TaxTMI 
TaxTMI 
2022 (12) TMI 1262
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.... case and material brought on record which remain uncontroverted. 2. Whether in the facts and circumstances of the case and in the law the Ld CIT(A) was in error in deleting the addition made by the AO on account of unsecured loan without appreciating the facts of the case and material brought on record which remain uncontroverted. 3. Whether in the facts and circumstances of the case and in the law the Ld CIT(A) was in error in deleting the addition made by the AO on account of disallowance of excess interest paid to bank without appreciating the facts of the case and material brought on record which remain uncontroverted. 4. Whether in the facts and circumstances of the case and in law the Ld. CIT(A) was in error in not appreciating the law laid down by the Hon'ble Supreme Court of India in the case of NRA Iron and Steel Pvt. Ltd., where the Apex Court while discussing genuineness of share capital laid down the general principles that would apply to judge the genuineness of a transaction, creditworthiness etc. 5. Whether in the facts and circumstances of the case and in law the Ld. CIT(A) was in error in establishing the source and genuineness ....
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.... of assessment, was also considered explained in terms of the identity, credit worthiness and the genuineness of the transactions of the capital contributors, who were all then existing partners of the appellant firm. The AO's enquiry and analysis with regard to the aforesaid is extracted hereinbelow for the facility of ready reference: "The Assesses submitted that funds received from the partner of the firm during the year for the business. The capital was introduced out of their capital account. The summary of the partners,' capital amount provided are as under: 1. Name of partner Bal as on 01.04.2011 Addition Drawing Profit Bal as on 31.03.2012 SUBHASH SHROFF 8,76,024 1,37,00,000/- 15,305,834 55,10,415 1,26,66,605 2. NAWAL MAGAN 87,62,024 2,78,77,193 55,10,415 (1,36,04,754) 3. ASHUTOS H GUPTA (11,05,943) 35,00,000/- 25,00,000 36,73,610 35,67,667 4. TARUN DHINGRA 2,06,35,140 1,90,00,000 91,84,025 1,08,19,165 5. VIKASH GUPTA 61,54,057 15,00,000/- 75,00,000 36,73,610 38,27,667 6. RAJEEV KALRA 18,135,140  ....
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.... On going through the above details, it is observed that the assessee partner was also a partner in the firm M/s AKSHH International and had declared exempt income u/s 10(2A) at Rs.36,73,610/- in addition to his return of income at Rs.2,66,840/-. An amount of Rs. 15,00,000/- on dated 17/02/2011 was transferred to M/s KTMR Metals by Sh. Vikas Gupta. No further document has been provided." 8. view of the aforesaid, the impugned addition of Rs.l,87,00,000/-is also directed to be deleted. It is ordered accordingly. The ground of appeal pertaining to the aforesaid issue, thus, stands allowed. 9. The other two impugned additions of Rs.9,80,000/-and Rs.ll,98,567/-on account of unsecured loans and excess interest paid to bank, respectively, were also enquired and commented upon by the AO in the remand proceedings: "In this contest, the assessee has received unsecured loan of Rs.49,90,000/- from Neerja Megan and out of that Rs.40,10,000/- has been returned and the balance amount of Rs 9,80,000/- only is outstanding and payable as on 31.03.2012. The complete details of unsecured loan is also reflected in the Form no 3CD viz.- name, address and PAN of the lender.....
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.... income tax record and is proof of identity. The genuineness of the ★/ transaction has been demonstrated by the Appellant; as the amount received from the said lender by cheque and is transmitted through banking, creditworthiness or financial strength is concerned, that has been proved by producing the bank statement of the lender which is showing that it had sufficient balance in its accounts to enable it to give loan. The assessing officer referring that the Appellant has not provided further evidence. In this respect we respectfully submit that the first proviso was inserted by the Finance Act 2012 w.e.f 01/04/2013 i.e. A. Y. 2013-14. Prior to the insertion of first proviso to section 68 the duty of the Assesses was limited to establishing the identity of the Creditor/Lender/Investor, the creditworthiness and genuineness of transaction, and further the proviso is also applicable to the company (not being a company in which the public are substantially interested). The Appellant is as firm thus the proviso is also not applicable. The Assesses has duly discharged the duty cast under the provision of Income Tax Act. Thus, the assessing officer not justified ....
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....ght on record which remain uncontroverted; that the Ld CIT(A) was not justified in deleting the addition made by the AO on account of disallowance of excess interest paid to bank without appreciating the facts of the case and material brought on record which remain uncontroverted; that Ld. CIT(A) was in error in not appreciating the law laid down by the Hon'ble Supreme Court of India in the case of NRA Iron and Steel Pvt. Ltd., where the Apex Court while discussing genuineness of share capital laid down the general principles that would apply to judge the genuineness of a transaction, creditworthiness etc. in establishing the source and genuineness of the addition in capital and unsecured loan. 7. Per contra, the ld. counsel supported the impugned order contending that the ld. CIT(A) was justified in deleting the addition. He has filed a brief synopsis which reads as under: "1. KTMR is a partnership firm engaged in the business of manufacturing of Copper wires etc. in the state of Jammu and Kashmir. The KTMR had filed its original return of Income u/s 139 (1) for assessment year 2012-13 and declaring total Income of Rs. 4,88,570/- after claiming deduction u/s 80IB of th....
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.... not applicable first proviso to section 68 inserted by the Finance Act 2012 w.e.f 01/04/2013 i.e A.Y. 2013-14 only. The Ld . CIT1A) deleted the addition Submission: That the assessee has duly discharged the duty case under the provisions of the Income Tax Act .The CIT(A) after considering the remand report as well as documents available on record, has passed a reasoned order and directing the addition of Rs. 1,87,00,000/- be deleted. Ground no. 2: Unsecured loan Rs 9,80,000 : Unsecured loan of Rs 49,90,000 received from Neerja Magan and out of that Rs 40,10,000 returned and the balance amount of Rs 9,80,000 o/s as on 31.03.2012. The complete detail of unsecured loan is duly provided in the Form no 3CD including name, address PAN number of the lender. AO alleged that KTMR failed to furnish detail/ documentary evidence to prove the genuineness of and offered no explanation nature and source of these loans. KTMR filed Copy of Neerja Magan account in the Assessee book of account for period 01.04.2011 to 31.03.2012, Copy of Neerja Magan ITR-V and Computation of income for the AY 2012-13, Copy of Bank Statement of Neerja Magan in support of t....
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.... The facts of the case are different and further CIT(A) duly followed the principal laid down and matter has been analyzed by the AO." 8. We have heard the rival contention, perused the material on record and the written submissions filed. The Assessment Order has been passed exparte qua the assessee by the Assessing Officer (In short "the AO"). However, it is seen that the Ld. CIT(A) has called for remand report and adjudicating the issued raised challenged before it after taking into consideration the remand report of the AO and the rebuttal of the assessee. It is seen that the Ld. CIT(A) has addressed and controverted the contentions raised by the rival parties therein, while granting relief to assessee. 9. It is seen that The Ld. CIT (A) has considered that fact that the first proviso was inserted by the Finance Act 2012 w.e.f 01/04/2013 i.e. A. Y. 2013-14 and therefore, prior to the insertion of first proviso to section 68, the lability of the assesses was limited to establish the identity of the Creditor/Lender/Investor, the creditworthiness and genuineness of transaction, and further the proviso is not applicable to the appellant assessee being a partnership Fi....