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Facts
The Revenue appealed against the deletion of additions made by the AO under Section 68 of the Income Tax Act, 1961. The assessee filed cross-objections challenging the reopening of assessment. The AO had added Rs. 25 lakhs each year as un-explained cash credit from Shri Vipul Vidur Bhatt group.
Held
The CIT(A) found that the loans were taken in AY 2013-14 and not in the years under appeal (AYs 2014-15 and 2015-16). Since no loans were taken in the disputed years, the addition under Section 68 was not warranted. The tribunal affirmed the CIT(A)'s order as the Revenue failed to provide contradictory material.
Key Issues
Whether additions under Section 68 for un-explained cash credit are justified when the actual loan was taken in a different assessment year and whether the reopening of assessment was valid.
Sections Cited
68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI “SMC” BENCH : MUMBAI
Before: SHRI B.R. BASKARAN & SHRI RAJ KUMAR CHAUHAN
ORDER PER BENCH :
The appeals filed by the Revenue and the Cross Objections filed by the assessee are directed against the orders passed by the Ld.CIT(A)- NFAC, Delhi and they relate to Assessment Years (AYs.) 2014-15 & 2015-16. The Revenue is aggrieved by the decision of the Ld.CIT(A) in deleting the addition made by the AO u/s. 68 of the Income Tax Act, 1961 („the Act‟) in both the years under consideration. In the cross objections, the assessee is challenging the validity of reopening of assessment of both the years under consideration.
We heard the parties and perused the record.The AO received information from Investigation Wing that the details of accommodation entries provided by Shri Vipul Vidur Bhatt through his group of companies. The AO noticed from the above said details that the assessee has availed Rs. 25 lakhs loan each in both the years under consideration. i.e., in the years relevant to AYs. 2014-15 and 2015-16. The AO added the above said amount of Rs.25 lakhs each in both the years, as un-explained cash credit u/s. 68 of the Act.
In the appellate proceedings, the Ld.CIT(A) noticed that the assessee had actually taken loans from Shri Vipul Vidur Bhatt group during the FY. 2012-13 relevant to the AY.2013-14, i.e., the assessee has not taken any loan from the above said group in both the years under consideration.Since no loan has been taken in these two years, the question of making any addition u/s 68 of the Act will not arise. Accordingly, the Ld.CIT(A) deleted the additions made by the AO u/s. 68 of the Act in both the years under consideration.
Before us, the Revenue could not produce any material to contradict the factual findings given by the Ld.CIT(A). Since the assessee has not taken any loan during the years under consideration from Shri Vipul Vidur Bhatt group, the question of making any addition u/s. 68 of the Act will not arise. Accordingly, we affirm the orders passed by the Ld.CIT(A) in both the years under consideration.
In the Cross Objections, the assessee is challenging the validity of re-opening of the assessment for both the years under consideration. Since the relief granted by the Ld.CIT(A) in both the years have been affirmed by us, the above said legal issue urged by the assessee in both the years is rendered academic in nature. Accordingly, we leave them open.
In the result, both the appeals of the Revenue and both the Cross Objections filed by the assessee are dismissed.