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2019 (9) TMI 863 - AT - Income TaxAddition u/s 68 - disallowing unsecured loan - HELD THAT - A.O. has not established as to how the documentary evidences furnished by the assessee were contrary to the human probabilities and circumstantial evidences. The Assessing Officer has not established as to what are the reasons and evidences on the basis of which he is alleging the loan creditors as paper companies and the transactions as fake loans. No parity in the facts of the decisions relied upon with the peculiar facts of the case in hand. Therefore, in view of the aforesaid factual matrix and legal position, the addition made by Assessing Officer was rightly deleted by the Ld. CIT(A), which does not need any interference on our part - Decided in favour of assessee Addition on account of Commission paid - HELD THAT - In view of findings given for ground No. 1 as aforesaid, the addition made by the Assessing Officer was rightly deleted by the Ld. CIT(A), which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) on the issue in dispute and accordingly, reject the ground no. 2 raised by the revenue.
Issues Involved:
1. Deletion of addition of ?18,48,00,000/- made by disallowing unsecured loan under Section 68. 2. Deletion of addition of ?13,86,000/- made by disallowing commission paid for obtaining unsecured loan under Section 68. 3. Admission of additional evidences by CIT(A) without providing an opportunity to the AO for examination. Issue-wise Detailed Analysis: 1. Deletion of Addition of ?18,48,00,000/-: The Revenue challenged the deletion of an addition of ?18,48,00,000/- made by the Assessing Officer (AO) under Section 68 of the Income Tax Act, 1961, claiming that the assessee failed to prove the genuineness of unsecured loans received from M/s Shirin Exports Pvt. Ltd. and M/s Vigorous Trade Link Pvt. Ltd. The AO argued that these companies did not comply with notices and failed to provide bank statements, suggesting the loans were bogus. The AO also noted that M/s Vigorous Trade Link Pvt. Ltd. lacked sufficient financial capacity to provide the loan without routing funds from M/s Promart Retail Pvt. Ltd., a company majorly owned by the assessee. The Tribunal observed that the assessee had provided substantial documentation, including confirmations, bank statements, income tax returns, and audited financial statements of the creditors. The AO's notices to the creditors were duly served, and responses were received, confirming the loans. The Tribunal found no discrepancies in the documents provided by the assessee and noted that the AO did not issue a show cause notice before making the additions. The Tribunal emphasized that suspicion alone could not replace concrete evidence and that the AO failed to provide any incriminating documents or evidence to support the claim of bogus loans. The Tribunal upheld the CIT(A)'s decision to delete the addition, finding the AO's actions unjustified and unsupported by evidence. 2. Deletion of Addition of ?13,86,000/-: The Revenue also contested the deletion of an addition of ?13,86,000/- made by the AO as commission allegedly paid for obtaining the unsecured loans. The AO presumed that the assessee must have paid commission to the creditors for providing accommodation entries. The Tribunal, referencing its findings on the first issue, concluded that since the loans were genuine and substantiated by adequate documentation, the addition of commission was also unwarranted. The Tribunal upheld the CIT(A)'s decision to delete this addition as well. 3. Admission of Additional Evidences: The Revenue claimed that the CIT(A) admitted additional evidence without giving the AO an opportunity to examine it. However, the Tribunal noted that the CIT(DR) failed to specify which additional evidences were admitted without the AO's examination. The Tribunal dismissed this ground, finding no merit in the Revenue's claim. Conclusion: The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s order to delete the additions of ?18,48,00,000/- and ?13,86,000/- and rejecting the claim regarding the admission of additional evidence. The Tribunal emphasized the importance of concrete evidence and proper procedural adherence in making additions under Section 68.
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