2021 (5) TMI 858 - AT - Income Tax

Reopening of assessment u/s 147 - Unexplained cash credit u/s. 68 in respect of loan received - HELD THAT - As documentary evidences submitted by the assessee before the lower authorities which had been summarily brushed aside by the lower authorities in the reassessment proceedings and also respectfully following the decision of this Tribunal in assessee's own case in the first round of appellate proceedings 2017 (10) TMI 1567 - ITAT MUMBAI we deem it fit and appropriate in the interest of justice and fair play, to remand this appeal to the file of the ld. AO for fresh adjudication in accordance with law. Grounds of the assessee are allowed for statistical purposes.

Summary

Issues:
- Addition of unexplained cash credit under section 68 of the Income Tax Act for a loan received from a specific company.

Analysis:
1. The appeal before the Appellate Tribunal ITAT Mumbai was regarding the addition of ?25 lakhs as unexplained cash credit under section 68 of the Income Tax Act for a loan received from Olympus Vision Pvt. Ltd. The issue was whether the ld. CIT(A) was justified in confirming this addition.

2. The assessee had filed its return of income for the relevant assessment year declaring a total income of ?80,176. The Assessing Officer (AO) observed that the assessee had received unsecured loans totaling ?10,30,88,998 from various parties, including ?25,00,000 from Olympus Vision Pvt. Ltd. The AO made the addition of ?25 lakhs during the original assessment proceedings under section 143(3) of the Act.

3. In the original assessment, the AO had issued notices under section 133(6) to all three parties from whom the assessee received loans. As no reply was received from Nicco Securities Pvt. Ltd., the AO proceeded to make the addition of ?25 lakhs related to the loan from this party. The matter was challenged before the CIT(A) and subsequently before the Tribunal, which remanded the issue back to the AO for verification and decision in accordance with the law.

4. Subsequently, the AO reopened the assessment proceedings and treated the ?25 lakhs loan from Olympus Vision Pvt. Ltd. as an unexplained cash credit under section 68 of the Act. The assessee had furnished all necessary documents regarding this loan, proving the identity, creditworthiness of the lender, and genuineness of the transaction. The Tribunal found that the lower authorities had disregarded the documentary evidence submitted by the assessee.

5. The Tribunal, considering the facts and evidence presented, decided to remand the appeal back to the AO for fresh adjudication in accordance with the law. The AO was directed to examine all documentary evidence provided by the assessee and allow the assessee to submit additional evidence if needed. The assessee was to be given a reasonable opportunity to be heard, and the grounds of the assessee were allowed for statistical purposes.

6. Ultimately, the appeal of the assessee was allowed for statistical purposes, and the order was pronounced in open court on 13/05/2021.