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2020 (9) TMI 239 - AT - Income TaxAddition u/s 68 r.w.s. 115BBE - unsecured loans received by the assessee from various companies/persons - HELD THAT - Some of the subscribes to the share capital as well as unsecured creditors are genuine creditors and their credit worthiness can be established, provided the opportunity is given to the assessee. As submitted by the assessee that some of the creditors are assessed in Hyderabad and filing the returns regularly. Though the entire facts were placed before the CIT (A), it seems that the learned CIT (A) did not consider the evidences placed before him - issues needs to be verified by the AO with regard to the genuineness and the creditworthiness of the creditors as well as the share applicants/share applications money received by the assessee. We remit back the matter to the file of the AO to redo the assessment de nova taking into consideration of all the evidences placed before him by the assessee - direct the AO to consider the issue of addition with regard to the opening balance and set off of losses u/s 115BBE as per the law and in the light of the board Circular issued by the CBDT in circular No.11 of 2009. - Appeals are allowed for statistical purposes.
Issues Involved:
Appeals filed for Assessment year 2014-15 against the order of Ld.CIT(A) and appeal for Assessment year 2015-16. Analysis: 1. Assessment Year 2014-15: - The assessee declared a total income of 'Nil' but the AO added unsecured loans received from various entities totaling Rs. 9,48,38,105 under section 68 of the Act. - Additionally, share application money of Rs. 7,50,00,000 was also brought to tax under section 68 r.w.s. 115BBE of the Act, resulting in a total addition of Rs. 16,98,38,110. - The CIT (A) partly allowed the appeal, confirming the addition of Rs. 9,48,38,105 and disallowing Rs. 73,04,912 as interest expenditure, while allowing relief of Rs. 7.50 crores related to share application money. - The AR argued that the unsecured loans and share application money were received from genuine parties, but the AO did not verify the information provided. - The AR contended that a portion of the unsecured loan pertained to the opening balance and requested a remittance back to the AO for verification. - The DR argued that the entities providing the unsecured loans and share application money were shell companies without creditworthiness, advocating for restoration of the assessment order. - The AR cited Board Circular No.11 of 2009 to support the claim that set off of losses should be allowed for the assessment year 2014-15. 2. Assessment Year 2015-16: - The issue was identical to that of A.Y. 2014-15, where the addition was made under section 68 r.w.s 115BBE of the I.T. Act. - The matter was remitted back to the AO to provide an opportunity to the assessee and decide the issue afresh on merits, considering the set off losses u/s 115BBE in light of Circular No.11 of 2009. Conclusion: The ITAT Hyderabad remitted both appeals back to the AO for de novo consideration, directing verification of the genuineness and creditworthiness of the creditors and share applicants. The AO was instructed to consider the issue of addition concerning the opening balance and set off of losses u/s 115BBE as per the law and CBDT Circular No.11 of 2009. The appeals were allowed for statistical purposes, emphasizing the need for a fresh assessment based on verified evidence.
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