A.C.I.T., CIRCLE-2,, GWALIOR vs. M/S K.S.REAL ESTAT PVT. LTD., INDORE

The assessee company is associated entity of M/s K.S. Oil Mills of Gwalior. The assessee reflected unsecured loans of Rs.47.83 Lacs and Sundry Creditors for Rs.12.41 Crores. The assessee adduced various evidences to demonstrate the genuineness of the entities; however, Ld. AO added both these items to the income of the assessee u/s 68. The unsecured loans were taken from M/s Ashish Rasnidhi Enterprises and M/s Chahat Infrastructure Pvt. Ltd. The Sundry Creditors were represented by sole entity by the name M/s Nirmal Lifestyle Indore Pvt. Ltd.

The Ld. CIT(A), in the light of assessee’s elaborate written submissions as well as remand report of Ld. AO, rendered its adjudication on unsecured loans in para-9. It was held that the assessee discharged the onus of proving the identity, capacity and creditworthiness of the loan creditors. The assessee duly furnished confirmation, bank statement of lender, income tax returns, final accounts of both the lenders and assessment orders in their respective cases which were passed by same Assessing officer. On these facts, the impugned addition of Rs.47.83 Lacs was deleted. The adjudication on sundry creditor has been rendered in para-13 of the impugned order. It was noted that during the course of assessment proceedings, the assessee submitted ledger extract, confirmation letter, bank statement and audited accounts of the creditor. On perusal of these documents, it emerges that the assessee successfully established the genuineness of the transactions. The outstanding amount represent advance received against sale of land which was duly been reflected in the financial statements of the creditors. The Ld. AO did not establish that the assessee introduced its unaccounted income in the form of sundry creditor. Accordingly, the impugned addition was deleted against which the revenue is in further appeal before us.

The aforesaid findings as rendered by Ld. CIT(A) remain uncontroverted before us. The adjudication is based on documents furnished by the assessee during assessment proceedings as well as during remand proceedings. It could be seen that the assessee was successful in discharging the onus of proving the primary ingredients of Sec.68 with respect to unsecured loans as well as sundry creditor. This being so, we see no reason to interfere in the impugned order, in any manner.

The appeal stand dismissed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.