TaxTMI 
TaxTMI 
TaxTMI 
2025 (2) TMI 861
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....ng total income of Rs. 10,33,16,780/-. Subsequently, the case of assessee was selected for complete scrutiny through "CASS". Accordingly, statutory notices 143(2) and 143(1) are issued. After deliberations, the assessment came to became completed with certain additions: (i) Addition on account of unexplained cash credit u/s 68 for Rs. 9,06,15,711/- (ii) Addition u/s 40a(ia) for non-deduction of TDS for Rs. 58,000/- 3.1 After the aforesaid two additions, aggregating to Rs. 9,06,73,711/-, the assessed income of the assessee was determined at Rs. 19,39,90,490/-. 4. Aggrieved with aforesaid additions by the Ld. AO, assessee preferred an appeal before the Ld. CIT(A), wherein the contentions and explanation furnished by the assessee are contemplated to be convincing / satisfactory by the Ld. CIT(A), and therefore, the appeal of the assessee has been rendered as allowed. 5. Since the appeal of the assessee is allowed by the Ld. CIT(A) by deleting the aforesaid additions u/s 68 made by the Ld. AO, aggrieved thereby the revenue filed the present appeal assailing the order of Ld. CIT(A), in terms of ground of appeal extracted (supra). 6. The additions u/s 68 of ....
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....econd wave of the COVID pandemic, therefore, there was sufficient and reasonable cause for not producing the evidence before the Ld. AO, accordingly, Ld. CIT(A) had accepted the documentary evidences additionally furnished before him. Such evidence was forwarded to Ld. AO on 26.02.2024 for examination and remand report, a reminder was also further issued by the Ld. CIT(A) to Ld. AO on 03.04.2024, however, no remand report was submitted by the Ld. AO till passing of the appellate order by Ld. CIT(A). 8. Ld. CIT(A) have considered the grounds of appeal, statement of facts and submissions of the assessee from time to time including the additional evidence and then have deliberated upon the issue raised by the assessee assailing the order of Ld. AO qua the additions made u/s 68. 9. Party wise and issue wise adjudication, observations and conclusion by the Ld. CIT(A) on the additions made are extracted as under: 6.3 1 have carefully considered the grounds of appeal, statement of facts, submissions made from time to time and the details mentioned in the assessment order. Ground no. 2 and its various clauses challenges the addition of Rs. 9,06,15,711/- made u/s 68 and is fi....
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....fication for treating this loan of Rs. 25,00,000/- as unexplained cash credit. Thus, the addition u/s 68 of Rs. 25,00,000/- being loan taken from the Director Shri Rakesh Agrawal is hereby directed to be deleted. (iii) RM Developer Rs. 18,00,000/-: This is an old unsecured loan in the books of the proprietorship concern which was taken over by the company during the present year. It is seen that the confirmation, copy of ITR and computation from this creditor was filed before the AO. The AO has doubted the genuineness of the loan amount as the relevant bank statement was not produced. The credit in the books of the company during the year is only a book entry and the loan was actually taken prior to 1.4.2017. The relevant documents in this regard have been perused. There is no justification for treating a loan taken prior to the AY under consideration as unexplained cash credit, which has appeared as 'new' credit in the books of the company during the year only on account of taking over the liabilities of the partnership firm during the relevant year. Reliance is also placed on the decision of the Hon'ble Calcutta High Court in the case of Jatia Investment Comp....
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....Ltd. Rs 1,93,46,365/-: This is an old unsecured loan in the books of the proprietorship concern which was taken over by the company during the present year. The total amount outstanding as per details submitted during the appeal proceedings is Rs. 2,14,35,772/- However, the AO has considered the total increase in unsecured loans from related parties as Rs. 5,78,42,443/-, which includes Rs. 2,14,35,772/- from Vitality Steel Pvt. Ltd. It is seen that the confirmation, copy of ITR and computation from this creditor was filed before the AO. The AO has doubted the genuineness of the loan amount as the relevant bank statement was not produced. The credit in the books of the company during the year is only a book entry and the loan was actually taken prior to 1.4.2017. The relevant documents in this regard have been perused. There is no justification for treating a loan taken prior to the AY under consideration as unexplained cash credit, which has appeared as 'new credit in the books of the company during the year only on account of taking over the liabilities of the partnership firm during the relevant year. Reliance is also placed on the decision of the Hon'ble Calcutta High Co....
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.... of Rs. 48,67,496/- as unexplained cash credit u/s 68. The addition of Rs. 48,67,496/- is directed to be deleted. To sum up, the entire addition u/s 68 of Rs. 9,06,15,711/- is hereby directed to be deleted and ground no. 2 and its sub- grounds are treated as allowed. 10. Before us Ld. CIT-DR representing the revenue submitted that the assessee failed to substantiate the identity and creditworthiness of the lenders / investors and genuineness of transactions with corroborative evidence before the Ld. AO, therefore, the additions u/s 68 of the Act are made. It is further submitted that additional evidence produced by the assessee are admitted by the Ld. CIT(A), whereas ample opportunity was given by the Ld. AO to assessee, therefore, the additions are rightly made by the Ld. AO, accordingly, the order of Ld. CIT(A) is not acceptable on merits, the same is liable to be set aside and the additions made u/s 68 in the order by Ld. AO deserves to be restored. 11. Contradicting the aforesaid contentions of the revenue, Ld. AR Shri Ravi Agrawal, CA submitted that, under the compelling circumstances on account of pandemic due to which the lockdown was in operation in the city of Raipur....
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.... assessee company, it is apparent from schedule "C- Unsecured Loan" (page no. 81 & 86 of APB), that unsecured loan from Rakesh Agrawal HUF for Rs. 9,40,833/- was outstanding as on 31.03.2017. In view of such facts, we find substance in the finding of Ld. CIT(A), thus, we approve the same. (ii) Unsecured loan received from related party, Shri Rakesh Agrawal for Rs. 25,00,000/- : The assessee company had received an unsecured loan of Rs. 25,00,000/- on 31.03.2018 by way of a cheque from Shri Rakesh Agrawal, Director of the company. The cheque issued on 31.03.2018 was expired on 30.06.2018, in lieu of which a fresh cheque was issued bearing no. 086945, which were then released on 05.07.2018. In support of identity, creditworthiness of the lender and genuineness of transaction, assessee submitted copy of confirmation, ITR and computation of the lender. Also, to substantiate that the actual transaction has taken place, copy of bank statement of the lender showing such entry on 15.07.2018 is placed before us, relevant page no. 29 of APB. In view of such facts, Ld. CIT(A) had rightly observed that there is no justification to treat the aforesaid transaction as unexplained cash cr....
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.... to the facts qua the addition on account of unsecured loan from Rakesh Agrawal HUF (Para (i) supra), as the balance of this unsecured loan is brought in the books of assessee company on account of taking over of the business of proprietary concern M/s Agrawal Infrastructures, therefore, our decision therein to concur with the findings of Ld. CIT(A) in deleting the addition, shall apply mutatis mutandis on this addition also, consequently, we direct to delete the same. (vii) Increase in share capital- Rs. 64,70,000/-: During the year under consideration 6,47,000 shares having face value of Rs. 10/- and premium at Rs. 90 per share, were issued to Shri Rakesh Agrawal in lieu of part of shell consideration for taking over the running business of the proprietary concern, M/s Agrawal Infrastructure. As per agreement for takeover of business dated 01.04.2017 (page no. 62 to 66 of APB), at para 3, it is evident that the consideration for taking over of the proprietary concern was decided at Rs. 8,22,13,702/-, equivalent to the amount of Proprietor's Capital Account as on 31.03.2017, as per audited balance sheet (page 81 of APB). The consideration was decided to be settled by way ....