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2015 (9) TMI 1233 - ITAT DELHI

2015 (9) TMI 1233 - ITAT DELHI - TMI - Addition u/s. 68 - unaccounted cash paid for obtaining the accommodation entries - CIT(A) deleted the addition - Held that:- The creditworthiness is reflected through sources of funds in the balance sheet, the details of which were made available by the assessee during the assessment/ remand and appellate proceedings, on the basis of which it can be concluded that the lenders had sufficient funds to make the investment and to advance loans and those investm .....

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ount of unsecured loans from the loan creditors and as a natural consequence, the additions on account of commission to the extent of ₹ 35,000/- was also rightly deleted. Since the Ld. CIT(A) has passed a well reasoned order and therefore, no interference is called for in the impugned order on our part, hence, we uphold the impugned order dated 03.12.2010 passed by the Ld. CIT(A) and accordingly dismiss the appeal of the Revenue. - Decided in favour of assessee.

Treating the int .....

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impugned order and decide the issue in favor of the assessee. As submitted by the Ld. DR that the issue may be set aside to the file of the Ld. CIT(A) to decide the same afresh, after considering the decision of the Hon’ble Delhi High Court. In view of the above, we think it proper that request of the Ld. DR seems to be genuine and should be accepted, therefore, we set aside the issue involved to the file of the Ld. CIT(A) to decide the same afresh, under the law, after considering the decision .....

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ORDER PER H.S. SIDHU, JM:- These are the appeal filed by the Revenue and Cross objections filed by the Assessee emanate out of the common Order dated 03.12.2010 passed by the Ld. CIT(A)-VII, New Delhi pertaining to assessment year 2002-03. 2. The grounds raised in the Revenue s appeal read as under:- 1. The order of the Ld. CIT(A) is erroneous and contrary to facts and law. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of ͅ .....

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s Cross Objection read as under:- 1. That the Ld. CIT(A) has erred in law and on facts, to the extent, in treating the interest earned on Margin Money Deposits of ₹ 7,77,656/- as income from other sources and therefore denying deduction u/s. 80-IB thereon. 2. That the Ld. CIT(A) has earned in law and on facts, to the extent, in confirming the withdrawal of deduction u/s. 80IB on the notional profits of ₹ 36,673/- computed on the sale of ₹ 33,66,570/- considering it as trading .....

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have heard both the counsel and perused the records available with us, especially the orders of the revenue authorities, we are of the view that Ld. CIT(A) has adjudicated the issue in dispute vide para no. 6.4 to 6.7. The same are reproduced hereunder to facilitate ready reference:- 6.4 I have carefully considered the written submission made on behalf of the appellant, the findings of the AO in the assessment order as well as in the remand report and the facts and circumstances under which the .....

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arged to income tax as the income of the assessee of the previous year if he offers no explanation about the nature & source thereof or the explanation offered by him is not satisfactory in the opinion of the Assessing Officer, the sum so credited may be charged to income tax as the income of the assessee of the relevant previous year. Therefore, what has to be enquired into by the Assessing Officer is the nature & source of the sum or deposit. Such opinion formed itself constitutes a pr .....

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receipt is in the nature of income, the burden of proving that it is not taxable because it falls within the exemption provided by the Act lies upon the assesse…. But in view of section 68 of the Income-tax Act, 1961, where any sum is found credited in the books of the assessee for any previous year it may be charged to incometax as the income of the assessee of that previous year if the explanation offered by the assessee about the nature and source thereof is, in the opinion of the Ass .....

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ve neither the source nor the nature of the receipts, as has been held by the Madhya Pradesh High Court in Seth Kalekhan Md Hanif v. CIT [1958] 34 ITR 669 which decision has been affirmed by the Hon'ble Supreme Court in Kalekhan Mohammad Hanif v. CIT [1963] 50 ITR 1. The same principle has been reiterated by the Hon'ble Supreme Court in CIT v. Devi Prasad Vishwanath Prasad [1969] 72 ITR 194, by Calcutta High Court in Shankar Industries Ltd. v. CIT [1978] 114 ITR 689, C. Kant & Co. v. .....

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ty of such creditor to advance money & (iii) genuineness of the transaction. If all the aforesaid three conditions are proved the burden shifts on the Revenue to prove that the amount belonged to the assessee. [CIT vs. United Commercial & Industrial Co. (P) Ltd. (1991) 187 ITR 596 (Cal.); M. A. Unneeri Kutty vs. CIT (1992) 198 ITR 147 (Ker.); CIT Vs. Precision Finance P. Ltd. (1994) 208 ITR 495(Cal.). 6.6 Thus, seen in the context of such overwhelming evidences, and in. the light of the .....

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to sit over the matter without making any such effort for more than eight months. There is absolutely no substance in the addition made as the appellant has duly discharged its onus of proving the identity and creditworthiness of the persons and genuineness of the transactions by furnishing the confirmation letters, assessment particulars including PAN and copy of Í. T. return, balancesheet & P&L account, Bank statement to show that the payments have been made through banking chan .....

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which is reflected in the bank statements of the bank accounts of the respective loan creditors and the creditworthiness has been established through submission of their balance sheet and profit & loss account. Needless to mention that the creditworthiness is reflected through sources of funds in the balance sheet, the details of which were made available by the assessee during the assessment! remand and appellate proceedings, on the basis of which it can be concluded that the lenders had su .....

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from the three (3) loan creditors listed in Para 6 above. Therefore, the addition of ₹ 17,50,000/- made on account of unsecured loans from the loan creditors is deleted. As a natural consequence, the additions on account of (a) commission to the extent of ₹ 35,000/- and (b) interest amounting to ₹ 77,269/- on the loan amount are also deleted. As a result, Grounds No. 4,5 & 7 are allowed. 8. In the background of the aforesaid discussions and precedent relied upon by the Ld. .....

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fficer preferred to sit over the matter without making any such effort for more than eight months. There is absolutely no substance in the addition made as the assessee has duly discharged its onus of proving the identity and creditworthiness of the persons and genuineness of the transactions by furnishing the confirmation letters, assessment particulars including PAN and copy of I.T. return, balance-sheet & P&L account, Bank statement to show that the payments have been made through ban .....

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channels which is reflected in the bank statements of the bank accounts of the respective loan creditors and the creditworthiness has been established through submission of their balance sheet and profit & loss account. Needless to mention that the creditworthiness is reflected through sources of funds in the balance sheet, the details of which were made available by the assessee during the assessment/ remand and appellate proceedings, on the basis of which it can be concluded that the lend .....

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the loan creditors. Therefore, the Ld. CIT(A) has rightly deleted the addition of ₹ 17,50,000/- made on account of unsecured loans from the loan creditors and as a natural consequence, the additions on account of commission to the extent of ₹ 35,000/- was also rightly deleted. Since the Ld. CIT(A) has passed a well reasoned order and therefore, no interference is called for in the impugned order on our part, hence, we uphold the impugned order dated 03.12.2010 passed by the Ld. CIT( .....

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ore denying the deduction u/s. 80IB thereon is concerned, Ld. Counsel for the assessee stated that the issue in dispute is squarely covered in favour of the assessee by the decision of the Hon ble Delhi High Court in the case of CIT vs. Jaypee DSC Ventures Ltd. (2011) 335 ITR 132 (Del). He requested that the issue in dispute may be decided in favor of the assessee, in view of the decision of the aforesaid decision of the Hon ble Delhi High Court. 11. Ld. DR stated that this decision of the Hon b .....

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