2021 (4) TMI 1012

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....ssessing Officer ( AO) under s. 143( 3) of the Income Tax Act, 1961 (the Act) concerning AYs. 2013- 14 & 2014- 15. 2. Both the appeals are related to same assessee. Accordingly, both the appeals are being disposed of by common order for the sake of convenience. 3. We shall first take the facts concerning AY 2013- 14 in ITA No. 909/Ahd/ 2018 for adjudication purposes. ITA No. 909/Ahd/2018-AY-2013-14 4. The ground of appeal raised by the assessee for AY 2013- 14 is reproduced hereunder: "1. The Ld. CIT(A)12 , Ahmedabad erred in law and on facts in confirming the addition of Rs. 11, 36 , 454/- being the difference in closing balance as per the books of the Appellant and M/ s. PSL Limited." 5. Briefly stated, the assessee is a partnershi....

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....rty was furnished before the lower authorities. The creditworthiness of the loan received stands proved by the return of income where gross total income declared by the lender is stated to be Rs. 13.01 Lakhs. The copy of bank statement of the assessee and also of lender was also furnished before the lower authorities to support the transaction. The AO had issued notice under s. 133( 6) of the Act to the lender and observed from the details furnished by the lender ( Rakesh Swadia) that amount of Rs. 5 Lakhs in cash and Rs. 3 Lakhs by cheque were deposited on 15.06. 2012 prior to the transfer of Rs. 8 Lakhs to the assessee. The AO accordingly doubted the genuineness of the loan transaction having regard to the cash deposits. In rebuttal, the ....

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....g circumstance and transcends all considerations. We thus find that the documents placed by the assessee before the Revenue authorities sufficiently discharge the onus towards the identity and genuineness of the transaction and creditworthiness of the lender contemplated under s.68 of the Act. In our view, in the facts of case, the statutory discretion available to AO under s. 68 of the Act ought to have been exercised in favour of the assessee. The action of the Revenue authorities thus cannot be countenanced having regard to the extenuating circumstances existing in the case. The addition made under s.68 of the Act on credit received from Rakesh Swadia therefore deserves to be reversed and cancelled. 8.3 As regards another credit of Rs. ....

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....of PSL Ltd. the balance stands at Rs. 62, 45,379/- as on 31. 03.2014. This difference between the version of assessee and that of corresponding party triggered the impugned additions in the hands of assessee. 13. In this regard, we find the following contentions raised on behalf of the assessee to be noteworthy: (i) no copy of ledger accounts in the books of debtor (PSL Ltd.) was collected by the AO while relying upon the outstanding balance declared by the Chartered Accountant of PSL Ltd. The Chartered Accountant showing confirmation was stated to be mandated by ICICI Bank Ltd. to carry out satisfactory audit of the PSL Ltd.; (ii) no transactions have been carried out during the year with PSL Ltd. and the difference in balance, if any, re....