TMI Blog2018 (4) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... der has duly filed its return of income the encompassing transaction with the assessee; we see little merit in the grievance of the Revenue on the aforesaid issue. The conclusion drawn by the CIT(A) is based on proper appreciation of evidences and founded on peculiar facts of the case. Therefore, we decline to interfere with the conclusion drawn by the CIT(A) deleting the addition towards unexplained credit. - Decided against revenue. - ITA No. 2694/Ahd/2014 - - - Dated:- 28-2-2018 - Shri S. S. Godara, Judicial Member And Shri Pradip Kumar Kedia, Accountant Member By Revenue : Shri V.K. Singh, Sr DR By Assessee : Shri G.C. Pipara, AR ORDER Per Pradip Kumar Kedia, AM 1. The instant appeal has been filed by the Revenue against the order of the CIT(A)-VIII, Ahmedabad dated 14.07.2014, arising from the assessment order dated 27.03.2014 passed under Section 143(3) of the Income-tax Act, 1961 (in short the Act ), concerning Assessment Year 2011-12. 2. The Revenue is aggrieved by the order of the CIT(A) for which following grounds of appeal have been raised:- 1. The Ld. CIT)(A) has erred in law and on facts to delete the addition of ₹ 52,50,000/- be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 87,78,254/- and thus aggregate current year income was reflected at ₹ 4,85,28,254/-. The CIT(A) noted that the Assessing Officer has merely added the difference between the survey disclosure of ₹ 4,50,00,000/- and unaccounted income disclosed at ₹ 3,97,50,000/- as total income in Return of Income without taking cognizance of the current year income. The CIT(A) has also taken note of the statement made by the Director, Shri Suresh Agrawal and subsequent statement of Managing Director, Shri Vineet Agrawal and accepted the plea of assessee that the disclosure of ₹ 4,50,00,000/- was not exclusively towards undisclosed income but represented total current year income. The CIT(A), after taking note of the judicial precedents in the case of CIT vs. Dhingra Metal Works, (2010) 328 ITR 284 (Del); CIT vs. S. Khader Khan Son, (2012) 25 taxmann.com 413 (SC); Paul Mathews Sons vs. CIT, (2003) 263 ITR 101 (Kerala); CIT vs. Kader Khan, (2008) 300 ITR 157 (Mad) and some other decisions and found merit in the plea of the assessee for deletion of the addition of the differential amount based solely on the statement recorded in the course of survey. The relevant ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan taken by the company from ... The tax on the said income of the current FY2010-11 shall be paid by the company. However, the exact working of the disclosure will be provided by my son Shri Vineet Agrawal, upon his arrival from Dehradun. Subsequently the statement of Shri Vineet Agrawal was also recorded and he stated as under: - With respect to disclosure made by Shri S.C. Agarwal recorded as on 22/10/10 under Income fax Act 1961, I confirm the disclosure of ₹ 4.50 cr. of the Company for the year 2010-11 including current year's income. Therefore, it is clear from the above statements that Shri Suresh Agrawal as well as Shri Vineet Agrawal that the income for the current year would be ₹ 4.5 crores. The statement of Shri Suresh Agrawal is categorical on the issue that the income includes the income arising out of various schemes of the company and share of profit from partnership firms and explained cash credits in the books, if any. Subsequently, Shri Vineef Agrawal clarified the statement and stated that the disclosure would be ₹ 4.50 crores including the current year's income. There is no difference in both the statements. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leged undisclosed income in the hands of the assessee. Thus, in our view, the reasonings adopted by the CIT(A) while granting relief to the assessee are based on sound legal proposition and thus cannot be faulted. In the absence of any reference of incriminating materials to justify the addition, we find no infirmity in the order of the CIT(A) towards cancelling the addition made by the Assessing Officer on this score. Therefore, we decline to interfere with the order of the CIT(A) in this regard. 8. In the result, ground no.1 of the Revenue s appeal is dismissed. 9. The second ground concerns addition of ₹ 3,19,00,726/- under Section 68 of the Act. 10. The relevant facts concerning the issue, as emanated from the records, are that in the course of scrutiny assessment the Assessing Officer found that the assessee has obtained unsecured loan of ₹ 3,19,00,726/- from M/s. Prema Mercantile Pvt Ltd, Kolkata during the year. The Assessing Officer issued notice to the lender under Section 133(6) of the Act and collected evidences viz: copy of Income-tax Returns, balancesheet, profit and loss account as well as bank statement of the lender, apart from copy of annual re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence :- 3.3 I have carefully considered the assessment order and the submission made by the appellant during the course of appellate proceedings. The AO has made an addition on account of unsecured loan of ₹ 3,19,00,726/- taken by the appellant from Prema Mercantile Pvt Ltd Kolkata during the year. The AO was of the opinion, after examining the details filed by the appellant, that the appellant had failed to discharge its onus as it has failed to produce the directors of the Prema Mercantile Pvt Ltd. It has been further held that as the existence of the party itself was in question the genuineness and creditworthiness of the transaction could not be established. The appellant, on the other hand, has submitted that it has furnished duly confirmed Ledger account of the party giving complete particulars such as name and address, PAN etc. for the relevant year and the documents from the Registrar of Companies were also filed to prove the existence and genuineness of the company. Further, the appellant also filed the Income Tax Return of that company. Audited Balance Sheet and P L account along with Schedules, Bank Statement of the company and Ledger account of the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sufficient information to discharge its onus in respect of proving the unsecured loan taken by it. Honourable High Court of Gujarat has held, in series of decisions, that if the confirmation letters have been filed, the identity of the party has been established, the transaction is through banking channel, PAN has been given and a copy of acknowledgement of return is given no addition could be made in respect of that deposit or loan. The recent decision which been given by the honourable High Court of Gujarat is in the case of Patel Romniklal Hirji, 41 taxman.com 493 (2014). It has been held by the honourable court that if the above information is furnished no interference was called for. The relevant extracts from the head note of the judgement is reproduced as under: - II. Section 68 of the Income-tax Act, 196-1 - Cash credits [Loan] - Assessment year 2005-06 - Assessee had shown unsecured loans in name of four different persons in books of account - Assessing Officer added said amount as unexplained credit on ground that genuineness of transactions and creditworthiness of depositors were not properly established - Commissioner found that assessee had furnished copi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A) concluded the issue in favour of the assessee. We find rationale in the view taken by the CIT(A) on the basis of such evidences and find no reason to disturb the same. This apart, we also reckon another crucial fact pointed out on behalf of the assessee that the aforesaid loan has actually been repaid during the FY 2015-16 through banking channel to the lender. The loan thus has ceased to exist in the later year. We find potency in the argument of the assessee that where, apart from the clinching evidences towards loan procurement, the loan itself stood repaid, the assessee does not ultimately stand to gain any spurious benefit from such alleged unexplained cash credit. In the totality of facts, where the trail for obtaining the loan and repayment thereof is proved and the lender has duly filed its return of income the encompassing transaction with the assessee; we see little merit in the grievance of the Revenue on the aforesaid issue. The conclusion drawn by the CIT(A) is based on proper appreciation of evidences and founded on peculiar facts of the case. Therefore, we decline to interfere with the conclusion drawn by the CIT(A) deleting the addition towards unexplain ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
