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Facts
The Assessing Officer (AO) made additions of Rs. 3,93,800/- for unexplained unsecured loans and Rs. 74,47,915/- for unexplained income from a bank loan under Section 68 of the Income Tax Act. The CIT(A) deleted these additions after the assessee submitted additional evidence, which the AO verified and accepted in a remand report.
Held
The Tribunal affirmed the CIT(A)'s decision, holding that since the AO had accepted the assessee's contentions in the remand report, the revenue had no valid grounds for further appeal. The Tribunal found no infirmity in the CIT(A)'s order deleting the additions.
Key Issues
Whether the CIT(A) was correct in deleting additions made under Section 68 for unsecured loans and unexplained income, and whether the revenue can appeal when the AO's remand report accepts the assessee's contentions.
Sections Cited
143(3) of Income Tax Act, 1961, 153A of Income Tax Act, 1961, 68 of Income Tax Act, 1961, 115BBE of Income Tax Act
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Income Tax Appellate Tribunal, DELHI BENCH “C”: NEW DELHI
Before: SHRI M. BALAGANESH & SHRI VIMAL KUMAR
O R D E R PER M. BALAGANESH, A. M.: 1. This appeal in No. 82/Del/2023 for A.Y. 2018-19 arises out of the order by ld CIT(A)-3, Noida in appeal No. CIT(A)-IV/KNP/11086/2017-18 dated 28.04.2023 (hereinafter referred to as ld CIT(A) in short) against the order of assessment passed u/s 143(3)/ 153A of the Income Tax Act, 1961 (hereinafter referred to CO No. 82/Del/2023 Karanvir Bajaj as Act) dated 16.06.2021 by the AO, DCIT, Central Circle, Ghaziabad (hereinafter referred to as ld. AO).
The revenue has raised the following grounds of appeal:-
1. On facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 3,93,800/- being unexplained unsecured loan without considering the facts brought out in the assessment order.
2. On facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 74,47,915/- made by the AO on account of unexplained income, without considering the facts brought out in the assessment order. 3. On facts and circumstances of the case and in law, the Ld. CIT(A) failed to consider the fact as elaborated in the assessment order that in spite of sufficient opportunities provided to the assessee, the assessee failed to furnish required details/documents. Therefore, in absence of documentary evidences, the AO was justified in making the aforesaid additions 4. That the appellant craves leave to add, modify, amend or delete any of the grounds of appeal
at the time of hearing and all the above grounds are without prejudice to each other.”
3. We have heard the rival submissions and perused the material available on record. At the outset, we find that the issue in dispute raised by the revenue have been accepted by the ld AO in the remand report submitted before the ld CIT(A). The two additions that were made by the ld AO were in respect of treating unsecured loan received by the assessee as unexplained cash credit for want of submission of certain evidences connected with the lenders. These documents were indeed submitted by the assessee before the ld CIT(A) in the form of additional evidences which were duly admitted by the ld CIT(A) and a remand report from the ld. AO was called for. As stated earlier, the ld AO accepted the entire contentions of the assessee after due verification of the additional evidences submitted before him in the remand proceedings. The ld CIT(A) having taken cognizance of the remand report filed by the ld AO granted relief to the assessee by observing as under:-
CO No. 82/Del/2023 Karanvir Bajaj “5.9 In the grounds of appeal no. (ii) & (ii)a), the appellant submits that the unsecured loan of Rs. 3,18,800/- has been taken from Sh. Umesh Kumar Bajaj [closing balance Rs. 13,66,800/- (-) opening balance of Rs. 10,48,000/-] and further unsecured loan of Rs. 75,000/- has been taken from Sh. Umesh Kumar Bajaj (HUF) [closing balance Rs. 3,50,000/- (-) opening balance of Rs 2,75,000/-]. In the assessment order, Ld. AO has made addition of Rs. 3,93,800/- u/s 68 of IT Act on account of unsecured loan taken from these persons with an observation that the appellant was required to furnish complete names, addresses, PAN, ledger accounts and confirmations duly signed by the persons, from whom the appellant has received loans so that the identity. genuineness of transaction and creditworthiness of the lender may be proved, however the appellant failed to file requisite details/ documents in respect of unsecured loan amount of Rs 3,93,800/-. On the other hand the appellant submits that no proper opportunities were provided to the appellant to furnish the required documents and even in show cause notice, no such addition was proposed to be made. In the appellate proceedings, the appellant furnished copy of Bank Statements with a claim that the unsecured loan of Rs 3,93,800/- has been taken from Sh. Umesh Kumar Bajaj [closing balance Rs. 13,66,800/- (-) opening balance of Rs. 10,48,000/-] and further unsecured loan of Rs. 75,000/- has been taken from Sh. Umesh Kumar Bajaj (HUF) [closing balance Rs. 3,50,000/- (-) opening balance of Rs. 2,75,000/-] Ld. AR submits that these amounts are received through banking channel. The appellant has also filed copies of confirmed ledger accounts, ITRs and bank statements of these persons. Thus Ld. AR submits that the appellant has sufficiently discharged his onus. In the remand proceedings, Ld. AO has also verified the facts and he could not bring anything on record from which submission of appellant in the appellate proceeding may be controverted. 5.10 Looking to the facts and circumstances of the case, the addition of Rs. 3,93,800/- made on account of unsecured loan of Rs. 3,18,800/- taken from Sh. Umesh Kumar Bajaj [closing balance Rs 13,66,800/- (-) opening balance of Rs 10,48,000/-] and further unsecured loan of Rs. 75,000/- taken from Sh. Umesh Kumar Bajaj (HUF) [closing balance Rs. 3,50,000/- (-) opening balance of Rs. 2,75,000/-] is hereby deleted and relief is allowed to the appellant. All the related grounds of appeal are adjudicated accordingly 5.11 In the grounds of appeal no (iii) & (iii)a), Ld. AR submits that the appellant had taken a loan of Rs. 74 lacs from Bank of India from Account Number 711362610000023 which was in the name of the appellant and his brother Sh Abishek Bajaj. This amount was transferred to the various accounts of family members as under:- Amount Transfer to Transfer Date Rs. 33,00,000/- Sh. Abhishek Bajaj 27.10.2017 Rs. 10,00,000/- Mrs. Anu Bajaj 30.10.2017 Rs.15,00,000/- M/s A.K. Beverages 30.10.2017 Rs. 8,00,000/- M/s Bajaj Prime Fuels 03.11.2017 CO No. 82/Del/2023 Karanvir Bajaj Rs. 2,50,000/- HPCL Retail 03.11.2017 Rs.5,50,000/- M/s Bajaj Prime Fuels 03.11.2017 Total Rs. 74,00,000/ Ld. AR submits that the amount of Rs. 33,00,000/- was transferred in the bank account Number of 711362610009037 of Bank of India, which was jointly held by appellant and his brother Sh. Abishek Bajaj and balance amount was transferred in other accounts from 27.10.2017 to 03.01.2017 as shown above. It is submission of Ld. AR that in this case the other account holder of the loan account was Sh. Abishek Bajaj, brother of the appellant, however, the entire loan amount was reflected in the books of the appellant. The said loan was taken to fund the various business entities of the family. All the transactions were duly recorded in the books of accounts of the respective family members / business entities filed during the course of assessment proceedings. Ld. AR submits that Ld. AO in total disregard of the documentary evidence filed in the assessment proceedings, made the addition u/s 68 of IT Act. In the Remand proceedings Ld. AO states that from the Bank loan statements it has been verified that amount of Rs. 74,47,915/- was outstanding as on 31.03.2018 in Bank of India Account Number - 711362610000023. Ld. AO concludes that from the additional evidences furnished by the appellant in the appellate proceedings, the contention of the appellant seems to be acceptable.
5.12 Looking to the facts and circumstances of the case, the addition of Rs. 74,47,915/- made on account of the loan taken from Bank of India Account Number 711362610000023 is well explained and hence the same is hereby deleted and relief is allowed to the appellant. All the related grounds of appeal are adjudicated accordingly 5.13 in the ground of appeal no. (iv), the appellant submits that the provisions of section 115BBE of IT Act have been wrongly invoked on the additions of Rs. 3,93,800/- and Rs. 74,47,915/- made u/s 68 of IT Act. Since these additions made u/s 68 of IT Act have been deleted, this ground of appeal becomes in- fructuous, hence the same needs no adjudication.)
4. Once the ld AO had accepted the stand of the assessee in the remand report, the ld. AO would be precluded from filing further appeal before the Tribunal as there could be no grievance left for the revenue. This view of ours is further fortified by the decision of the Hon’ble Madras High Court in the case of Smt B Jayalakshmi vs ACIT reported in 96 taxmann.com 486 (Mad HC). In view of the above, we do not find any infirmity in the order of the ld CIT(A). Accordingly, the grounds raised by the revenue are dismissed.
CO No. 82/Del/2023 Karanvir Bajaj
The ld AR submitted that cross objection preferred by the assessee are only supportive of the order of the ld CIT(A). Hence, the same is hereby dismissed as infructuous.
In the result, both the appeal of the revenue and cross objections of the assessee are dismissed.