan of Rs.2,93,00,000/- and current liabilities of Rs.13,55,53,343/- as on 31.03.2013. The details of three parties namely M/s. Mandora Securities Pvt. Ltd., M/s. Sadhna Barter Pvt. Ltd. and M/s Enhanced

Page 2 of 3 Projects Pvt. Ltd. were called by the Assessing Officer. The assessee submitted details before the Assessing Officer along with its submissions. The Assessing Officer observed that the assessee failed to give satisfactory explanation of cash credits in line with unsecured loan and, therefore, made addition of Rs.15,71,75,760/- under Section 68 of the Act thereby treating the said income as unexplained income of the assessee.

4.

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

5.

At the time of hearing despite giving notice through Ld. D.R. to the assessee the same was returned back as not known or insufficient address in the Registry. There is no new address given by the assessee either to the Revenue Department or to the Registry. Therefore, we are proceeding on the basis of submissions mentioned in the assessment order and the CIT(A)’s order of the assessee as submissions before us.

6.

The Ld. D.R. submitted that the CIT(A) has simply accepted the contentions of the assessee but has not verified the evidences and, therefore, the deletion of the addition is not correct.

7.

The Ld. D.R. further pointed out that the assessee at no point of time proved identity, creditworthiness and genuineness of the transactions in respect of all the three parties and, therefore, the addition should be sustained.

8.

We have heard the ld. D.R. and perused all the relevant material available on record. After going through the contentions of the assessee before the CIT(A) and after taking cognisance of the comments offered by the Assessing Officer, it is found that the assessee has given details relating to three parties such as PAN copy of ITR audited account along with Profit & Loss account and Balance Sheet as well as Bank statement of loan creditors in support of identity and creditworthiness and genuineness of the transactions. Further, the assessee has demonstrated before the Assessing Officer as well before the CIT(A) which was extensively pointed out by the CIT(A) in the order dated 09.05.2019 and thereafter deleted the said addition. There

Page 3 of 3 is no need to interfere with the findings of the CIT(A). Hence, appeal of the Revenue is dismissed.

9.

In the result, appeal filed by the Revenue is dismissed.

Order pronounced in the open Court on this 13th day of April, 2022.

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