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2017 (3) TMI 1934 - AT - Income TaxDisallowance u/s. 14A - sufficiency of own funds - submission of the assessee that the said investment was made by the assessee company out of non-interest bearing funds comprising share capital & reserves - HELD THAT:- As perused the judicial pronouncement of CIT v Corrtech Energy (p) Ltd [2014 (3) TMI 856 - GUJARAT HIGH COURT] held that as per section 14A of income Tax Act 1961 read with rule 8D of the income tax rules 1962 expenditure incurred in relation to income not includable in income in a case assessee did not make any claim for exemption of any income from payment of taxes, in that case disallowance u/s 14A of the act could not be made. It is crystal clear that the jurisdictional High Court has decided to attract the provision of section 14A it is required that assessee should have earned an exempt income, if the assessee has not earned an exempt income and not claimed so in the return of income then the provision of section 14A are not applicable. We find that during the year under consideration the assessee company has not earned any exempt income and has not claimed any such exempt income in the return of income therefore as per our considered opinion the provision of section 14A are not applicable. - Decided in favour of assessee. Unsecured loan u/s. 68 - identity, genuineness and creditworthiness of the unsecured loan providers not proved - HELD THAT:- We have noticed that in the case of the assessee, the confirmation with the name, address, copy of ledger account, copy of balance sheet and profit and loss account, copy of income tax returns and computation of total income in respect of all the parties were filed before the assessing officer. As perused the judicial pronouncement in the case of CIT-Rajkot v Ayachi Chandrashekhar Narsangji [2013 (12) TMI 372 - GUJARAT HIGH COURT] held that in case the loan amount has been repaid by the assessee in the immediate next financial years that indicate that the department has accepted the repayment of loan without proving into it. We have also observed that it was undisputed fact that the assessee had repaid considerable amount of the loans to the lenders in the next year along with the interest amount. The assessment records of all the lenders are available with the income tax department and the assessing officer could have easily verify the same. We have also noticed that not any lender has made denial of not extending any loan to the assessee company. All the transactions have been made through proper banking channels. The submission made by the assessee that the net worth of the lending companies were very high, the identity, creditworthiness, genuineness of the transactions have not been disproved by the assessing officer with cogent and concrete supporting evidences. The amounts in question had been received by way of account payee cheques. Having regard to the fact that the permanent account numbers and the income tax returns of all the investors had been furnished by the assessee, the Assessing Officer could have easily verified the same. We have noticed that all the transactions of advances received were made through bank only and the assessing officer should have verified these transactions with the relevant banks and should have made further inquiries in this regard, which she has failed to do so. In all the cases the lenders were filing their returns on regular basis and copies of the returns of income were produced for verification in support of his case. Not any evidence had been brought on the record which even remotely indicated that the money originally belonged to the assessee and it had returned back to the assessee again. We observed that during the assessment proceedings the assessee had furnished the details of the persons from whom loan had been received stating, name and the address, PAN, copy of account confirmation, copy of acknowledgement of ROI, copy of relevant portion of their bank account and the copies of the audited annuals accounts. Further we have noticed that the assessing officer had issued notices u/s 133(6) of the act and all the notices were duly complied by the lenders. Thus, from the facts noted hereinabove, it is evident that the assessee had produced all relevant details in its possession, namely, names, permanent account numbers, income tax returns, and bank statements of all the investors. The lower authorities have made findings mostly on the basis of assumption based on own analysis without disproving the supporting and evidences produced by the assessee as elaborated supra in this order. Decided in favour of assessee.
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