A.C.I.T., CIRCLE-42, MURSHIDABAD, MURSHIDABAD vs. BHARAT KUMAR JHAWAR, MURSHIDABAD

ORDER Per M.Balaganesh, AM

Bharat Kumar Jhawar A.Yr. 2011-12 3. The first issue to be decided in this appeal is as to whether the ld CITA was justified in deleting the addition towards unsecured loans in the sum of Rs 31,58,367/- u/s 68 of the Act in the facts and circumstances of the case.

3.1. The brief facts of this issue are that the assessee is a Government Contractor executing civil contract works for various Government departments. The assessee had filed his return of income for the Asst Year 2011-12 on 30.9.2011 declaring total income of Rs 22,83,680/-. The assessee produced the balance sheet and other relevant documents as were required by the ld AO during the course of assessment proceedings. From the same, the ld AO observed that the assessee had borrowed loans from the following persons:-

Sanjoy Kumar Sarda - Rs 5,91,629/- Suvendu Kumar Sarda - Rs 4,41,638/- J D Rathi - Rs 5,63,400/- Ratanlal Behni - Rs 1,12,000/- B J Construction - Rs 14,49,700/- -------------------- Rs 31,58,367/- The ld AO sought to verify the veracity of these loan creditors by issuing notice u/s 133(6) of the Act calling for various details. No reply was received from these loan creditors. Accordingly, the ld AO proceeded to add the same as unexplained cash credit u/s 68 of the Act and added the same to the total income of the assessee.

3.2. The assessee submitted that he had borrowed loans from his near relatives and friends in the earlier assessment years and the unsecured loans were duly reflected in his balance sheet and the said unsecured loans of Rs 31,58,367/- were brought forward from earlier years and not the loans borrowed during the year. The ld CITA on examination of the facts and documents categorically observed that the loans were 2

Bharat Kumar Jhawar A.Yr. 2011-12 brought forward from earlier years. He also observed that the loan creditors had directly filed confirmation before the ld AO vide their letter dated 25.3.2014 accepting the factum of giving loans to the assessee i.e much before the completion of the assessment by the ld AO and hence he held that the observation of the ld AO that no reply was received from loan creditors was factually wrong. With these observations, he deleted the addition made u/s 68 of the Act. Aggrieved, the revenue is in appeal before us.

3.3. We have heard the ld DR. We find that the ld CITA had given a finding that on examination of books and records, the unsecured loans of Rs 31,58,367/- were only brought forward from earlier assessment years by the assessee and that the same were not received during the year under appeal. This fact remain uncontroverted by the ld DR before us. Hence the provisions of section 68 of the Act cannot be applied at all for the year under appeal before us. Hence we hold that the ld CITA had rightly deleted the addition thereon which does not require any interference. Accordingly, the Ground No. 1 raised by the revenue is dismissed.

4.1. The brief facts of this issue is that the assessee had contracted work with sub- contractors M.D.Construction and M/s Pratibha Electronic Works amounting to Rs 89,61,050/- and Rs 11,11,111/- respectively totaling to Rs 1,00,72,161/- and made payment thereon without deduction of tax at source u/s 194C of the Act. Accordingly, the ld AO proceeded to make disallowance u/s 40(a)(ia) of the Act to the tune of Rs 1,00,72,161/-. The assessee submitted that the sub-contract payments made to M/s M.D.Construction and M/s Pratibha Electronic Works amounting to Rs 89,61,050/- and 3

Bharat Kumar Jhawar A.Yr. 2011-12 Rs 11,11,111/- were duly subjected to deduction of tax at source in terms of section 194C of the Act in support of which, copy of TDS certificate in Form No. 16A issued to those parties were enclosed. These TDS certificates were also filed before the ld AO in the course of assessment proceedings which were ignored by the ld AO without any basis. The ld CITA on verification of this fact available in the assessment records agreed with the contention of the assessee and deleted the disallowance made u/s 40(a)(ia) of the Act. Aggrieved, the revenue is in appeal before us.

4.2. We have heard the ld DR. We find that the ld CITA had deleted the disallowance on verification of facts available on record that the assessee had indeed deducted tax at source on sub-contract payments made to aforesaid two parties and remitted the TDS to the account of the Central Government, which is supported by TDS certificates which were available in the assessment records itself. Hence we find no infirmity in the order of the ld CITA. Accordingly, the Ground No. 2 raised by the revenue is dismissed.

Order pronounced in the Court on 25.05.2018