2013 (5) TMI 869 - AT - Income Tax

Tribunal Upholds CIT(A) Decisions on Cash Credit & Trading Loss

The Tribunal dismissed the Revenue's appeal, upholding the decisions of the ld. CIT(A) on both grounds related to unexplained cash credit and the ... - Issues involved:The appeal filed by the Revenue against the order of ld. C.I.T.(A)-I, Kolkata in Appeal No.259/CIT(A)-I/3(2)/08-09 dated 11.11.2009 for the Assessment year 2006-07.Grounds 1 and 2 - Unexplained cash credit:The Revenue contended that the ld. CIT(A) erred in law by deleting the addition of Rs. 63,00,000/- on account of unexplained cash credit without satisfactory proof of creditworthiness and genuineness of transactions. The AO added the share application money received, stating the applicants were of lower middle class with unestablished creditworthiness. The ld. CIT(A) deleted the addition based on documents provided by the applicants. The Tribunal upheld the ld. CIT(A)'s decision citing precedents and the genuineness of transactions.Ground 3 - Disallowance of loss in trading of textiles:The Revenue challenged the deletion of the disallowance of loss of Rs. 3,30,225/- in trading of textiles, arguing lack of explanation for the loss incurred. The ld. CIT(A) upheld the transaction's genuineness and the regular business activity of the assessee. The Tribunal supported the ld. CIT(A)'s decision, emphasizing that a genuine loss in a transaction cannot be disallowed solely based on the loss incurred.Conclusion:The Tribunal dismissed the Revenue's appeal, upholding the decisions of the ld. CIT(A) on both grounds related to unexplained cash credit and the disallowance of loss in trading of textiles. The Tribunal found that the assessee had provided sufficient documentation and explanations, meeting the necessary requirements.