2024 (7) TMI 1272 - AT - Income Tax

Addition u/s 69A - unexplained income as advances taken - HELD THAT - In the present case admittedly though there was an error of punching of the date in the books of account, but loan amount given, and loan amount taken from two different parties was recorded in the books of accounts of the assessee supported by the bank statement and confirmation of those parties. It is immaterial for the application of section 69A of the act that assessee could not submit the detail of the transaction of advances for immovable property which did not materialize. Therefore, it cannot be said that assessee is owner of the asset which is not recorded in the books of account of the assessee. Therefore, the provisions of Section 69A are not satisfied as the assessee is not found to be the owner of any sum, which is not recorded in the books of account of the assessee. CIT A has considered all the aspects of the above transaction and thereafter deleted the addition made u/s 69A of the act by the learned assessing officer with reasons. No infirmity is pointed out in the order of the first appellate authority. Therefore, we do not have any hesitation in upholding the order of the learned first appellate authority. Accordingly, we do not find any merit in the appeal of the learned AO. Addition on account of transaction with Outstripe Suppliers Pvt. Ltd. - HELD THAT - The amount of ₹1.70 crores is part of the transaction of ₹2 crores which was part of the addition of ₹2 crores made in A.Y. 2015-16. As we have upheld the order of the learned CIT (A) deleting the addition of ₹2 crore, we also confirmed the order of the learned CIT (A) deleting the addition of ₹1.70 crores for the reason that it is part of the same transaction of ₹2 crores and further, it amounts to double addition of ₹1.70 crores made by the AO. Accordingly, we do not find any merit in the appeal of the learned Assessing Officer for this year.

Summary

Issues Involved:
1. Deletion of addition of Rs. 2,00,00,000 under Section 69A of the Income Tax Act for A.Y. 2015-16.
2. Deletion of addition of Rs. 57,131 under Section 69A of the Income Tax Act for A.Y. 2015-16.
3. Deletion of addition of Rs. 1,70,00,000 under Section 69A of the Income Tax Act for A.Y. 2016-17.

Detailed Analysis:

1. Deletion of Addition of Rs. 2,00,00,000 under Section 69A for A.Y. 2015-16:
The assessee filed its return for A.Y. 2015-16 on 29th September 2015, which was processed without scrutiny. A notice under Section 148 was issued on 31st March 2021 based on findings that the assessee was involved in providing accommodation entries to Outstrip Suppliers Pvt. Ltd. The Assessing Officer (AO) noted a transaction of Rs. 2 crores on 5th March 2015, which was not recorded in the assessee's books. The assessee explained that this transaction was erroneously recorded on 5th April 2015 instead of 5th March 2015. The AO did not accept this explanation and made an addition under Section 69A of Rs. 2 crores.

The CIT (A) deleted the addition, noting that the AO's conclusion was based on an incomplete investigation and that the assessee provided sufficient documentary evidence, including bank statements and confirmations from VVF (India) Ltd. The CIT (A) emphasized that the transaction was duly recorded in the books and that the funds were repaid, thus not satisfying the conditions for invoking Section 69A. The Tribunal upheld the CIT (A)'s decision, agreeing that the AO's selective approach was not justified and that the provisions of Section 69A were not applicable as the assessee was not found to be the owner of any unexplained money.

2. Deletion of Addition of Rs. 57,131 under Section 69A for A.Y. 2015-16:
The AO also noted a discrepancy of Rs. 57,131 in the closing balance of the bank account, which was added to the assessee's income under Section 69A. The CIT (A) deleted this addition as well, considering it consequential to the primary addition of Rs. 2 crores. The Tribunal agreed with the CIT (A) that the discrepancy was minor and did not warrant a separate addition under Section 69A.

3. Deletion of Addition of Rs. 1,70,00,000 under Section 69A for A.Y. 2016-17:
For A.Y. 2016-17, the AO made an addition of Rs. 1.70 crores, which was part of the Rs. 2 crores transaction from A.Y. 2015-16. The CIT (A) deleted this addition, noting that it was part of the same transaction already addressed in A.Y. 2015-16. The Tribunal upheld this decision, confirming that the addition amounted to double counting and was not justified.

Conclusion:
The Tribunal dismissed the appeals of the AO for both A.Y. 2015-16 and 2016-17, upholding the CIT (A)'s deletion of the additions under Section 69A. The Tribunal found that the transactions were duly recorded and explained, and the AO's selective approach and incomplete investigation did not justify the additions. The provisions of Section 69A were not applicable as the assessee was not found to be the owner of any unexplained money.