TMI Blog2021 (1) TMI 998X X X X Extracts X X X X X X X X Extracts X X X X ..... ishing the identity and capacity of the concerned loan creditors as well as the genuineness of the relevant loan transactions by adducing the necessary supporting evidence. AO is directed to decide this issue afresh to the extent of loan after necessary verification. Ground No. 1 to 3 of the revenue s appeal are thus treated as partly allowed while ground no. 1 of the assessee s cross-objection is treated as allowed for statistical purpose Disallowance of finance cost incurred by the assessee society - as observed that the finance cost claimed by the assessee under Capital-Work-in- Progress was disallowed by the authorities below on the ground that the assessee society was not registered u/s 12AA - HELD THAT:- As claimed by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mt. Puja Somani, CA appearing on behalf of the Assessee ORDER PER P.M. JAGTAP, VICE-PRESIDENT (KZ) This appeal is preferred by the Revenue against the order of Ld. CIT (A), Durgapur dated 22.03.2019 and the same is being disposed of along with the cross-objection filed by the assessee being C.O. No. 19/Kol/2020. 2. The common issue relating to the addition of ₹ 14,76,47,829/- made by the AO on account of unsecured loan which is sustained by the Ld. CIT(A) to the extent of ₹ 1,45,01,400/- is raised in ground no. 1 to 3 of the revenue s appeal and ground no. 1 of the assessee s cross-objection which read as under: Grounds of Revenue s appeal: 1. The Ld. CIT(A) erred in restricting the addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of finance cost incurred by the society on the alleged notion that the said amount relates to Capital Work in Progress and cannot be allowed as revenue expenditure. 3. That the Ld. CIT(A) has erred in law and facts of the case in upholding the disallowance of ₹ 3,53,989/- u/s 40A(3) of the Act. 4. The Cross-objector craves leave to amend, alter, modify, substitute, add to, abridge and/or rescind any or all of the above grounds. 3. The assessee in the present case is a society registered under the West Bengal Registration Act, 1961 on 02.02.2005 and is running educational institution in Burdwan, West Bengal. The return of income for the year under consideration was filed by it on 31.03.2015 declaring a loss of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be treated as unsubstantiated / bogus and not the entire amount of ₹ 14,76,47,829/- as done by the AO. He accordingly restricted the additions of ₹ 14,76,47,829/- made by the AO on this issue to ₹ 1,45,01,400/-. Aggrieved by the same, the revenue has preferred this appeal before the Tribunal while the assessee has also filed its cross-objection. 5. We have heard the arguments of the sides on this issue and also perused the relevant material available on record. As rightly submitted by the ld. DR, the primary onus to prove the unsecured loans of ₹ 14,76,47,829/- representing cash credits by establishing the identity and capacity of the concerned loan creditors as well as the genuineness of the loan transactions was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtunity to the assessee to explain the same by establishing the identity and capacity of the concerned loan creditors as well as the genuineness of the relevant loan transactions by adducing the necessary supporting evidence. The AO is directed to decide this issue afresh to the extent of loan amount of ₹ 4,10,05,680/- after necessary verification. Ground No. 1 to 3 of the revenue s appeal are thus treated as partly allowed while ground no. 1 of the assessee s cross-objection is treated as allowed for statistical purpose. 7. As regards the issue raised in ground no. 2 of the assessee s cross-objection relating to the disallowance of ₹ 4,39,84,532/- made by the AO and confirmed by the Ld. CIT(A) on account of finance cost incu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017) 88 taxmann.com 363 (Hyd. Trib) wherein it was held that no disallowance u/s 40A(3) can be made while determining the income u/s 11 of the Act of the assessee which is registered u/s 12AA of the Act. Respectfully following the said decision of this Tribunal, we delete the disallowance made by the AO u/s 40A(3) of the Act and confirmed by the Ld. CIT(A) in the case of the present assessee society which is now duly registered u/s 12AA of the Act. Ground no. 3 of the assessee s cross-objection is accordingly allowed. 9. In the result, the appeal of the revenue is treated as partly allowed for statistical purpose while the cross-objection of the assessee is treated as allowed as indicated above. Order Pronounced in the Open Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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