TaxTMI 
TaxTMI 
2026 (9) TMI 1861
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....nt Year 2019-2020. 3. The Revenue has raised the following grounds of appeal: 1. The Ld. CIT(A) has erred in deleting the addition of Rs. 8,08,39,189/- made by the Assessing Officer u/s. 68 of the Income Tax Act on account of unsecured loan without considering the detailed analysis made by the A.O. and has allowed the appeal of the assessee by taking the view that full amount shown as loan had been repaid by the assessee. 2. The Ld. CIT(A) has erred in deleting the addition of Rs. 8,08,39,189/- u/s. 68 of the Income Tax Act by noting that as the A.O. had not made addition of the full amount, if proved the genuineness of the transaction without appreciating the full facts and findings of A.O. in the assessment order. 3. The Revenue craves leave to add/alter/armed and/or substitute any or all of the grounds of appeal. 4. The relevant facts in brief are that Assessee, an individual, filed Return of Income for the Assessment Year 2019-2020 under Section 139(1) of the Act on 21/10/2019 which was revised by way of Return of Income filed on 22/06/2020. Subsequently, a search action under Section 132 of the Act was carried out on B. Safal Group, group entit....
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....ubmissions, dated 04/03/2024, which reads are as follows: " To, The DCIT Central Circle-1(4) Ahmedabad Date: 04/03/2014 Dear Sir, Sub Reply to Notice u/s 142(1)-АУ. 2019-20 xx xx In reference to the above referred SCN, following are my submissions:- As regards para 4 of the SCN, following are my detailed submissions in respect to the unsecured loans received from the lenders mentioned in para 4 of the SCN:- 1. In respect of the Unsecured Loan mentioned in para 4 of the SON, your goodself have requested to furnish the copy of ITR acknowledgement and bank account statement and copy of confirmation from the contra unsecured lender to discharge the onus of creditworthiness of creditor and genuineness of transaction as per the provisions of Section 68 of the Act. In order to substantiate the identity of the lenders and to substantiate the genuineness of the transactions and to substantiate the creditworthiness of the lenders I am submitting herewith Name, Address, PAN, and contra confirmation from the sand lenders to substantiate the deity of the lenders as pe....
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....person are resistant to provide the details because of their confidentiality of information and business secrecy I am submitting herewith the details of their Name, PAN and complete address, in case for your further satisfaction, your good sell requires any further information, you are requested to kindly issue notice u/s 133(6)/summon u/s 131 to the respective parties for getting the further information to your satisfaction. Hence from the above, I have satisfactorily proved identity of the lender and genuineness of the transaction and the capacity and creditworthiness of the lender and also proved the source of source of said lender and hence complied with the requirements of section 68. b. Sampati Securities Limited (Rs. 2,00,00,000/-) in respect of the said lender, I am submitting herewith the copy of the confirmation of Account, copy of the Bank Account and the Copy of ITR for AY 2019-20 showing Gross total income of Rs. 1,64,87,955/-in order substantiate the identity of the lender and genuineness of the transaction and the capacity and creditworthiness of the lender. Further, lam also attaching herewith the copy of the Audited Balance Sheet of M/ Sa....
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....d receipts the said lender lent to me loan of Rs. 50,00,000/- and lam submitting herewith the Name, PAN and Address of the said M/s Arya Fin trade Services (India) Private Limited, Address: 20th Floor PrivilonAmbali-Brt Road B/h Iscon Temple Off. SG Highway Ahmedabad Gujarat 380059, Pan: AAICASS 44Q and the copy of the Audited Balance sheet of said M/s Arya Fin trade Services (India) Private Limited for FY 2018-19 showing Networth of Rs. 31,37,61,167/- Hence, the source of the source s also proved. For source of source, I am making efforts to collect the copy of confirmation, copy of ITA and the Bank statements. However, said person are resistant to provide the details because of their confidentiality of information and business secrecy. I am submitting herewith the details of their Name, PAN and complete address, in case for your further satisfaction, your good self requires any further information, you are requested to kindly issue notice u/s 133(6)/summons u/s 131 to the respective parties for getting the further information to your satisfaction Hence from the above, I have satisfactorily proved identity of the lender and genuineness of the transaction and the capacity ....
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....apacity and credit worthiness of the lender. Further your observation that unsecured loan lent by Shani P Patel to me is s 21,02,57,651/-is also mistaken because the said amount is the total of various transaction of loans given try Share P Patel to me and loans returned back by me to Shani P Patel and hence at any one point of time the outstanding unsecured loan has never been at the sand Rs. 21,02,57,851/ The maximum amount outstanding during the year under consideration is Rs 14,19,29,655/ This is quite evident from the confirmation of the Account submitted by me which shows multiple transaction of loans taken and given back. Further, the copy of the Balance Sheet of Shani P Patel as on 31/03/2019 is attached herewith, which shows that the Networth of Shani P Patel is Rs 2,07,28,251/-. On the basin of the said strong Networth, he has been able to raise loans of Rs. 29,60,88,961/- And hence he is having required capacity and creditworthiness to lend unsecured loan. Further, I am attaching herewith the details of source of source (source-2) for each receipt of loan by me prepared from the bank statement of the said lender and also attaching herewith the ....
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.... from source of source as disclosed by the Assessee. Since the Assessee had failed to discharge the aforesaid onus, the Assessing Officer made addition of INR.8,08,39,189/- in the hands of the Assessee under Section 68 of the Act holding the same to be unexplained cash credit liable to tax at the rate specified under Section 115BBE of the Act. The concluding paragraphs of the Assessment Order read as under: "6. In light of the above mentioned analysis, the submissions filed by the assessee has been carefully examined. But same was not found acceptable due to following reasons: 6.1 The assessee has claimed the following: For source of source, I am making efforts to collect the copy of confirmation, copy of t and the Bank statements However, said person are resistant to provide the details became of their confidentiality of information and business secrecy i am submitting herewith the details of their Name, PAN and complete address, in case for your further satisfaction, your good sell requires any further information, you are requested to kindly issue notice u/s 133(6)/summons u/s 131 to the respective parties for getting the further information to your sa....
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.... 7. Being aggrieved the Assessee challenged the additions made by the Assessing Officer before the Learned CIT(A). It was contended on behalf of the Assessee that the Assessee had discharged the primary onus cast upon the Assessee in terms of Section 68 of the Act by providing the source of cash credit as well as source of source thereof. The aforesaid submissions found favour with Learned CIT(A) as the Learned CIT(A) deleted the additions made by the Assessing Officer holding that the Assessee has discharged the primary onus in terms of Section 68 of the Act. The Learned CIT(A) returned the findings that there was opening outstanding balance of loan of INR.6,08,09,746/- and the Assessee had received further unsecured loans of INR.21,02,57,851/- from her husband (namely Shri Shani P. Patel). The Assessee had placed on record ledger confirmation showing repayment of loans aggregate to amount to INR.25,32,05,406/- during the relevant previous year. As on 31/03/2019 the outstanding loan amount stood at INR.1,78,62,190/-. The Assessing Officer had only made addition to the extent of INR.8,08,39,189/- which showed that Assessing Officer had accepted the genuineness of the balance unsec....
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.... the Assessee had discharged its primary onus cast upon the Assessee in terms of Section 68 of the Act the onus had shifted on the Assessing Officer to bring on record material/evidence to doubt the genuineness of the transaction or to establish that the parties lack creditworthiness to give loans. In the present case sequent to shifting on onus as aforesaid, the Assessing Officer failed to conduct independent inquiries under Section 133(6) or 131 to verify the credentials of the parties/lender. It was further emphasized that the statutory amendment to Section 68 mandating the explanation of source of source came into effect subsequently from Assessment Year 2023- 2024 and cannot be applied retrospectively to Assessment Year 2019- 2020. 12. We have given thoughtful consideration to the rival submissions and have perused the material on record. The issue that arises for consideration is that whether in the facts of the present case the Assessee had discharged the onus cast upon the Assessee in terms of Section 68 of the Act to bring on record details and documents to support genuineness of the loan transaction as well as creditworthiness of the parties. We find that on perusal of....
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.... of the view that the contention advanced by the Revenue lack merits and are, therefore, rejected. Accordingly, Ground Nos. 1 and 2 raised by the Revenue are dismissed. 13. In the result, appeal preferred by the Revenue (ITA No. 1756/AHD/2024) is dismissed. ASSESSMENT YEAR 2020-2021 Appeal's Appeal: ITA No. 1754/AHD/2024 & Revenue's Appeal: ITA No. 1757/AHD/2024 14. We will next take up cross appeals pertaining to Assessment Year 2020-2021 which arise from the Common Order, dated 06/08/2024, passed by Learned CIT(A) whereby the Learned CIT(A) had disposed the appeal filed by the Assessee against the Assessment Order, dated 21/03/2024, passed under Section 143(3) read with Section 147 of the Act. 15. In ITA No. 1754/AHD/2024 the Assessee has raised the following grounds of appeal: "1. In law and in the facts and circumstances of the appellant's case, the Ld. CIT(A) has erred in partially upholding the addition of alleged unexplained investment of Rs. 87.40,290/ under section 698 r.w.s. 115BBE of the Act. 2. In law and in the facts and circumstances of the appellant's case, the Ld. CIT(A) erred in partially upholding the addition made by Ld....
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....laring total income of INR.28,52,490/-, which was processed under Section 143(1) of the Act. Following a search and seizure operation under Section 132 on 28/09/2021 on the B. Safal Group and associated entities, notice under Section 148 of the Act was issued to the Assessee on 17/08/2022. In response, the Assessee filed return of income declaring the same income of INR.28,52,490/- on 06/10/2022. The Assessing Officer subsequently passed Assessment Order, dated 21/03/2024, under Section 143(3) read with Section 147 determining the total assessed income at INR.12,82,16,565/- after making two primary additions: (a) an addition of INR.11,32,00,000/- on account of unexplained cash credit under Section 68 read with Section 115BBE of the Act, and (b) an addition of INR.1,21,64,075/- as unexplained investment under Section 69B read with Section 115BBE of the Act towards the acquisition of unit in the Parijat Eclat project. The Assessing Officer computed the estimated actual purchase price of the unit at INR.3,09,64,878/-applying an average basic rate of INR.6,850/- psf, Other Charges of INR.608/- psf, and 3 parking slots costing INR.12,00,000/- as against the documented sale consideration....
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.... transactions. Therefore, respectfully following the aforesaid decision of the Tribunal we hold that the addition made by the Assessing Officer on account of 'On Money' transaction between the Assessee and SKZ Developers LLP under Section 69B of the Act cannot be sustained in view of the aforesaid decision of the Co-ordinate Bench of Tribunal. Therefore, the addition of INR.87,40,290/- [that was sustained by the Learned CIT(A)] is also deleted. Accordingly, Ground No. 1 to 5 raised by the Assessee are allowed while Ground No. 1 raised by the Revenue is dismissed. Ground No. 2 & 3 raised by the Revenue 22. As regards Ground No. 2 & 3 raised by the Revenue directed against the order passed by the Learned CIT(A) deleting the addition of INR.11,32,00,000/- made by the Assessing Officer under Section 68 of the Act treating the unsecured loans as unexplained cash credit are concerned, during the course of hearing both the sides agreed that in the identical facts and circumstances identical to those prevailing in Assessment Year 2019-2020, addition was made in the hands of the Assessee under Section 68 of the Act which was deleted by the Learned Commissioner of Income Tax (Appeals) ....
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.... the appellant's case, the Ld. CIT(A) erred in partially upholding the addition made by Ld. A.O. wherein Ld. AO has made the entire addition on the basis of surmises and presumptions made from material seized during the course of search from a third party and without application of mind. 3. The Ld. CIT(A) has erred in law and on facts in partially upholding the addition u/s 69B r.w.s. 115BBE of the Act in the absence of any incriminating evidence which proves that the appellant has paid ON-MONEY to Developer for purchase of property in respect of which addition is made. 4. The Ld. CIT(A) has erred in law and on facts in partially upholding the addition made by the Ld. AO under section 69B r.w.s. 115BBE of the Act without granting opportunity of cross examination of the searched person even after specific request for the cross examination was sought by the appellant. 5. The Ld. CIT(A) has erred in law and on facts in not properly appreciating and considering various submissions, evidences and supporting placed on record during the course of the assessment proceedings and not properly appreciating various facts and law in its proper perspective." 26. In ....