TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 403
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....h Commercial Pvt Ltd 27,47,397 4 M/s Rajrath Merchants Pvt Ltd 16, 15,973 5 M/ s SL Traders & Finance (1) Pvt Ltd 10,94,027 6 M/s Tekmek Trading Co Pvt Ltd 14,35,321 7 M/ s Transcrop International Ltd 19,50,000 8 M/ s Trishla Vyapaar Pvt Ltd 59,44,778 9 M/s Vitro Suppliers Pvt Ltd 22,05,151 10 M/s Waltar Investment Pvt Ltd 11,04,219 TOTAL 2,09,99,195 2.1 The AO, therefore, in order to verify the identity and creditworthiness of the lenders and genuineness of the transactions, issued a summon dated 06.12.2017 u/s 131 of the Act to the Assessee, in response to which the Assessee on dated 12.12.2017 attended the Assessing Officer (AO), who recorded the statement of the Assessee on oath u/s 131 of the Act and on the basis of statement, the AO doubted the transactions. Though the Assessee in order to show that the Assessee has repaid the unsecured loans along with interest through banking channel after deducting TDS thereon and in order to prove the identity, creditworthiness and genuineness, submitted various documents before the AO such as copy of ITRs of the parties, confirmation note, bank statement....
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....genuineness of the transaction, a notice u/s 131 of the Act dated 06.12.2017 was issued to the appellant. On 12.12.2017, the appellant had attended the office and statement was recorded by the AO under the oath, in the presence of Shri Sunil Wankawala, AR of the appellant. The AO asked 25 questions relating to the parties who have given loan to the appellant. The appellant in response, promptly replied to the questions asked by the AO. The extract of the same was reproduced by the AO in para 3.1 of the assessment order which is attached in Paper Book Pg. No. 52 to 55. After going through the statement recorded by the appellant which is reproduced in para 3.1 of the assessment order, your Honour will realise that appellant has clearly and fairly given answers to all the questions put in front of him and accordingly, their stands no chance of any addition to be made u/s. 68 of the Act. Regrettably, despite all the answers by the appellant, the AO with prejudiced mind, went on making addition u/s.68 of the Act. Aggrieved by the same, the appellant has preferred an appeal before your Honour. The ground-wise submission is as under: - Ground no.1: "On the facts....
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.... that, the AO was not of an open mind, he was completely prejudicial to make an addition u/s. 68 of the Act. As already mentioned earlier, appellant had given all the answers in detail and details relating to the loan obtained was also provided to the AO vide appellant's submission dated 26.12.2017 which is already annexed, supra. Here in this context, we would like to state the provisions of section 68 which reads as under: "68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year: [Provided that where the sum so credited consists of loan or borrowing or any such amount, by whatever name called, any explanation offered by such assessee shall be deemed to be not satisfactory, unless - (a) the person in whose name such credit is recorded in the books of such assessee also offers an explanation about the nature and source of such sum so credited....
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....T.Act and the appellant has discharged his onus as required under the Act, the addition made by the AO may please be deleted. The appellant places reliance on the following judicial pronouncements: - * Decision of Honorable High Court of Gujrat in the case of Principal Commissioner of Income-tax v/s Ojas Tarmake (P.) Ltd., wherein it is held that- "Where appellant showed unsecured loans received during relevant assessment year and AO made addition on ground that appellant failed to discharge onus of liability as laid down under section 68, since amount of loan received by appellant was returned to loan party during year itself and all transactions were carried out through banking channels, impugned addition was to be deleted." [Attached in Paper Book Pg. No. 106 to 113] Decision of Honorable ITAT Delhi Bench "G" in the case of Deputy Commissioner of Income-tax Circle 4(2), New Delhi v/s Bhaijee Commodities Pvt. Ltd. [Attached in Paper Book Pg. No. 114 to 131]. In the light of the above submission and case laws cited supra, we request your Honour to kindly delete the addition of Rs. 2,09,99,195/- made u/s. 68 of the Act. Ground n....
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....s clearly indicates his prejudicial mind in the matter. Therefore, we hold that the addition made may kindly be deleted. The appellant places reliance on the following case laws: - * Vachitra Builders Pvt Ltd Vs ITO (ITAT Delhi), wherein the ITAT Delhi held that addition towards unexplained credits under section 68 of the Income Tax Act unsustainable as genuineness, identity and creditworthiness of the creditors proved (Copy attached in Paper Book Pg. No. 132 to 151). Commissioner of Income Tax -II vs Kamdhenu Steel & Alloys Ltd. (High Court of Delhi) (Copy attached in Paper Book Pg. No. 152 to 209). PCIT vs. M/s. Sree leathers (Calcutta High Court) (Copy attached in Paper Book Pg. No. 210 to 223). Based on the above submission and case laws cited supra, we request your Honour to kindly delete the addition of Rs. 2,09,99,195/-. Ground no.3: "The Learned Assessing Officer erred to appreciate as loans were already repaid and communicated vide letter dated 26.12.2017. The Assessee respectfully submits that the Assessing Officer ought to have appreciated that since loans were repaid even before assessment the loans are genu....
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....tted that the above mentioned loans were received through proper banking channel and the same were also repaid with interest through banking channel after deducting IDS thereon. Further, the appellant submitted copy of ITR, confirmation note, bank statement to prove identity, genuineness and creditworthiness. As per appellant, the AO made addition on the basis of conjuncture and surmises. It is worthy to mention that the above mentioned details were also submitted during the assessment proceedings. 5.2 After perusing the appellant's submission, it is noticed that the AO has not considered the appellant's submission and made addition with predetermined mind. As can be seen from the submission filed by the appellant before the AO that the appellant had furnished ITR, Acknowledgment, loan balance confirmation, bank statement and certification of registration with NBFC, however ignoring all these, the AO had concluded that identity, creditworthiness of the creditors and genuineness of transaction has not been proved. Further, since the said loans have been repaid in the subsequent years, the question of getting accommodation entries does not survive anymore as Hon'....
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.... being aggrieved, is in appeal before us. The Ld. D.R. supported the assessment order, whereas the Ld. A.R. supported the impugned order. 6. Heard the parties and perused the material available on record and given thoughtful consideration to the rival claims of the parties. It is admitted fact that the Assessee had received the unsecured loan Rs. 2,09,99,195/- through banking channel and also repaid the same while deducting TDS thereon, through banking channel itself. It is also a fact that the Assessee has duly submitted the copy of ITR, confirmation note, bank statement etc. to prove the identity and creditworthiness and genuineness of the transaction and therefore prima-facie discharged its onus cast u/s 68 of the Act. However, still the AO doubted the transactions on some of the answers given by the Assessee to the questions raised by the AO, while recording statement u/s 131 of the Act and by considering the fact that some of the companies from whom the Assessee has taken the loans are based at Kolkata and the Assessee has not provided even the mobile number of Shri Manoj Tibrewal during the assessment proceedings. 6.1 The Ld. Commissioner while deleting the addition in ....