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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: DR. M. L. MEENAANDSH. ANIKESH BANERJEE
Date of Hearing 25.04.2023 Date of Pronouncement 27.04.2023 ORDER Per Bench: Both the appeals of the revenue against two different assesses are filed against the order of the ld. Commissioner of Income Tax (Appeal)-5, Ludhiana [in
I.T.A.No. 205 & 206/Asr/2022Assessment Year: 2015-16) 2 brevity the CIT(A)] order passed U/s 250(6) of the Income Tax Act, 1962 [in brevity the Act]. The ld. Deputy Commissioner of Income Tax, Central Circle-I, Jalandhar [in brevity the AO] had framed the assessment U/s 153A of the Act. 2. At the outset, both the parties are stated that the relevant factual backdrops as well as the issues involved in all the cases are identical. We, therefore treat the assessee’s appeal, for the Assessment Year 2015–2016 as the lead case.
3. The assessee has taken the following grounds:- “1. Whether in the facts and circumstances of the case, the Ld.CIT(A) has erred in deleting the addition of Rs.4,97,50,000/- made by the Assessing officer on account of unexplained credits u/s 68 of the Act being the amount of loan in the name of Sh. Gurdip Singh Bath.
2. Whether in the facts and circumstances of the case, the Ld.CIT(A) has erred in deleting the addition of Rs.4,97,50,000/- made by the Assessing officer on account of unexplained credits u/s 68 of the Act, ignoring the fact that the creditworthiness of Sh. Gurdip Singh Bath could not be proved.
I.T.A.No. 205 & 206/Asr/2022Assessment Year: 2015-16) 3
The appellant craves leave to add, amend, modify, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal.”
Brief fact of the case is that both the assessees companies had received loan from Mr Gurdip Singh Bath related to assessment years 2015-16 & 2012-13 which are as follows.
Sl Name of assessee AY Amount of loan no 1 Silverline Buildtech Pvt Ltd 2015-16 Rs. 4,97,50,000/-
2 D.P.Ventures Pvt Ltd 2012-13 Rs.3,50,00,000/- The assessment was framed under section 153Afor both the assessee. The addition was confirmed related to amount of loan which was receipt from the said loan creditor. The ld. AO was not satisfied about the credit worthiness of loan creditor. The addition was confirmed the entire amount of loan U/s 68 of the Act. Being dissatisfied on the assessment order, the assessee filed appeal before the ld. CIT(A). During the appeal proceeding, the assessment of loan creditor, Mr Gurdip
I.T.A.No. 205 & 206/Asr/2022Assessment Year: 2015-16) 4 Singh Bathwas completed for assessment year 2015-16 and 2012 13u/s 153A r.w.s. 143(3) of the Act date of order17/04/2021 for both the assessment years. In assessment of loan creditor was as per return and the revenue has not made any adverse comment about the loan in the assessment order, dated 17/04/2021. Considering the fact of the case the ld. CIT(A) dismissed the addition of both the assessee. Being aggrieved the revenue, filed an appeal before us by challenging the appeal order.
The ld. DR vehemently argued and fully relied on the assessment order.
During appeal hearing the ld. AR filed written submissions which are kept in record. The ld.AR first invited our attention in appeal order page number 19.The relevant paragraph is extracted as follows: -
“It is further mentioned that of late the assessment in the case of Sh. Gurdip Singh Bath was completed vide order dated 17.04.2021 passed u/s 153A r.w.s. 143(3) and thus having accepted the source of income in the hands of Sh. Gurdip Singh, the lender, the addition made in the case of the assessee does not survive anymore and filed a copy of the assessment order dated 17.04.2021 in the case of Sh. Gurdip Bath for Assessment Year 2015-16. The AR was asked to file the documents showing money trial in respect of the loan received by I.T.A.No. 205 & 206/Asr/2022Assessment Year: 2015-16) 5 the assessee and it is seen that the amount of Rs. 4,97,50,000/- was received by the assessee from the bank account of Sh. Gurdip Singh Bath on 09.04.2014 from his NRE bank account number 0173000505268902 with Punjab National Bank and the funds in the bank account of Sh. Gurdip Singh Bath were foreign remittances and hence the arguments of the AR has merits that the assessee could not have introduced its own income generated through undisclosed transactions in India. In view of the above, the arguments of the AR are found acceptable that once receipt of the loan by the assessee from the bank account of Sh. Gurdip Bath is on record and the assessment of Sh. Gurdip Bath was also completed by the AO u/s 153A but no adverse inference has been drawn for the source of loan given to the assessee, then the addition made by the AO u/s 68 in respect of receipt of loan from Sh. Gurdip Singh Bath amounting to Rs. 4,97,50,000/- is not justifiable. Under these facts & the circumstances of the case, the addition made by the AO on account of loan from Sh. Gurdip Singh Bath is not found sustainable and hence deleted. Accordingly, these grounds of appeal are allowed.”
The ld. AO mentioned that the bank accounts of the loan creditor are annexed in APB Page 4- 9. The attention was also called for in the assessment order, dated 17/04/2021, passed U/s 153Ar.w.s. 143(3) of the Act of loan creditor
I.T.A.No. 205 & 206/Asr/2022Assessment Year: 2015-16) 6 which is annexed in APB, page 10-11. In the said assessment order, the revenue has not made any addition and the return income of the assessee is accepted. So, the credentialism related to the investment in assessee-company is not in doubt as per the assessment order of loan creditor.
We heard the rival submission and consider the documents available on the record. The addition was confirmed due to the doubt on the creditworthiness of the loan creditor, Mr. Gurdip Singh Bath. There is no dispute in transaction and in the identity of the loan creditor. The loan creditor himself NRI the transaction with the assessee-company was done through bank in convertible foreign exchange. The relevant certificates from bankers and bank statements are also placed before bench, in APB, page 8-9. The doubt about the creditworthiness is also cleaned up by the order of the revenue related to the loan creditor, dated 17- 04-2021. The transaction and creditworthiness of lone creditor are beyond doubt as per the order of the revenue. The ld. DR has not made any objection about the submission of assessee. We find that there is no infirmity in the order of appeal. Accordingly, the ground of the revenue is dismissed.
I.T.A.No. 205 & 206/Asr/2022Assessment Year: 2015-16) 7 The order of is mutatis mutandis applicable to and follows accordingly.