2014 (9) TMI 1175 - AT - Income Tax

Unexplained cash credit u/s 68 - Held that - A perusal of the paper book as filed by the assessee shows that the assessee has provided Permanent Account Numbers and the confirmation of the loans by all the loan creditors. A perusal of the paper book clearly shows that all the creditors are assessed to income tax and they have filed their returns of income for the assessment year 2006-07 in March 2007. The assessment in the case of the assessee has been initiated only after March 2007 so obviously it cannot be assumed that the returns had been filed by the creditors after the initiation of the assessment proceedings in the case of the assessee. A perusal of the paper book clearly shows that the return acknowledgment computation of income along with the Capital A/c. and the affidavits of the creditors were before the Assessing Officer. This fact being undisputed clearly the decision in the case of Dataware Private Limited 2011 (9) TMI 175 - CALCUTTA HIGH COURT squarely applicable on the facts of the assessee s case. - Decided in favour of assessee.

Summary

Issues involved:
Appeal against order of Commissioner of Income Tax (Appeals) for assessment year 2006-07; Treatment of unsecured loans as unexplained cash credit u/s 68; Charging of interest under section 234A, 234B & 234D.

Analysis:
The appeal was filed against the order of the Commissioner of Income Tax (Appeals) for the assessment year 2006-07. The appellant raised various grounds challenging the order, including the treatment of unsecured loans as unexplained cash credit under section 68 and the charging of interest under sections 234A, 234B, and 234D. The appellant argued that the Assessing Officer treated the entire unsecured loans as unexplained cash credit due to doubts about the genuineness of the transactions. The appellant contended that the creditors were income tax assesses, and their details were available to the Assessing Officer, which should have been considered. The appellant relied on a decision of the Hon'ble jurisdictional High Court to support their case. Additionally, the appellant presented a previous Tribunal order where a similar addition was deleted under identical circumstances.

The Assessing Officer and the Commissioner of Income Tax (Appeals) had upheld the addition of unexplained cash credit and the charging of interest. However, upon review, the Tribunal found that all the loan creditors were income tax assesses who had filed their returns of income for the relevant assessment year before the initiation of assessment proceedings against the appellant. The Tribunal noted that the creditors' details, including return acknowledgments and affidavits, were before the Assessing Officer, indicating the genuineness of the transactions. Relying on the decision of the Hon'ble jurisdictional High Court and a previous Tribunal order, the Tribunal concluded that the addition made by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeals) should be deleted.

In conclusion, the Tribunal allowed the appeal filed by the assessee, ruling in favor of deleting the addition of unexplained cash credit and the interest charges. The decision was based on the genuine nature of the transactions with income tax assesses and the precedents cited in support of the appellant's case.