AI Drafter 
TaxTMI 
TaxTMI 
2025 (12) TMI 491
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....e various grounds is against the deletion of addition of Rs. 9,35,00,000/- comprising Rs. 2,25,00,000/- in respect of share capital / share premium and Rs. 7,10,00,000/- in respect of unsecured loans which were made by the AO as unexplained cash credit u/s. 68 of the Act. 03. The facts in brief are that the assessee filed the return of income on 27.09.2011, declaring total income of Rs. 89,968/-. The ld. AO on the basis of information available observed that during the year the assessee has raised share capital and unsecured loan from shell companies. Accordingly, the case of the assessee was reopened u/s. 147 of the Act by issuing notice u/s. 148 of the Act. In response the assessee filed the return of income on 16.04.2018, declar....
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....uly filed by the ld. AO before the ld. CIT (A) but in the remand report again the ld. AO noted the non-compliance to summon u/s. 131 of the Act by the subscribers/ loan creditors. The ld. CIT (A) controverted the conclusion drawn by the ld. AO that the share subscribers/ loan creditors were not having any operating income during the year by relying on the decision of CIT Commissioner of Income-tax vs. Ms. Mayawati [2011] 338 ITR 563 (Delhi)/[2011]. The ld. CIT (A) while deleting the addition dealt with each subscriber from page no.47 to 56 by discussing the credential of each subscriber. Similarly, the ld. CIT (A) discussed each and every loan creditors from page no. 56 to 59 of the Paper Book, while deleting the addition. The ld. CIT (A) r....
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....dings, we note that the assessee furnished before the ld. AO all the evidences/ documents qua the subscribers as well as loan creditors. We note that the summon u/s. 131 of the Act and notice u/s. 133(6) of the Act were issued. There was part compliance from the subscribers/ loan creditors. The ld. CIT (A) discussed the issue at length in the appellate order from page no.47 onwards discussing each and every subscriber as well as the loan creditors. We note that the assessee has filed all the evidences before the ld. AO and therefore, making the addition merely on the ground that the summons was not complied to and the subscribers have meagre income is not correct. The ld. CIT (A) has rightly deleted the addition in respect of share capital/....
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....rs before the ld. AO and loans are also repaid then the same cannot be added u/s 68 of the Act. Similarly, the case of assessee is squarely covered by the decision of the Hon'ble Gujarat High Court in the case of Ambe Tradecorp (P.) Ltd., reported in [2022] 145 taxmann.com 27 (Gujarat), wherein it has been held as under :- "3. The issue in this case arose in respect of the assessment year 2012-2013. It appears that the two loan transactions of Rs. 8,50,00,000/- and Rs. 23,70,00,000/- received by respondent assessee from one M/s. J.A Infracon Private Limited and M/s. Satya Retail Private Limited were treated by assessing officer to be sham in the sense that the creditworthiness etc. of the giver of the loan were not established. Acc....
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....e Authority. The Tribunal referred to the decision of Durga Prasad More (82) ITR 540 and also in Sumati Dayal (214) ITR 801, to further record on the basis of the facts that the assessee had furnished the details such as copy of ledger account, bank statements, income tax returns, balance sheet etc. It was also recorded that notice under Section 133(6) of the Act was issued to the said parties which were duly responded by them. The identity of the parties could not be, therefore disputed, recorded the tribunal. The aspect was also noticed that the assessee was not beneficiary of the loan received by it and the loan was repaid by the assessee in the subsequent year. It led to unacceptable conclusion that the impugned transaction was a busine....