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Income Tax Appellate Tribunal, DELHI BENCHES, NEW DELHI
Before: SHRI I.C. SUDHIR & SHRI PRASHANT MAHARISHI
IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCHES, NEW DELHI (CIRCUIT BENCH AT MEERUT) BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA No. 5942/Del./2014 Asstt. Year: 2010-11 ACIT vs. Sarvahit Trust Circle -2 , Meerut. G-10 Krishna Plaza, Meerut. [PAN: AAHTS3245C] (Appellant) (Respondent) Appellant by : CA Chander Mehra Revenue by : Sh. Seodan Singh Bhaddoria, Sr. DR Date of hearing : 16.12.2015 Date of pronouncement : 22.12.2015 ORDER Per Prashant Maharishi, Accountant Member:
This appeal is directed by revenue against the order of CIT (A), Meerut dated 12-05-2014 against deletion of addition u/s 68 of the Income Tax Act of Rs. 2,99,50,000/- received by assessee trust as unsecured loan from M/s Nishyam farms ( P ) Limited.
Brief facts of the case are that the assessee is a trust engaged in running a university at Pilani Rajasthan. During the year it received ITA 5942 Del 2014 ACIt V sarvahit Trust A Y 2010-11
an unsecured loan of Rs 2, 95, 00,000/- from one Nishyam Farms (P)limited. In computation of total income filed by the trust it has shown this sum received asloan in the balance sheet as at 31.3.2010. As at 31.3.2009 the assessee has taken loan from this company of Rs 2,94,00,000/- and as at 31.3.2010 this loan increased to Rs. 4,79,50,000/-. Based on the information obtained by ld. AO in AY 2009-10 from ADIT vide letter dated 27.12.2011 where in it is intimated that from site of ministry of corporate affairs (www.mca.gov.in) is that fund flow of the company is from share capital and unsecured loans and outflow is cash in hand and bank balances and loans and advances. No business activity is carried on by this company. Therefore as there was an addition of Rs 2,94,00,000/- in AY 2009-10, AO also made an addition of Rs 2,95,00,000/-in this year u/s 68 of the Act, on identical facts, despite assessee filing confirmation of the company supported by the Income tax returns of the company and also produced the director of the company who was examined and he also submitted the audited annual accounts of the company. Assessee aggrieved with the order of AO carried the matter before CIT (A) who relying on his orders pf AY 2009-10 in appeal no 248/11-12 dated1/5/2012 deleted the addition. Therefore revenue is in appeal.
ITA 5942 Del 2014 ACIt V sarvahit Trust A Y 2010-11
Ld. DRsubmitted that assessee trust has received loan from a firm which is not carrying on any business activity and has given the huge loan to the assessee and therefore relying on the order of AO he vehemently submitted that the addition u/s 68 may be confirmed.
Ld. AR submitted that as assessee has dischargedits onus cast u/s 68 by producing the overwhelming evidence in support of creditors which are duly confirmed the addition is rightly deleted by CIT (A). 5. We have carefully considered rival contentions. During the year assessee has taken loan from Nishyam farms (P)Limited of Rs 2,95,00,000/- . In response to query from AO to prove the loan, assessee has produced the directorof the company Mr Pankaj Gupta before AO and he filed an affidavit along with the confirmation letter, Income tax return of the company as well as its annual audited accounts. He also submitted proof of the cheques paid from Union bank of India to the assessee trust along with the bank statement of Lender Company. During the examination of director it was also explained that sources of the funds are from unsecured loan from the directors and shareholders of the company. Regarding deposit of cash in the bank account it was explained that money was withdrawn from Rajasthanbank Limited. AO was concerned that as prior to issue of cheque the amount in cash was deposited in the account ITA 5942 Del 2014 ACIt V sarvahit Trust A Y 2010-11
from which the cheques were issue by Lender Company. In response to that the creditor has explained that the amount was withdrawn from Rajasthan bank Limited and same were deposited in union bank of India and then cheques were issued to the assesee truts. These facts were also confirmed by AO in remand proceedings also. Now looking at the information that has been gathered by AO from ADIT is very simple which is available in case of every company and is also based on the information filed by those companies as per the Companies Act 1956. Therefore it is the same information which company has uploaded on the website of MCA and same information is supplied by the assessee and lender company to the AO. On perusal of information received it does not suggest that the company is not in existence or the sources of the funds which are given as loan to the assessee trust are not proper in spite of the compliance made by lender by making himself available before AO for examination. It is also not important that whether the company is carrying on any business activity or not but what is important is that funds lent by that company are also shown in the balance sheet of the lender who is assessed to Income Tax. Therefore in our view assessee has discharged its onus cast up on as per the provisions of section 68 of The Income Tax act by proving identity, creditworthiness and ITA 5942 Del 2014 ACIt V sarvahit Trust A Y 2010-11