2026 (4) TMI 1131

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....isclosed source u/s 68 of the Act. 4. We have heard the rival submissions and perused the material available on record. The assessee is a partnership firm engaged in the business of refinery of precious metal and also sale and purchase of precious metal. The return of income for AY 2017-18 was filed by the assessee firm electronically on 23.10.2017 declaring total income of Rs. 1,19,20,030/-. During the course of scrutiny proceedings, the ld AO noted that the assessee had deposited cash in specified bank notes during demonetization period in Punjab National Bank amounting to Rs. 1,18,00,000/-. The assessee was asked to explain the source for the sum in a tabular form. The assessee filed reply dated 03.12.2019 explaining that the source of cash deposit emanated out of cash sales made by the assessee and furnished all the requisite details in support of its contention in tabular form. It was submitted that assessee was having sufficient source and sufficient cash balance to make the cash deposit in the bank account including during demonetization period. The assessee also submitted that it had sufficient stock of quantity of gold in hand and to the extent of cash sales made by the....

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.... had indeed proved the source of cash deposits by clearly establishing that the source emanated from the books of account and the cashbook regularly maintained. None of the books of account have been rejected by the ld AO. In these facts and circumstances, there is no case made out by the revenue for making an addition on account of cash deposit separately. Accordingly, the addition made is hereby directed to be deleted. Further, we also find that Hon'ble Madras High Court in the case of of SMILE Microfinance Limited vs ACIT in WP (MD) No. 2078 of 2020 and WMP (MD) No. 1742 of 2020 dated 19-11-2024 had held that the provisions of section 115BBE of the Act which enhanced the rate of tax could be made applicable only from 01.04.2017, relevant to assessment year 2018-19 onwards and not earlier. Accordingly, the Ground Nos. 2 and 3 raised by the assessee are allowed. 7. In the result, the appeal for AY 2017-18 is allowed. ITA No. 5076/Del/2025 - AY 2018-19 8. Ground Nos. 1 and 4 raised by the assessee are general in nature and does not require any specific adjudication. Ground No. 2 raised by the assessee is challenging the confirmation of addition made on account of unsecured....

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....on 31.03.2018 of the said lender, bank statement of the said lender before the ld AO. The ld AO noted that the confirmation of unsecured loan given by the assessee from Gogia Leasing Ltd was not authenticated document inasmuch as no signature and stamp was affixed in the place provided. Accordingly, the ld AO concluded that the assessee failed to furnish satisfactory explanation, creditworthiness and genuineness of the unsecured loan transaction. 12. During the appellate proceedings the assessee furnished additional evidence before the ld CIT(A) in terms of Section 46A of the Income Tax Rules. Notice u/s 133(6) of the Act stood issued to Punjab National Bank and to M/s. Gogia Leasing Ltd, which stood non complied. The ld CIT(A) noted that additional evidences submitted by the assessee cannot be admitted. For this purpose, he relied on the remand report furnished by the ld AO wherein, the ld AO had objected to the admission of additional evidences. The ld CIT(A) upheld the action of the ld AO by stating that the three ingredients of the Section 68 of the Act were not proved by the assessee herein. 13. At the outset, we find that a sum of Rs. 26 crores has been given as short t....

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.... 1,64,99,362/- which also stood repaid by the assessee during the year itself. The balance of unsecured loan outstanding loan as on 31.03.2018 represent the unpaid balance of opening balance of loan after making partial repayments during the year. From the perusal of all the financial statements of Gogia Leasing Ltd we find that as on 01.04.2017, the shareholders funds available with the lender of Rs. 18.43 crores which will sufficiently take care of amounts advanced during the year by the lender company to the assessee. This proves the creditworthiness of the lender company. All transactions are routed through the regular banking channels which proves the genuineness of the transactions. Hence, we have no hesitation to conclude that assessee had duly proved all the three ingredients of Section 68 of the Act qua Gogia Leasing Ltd i.e. identity of the creditor, genuineness of the transaction and creditworthiness of the creditor. Hence, no part of the unsecured loan received from Gogia Leasing Ltd as unexplained warranting invocation of Section 68 of the Act. Hence, the addition made on account of unsecured loan received from Gogia Leasing Ltd is deleted and disallowance of interest ....