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2023 (11) TMI 1041 - AT - Income TaxUnexplained cash credits - undisclosed sources u/s 68 - as per DR only a few persons provided fund to the assessee company in the form of share application money and unsecured loans and most of them stated that their source of investment is from sale of shares - CIT(A) gave a clear findings that the AO has not made out any case as to how once the details and submission have been furnished by the assessee and even after enquiries made by the AO, when no adverse remark was made how there could be a justification of making addition u/s 68 - HELD THAT:- CIT(A) while granting relief to the assessee has relied on the various judgments of Hon'ble Supreme Court and jurisdictional Delhi High court which supports the conclusion drawn by the ld first appellate authority. CIT(A) also considered the allegation made in the tax evasion petition and noted that the despite the information of TEP the AO has not brought any adverse material on record, no addition can be made on general apprehensions or surmises. CIT(A) finally relying on the proposition rendered in the case of CIT Vs. Lovely Exports [2008 (1) TMI 575 - SC ORDER] concluded that no adverse finding other than baseless observation given by the AO and also that this is not a case relating to entry operators and the ld CIT(A) has recorded categorical finding that all the parties are regularly assessed to tax and intimation have also sent to various AO to take necessary follow up action. CIT(A) finally concluded the details in the remand report as well as various documents filed by the assessee have clearly established that the onus cast upon the appellant with regard to establishing identity, capacity and creditworthiness of contributor/ investor of share application amount has been discharged. Thus, we are unable to see any ambiguity, perverse to any valid finding recorded by the ld CIT(A) that the onus discharged by the appellant with regard to share application amount and no specific adverse information or evidence has been brought on record by the AO to justify the addition u/s 68 of the Act. Accordingly, we hold that the findings of the ld CIT(A) are quite correct and justified based on sustainable & self-speaking documentary evidence which requires no interference by this bench. Accordingly, ground No. 1 of the revenue is dismissed. Unsecured loan unexplained credit from undisclosed source u/s 68 - CIT(A) deleted the addition by observing that the evidence and circumstances under which the unsecured loan have been taken and the AO did not controvert the various evidence of facts brought on record, there is no justification to sustain the addition made by the AO u/s 68 - HELD THAT:- It is pertinent to mention that on being asked by the bench the ld Sr. DR did not controvert the factual position noted by the ld CIT(A) that the amount of Rs. 31 lakhs was repaid during the same financial period to the respective loan creditor i.e. M/s. Abhinav Leasing and Finance Ltd. Thus we are unable to see any valid reason to interfere with the findings arrived and recorded by the ld CIT(A) and thus we uphold the same. Estimation of business income - CIT(A) restricting the estimated business income as below the returned income - HELD THAT:- As returned income of assessee was Rs. 1,92,270/- and the AO estimated business income from operations Rs. 2,31,200/- above the returned income by considering the net profit @10% on the total turnover/ receipt of the assessee. It is well accepted principle of tax jurisprudence that the returned income cannot be reduced by allowing claims or deduction to the AO. From the relevant part of the first appellate order we note that the ld CIT(A) despite noting that the assessee could not establish that the expenses have been properly vouched and restricted the addition from Rs. 2,31,200/- to Rs. 1 lakhs only without mentioning the valid justified reason and basis therefore, the findings of ld CIT(A) in this regard being un-sustainable are reversed restoring the addition made by the AO. Decided in favour of revenue.
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