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2019 (1) TMI 1525 - AT - Income TaxAddition on Foreign Remitance from LTC College London (U.K.) terming as loan remitted though banking channel - commission or as against invoice which is reflected in the account statements of the banks - Held that - CIT(A) has based his order on two remand reports. In the remand reports, the AO has admitted that LTCC is remitting the money through banking channel and the college has given confirmation. Doubts have not been raised. When we have confronted this aspect to the ld.DR, then he was unable to rebut the finding of the ld.CIT(A), rather conceded that this finding has been recorded on the basis of remand report given by the AO under the tutelage of additional CIT. CIT(A) has deleted this addition after reproducing reconciliation of cash entry with cashbook. The assessee has demonstrated as to how it has deposited the cash in the bank account, and how this cash was available with the assessee in the cash book. This was also not rebutted in the remand report by the AO. The ld.CIT(A) in the finding extracted on both the issues has based its finding on remand reports. Revenue has not raised any plea that any additional evidence was entertained by the ld.CIT(A) in violation of Rule 46 of the Income Tax Rules. We have duly extracted grounds of appeal taken by the Revenue. Taking into consideration, the detailed order of the ld.CIT(A) on both the issues, we do not find any reasons to interfere in it. Hence, appeal of the Revenue is dismissed.
Issues Involved:
1. Deletion of addition of ?3,52,33,234/- made on Foreign Remittance from LTC College London. 2. Deletion of addition of ?1,34,19,000/- made on unexplained cash credit. Issue-wise Detailed Analysis: 1. Deletion of Addition of ?3,52,33,234/- Made on Foreign Remittance from LTC College London: The Revenue challenged the deletion of an addition of ?3,52,33,234/- made by the Assessing Officer (AO) on account of foreign remittance from LTC College London (LTCC), which the AO initially treated as income. The AO believed that the remittance was commission income, not a loan, based on the bank's account statements. However, upon further verification, it was revealed that the actual amount received was ?4,18,45,447/-, not ?4,65,53,146/-. The difference of ?47,07,699/- was stated to be a liability, not an unsecured loan. The CIT(A) observed that the AO should verify whether the amount of ?47,07,699/- was indeed a liability. If confirmed, it should be deleted. The CIT(A) noted that the AO, in his remand reports dated 26.3.2015 and 11.6.2015, confirmed that LTCC was the remitter of ?3,52,33,234/- through banking channels, and no services were rendered by the assessee to LTCC. Thus, the amount of ?3,52,33,234/- was confirmed as a loan, not income. The CIT(A) concluded that the remaining amount of ?66,12,213/- was unexplained and should be added to the total income as unexplained cash credit under Section 68 of the Income Tax Act. The addition of ?3,52,33,234/- was deleted based on the remand reports confirming the identity and genuineness of the transaction. 2. Deletion of Addition of ?1,34,19,000/- Made on Unexplained Cash Credit: The AO observed cash deposits of ?1.43 crores in the assessee's bank accounts and questioned the source. The assessee contended that these deposits were made from cash withdrawals and provided a reconciliation statement. The CIT(A) analyzed the reconciliation and called for remand reports from the AO, which did not provide any adverse findings against the reconciliation. The CIT(A) noted that the assessee had filed a reconciliation of cash entries with the cash book, explaining each deposit. The AO, in his remand reports dated 26.3.2015 and 11.6.2015, did not dispute the sources of the cash deposits. Consequently, the CIT(A) deleted the addition of ?1,34,19,000/- as explained and confirmed the remaining addition of ?8,81,000/- for want of explanation. Conclusion: The Tribunal upheld the CIT(A)'s order, finding no reason to interfere. The CIT(A)'s decisions were based on remand reports that confirmed the genuineness of the transactions and the explanations provided by the assessee. The appeal of the Revenue was dismissed. Pronounced in the Open Court on 29th January, 2019.
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