2018 (11) TMI 1242 - AT - Income Tax

Addition u/s 68 - assessee obtained loans from 6 entities - proof of credit received in the impugned AY - Held that - So far as the addition of ₹ 79 Lacs is concerned, Ld. CIT(A), after examining confirmation of accounts, has recorded a finding that credit of the same was not received by the assessee during impugned AY and therefore, the addition u/s 68, to that extent, could not be made. We agree with the arguments of Ld. AR to that extent. Accordingly, the conclusion drawn by CIT(A), to that extent, stand confirmed. Regarding the balance fresh loans of ₹ 20.50 Lacs as obtained by the assessee during impugned AY, in terms of submissions of Ld. AR, we deem it fit to restore the matter back to the file of Ld. AO for deciding afresh as per law with a direction to the assessee to substantiate the same with documentary evidences etc. The ground of appeal stand allowed to that extent. - decided partly n favour of assessee.

Summary

Issues:
Appeal by revenue contesting deletion of additions under section 68 for Assessment Year 2012-13.

Analysis:
The appeal contested the order of the Ld. Commissioner of Income-Tax (Appeals) regarding the deletion of certain additions under section 68 made by the Ld. Assessing Officer. The assessee, a resident individual engaged as a commission agent and dealer in shares, faced additions of ?106.48 Lacs under section 68 based on loans obtained from various entities. The loans were linked to a group providing bogus unsecured loans. The assessee defended the loans with confirmations and bank statements, but the Ld. AO added the amounts as cash credit under section 68.

The Ld. CIT(A) examined the case and considered various judgments on section 68, emphasizing that a sum must be found credited in the books of the assessee for the relevant assessment year. The CIT(A) highlighted the need for satisfactory explanations regarding the nature and source of such credits. The judgment in the case of CIT Vs. Usha Stud Agricultural Farms Ltd. was cited to support the position that credits over multiple years may not be fresh entries for the relevant assessment year.

The Ld. CIT(A) noted that the identity and creditworthiness of the creditors, as well as the genuineness of the transactions, were established by the appellant through various documents. The principles laid down in the case of ITO vs Anant Shelters Pvt. Ltd. were referenced, emphasizing the need for objective assessment by the AO and the importance of evidence provided by the assessee. The Ld. CIT(A) also referred to a judgment of the Hon'ble Bombay High Court in a similar case to support the appellant's position.

The Tribunal partially allowed the revenue's appeal. It confirmed the deletion of additions not received during the impugned assessment year but remitted the matter back to the AO for fresh adjudication regarding the balance of fresh loans obtained during the relevant year. The Tribunal directed the assessee to provide further documentary evidence to substantiate the fresh loans. The revenue's appeal was partly allowed based on these findings.

In conclusion, the Tribunal upheld the CIT(A)'s decision regarding the non-receipt of certain credits during the assessment year but directed a re-examination of the balance of fresh loans obtained. The matter was sent back to the AO for further assessment in accordance with the law.