2014 (6) TMI 249 - AT - Income Tax

Tribunal affirms deletion of unsecured loan & share application money additions under section 68.

The Tribunal upheld the Ld.CIT(Appeals)'s decision to delete the additions of Rs.9,77,000/- under section 68 of the Act, related to an unsecured loan from ... Addition made u/s 68 of the Act - Genuineness and credit worthiness of the person not established – Unsecured loan and share application money - Held that:- The amount received from Mr.Piyush Kanthilal Kadiwar, was repaid - assessee has submitted that Mr.Piyush Kanthilal Kadiwar was a person residing in Goa and as the time given for producing evidences by the AO was insufficient, application for admission of additional evidence under Rule 46A was filed before the CIT(A), who admitted the same – the FAA was right in deleting the addition as cash credit u/s 68 of the Act - on the addition of unexplained share application money, the findings of the CIT(A) is not controverted - The identity, capacity and genuineness of the transaction had been demonstrated by the assessee – Decided against Revenue. Issues:1. Addition of Rs.9,77,000/- under section 68 of the Act.2. Deletion of the addition of Rs.9,77,000/- by the Ld.CIT(Appeals).3. Unsecured loan from Mr. Piyush Kanthilal Kadiwar.4. Share application money from Mr. Piyush Kanthilal Kadiwar.5. Additional evidence submitted before the Ld.CIT(Appeals).6. Confirmation of advance by Mr. Piyush Kanthilal Kadiwar.7. Finding on unexplained share application money.Analysis:The appeal was filed by the revenue against the order of the Ld.CIT(Appeals)-V, New Delhi for the Assessment Year 2007-08. The main issue revolved around the addition of Rs.9,77,000/- under section 68 of the Act. The Assessing Officer had added this amount as an unsecured loan from Mr. Piyush Kanthilal Kadiwar, but the Ld.CIT(Appeals) deleted this addition. The appellant challenged the deletion on the grounds of the assessee's failure to fulfill the requirements of section 68 and to prove the genuineness and creditworthiness of the lender. However, the Tribunal upheld the deletion based on additional evidence submitted, including a confirmation letter, a certificate from the Branch Manager of SBI, and the acknowledgment return for the following assessment year.Regarding the unsecured loan of Rs.3,77,000/-, it was clarified that the amount was repaid to Mr. Piyush Kanthilal Kadiwar, who confirmed the advance for booking a plot and its subsequent repayment. The Tribunal found the additional evidence and Mr. Kadiwar's confirmation to be satisfactory, leading to the deletion of the addition under section 68 of the Act.Moving on to the issue of Rs.6 lakhs share application money from Mr. Piyush Kanthilal Kadiwar, the Ld.CIT(Appeals) had already dismissed the revenue's grounds as the identity, capacity, and genuineness of the transaction were established by the assessee. This finding was not contested by the Ld.D.R., resulting in the dismissal of this ground of appeal as well.In conclusion, the Tribunal upheld the Ld.CIT(Appeals)'s decision to delete the additions, both the unsecured loan and the share application money, based on the evidence provided and the confirmation by Mr. Piyush Kanthilal Kadiwar. The appeal of the revenue was ultimately dismissed, and the order was pronounced in an open court on 21st May 2014.