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Facts
The appeals arose from additions made by the Assessing Officer under Section 68 for unsecured loans for assessment years 2009-10, 2010-11, and 2011-12. The CIT(A) had deleted these additions, but the Revenue appealed to the Tribunal. A difference of opinion arose between the Judicial Member and the Accountant Member, leading to the appointment of a Third Member.
Held
The Judicial Member reversed the CIT(A)'s order and allowed the Revenue's grounds. The Accountant Member remitted the matter back to the AO. The Third Member, however, confirmed the Judicial Member's order, establishing it as the majority decision. Consequently, the grounds raised by the Revenue were allowed, and the CIT(A)'s order was reversed.
Key Issues
Whether the documentation provided was sufficient to prove the genuineness of unsecured loans, especially when the lenders were found to be non-existent, and if subsequent repayment is enough to discharge the onus under Section 68.
Sections Cited
68, 255(4), 133(6)
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Income Tax Appellate Tribunal, ‘E’ BENCH
Before: SHRI NARENDRA KUMAR BILLAIYA & SHRI AMIT SHUKLA
आदेश / O R D E R
PER AMIT SHUKLA (J.M): In the aforesaid case there was a difference of opinion between the ld. Judicial Member and ld. Accountant Member
in the aforementioned appeal filed by the Revenue. Accordingly, u/s.255(4) of the Act, the Hon’ble President had appointed ld. Third Member to decide the issue. The questions for which the matter was referred were as under:-
1)Whether meticulous paper work to prove the transaction in question by bringing on record PAN, bank statement, copy of ledger account are sufficient to justify the alleged transactions of bogus unsecured loans in the absence of explaining the nature and source of credit, particularly when lender's entities in question are found to be not existing, is enough to discharge the onus under section 68 of the Act.? 2) Whether when the notice issued under section 133(6) of the Act received back with the report that no such entities are in existence and the assessee has failed to discharge the onus to produce the lender parties before the AO as required under section 68 of the Act, the subsequent repayment by the assessee qua the alleged bogus loans is enough to grant the relief to the assessee? 3) Whether, in the facts and circumstances of the case, the assessee can be considered to have discharged the onus placed upon him u/s. 68 of the Act to prove the cash credit ?
In all these appeals, the substantive issue involved was addition u/s.68 for the addition of Rs.3.1 Crores for the A.Y.2009-10; Rs.2.29 Crores for A.Y.2010-11; and Rs.95 lakhs for A.Y.2011-12. The ld. CIT(A) had deleted the addition for all the years against which Revenue had come in appeal before the Tribunal. The ld. Judicial Member had reversed the finding of the ld. CIT(A) citing various reasons and allowed Revenue’s grounds. However, ld. Accountant Member in his separate order had remitted the matter back to the file of the ld. AO after giving certain directions. The ld. Third Member vide order dated 10/11/2024 has confirmed the finding and order of the ld. Judicial Member’s allowing the Revenue’s appeal in 568/Mum/2018 and 569/Mum/2018. Once the order of the ld. Judicial Member has been confirmed by the ld. Third Member, accordingly the Others M/s. Tirupati Developers observation and the finding of the ld. Judicial Member is held to be majority judgment and consequently, the grounds raised by the Revenue in all the three years are allowed and the order of the ld. CIT(A) is reversed. Addition thus made by the ld. AO is confirmed.
In the result all the three appeals of the Revenue are allowed.
Order pronounced on 29th November, 2024.