TMI Blog2023 (4) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... p of loans while giving relief to the assessee. Accordingly, so far as addition u/s. 68 on account of opening balance we find no infirmity in the order of ld. CIT(A) so as to call for any interference. Unsecured loans received during the year under consideration from Vinita Neshva Infrastructure Pvt. Ltd - As we observe that various documentary evidences were placed on record by the assessee in respect of such fresh credits received during the year under consideration viz. confirmation of the party, acknowledgement of ITR and statement of total income of the party, annual report of the lender, audit report of the party - Therefore assessee has been able to give satisfactory documentary evidences in support of the genuineness and creditworthiness of the aforesaid party. Fresh unsecured loan from Dharamdev Infrastructure Ltd. - As the assessee had furnished copy of the balance sheet of the said party before ld. CIT(A) in order to establish creditworthiness of such party and a copy of PAN and Income Tax Return of such party had been furnished by the assessee before the A.O. Accordingly, assessee has given satisfactory documentary evidences in respect of fresh unsecured loans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 68 of the Act on the ground that the assessee has not been able to establish the genuineness and creditworthiness of the parties. 4. In appeal before ld. CIT(A), the assessee submitted details of unsecured loans received of Rs. 50 lakhs from Dharamdev Infrastructure Pvt. Ltd., the assessee also submitted copy of balance sheet, income tax return of the party and submitted that the creditworthiness of the party is clearly established. Further, the assessee submitted that during the year under consideration, the assessee received a sum of Rs. 289 lakhs from Vinita Neshvi Infrastructure Pvt. Ltd. towards advance against land. In support thereof, the assessee submitted copy of confirmation, income tax return and balance sheet of Vinita Neshvi Infrastructure Pvt. Ltd. Therefore, the assessee submitted that he only received a sum of Rs. 50 lakhs and Rs. 289 lakhs from M/s Dharamdev Infrastructure Pvt. Ltd. and M/s. Vinita Neshvi Infrastructure Ltd. respectively as fresh unsecured loans during the year under consideration, the source of which was fully explained. Regarding the balance addition amounted to Rs. 4,74,88,871/-, the assessee submitted that this amount represented closing bal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if share broker, even after issue of summons does not appear, for that reason, the claim of assessee should not be denied, especially in the cases when the existence of broker is not in dispute, nor the payment is in dispute. Merely because some broker fa/led to appear, assessee should not be punished for the default of a broker and on mere suspicion the claim of assessee should not be denied. I agree with the contention of the appellant that the plethora of evidences on record cannot be ignored. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx The appellant has also given details of PAN Nos. and address of each of the above depositors but have not been reproduced in the above table owing to limitation of space. The appellant also relied on the ratio of following case laws : Dy CIT vs Amod Petrochem (P) Ltd (2008) 23 (I) ITCL 145 (Guj-HC); (2008) 217 CTR (Guj) 401 CIT vs Usha Stud Agricultural Farms Ltd (2008) 301 ITR 384 (Del): (2009) 183 Taxman 277 (Del), Mahabir Prasad Prem Chand Jain vs. ITO (1988) 40 Taxman 35 (Del- Trib) (Tax Mag) Nuchem L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vious year , (Emphasis provided). The first proviso to Section 68 further stipulates certain additional requirements in case of an assessee being a company where such sums so credited consist of share application money, share capital or share premium, etc. However, in this case since the appellant is an individual and credits are not in the nature of share capital or share premium, etc. the additional conditions stipulated in the first proviso are not applicable. Thus, a plain reading of the provisos of Section 68 make it quite clear that the AO is required to make addition of unexplained cash credit only in the previous year in which such cash credit has been made and the assessee is not in a position to offer satisfactory explanation relating thereto. This view is also supported by various case laws relied by the appellant where the unanimous view taken by the courts/ITAT is also the same and thus the law is well settled that the addition u/s 68 could be made only during the year in which such credit has been received and that if the credit balance appearing in the account of the assessee is not pertaining to the year under consideration, the assessing officer cannot make ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is allowed. 5. The Department is in appeal before us against the order passed by the ld. CIT(A) deleting the additions made by the ld. Assessing Officer u/s. 68 of the Act. The ld. Departmental Representative primarily relied upon the observations made by the ld. Assessing Officer in the assessment order. In response, the counsel for the assessee submitted that a total addition of Rs. 7,63,88,871/- was made by the ld. Assessing Officer u/s. 68 of the Act, the break-up of which is below:- On account of opening balance Rs. 4,74,88,871/- On account of fresh receipt during the year Rs. 2,89,00,000/- Total Rs. 7,63,88,871/- The counsel for the assessee submitted that it is a well settled law that Opening Balance cannot be added u/s. 68 of the Act. Since in the instant facts, the amount of Rs. 4.74 crores represented the opening balance of unsecured loans taken by the assessee during earlier financial years, the same cannot be the subject matter of addition u/s. 68 of the Act. Regarding the fresh unsecured loans taken during the ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Shri Vardhman Overseas Ltd. vs. ACIT 24 SOT 393 (Delhi Trib.) held that since no new amount has been credited by the assessee in its account during the year under consideration, applicability of section 68 of the Act is ruled out. Therefore, in view of the above judgments, we observe that it is a settled law that opening balance of unsecured loans coming from previous financial years cannot be added u/s. 68 of the Act to the income of the assessee. We further observe that even the PAN numbers as well as addresses of all such parities were duly furnished by the assessee to the ld. Assessing Officer during the course of assessment proceedings. The copy of chart containing details of unsecured loans which were provided to the Assessing Officer is produced before us at pages 9 to 13 of the paper book. We observe that ld. CIT(A) also gave due consideration to the above chart giving details of party wise break up of loans (at pages 12 to 14 of the order of the CIT(A)), while giving relief to the assessee. Accordingly, so far as addition u/s. 68 of the Act on account of opening balance of Rs.4,74,88,871/- is concerned, we find no infirmity in the order of ld. CIT(A) so as to cal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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