DCIT CC, 4(3), MUMBAI, MUMBAI vs. RAJENDRA MULCHAND VARMA, MUMBAI

Before the ld. CIT(A), assessee furnished additional evidences to substantiate his claim in respect of addition made by the AO by resorting to Rule 46A of the Income-tax Rules, 1962(‘the Rules’). The details of additional evidences furnished by the assessee is extracted below, as reproduced in the order of ld. CIT(A).

On the above submission of additional evidences, ld. CIT(A) called for a remand report from the AO which was furnished by him vide letter dated 26.06.2023. In the remand report, ld. AO furnished his comparative analysis of the loans received, total assets and total income based on the additional evidences furnished by the assessee. The said comparative analysis made by him is reproduced as under:

Assessee furnished his rebuttal on the remand report e furnished his rebuttal on the remand report vide letter dated 10.07.2023 and also also explained his case in respect of the three explained his case in respect of the three lenders for which ld. AO had observed that the assessee had not lenders for which ld. AO had observed that the assessee had not lenders for which ld. AO had observed that the assessee had not submitted the bank statements. The explanation so furnished is submitted the bank statements. The explanation so furnished is submitted the bank statements. The explanation so furnished is reproduced below:

Ld. CIT(A) on considering the additional evidences furnished by Ld. CIT(A) on considering the additional evidences furnished by Ld. CIT(A) on considering the additional evidences furnished by the assessee as well as the remand report and its rebuttal the assessee as well as the remand report and its rebuttal, , analysed the factual matrix of the the factual matrix of the eleven parties from whom the assessee had parties from whom the assessee had taken unsecured loans during th taken unsecured loans during the year. He took into consideration the He took into consideration the Rajendra Mulchand Varma, AY 2018-19 comparative analysis made by the ld. AO for the lender parties in the remand proceedings which is already extracted above and not reiterated. 7.1. Ld. CIT(A) also for each of the partiesanalysed the details and documents furnished by the assessee. He took note of documents like ledger confirmation, ITR acknowledgement, computation of income, bank statements of the lenders placed on record to hold that assessee has discharged his prima facie onus. He also took note of the fact about income returned by the lenders and their net-worth in relation to the loans taken by the assessee from those parties. He also noted in certain cases about the relationship of the assessee with the lenders whereby the lender is the brother of the assessee or assessee is a partner in the lending entity. 7.2. In respect of the three lenders for whom the AO in his remand report has observed about non-submission of bank statement, ld. CIT(A) noted that for the two lenders namely, Shri Babulal Varma and Shri Shashikant Mehta, the loans have been repaid. It is only in one case of Shri Hariram Jagdish, the addition made has been confirmed since no proper documents have been furnished as called for, to discharge the onus in terms of Section 68 of the Act.

We have considered the above observations and factual noting made by the ld. CIT(A) vis-à-vis explanation and documentation furnished by the assessee before him, remand report submitted by the AO and the rebuttal made by the assessee there upon. All these analysis and details are tabulated in the tables extracted above. Ld. Sr. DR had contended about the non-submission of documents and details before the Assessing Officer because of which the addition was made. In this respect, we note that assessee furnished the required documents and details before the ld. CIT(A) as additional evidence by Rajendra Mulchand Varma, AY 2018-19 complying with rule 46A of the Rules. Remand report called from the ld. AO on these additional evidence does not suggest anything adverse on the same nor does it point out any defect or deficiency in the documents furnished by the assessee of the lenders. These evidences furnished have neither been controverted by the Ld. AO during the remand proceedings nor anything substantive brought on record before us to justify the addition made by him. 8.1. Considering the facts and circumstances of the case and detailed narration above, we do not find any reason to interfere with the factual findings arrived at by the ld. CIT(A) in deleting the addition of Rs.9,18,97,928/ out of the total addition Rs.9,75,97,928/-, made by the AO u/s.68 of the Act. Accordingly, the sole ground taken by the Revenue in this respect is dismissed.

In the result, appeal of the Revenue is dismissed. Order is pronounced in the open court on 06 May, 2024.