ITO, NEW DELHI vs. M/S. I.C. TEXTILES LTD., NEW DELHI

Assessee by : Smt. Paramita M. Viswas, CIT DR Revenue by: Sh. O.P.Mody, Adv Date of Hearing 03/05/2016 Date of pronouncement 01/07/2016 O R D E R PER PRASHANT MAHARISHI, A. M. 1. This is appeal filed by the revenue against the order of the ld CIT (A)-XV, New Delhi dated 17/05/2012 for the Assessment Year 2008-09. 2. The revenue has raised the following grounds:- “

1 On the facts and circumstances of the case and in law, the ld CIT (A) has erred in deleting the additions ofRs.183060000/- made under the head unsecured loans.

2. On the facts and circumstances of the case and in law, the ld CIT (A) has erred while ignoring the findings of the AO in the assessment order with respect to the identity, creditworthiness of creditors and genuineness of transactions.”

3. The brief facts are that the assessee is ltd company filed its return of income showing Nil income and during the course of assessment proceedings it was submitted in November 2007 the company has closed its business activities. Ld Assessing Officer was of the view that company has not filed a confirmation from its Korean promoters with respect to loan of Rs. 183060000/- and therefore, the same was added to the income of the ITO V I C Textile Limited assessee. On appeal before the ld CIT (A) this addition was deleted and therefore the revenue is in appeal before us.

4. Ld DR relied upon the order of the ld Assessing Officer and reiterated the same reasons for which addition has been made by the Assessing Officer. 5. Ld AR submitted that there is no loan taken by the company during the year and as on 31.03.2008 the loan amount is outstanding of Rs. 2276.29 lakhs and as on 31.03.2007 it was Rs. 2497.14 lakhs. The difference is arisen because of fluctuation of exchange rate only and there is no loan and therefore they cannot be any addition during this year. 6. We have carefully considered the rival contention and also perused the reasons given by the ld CIT (A) for deletion of the same. Vide para No. 10 of the order he has deleted the addition stating as under: “10. I have gone through the above submission of the appellant and have also considered the facts and evidences on record and have perused the AO’S order. The appellant’s plea is that they have not raised any loan, in fact the auditor’s note have wrongly been interpreted by the AO, rather fact of the matter is that on the loan raised by them from KDLC they have not been providing interest on year to year basis and the total amount of interest outstanding as on 31.03.2008, comes to Rs. 1830.60 crore. During the course of appellant proceedings the appellant also filed the following chart of “unprovided interest of KDLC account.” Financial Year Amount of Unprovided amount of unprovided interest during unprovided interest the year interest at the close of the year 306.13 306.13 1998-99 306.13 377.22 683.35 1999-00 683.35 142.63 825.98 2000-01 1073.22 247.24 1073.22 2001-02 1139.32 66.10 1139.32 2002-03 1177.40 38.03 1177.40 2003-04 1400.73 223.33 1400.73 2004-05 1564.201 163.47 1564.21 2005-06 1564.21 204.42 1768.63 2006-07 1768.63 61.97 1830.60 2007-08