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Income Tax Appellate Tribunal, MUMBAI BENCH “C” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY
This appeal has been preferred by the Revenue against order of the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2018-19, raising following grounds:
1 (i) "Whether on the facts and circumstances of the case and in law, the Ld. CIT (A) was justified in deleting the addition made u/s 68 of the Act by holding that merely non-compliance of third party cannot be a ground for disallowance, ignoring the fact that no documentary evidence were submitted during the assessment proceedings to prove the creditworthiness of the lenders and genuineness of the transactions." ii. "Whether on the facts and circumstances of the case and in law, the ii. "Whether on the facts and circumstances of the case and in law, the ii. "Whether on the facts and circumstances of the case and in law, the Ld. CIT (A) was justified in deleting the addition made u/s 68 of the Act (A) was justified in deleting the addition made u/s 68 of the Act (A) was justified in deleting the addition made u/s 68 of the Act by relying on the bank statement o by relying on the bank statement of the lenders and holding that the f the lenders and holding that the lender had funds to lend, ignoring the decision of Apex Court in the case lender had funds to lend, ignoring the decision of Apex Court in the case lender had funds to lend, ignoring the decision of Apex Court in the case of Pavankumar M Sanghavi [2018] 97 of Pavankumar M Sanghavi [2018] 97 taxman.com 398(SC), wherein the taxman.com 398(SC), wherein the Apex Court has upheld the judgment of Gujarat High Court wherein the Apex Court has upheld the judgment of Gujarat High Court wherein the Apex Court has upheld the judgment of Gujarat High Court wherein the similar facts and issue was involved." ts and issue was involved."
Briefly stated, facts of the case are that the assessee was Briefly stated, facts of the case are that the assessee was Briefly stated, facts of the case are that the assessee was engaged in the business of import and export of printing works engaged in the business of import and export of printing works engaged in the business of import and export of printing works such as calendars, books journals etc. The assessee filed its return such as calendars, books journals etc. The assessee filed its return such as calendars, books journals etc. The assessee filed its return of income for assessment year und of income for assessment year under consideration on 05.10.2018. er consideration on 05.10.2018. The return of income filed by the assessee was selected for scrutiny The return of income filed by the assessee was selected for scrutiny The return of income filed by the assessee was selected for scrutiny and statutory notices under the Income and statutory notices under the Income-tax Act 1961 (in short ‘the tax Act 1961 (in short ‘the Act’) were issued and complied with. In the assessment completed Act’) were issued and complied with. In the assessment completed Act’) were issued and complied with. In the assessment completed u/s 143(3) of the Act u/s 143(3) of the Act on 31.05.2021, the Assessing Officer made he Assessing Officer made addition u/s 68 of the Act in respect of four parties namely (i) addition u/s 68 of the Act in respect of four parties namely addition u/s 68 of the Act in respect of four parties namely Divakar Shetty,(ii) Pooja Prakash Bhandary, Pooja Prakash Bhandary, (iii) Vidhiyadhar Ridij Vidhiyadhar Ridij and (iv) Zainub Abbar Presswala. Zainub Abbar Presswala.
On further appeal, the Ld. CIT(A) deleted the On further appeal, the Ld. CIT(A) deleted the On further appeal, the Ld. CIT(A) deleted the addition. Aggrieved, the Revenue is in appeal before the Tribunal raising the Revenue is in appeal before the Tribunal raising the Revenue is in appeal before the Tribunal raising grounds as reproduced above. grounds as reproduced above.
We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. Before us, the Ld. counsel for the relevant material on record. Before us, the Ld. counsel for the relevant material on record. Before us, the Ld. counsel for the assessee filed a Paper Book containing pages 1 to 86. He referred to assessee filed a Paper Book containing pages 1 to 86. He referred to assessee filed a Paper Book containing pages 1 to 86. He referred to Page No. 36 of the Paper Book which is a copy of the confirmation Page No. 36 of the Paper Book which is a copy of the confirma Page No. 36 of the Paper Book which is a copy of the confirma filed by Divakar Shetty. On perusal of the confirmation, we find that filed by Divakar Shetty. On perusal of the confirmation, we find that filed by Divakar Shetty. On perusal of the confirmation, we find that a sum of Rs.70,00,000/ sum of Rs.70,00,000/- is appearing as opening balance opening balance as on 1/4/2017. Similarly, on perusal of the page No. 52 of the Paper . Similarly, on perusal of the page No. 52 of the Paper . Similarly, on perusal of the page No. 52 of the Paper Book, we find that in the Book, we find that in the case of Vidhyadhar Ridij also amount Vidhyadhar Ridij also amount of Rs.50,000/- is appearing as opening balance. Similarly, in the case is appearing as opening balance. Similarly, in the case is appearing as opening balance. Similarly, in the case of Zainub Abbar Presswala copy of the confirmation has been filed of Zainub Abbar Presswala copy of the confirmation has been filed of Zainub Abbar Presswala copy of the confirmation has been filed on Paper Book page 53 and according to which the amount of on Paper Book page 53 and according to which the amount of on Paper Book page 53 and according to which the amount of Rs.4,00,000/- is appearing s appearing as opening balance. Wherever, opening balance. Wherever, amount is appearing as opening balance, as opening balance, then said sum has not been said sum has not been received during the year under consideration received during the year under consideration and therefore, no and therefore, no addition could have been made u/s 68 of the Act for the year under addition could have been made u/s 68 of the Act for the year under addition could have been made u/s 68 of the Act for the year under consideration. Accordingly, find consideration. Accordingly, finding of the Ld. CIT(A) in respect of ing of the Ld. CIT(A) in respect of three parties is upheld. In respect of Pooja Prakash Bhandary a three parties is upheld. In respect of Pooja Prakash Bhandary a three parties is upheld. In respect of Pooja Prakash Bhandary a sum of Rs.2 crores have been received during the year under sum of Rs.2 crores have been received during the year under sum of Rs.2 crores have been received during the year under consideration. Before us, the Ld. consideration. Before us, the Ld. Counsel for the assessee has filed the assessee has filed a copy of the registration a copy of the registration deed of sale of property by her on Paper deed of sale of property by her on Paper Book page 36. It is clearly evident that she had . It is clearly evident that she had received Rs. 2 crores received Rs. 2 crores as advance from sale of the property on 26.03.2018 and same has as advance from sale of the property on 26.03.2018 and same has as advance from sale of the property on 26.03.2018 and same has been advanced to the assessee been advanced to the assessee. Thus, all the three ingredient of all the three ingredient of section 68 of the Act i.e. identity, creditworthiness and genuineness he Act i.e. identity, creditworthiness and genuineness he Act i.e. identity, creditworthiness and genuineness of the transaction in the case are established and therefore, no of the transaction in the case are established and therefore, no of the transaction in the case are established and therefore, no addition could have been made u/s 68 of the Act in case of credit addition could have been made u/s 68 of the Act in case of c addition could have been made u/s 68 of the Act in case of c received from said party received from said party. Therefore, we uphold the finding of the Ld. . Therefore, we uphold the finding of the Ld. CIT(A) in respect of this party also. It is not the case that the Ld. CIT(A) in respect of this party also. It is not the case that the Ld. CIT(A) in respect of this party also. It is not the case that the Ld. CIT(A) has deleted the addition merely relying on the bank CIT(A) has deleted the addition merely relying on the bank CIT(A) has deleted the addition merely relying on the bank statement of the lenders and therefore, the lenders and therefore, the decision the decision relied upon by the Revenue in grounds raised the Revenue in grounds raised is not applicable over the fa over the facts of instant case. The ground of appeal of the Revenue is accordingly instant case. The ground of appeal of the Revenue is accordingly instant case. The ground of appeal of the Revenue is accordingly dismissed.
In the result, the appeal of the Revenue is dismissed. In the result, the appeal of the Revenue is dismissed. In the result, the appeal of the Revenue is dismissed.