2024 (4) TMI 927

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....Income-tax Act, 1961 (hereinafter referred to as "the Act") dated 29.12.2018 by the Assessing Officer, ACIT, Circle-47(1), New Delhi (hereinafter referred to as "ld. AO"). 2. The assessee has raised the following grounds of appeal before us:- "1. the order passed by the learned Commissioner of Income Tax (Appeals) is against the law, facts and circumstances of the case and hence be quashed. 2. That the learned Commissioner of Income-tax (Appeals)-16, New Delhi erred in facts and law in confirming Rs. 36,00,000/- under Section 68 of the Income Tax Act, out of total addition of Rs. 50,00,000/-, (Rs. 26,00,000/- + Rs. 24,00,000/-) ignoring all the evidence, facts and documents available on record, which is against the law ....

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....tely preceding assessment year at 11.91%. The ld. AO noticed that the assessee had received loan of Rs 50 lacs from "Banwari Lal Naresh Kumar". The ld. AO observed that there were cash deposits in the bank account of the lenders which was the immediate source of credit for the lender. The assessee on his part furnished all the requisite documents pertaining to the said unsecured loan to prove the three necessary ingredients of section 68 of the Act viz identity of the lender, creditworthiness of the lender and genuineness of the transaction. Since there were cash deposits in the bank account of the lender, the ld. AO sought to disbelieve the loan given to the assessee in the sum of Rs 50 lacs u/s. 68 of the Act and consequentially disallowe....

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....cash deposits made in the bank account of the lender firm, it is pertinent to note that Shri Naresh Goel, partner of the lender firm was examined by the ld. AO u/s. 131(1A) of the Act on 28.12.2018. Shri Naresh Goel duly explained the sources of cash deposits made in the bank account of his partnership firm and confirmed the fact of advancing loan to the assessee. Since the statement was recorded on 28.12.2018 i.e. during the fag end of the proceedings, Shri Naresh Goel sought to answer all the questions that were posed by the ld. AO to him and also sought time for replying to certain questions to produce further evidence to support his statement. Since no details were called for in the summons issued u/s. 131(1A) of the Act by the ld. AO ,....

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....e business of the lender firm and had duly replied that the firm generates cash on a daily basis out of its sales. Hence the said cash sales were deposited by the lender firm in its bank account in cash. That's why no additions were made in the hands of the firm by the ACIT, Circle 47(1), Delhi. Even though the case of the assessee was selected only for "Limited Scrutiny" in the hands of the lender, still if the Assessing Officer had found anything alarming, he could have converted the Limited Scrutiny into Complete Scrutiny by seeking permission from the competent authority in the manner known to law. This was admittedly not done in the case of the lender, which goes to prove that the ACIT, Circle 47(1), Delhi did not find anything alarmin....