INCOME TAX OFFICER, WARD-3(2)(1), AHMEDABAD vs. AKSHAR TECHNOLOGY, AHMEDABAD

Revenue Represented: Shri Prasad Rao Waghe Annasaheb, Sr. D.R. Assessee Represented: Shri Kirit B. Soni, A.R. Date of hearing : 29-08-2024 Date of pronouncement : 03-09-2024 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the Revenue as against the appellate order dated 26.02.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the assessment order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2017-18.

A.Y. 2017-18 Page No 2 ITO Vs Akshar Technology

A.Y. 2017-18 Page No 3 ITO Vs Akshar Technology

(c) The appellant craves leave to add, alter and/or to amend all or any the ground before the final hearing of the appeal.

6. Per contra Ld. Counsel appearing for the assessee supported the reply filed by the Assessing Officer in the Remand Report and therefore requested to uphold the order of Ld. CIT(A).

7. We have given our thoughtful consideration and perused the materials available on record. On the addition of unsecured loans of Rs.60,50,000/- the finding of Ld. CIT(A) after considering the Remand Report is as follows:

“7.1.1 All the facts of the case, Grounds of appeal

, statement of facts, online submissions of the appellant, the assessment order, remand proceedings and remand report of the AO dated 17.10.2023 are considered carefully. The submission of the appellant and Remand report of the AO are examined. The AO has observed in the remand report mentioning that. "With respect to the issue involved i.e. unsecured loans the assessee, however, during the assessment proceedings could not submit the all required documents i.e. ITR, Confirmation, Bank Statements, P&L A/c and Balance Sheet etc. But, now, during the remand proceedings, the assessee is submitting these documents for all the persons which are sufficient to establish the identity, creditworthiness and genuineness of the transaction." The supporting documents submitted by the appellant relating to unsecured loan amounting to Rs. 60,50,000/- from five loaners 1. Harshad Pandya, 2. Hemen Pandya HUF, 3. Jatin Pandya HUF, 4. Krishnaben Vyas,

5. Madhvi Pandya have been examined and found in order to establish the identity, genuineness and creditworthiness of the same. In view of the above, addition made by the AO on account of treating unsecured loan of Rs.60,50,000/- as unexplained credit U/s 68 of the IT Act, 1961 is hereby deleted. Thus, the grounds of appeal no. 1 is allowed.”

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“7.2.1 All the facts of the case, Grounds of appeal

, statement of facts, online submissions of the appellant, the assessment order, remand proceedings and remand report of the AO dated 17.10.2023 are considered carefully. The submission of the appellant and Remand report of the AO are examined. The AO has observed in the remand report mentioning that, The assessee further submitted that it had provided confirmation letter for FY 2016-17 from E secure Electronics and Mantra Softech to the assessing officer. It can be seen that the supplier has delivered material up to 25th February 2017 of Rs.6,28,38,300/- arid the assessee had made payment to supplier upto 19th December, 2016 of Rs.9,67,49,000/- Thus advance Rs.3,39,10,700/- where was settled in the next year as stated below it can be seen that confirmation letter of Mantra Softech for FY 2016-17 that the assessee had supplied material to the customer upto February 28, 2017 was Rs.6,99,35,250/- and the payment received from the customer up to 30th March, 2017 is Rs.5,25,00,000/- Thus, Rs.1,74,35,250/- is receivable from customer as at 31/03/2017.

4. In the considered opinion of the undersigned, in view of the assessee's submission and contentions, the issue regarding interest disallowance needs to be reconsidered. With regard to the issue of interest disallowance the assessee's claim that it is a trading activity is supported by necessary documents. The assessee has established identity, creditworthiness and genuineness of the transaction by submitting supporting evidences. Therefore, under the facts and circumstances of the case as mentioned above, it is recommended that the submission made by the assessee during the appellate proceedings, may be taken into consideration, if deemed fit." The written submission along with supporting documents submitted by the appellant relating to the amount of interest of Rs.13,58,876/- calculated and disallowed by Assessing Officer in assessment order treating as interest free loan/ advance given by the appellant to the above mentioned two companies M/s E secure Electronics and M/s Mantra Softech in the name of purchase/ sales to avoid interest payment, is considered carefully and the claim of the appellant is found in order. As it is evident from the supporting documents submitted by the appellant that the interest free loan/ advance treated by the AO are actually trading activity of the appellant made in course of his business. The assumption made by the AO in this regard is baseless. In view of the above, disallowance of the interest on capital to partner for Rs.13,58,878/- made A.Y. 2017-18 Page No 5 ITO Vs Akshar Technology by the AO is deleted. Thus, the grounds of appeal no. 2 is allowed. Remaining grounds are general in nature, therefore, not adjudicated separately.” 8.1. Thus we do not any merits in the grounds raised by the Revenue.

Order pronounced in the open court on 03-09-2024 Sd/- Sd/- (NARENDRA PRASAD SINHA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 03/09/2024 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद