TMI Blog2023 (10) TMI 1274X X X X Extracts X X X X X X X X Extracts X X X X ..... shwaram developers was from the loan availed by the assessee. CIT(A) appreciated the fact that once, entire loan was added u/s 68, the application of fund by way of investment cannot be added again, which is otherwise double additions - stand of the assessee right from the beginning is that the assessee made advance for purchase of land for development. The land was ultimately transferred in favour of assessee in assessment year 2019- 20 purchases by way of two sale deeds on 02.07.2018 vide document No.11863 respectively, copy of such sale deed is available on record. All the payment for purchase of land was made by way of account payee cheques. AO has not brought adverse material on record to doubt the transaction of land which was in consequence of the advance payment of the land. Hence, no infirmity or illegality in the order of CIT(A) in deleting the addition which is affirmed. Decided against revenue. Addition u/s 68 - taxation u/s 115BBE - issuing show cause notice the assessee failed prove genuineness and creditworthiness of loan amount - HELD THAT:- We find that the assessee has already furnished all details in the comprehensive sheet mentioned; the name of the lend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1961 (hereinafter referred to as the Act for the sake of brevity) on 22.04.2021. Therefore, both appeals were clubbed, heard together and are decided by consolidated order to avoid conflicting decisions. The assessee in its appeal has raised the following grounds of appeals: 1. On the facts and circumstances of the case as well as the law on the subject, the learned CIT(a), Surat has erred in partly confirming the action of ld. Assessing Office by sustaining the addition to the tune of Rs. 26,42,30,416/- made u/s 68 of the I.T. Act, 1961. 2. On the facts and circumstances of the case as well as the law on the subject, the learned CIT(A), Surat has erred in sustaining the addition as above although assessee has filed complete documentary evidences of all the lenders clearly discharged the burden cast on it u/s 68 of the I.T. Act, 1961. 3. Appellant craves leave to add, alter or delete ground(s) either before or in the course of hearing of appeal. 2. The Revenue in its cross-appeal in ITA No.375/SRT/2023 has raised the following grounds of appeal 1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer noted that assessee in its reply stated that advances were given to Rameshwaram Developers for purchasing land for undertaking projects. The Assessing Officer recorded that assessee has not furnished any agreement with the parties and only copy of ledger was furnished, which do not justify the payment of huge amount without any registered document. The Assessing Officer recorded that assessee failed to prove genuineness and creditworthiness and amount of Rs. 27.72 crores was also treated as unexplained credit under section 68, in the assessment order passed under section 143(3) r.w.s 144B of the Act on 22.04.2021. 4. Aggrieved by the addition made in the assessment order, the assessee filed appeal before Ld. CIT(A). Before Ld. CIT(A) the assessee filed detailed statement of fact as well as written submission. To substantiate the transaction of loan, the assessee furnished particulars of identity of lenders, creditworthiness and genuineness of such transaction. Against the addition of advance, the assessee submitted that Assessing Office not appreciated the fact and despite furnishing documentary evidence in support of advance given for purchase of land, the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y assessee. The Assessing Officer thus, objected for admission of additional evidence. 6. However, the Assessing Officer in his without prejudice contention submitted that he has verified the issue of unsecured loan and prepared party-wise report. The Assessing Office furnished party-wise report with respect of 44 lenders / investors. In respect of all lenders Assessing Officer accepted that their ITRs and bank statements were furnished. With respect to lenders, namely, Rajgreen Infrastructure, who has given loan of Rs. 24.04 crores, the Assessing Officer commented that various entries routed through concerned group. For Sai developers, who has given loan of Rs. 1.00 crores, the Assessing Officer remarked that there were credit entries in the bank account of lender doubt before lending money. For Srushti Developers, who was given loan of Rs. 60.00 lakh, the Assessing Officer commented that ITR, confirmation and bank statement have been verified. With regard to remaining other 41 lenders, from whom the amount of loans ranges from Rs. 5.00 lakh to Rs. 10.00 lakh, the Assessing Officer reported that either their contra-conformations were not furnished, confirmation was furnished fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer failed to give any reason for justification of addition. He has made just a general remark. In para-3 of assessment order, the Assessing Officer observed that assessee claimed unsecured loan of Rs. 26.42 crores from various persons in profit and loss account in the year ending on 31.03.2021. This fact was factually wrong. The amount of loan is not credited in profit and loss account but shown in the liability side of balance sheet. The assessee availed that total loan of Rs. 28.12 crores out of which Rs. 24.04 crores were obtained from Rajgreen Infrastructure which is associate concern of assessee. Both the firms have many common partners. The assessee filed copy of ITR, audited financial statements, with bank statement and showing income approximately Rs. 21 crores and paid tax almost of Rs. 8.00 crores. The Assessing Officer has not made any adverse inference no discrepancy was pointed out by Assessing Officer against such transaction. For other two major lenders, i.e., M/s Sai Developers of Rs. 1.00 crores and MS Shrushti Developers of Rs. 60 lakhs. The assessee has already filed their ITR, bank statements highlighting the transactions and contra-confirmation all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 68 can only be made, when some funds are credited in the books of account maintained by assessee for any previous year. Thus, for making addition, there must be credit in the books of assessee. The transaction is not related to receive of fund, but on the other hand it is case of advance. Such advance shown in the books of account on the asset side of balance-sheet. Consequently, neither section 68 nor section 69 is not applicable on such transaction. The assessee also given the details of advance with date, amount and the bank account from which such amount was paid to Rameshwaram Developers. The assessee further stated that in assessment year 2019-20 purchases was completed and two sale deeds for land were executed on 02.07.2018 vide document No.11863 respectively. Copy of such sale deed was also furnished. The assessee in its without prejudice submissions submitted that Assessing Officer added source of fund being unsecured loan as income under section 68. And once again, the Assessing Officer added application of said source as advance for land of Rs. 27.73 crores by turning as unexplained cash credit for the reasons known. The assessee also objected the manner in whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before loan they had received Rs. 1.00 crore in their bank account in HDFC Bank on 29.09.2017. For loan of Rs. 60.00 lakh from Srushti Developers, the Ld.CIT(A) noted that before giving loan they had received Rs. 62.60 lakh in their bank account in Axis Bank on 13.03.2018 and loan was given on 26.03.2018. On the basis of such observation, the NFAC/Ld.CIT(a) by referring the decision of Delhi Tribunal in the case of Harsh W Chadda Vs DDIT [201] 9 taxmann.com 1, (Delhi), Hon ble Apex Court Court in the case of CIT vs. Durga Prasad More [1971] 82 ITR 540 (SC) and in the case of Sumathy Dayal Vs CIT 214 ITR 801 (SC) held that in such cases, principle was laid down that where entry of loan in a set of entities, mere furnishing certain details and payment made account payee cheque is not sacrosanct and held that loan are not explained, thereby upheld the addition. 10. However, on the addition of Rs. 27.72 crores on account of advance given to Rameshwaram Developers, the ld. CIT(A) noted that assessee has given details about advance given for purchase of land. The dates of advance correspond with the arrangement of loan from various entities, the Ld. CIT(A) was of the view that once th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t assessee get money routed through unsecured loan. The assessee has made TDS against interest paid all the loans. The TDS was credited in the account in Government coffer. The assessee clearly stated that some of the loan amount were paid however, no credit of such paid given. For Srushti Developers who has paid Rs. 60.00 lakh, the Assessing Officer clearly accepted that he has verified the evidence furnished by assessee. The Assessing Officer or Ld. CIT(A) nowhere disputed the identity of the lenders, genuineness of transactions merely disputed the creditworthiness of some of the lenders on their own presumption without bringing any adverse evidence on record. The Ld. AR for the assessee submits that he has duly discharged his primary onus as per the decision of Hon ble jurisdictional High Court in the case of Ranchod Jivabhai Nakhava (supra), once the assessee has discharged their onus the burden shift on the assessing officer to prove otherwise or to bring adverse evidence on record or to make further investigation. In absence of adverse addition, the additions of loan under section 68 is not sustainable. The Ld. AR for the assessee in his other submission reiterated all the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to corroborate evidence. In the present case, the evidence furnished by assessee itself suggest that all the lenders except three major lenders were not having sufficient means, so there was no need to seek further clarification directly by issuing the notice under section 133(6) or summon under section 131. The Ld. CIT-DR for the Revenue prayed for upholding the findings of Ld. CIT(A) on the additions of unsecured loan. 15. On the additions on account of loan and advance for investment in land, which is the subject matter in the appeal filed by revenue, the ld CIT-DR for the revenue submits that during the assessment the assessee failed to provide complete details of land and only ledger accounts of payment was furnished, which was not sufficient to prove the huge investment in the land. The ld CIT-DR for the revenue submits that he supports the order of assessing officer on this issue. 16. We have considered the rival submission of both the parties and have gone through the orders of lower authorities carefully. We have also deliberated on various case law relied by Ld. AR for the assessee and Ld. CIT-DR for the Revenue. First, we are dealing with the grounds of appeal ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 115BBE by taking view that on issuing show cause notice the assessee failed prove genuineness and creditworthiness of loan amount of Rs. 26.42 crores. We find that before ld CIT(A) the assessee filed detailed written submission contending that complete details of lenders were furnished before assessing officer. The assessee again furnished the name address, PAN, return of income, details of TDS made on payment of interest and details of the repayment of certain loan amount. The assessee in its submissions specifically contended that majority of the loan amount is received from three party namely; Rajgreen Infrastructure of Rs. 22.04 crores and Rs. 1.00 crores from Sai Developers and Rs. 60.00 lakhs from Srushti Developers. On the submissions of assessee, the ld CIT(A) directed the assessing officer to furnish his remand report. The assessing officer furnished his remand report on 21.02.2023. 19. We find that the assessing officer initially raised objection on the detail submissions of the assessee on the pretext that despite granting sufficient time the assessee has not furnished complete details. However, in his without prejudice contention, the assessing officer s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. The assessing made such remark on his own observation, without making any investigation of facts or bringing any adverse evidence on record to disregards the evidences furnished by the assessee in discharging its primary onus. The assessee in his rejoinder refuted all the allegations of the assessing officer, which we have recorded above and are not repeated here for the sake of brevity. 21. We find that the assessee has already furnished all details in the comprehensive sheet mentioned; the name of the lender, PAN, amount of loan, repayment of loan, interest paid and Tax Deducted at Source (TDS in short) and the closing balance as on 31.03.2018 and complete pdf folder consisting of duly signed of confirmation of ITR, relevant bank statement of the depositors was furnished, even on furnishing such details, the Assessing Officer has not made any enquiry of his own either issuing notice under section 133(6) or 131 of the Act. The assessee has discharged its onus. The Assessing Officer without making any independent verification or enquiry prepared to make huge addition in Crores of rupees, which he clearly tantamount to travesty of justice. While making submissions before u ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
