Revenue's appeal dismissed by ITAT, CIT(A)'s decisions upheld. Estimations rejected, loans deleted. No fault found.

The ITAT dismissed the Revenue's appeal, upholding the CIT(A)'s decisions on both issues. The estimated addition based on net profit rate rejection and the addition of an unsecured loan were deleted as the assessee provided necessary evidence and met the requirements of the Act. The ITAT found no fault in the CIT(A)'s orders, leading to the appeal's dismissal on 23rd June 2023.

---

---

Issues:
1. Addition of Rs. 3,21,42,095/- based on estimated net profit rate rejection.
2. Addition of Rs. 34,00,000/- due to unsecured loan under section 68 of the I.T. Act, 1961.

Issue 1:
The appeal was against the order by the Commissioner of Income Tax (Appeals) regarding the addition of Rs. 3,21,42,095/- based on the rejection of books of accounts. The Assessing Officer estimated the profit at 8% on turnover under section 44AD of the Act due to the non-production of books of accounts by the assessee. The CIT(A) obtained a remand report which highlighted discrepancies but did not raise concerns about the maintenance of books of account. The High Court decision in Smt. B. Jayalakshmi Vs. ACIT was cited to support the acceptance of the issue by the AO in the remand report, precluding further appeal. The deletion of the estimated addition was upheld by the ITAT.

Issue 2:
The second ground of appeal involved the addition of Rs. 34,00,000/- on account of an unsecured loan under section 68 of the Act. The AO treated the loan as unexplained cash credit due to the lack of PAN, address, or confirmation from the lender. The assessee later provided documents including confirmation of the loan, ITR of the creditor, and evidence of loan receipt and repayment through banking channels. The AO sought verification from the Dhanbad office but did not receive a response. The CIT(A) accepted the additional evidence and concluded that the assessee had fulfilled the requirements of section 68 of the Act. As no adverse comments were made by the AO, the ITAT upheld the CIT(A)'s decision to delete the addition.

The ITAT, in its judgment, dismissed the appeal of the Revenue, upholding the decisions of the CIT(A) regarding both the estimated addition based on net profit rate rejection and the addition on account of the unsecured loan. The ITAT found no infirmity in the CIT(A)'s orders as the necessary evidences were provided by the assessee and no adverse comments were made by the AO. The appeal was thus dismissed, and the order was pronounced in Open Court on 23rd June, 2023.

---