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Income Tax Appellate Tribunal, DELHIBENCH ‘A’, NEW DELHI
Before: Sh. C. M. GargDr. B. R. R. Kumar
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the revenue and the cross objection is filed by the assessee against the order dated of the ld. CIT(A)-30, New Delhi dated 24.02.2020 for Assessment Year 2016-17.
CO No. 24/Del/2021 Aman Kaushik 2. The revenue has raised the following grounds of appeal:
“1. On the facts and in the circumstances of the case, the order of the Ld. CIT(A) is bad in law and not in consonance with facts of the case.
On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 3,30,00,000/-.
3. The appellant craves leave to add/alter/delete/modify the grounds of appeal before or during the hearing of the appeal. Total tax effect (see note below)”
The assessee has raised the following grounds of appeal in Cross objection:
“1. The assessment order, dated 23-12-2018, passed by the Id. Income Tax Officer, Ward - 55(1), Delhi (hereafter the ld. ITO) u/s 143(3) of the Income Tax Act, 1961 (hereafter the Act) is without jurisdiction, bad in law, null and void ab initio, inter alia, because the selection of the case for scrutiny without considering the return of income and financial statement and under CASS is in gross violation of provisions of section 143(2) of the Act.”
During the assessment proceedings, the A.O. has noted that the assessee has received unsecured loans totaling to Rs.7,25,25,409/-. The said unsecured loans was received from,
M/s Man Mohan Sharma (HUF) Rs. 28,20,000/- 2. M/s Shiva Mint Industries Rs. 3,30,00,000/- 3. Mr. Ashok Kumar Jain amounting to Rs. 80,000/- 4. M/s Ashok Kumar Jain (HUF) amounting to Rs. 1,00,000/- 5. Shri B.N. Sharma Rs. 30,00,000/- 6. Shri Gaurav Sharma Rs. 25,00,000/- 7. Shri Rajesh Kaushik Rs. 80,00,000/- 8. Shri Ram Avtar Kamal Kumar Rs. 50,00,000/- 9. M/s RBRL Commodities Limited Rs. 1,00,00,000/-
CO No. 24/Del/2021 Aman Kaushik 10. Shri Sanjeev Garg Rs. 51,25,409/- 11. M/s Aditya Birla Finance Limited Rs. 29,00,000/-.
After due enquiries, the AO made addition of Rs. 3,30,00,000/- received from M/s Shiva Mint Industries u/s 68 of the Income Tax Act, 1961 owing to non-receipt of confirmation in response to the notice issued u/s 131 of the Act.
The AO noted in the assessment order that the assessee has submitted bank statement, balance sheet along with schedule of advances given showing name of the assessee and the acknowledgement of return of income from all other parties except M/s Shiva Mint Industries. The A.O. noted that the assessee has neither submitted bank statement/details of the party M/s Shiva Mint Industries nor produced any documentary evidence to prove the identity, genuineness and creditworthiness of the party M/s Shiva Mint Industries.
Before the ld CIT(A) the assessee stated that the opening loan balance of the party M/s Shiva Mint Industries was Rs. 3,30,00,000/-, out of which Rs. 1,50,00,000/- was repaid and has further raised loan of Rs. 1,49,99,999/- during the year, and closing balance of Rs. 3,29,99,999/- is outstanding at the end of the year, which has been added back by the A.O. Thus, the AO has made addition of closing balance which is not the correct way to add any loan.
The assessee has filed the requisite primary details like loan confirmation, bank statement and acknowledgement of the return filed by M/s Shiva Mint Industries. The assessee has even filed the details of source of this loan. In the assessment
CO No. 24/Del/2021 Aman Kaushik order the AO has observed that M/s Shiva Mint Industries has filed return at very meager amount of Rs. 19,060/-, therefore the party has no creditworthiness.
In the present facts of the case, the assessee has mentioned that M/s Shiva Mint Industries has advanced the loan to the Assessee out of the amount received by them from M/s Sharp Mint Ltd. The assessee has also submitted that the letter issued by M/s Sharp Mint Ltd. along with the bank statement of M/s Sharp Mint Ltd.
The ld. CIT(A) categorically observed that summon u/s. 131 of the Act issued by the A.O. has been responded by M/s Shiva Mint Industries by filing evidences proving the identity, genuineness and creditworthiness of the unsecured loans transactions.
It has been argued that the assessee has established the identity, genuineness and creditworthiness of M/s Shiva Mint Industries and primary onus cast on the assessee has been discharged. It is further submitted that the Assessing Officer disregarded all the evidences and proofs furnished by the assessee and treated the loan transactions as non-genuine by simply stating that confirmation has not been filed, and creditworthiness has not been proved as the return income of the party M/s Shiva Mint Industries is only Rs. 19,060/-. The assessee with regard to prove the identity, genuineness and creditworthiness of the transaction of said unsecured loan from the party M/s Shiva Mint Industries, amounting to Rs. 3,30,00,000/-, submitted return of income for the A.Y. 2016-17,
CO No. 24/Del/2021 Aman Kaushik confirmation, bank statement, balance sheet of M/s Shiva Mint Industries alongwith schedule of loans and advances given showing the name of the assessee, certificate from M/s Sharp Mint Industries from whom M/s Shiva Mint Industries has received the amount out of which loan was given to the assessee alongwith the bank statement of M/s Sharp Mint Industries.
The assessee received loan from M/s Sharp Mint Industries who in turn received fund from M/s Sharp Mint Industries. Even, the amount received during the year was Rs.1,50,00,000/- as against Rs.3,30,00,000/- as alleged by AO. The ld. CIT(A) has deleted the addition after considering the entire facts of the loan and the sources thereof. Hence, we decline to interfere with the order of the ld. CIT(A).
In the result, the appeal of the Revenue is dismissed on merits and the CO of the assessee is treated as infructuous. Order Pronounced in the Open Court on 27/04/2023.