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Facts
The assessee, Indian Progressive Construction Private Limited, appealed an order that sustained an addition of ₹45,00,000 on account of an unsecured loan. The Assessing Officer made additions on the ground that the genuineness of the unsecured loan was not established. The CIT(A) confirmed the order, stating the appellant did not discharge its onus to explain the cash credits.
Held
The Tribunal observed that the assessee had not discharged its duty to establish the genuineness of the unsecured loan. Therefore, the matter was restored back to the Assessing Officer for a fresh assessment order after considering all submitted details and examining necessary documents and evidences.
Key Issues
Whether the addition made on account of alleged non-substantiated unsecured loan is justified and whether the assessee has discharged its onus to prove identity, genuineness, and creditworthiness of the loan.
Sections Cited
Section 143(3), Section 263, Section 68
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Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI
Before: SHRI GEORGE MATHAN & SHRI RATNESH NANDAN SAHAY
Assessee represented by Shri M.K. Choudhary, Adv. Department represented by Shri Khubchand T. Pandya, Sr.DR Date of hearing 03/04/2025 Date of pronouncement 03/04/2025 O R D E R PER: BENCH 1. This appeal by the appellant is directed against the order of National Faceless Appeal Centre, Delhi (NFAC)/ learned Commissioner of Income Tax (Appeals), [in short, the ld. CIT(A)] dated 09/12/2021 for the Assessment Year (AY) 2012-13. In this appeal, the appellant has raised following grounds of appeal:
1. For that Ld. CIT(Appeals) Dhanabd was unjustified in sustaining addition of alleged non-substantiated unsecured loan amounting to ₹ 45,00,000/- on flimsy grounds. The addition sustained is unjustified and uncalled for. 1.1 For that complete details of the Cash Creditors including confirmation of the loan, Audited accounts, Acknowledgment if IT return, their bank account of the Hallmark Commodeal (P) Ltd. were filed. The same stood verified directly by Ld. AO. The identity, genuinenity and creditworthiness stands proved. As such the addition made is fit to be deleted. 1.2 For that the Ld. AO failed to understand that this HCPL is a registered company duly been registered at ROC and was filing the IT return regularly which stood been accepted by IT Department. The three ingredients identity, genuineness and creditworthiness stands proved.
2. For that other grounds, if any, will be argued/take up at the time of hearing."
2. The facts of the case, in brief, are that in this case, assessment order was passed under Section 143(3) of the Income Tax Act, 1961 (in short, the Act)
Indian Progressive Construction Pvt. Ltd. Vs DCIT dated 26/03/2015 and the income was assessed at ₹ 2,69,20,470/-, subsequently, the ld. Pr.CIT, Dhanbad vide its order dated 31/03/2017 set aside the assessment order dated 26/03/2015 under Section 263 of the Act with a direction to Assessing Officer to pass the assessment order afresh after making proper enquiries and necessary investigations on the issues raised therein. Accordingly, the Assessing Officer passed assessment order under Section 143(3) read with section 263 of the Act on 28/12/2017 and made additions of ₹ 45.00 lacs on account of unsecured loan on the ground that the genuineness of the same was not established during the course of assessment proceedings.
3. The assessee filed appeal before the ld. CIT(A) who vide impugned order dated 09/12/2021 for the assessment year under consideration, confirmed the order of Assessing Officer on the ground that the appellant had not discharged the onus cast upon it to explain the cash credits appearing in the books of account of the appellant. The ld. CIT(A) also stated in the impugned order that the assessee was given as many as five opportunities but no documents or details were filed before him during the course of appellate proceedings to establish three ingredients as required under Section 68 of the Act i.e. the identity of the parties, their creditworthiness and the genuineness of the transactions.
Aggrieved by the order of the ld. CIT(A), this appeal has been preferred before this Tribunal.
5. During the appellate proceedings before us, the appellant has submitted paper book wherein it has been submitted as under: "As required information in the case of M/s Indian Progressive Construction Pvt. Ltd. For the FY 2011-12 (Asstt. Yr. 2012-13).
Indian Progressive Construction Pvt. Ltd. Vs DCIT 1. We have given unsecured loan to M/s Indian Progressive Construction Pvt. Ltd. Deoghar and having outstanding value of Rs. 45,00,000/- as on 31/03/2012. (A copy of Loan confirmation in this regard is enclosed) 2. Our Company is also allotted a PAN no. AACCH1135Q with Income Tax Department and is filling its income tax return on regular basis which are assessed on regular basis.
For the Asst. Yr. 2009-10, our company was assessed u/s 147/143(3) of the income Tax Act on 27/12/2016 by ITO Ward 14(2), Kolkata. (Copy of Assessment Order enclosed) 4. The Directors of M/s Indian Progressive Construction Pvt. Ltd. are well known to our Company Directors.
We have provided a unsecured loan of Rs. 45.00,000/- during the F.Y. 2011-12 through banking channel from our available accumulated fund and we are also earning interest on unsecured loan provided to the said company and TDS deducted are also claimed in our ITR on regular basis with effect from Asst. Yr. 2013-14. (Copy of ITR enclosed).
As asked 'regarding adverse order we hereby confirm that no adverse order is passed in past by Income Tax, SEBI, ED, ROC, etc. for the company. However copy of order u/s 147/143(3) of income Tax Act dated 27/12/2016 for the Asst. Yr. 2009-10 in which no adverse opinion was taken by the assessing officer. (Copy of Order Enclosed).
As asked regarding providing loan to M/s Indian Progressive Construction Pvt. Lid. reflected on bank statement, the transaction was made from our accumulated capital fund.
As asked regarding identity/genuineness & creditworthiness, we are providing copy of master data available with Registrar of Company which shows that our company active and going concern.
As asked regarding genuineness of transaction we have given unsecured loan through banking channel and no cash has been deposited in bank for doing the transaction.
As asked regarding credit worthiness the company has sufficient share capital and reserves in the Balance Sheet and the Loan was given from our own available sources. Sir. we further pray your honor to consider our new mail id as halImarkcommodeal(@gmaiI.com for any type of further correspondence in this regard."