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TMI Blog2025 (2) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... s not remanded back the issue to the AO under rule 46A of the Income Tax Rule. 1962? Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred, in deleting the addition of Rs. 83,70.259/- on account of the disallowance of expenses u/s 69C of the Act, in view of the fact that the assessee has failed to furnish the substantive documents evidencing the actual purchases and transportation of goods and failed to establish the genuineness of the transaction? Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred, in deleting the disallowance of Rs. 2.78.48.066/- made u/s 37 of the Act ignoring the fact that the expenses claimed by the assessee were aimed to reduce the purchase cost of third parties which were not actual business expenses and resultantly reduced the taxable income of the assessee? That the department craves to add or amend the grounds of appeal before Hon'ble ITAT is finally heard or disposed of." 3. Brief facts of the case are that, the Assessee filed return of income declaring total income at Rs. 15,63,09,040/- and the return of the Assessee was processed u/s 143(1) of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is no existence of other transaction like sale of assets during past four years to explain the source of funds to advance huge unsecured loan. The Ld. CIT(A) while deleting the addition held as under:- "4.2 During the appeal, the assessee submitted a copy of the ledger and explanation of source of the amounts lent during the year most of which was repaid by the assessee keeping the closing balance at Rs. 2,17,25,000/-. As per the assessee's declaration, which was evidenced with other documentary evidences, it is seen that the said lender was a legitimate taxpayer. The loans were duly reflected in his return of income. Most unfortunately, the lender had died in April, 2020. The lender was a close relative of the Directors of the assessed the assessee company and he had forwarded loans to other group entity too. It is seen from the ledger that at the beginning of the year, there was an outstanding credit balance of loan from the lender Shri NarainDass for a sum of Rs. 69,00,000/-. Such amount was repaid on 09.04.2019 for a sum of Rs. 65,00,000/- and again on 18.10.2019, the balance sum of Rs. 4,00,000/-. Thereafter, on 26th December, 2019 to 31st January, 2020, he f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rce of the amount lent during the year which was repaid by the Assessee by keeping the closing balance at Rs. 2,17,25,000/-. Based on the declaration of the Assessee coupled with the documentary evidence, the Ld. CIT(A) held that the lender was a legitimate tax payer and the loans were duly reflected in the return of income and the lender is a close relative of the Directors of the Assessee company and the said lender has also forwarded loan to other group entities too. The Ld. CIT(A) on going through the ledger found that there was an outstanding credit balance of loan from the ledger Sh. Narain Dass of sum of Rs. 69,00,000/- which has been repaid on 09/04/2019 and again on 18/10/2019 the balance of Rs. 4,00,000/- has been paid. The Ld. CIT(A) has also found that on 26/12/2019 to 31/01/2020, the said Narain Dass has further lent Rs. 3,27,25,000/- to the Assessee and the source of which was explained as out of refund of loan given by him to Golden Floor Furnishing Pvt. Ltd. and Golden International Pvt. Ltd. both of which were group entity of the Assessee Company. The Ld. CIT(A) finding that the Assessee has repaid the loan and also paid interest and TDS was duly deducted of such i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules. Considering the above facts and circumstances, we find no merit in the Ground No. 2 of the Revenue. Accordingly, Ground No. 2 of the Revenue is dismissed. 11. In Ground No. 3, it has been contended by the department that the Ld. CIT(A) committed error in deleting the addition of Rs. 83,70,259/- made on account of disallowance of expenses u/s 69C of the Act. The Ld. Departmental Representative submitted that the Assessee has failed to furnish the substantive documents evidencing the actual purchases and transportation of goods and failed to establish the genuineness of the transaction, thus submitted that the Ld. CIT(A) erroneously deleted the addition. 12. Per contra, the Ld. Assessee's Representative submitted that the Assessee Company has constructed new factory building at the cost of 15,06,99,308/- and purchased the sand and Bajri amounting to Rs. 83,70,259/- from Hardev Singh and the purchase of sand and Bajri from the said Hardev Singh was subjected to applicable GST at 5% and the payments made from term loans raised from the bank, thus sought for dismissing the Ground No. 3 of the Revenue. 13. Considering the fact that the Assessee Company has constructed new f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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