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Income Tax Appellate Tribunal, DEHRADUN “DB” BENCH, DEHRADUN
Before: SHRI SATBEER SINGH GODARA & SHRI M. BALAGANESH
PER SATBEER SINGH GODARA, JM
This Revenue’s appeal for assessment year 2015-16, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2023-24/1057614033(1), dated 02.11.2023, involving proceedings under section 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
This Revenue’s appeal raises the following substantive grounds:
1. 1. On the facts and circumstances of the case and in law, whether the CIT(A) was justified in admitting the additional evidences in view of Rule 46A and deleting the addition of rs.3.16 crores without providing opportunity to examine new evidences or to produce any evidence in rebuttal to the assessing authority.
2. That, the appellant craves leave to add or amend any other more ground of appeal as stated above as and when needs for doing so may arise.
2. Both the parties next invite our attention to CIT(A)/NFAC’s lower appellate discussion reversing the assessment findings making section 68 addition of unexplained cash credits to the tune of Rs.3.16 crores; reading as under: “4. During the course of appellate proceedings, the appellant furnished the written submission and the following documents:
1. Bank Account Statement 2. Copy of sale deed of the property purchased 3. Balance Sheet of the firm as on 31.03.2015
4. Confirmation Statement, ITR and Bank Account Statement of the Creditors who gave loan to the appellant for the purchase of the property
5. The matter has been carefully considered. I have perused the assessment order, grounds of appeal and written submission furnished during the appellate proceedings. It could be seen from the facts that in this appeal Ground No. 1 pertains to the single issue of addition of investment of Rs.3,16,00,000/- as income from undisclosed sources and the same is adjudicated as under. 5.1. The case was reopened u/s 147 of the Act and notice u/s 148 of the Act was issued to the appellant firm. In response to the same, the appellant firm filed its return of income declaring total income of Rs. Nil. However, despite providing many opportunities during the assessment proceedings, the appellant firm did not explain the nature & source of Rs.3,16,00,000/- invested for purchase of the immovable property. Therefore, the AO added entire amount of investment of 2 | P a g e Rs.3,16,00,000/- as income from undisclosed sources and completed the assessment proceedings u/s 144 of the Act. 5.2. During the appellate proceedings, the appellant contended that the appellant was a partnership firm engaged in the business of real estate development and during the year under consideration, the appellant firm acquired immovable property comprising of two plots of land measuring 444.62 Sq. Meters each for a total sum of Rs.3,16,00,000/-. Apart from this transaction, the appellant did not enter into any business activity. Since the appellant was not having any income, it did not file return of income for the A.Y. 2015-16. Further the appellant claimed that the source of investment for purchase of the immovable property was loans taken from the creditors. In support of the same, the appellant furnished the copy of balance sheet as on 31.03.2015. 5.3. On perusal of the balance sheet of the appellant firm, it is noted that the appellant firm received loan from creditors as under: Sr. No. Name of the Creditor Amount of loan (in Rs.) 1. Anil Sharma HUF 15,00,000/- 2. Anil Sharma 90,00,000/- 3. Ashwini Nautiyal 10,00,000/- 4. Narender Kumar Chaudhary 37,00,000/- 5. Ravi Maheshwari 60,00,000/- 6. Ravi Maheshwari HUF 60,00,000/- 7. Ravinder Bhushan 5,00,000/- 8. Shree Radha Govind Dal Mill 35,00,000/- 9. Laxmi Builders 20,00,000/- 10. Amar Nath Ahuja 50,00,000/- Total 3,82,00,000/- 5.4. During the appellate proceedings, the appellant firm was asked to prove the identity &creditworthiness of the creditor and genuineness of the transaction along with supporting documentary evidences. Accordingly, the appellant firm filed the written submissions along with supporting documents. The same is discussed herewith as under: 5.4.1. Anil Sharma HUF:- During the year under consideration, the creditor gave loan of Rs.15,00,000/- to the appellant firm. In support of the same, the creditor furnished the copy of confirmation statement, bank account statement through which loan was given and copy of ITR filed for the AY 2015-16. On perusal of the ITR field by the creditor, it is noted that the creditor was having total income of Rs.7,99,570/- for the A.Y. 2015-16. Thus the creditor has proved its identity &
3 | P a g e creditworthiness and genuineness of the transaction along with supporting documentary evidences. 5.4.2. Anil Sharma:- During the year under consideration, the creditor gave loan of Rs.90,00,000/- to the appellant firm. In support of the same, the creditor furnished the copy of confirmation statement, bank account statement through which loan was given and computation of income for the AY 2015-16. On perusal of the same, it is noted that the creditor was having total income of Rs. 14,54,540/- for the A.Y. 201516. Thus the creditor has proved its identity & creditworthiness and genuineness of the transaction along with supporting documentary evidences. 5.4.3. Ashwini Nautiyal:- During the year under consideration, the creditor gave loan of Rs.10,00,000/- to the appellant firm. In support of the same, the creditor furnished the copy of confirmation statement, bank account statement through which loan was given and copy of ITR filed for the AY 2015-16. On perusal of the ITR field by the creditor, it is noted that the creditor was having total income of Rs.5,06,090/- for the A.Y. 2015-16. Thus the creditor has proved its identity & creditworthiness and genuineness of the transaction along with supporting documentary evidences. 5.4.4. Narender Kumar Chaudhary:- During the year under consideration, the creditor gave loan of Rs.37,00,000/- to the appellant firm. In support of the same, the creditor furnished the copy of confirmation statement, bank account statement through which loan was given and copy of ITR filed for the AY 2015-16. On perusal of the ITR field by the creditor, it is noted that the creditor was having total income of Rs.9,19,470/- for the A.Y. 2015-16. Thus the creditor has proved its identity & creditworthiness and genuineness of the transaction along with supporting documentary evidences. 5.4.5. Ravi Maheshwari:- During the year under consideration, the creditor gave loan of Rs.60,00,000/- to the appellant firm. In support of the same, the creditor furnished the copy of confirmation statement, bank account statement through which loan was given and computation of income for the AY 2015-16. On perusal of the same, it is noted that the creditor was having total income of Rs.16,31,650/- for the A.Y. 201516. Thus the creditor has proved its identity & creditworthiness and genuineness of the transaction along with supporting documentary evidences. 5.4.6. Ravi Maheshwari HUF:- During the year under consideration, the creditor gave loan of Rs.60,00,000/- to the appellant firm. In support of the same, the creditor furnished the copy of confirmation statement, bank account statement through which loan was given 4 | P a g e and computation of income for the AY 2015-16. On perusal of the same, it is noted that the creditor was having total income of Rs.13,65,480/- for the A.Y. 2015-16. Thus the creditor has proved its identity & creditworthiness and genuineness of the transaction along with supporting documentary evidences. 5.4.7. Ravinder Bhushan:- During the year under consideration, the creditor gave loan of Rs.5,00,000/- to the appellant firm. In support of the same, the creditor furnished the copy of confirmation statement, bank account statement through which loan was given. For the source of loan given, the creditor claimed that he received an amount of Rs.10,00,000/- as part of sale proceeds of agricultural land. In support of the same, the creditor has furnished the copy of bank account statement and the same was found to be in order. Thus the creditor has proved its identity & creditworthiness and genuineness of the transaction along with supporting documentary evidences. 5.4.8. Shree Radha Govind Dal Mill:- During the year under consideration, the creditor gave loan of Rs.35,00,000/- to the appellant firm. In support of the same, the creditor furnished the copy of confirmation statement, bank account statement through which loan was given. For the source of loan given, the creditor claimed that he received an amount of Rs.33,25,354/- as repayment of loan advanced by it to M/s Mahalaxmi Buildwell and amount of Rs.1,74,646/- was paid out of balance available in the bank account. In support of the same, the creditor has furnished the copy of bank account statement, ledger account of "Loans& Advances” and the same were found to be in order. Thus the creditor has proved its identity & creditworthiness and genuineness of the transaction along with supporting documentary evidences. 5.4.9. Laxmi Builders:- During the year under consideration, the creditor gave loan of Rs.20,00,000/- to the appellant firm. In support of the same, the creditor furnished the copy of confirmation statement, bank account statement through which loan was given and copy of ITR filed for the AY 2015-16. On perusal of the ITR field by the creditor, it is noted that the creditor was having total income of Rs.13,03,120/- for the A.Y. 201516. Thus the creditor has proved its identity & creditworthiness and genuineness of the transaction along with supporting documentary evidences. 5.4.10. Amar Nath Ahuja:- During the year under consideration, the creditor gave loan of Rs.50,00,000/- to the appellant firm. In support of the same, the creditor furnished the copy of confirmation statement, bank account statement through which loan was given and copy of ITR filed for the AY 2015-16. On perusal of the ITR field by the creditor, it is noted that the creditor was having total income of Rs.89,93,720/- 5 | P a g e for the A.Y. 2015-16. Thus the creditor has proved its identity & creditworthiness and genuineness of the transaction along with supporting documentary evidences. 5.5. In view of the facts narrated above and documentary evidences filed by the appellant firm, it is noted that the appellant firm made investment for purchase of the immovable property. The source for this investment was stated to be capital contributions of the partners of the firm and later on unsecured loans were taken by the appellant firm so as to enable the partners to withdraw part of the capital invested. All the partners and creditors have proved their identity & creditworthiness and genuineness of the transaction along with supporting documentary evidences. Therefore, this is not a case made out for addition of investment as income from undisclosed sources. Hence, I accept the contention of the appellant firm that the source of investment was duly explained and direct the AO to delete the addition of Rs.3,16,00,000/- made on account of income from undisclosed sources. Accordingly, Ground No. 1 is allowed.”
It is in this factual backdrop that the Revenue’s sole substantive contention before us is that the CIT(A)/NFAC has erred in law and on facts in first admitting assessee’s additional evidence in violation on Rule 46A of the Income Tax Rules, 1962 thereby deleting the above unexplained cash credit addition. Learned authorized representative on the other hand vehemently submits that the assessee had not filed any additional evidence in the lower appellate proceedings nor do we find any material to the contrary in the appeal file before us. We thus conclude in light of (2008) 112 ITD 293(Mum), ITO Vs. Industrial Roadways that till the time assessee does not himself file such an additional evidence, Rule 46A of the Income Tax Rules does not come into play. This is 6 | P a g e further coupled with the fact that the assessee had duly proved the source of the above impugned alleged cash credits as well. We thus find no reason to interfere with the lower appellate discussion hereinabove deciding the instant sole issue in assessee’s favour on merits. Ordered accordingly. No other ground or argument has been pressed before us.
This Revenue’s appeal is dismissed in above terms. Order pronounced in the open court on 13th June, 2025 Sd/- Sd/- (M. BALAGANESH) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 13th June, 2025. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi
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