2021 (12) TMI 510 - AT - Income Tax

Addition u/s 68 - unexplained cash credit - Unsecured loan - CIT- A deleted the addition - AO as per ground 1(b), has stated that even the carry forward of unsecured loans are required to be added under section 68 - HELD THAT - On plain reading of provisions of section 68 of the Act, we do not agree with the above contention - departmental representative stated that the learned Commissioner of Income tax (Appeals) should have given a direction for making an addition of the above sum in the year in which such sum was received. We fail to appreciate this argument because of the reason that the learned Assessing Officer raises no such ground of appeal. Even otherwise, what order the learned Commissioner of Income tax (Appeals) should have passed, could not be the matter of argument before us unless the same is raised in the grounds of appeal. We are also not empowered to suggest to the parties about what grounds should have been raised by them. Commissioner of Income tax (Appeals) has reached to the above conclusion after obtaining the remand report of the AO. DR could not show us the argument of LD AO before LD CIT (A) to give him direction to make addition in the year in which it is received. In view of this, we find no infirmity in the order of the learned Commissioner of Income tax (Appeals). Accordingly, ground 1 raised by the learned Assessing Officer is dismissed.

Summary

Issues Involved:
Appeal against deletion of addition under section 68 of the Income Tax Act for unexplained cash credit.

Analysis:

Issue 1: Addition under section 68 of the Income Tax Act
- The Assessing Officer (AO) filed an appeal against the Commissioner of Income-tax (Appeals) order deleting the addition of ?4,42,46,972 under section 68 of the Income Tax Act for unexplained cash credit for the assessment year 2010-11.
- The AO contended that the assessee failed to prove the identity, genuineness, and creditworthiness of the creditors, and argued that unsecured loans received in earlier years should also be considered for addition under section 68.
- The AO made additions totaling ?8,03,63,470, including amounts received from various parties and cash deposits in the bank account. The CIT (A) confirmed some additions but deleted ?4,16,46,970 as it was not credited in the current year.
- The CIT (A) based the deletion on the requirement that the sum must be found credited in the books of the assessee during the previous year for addition under section 68.
- The ITAT upheld the CIT (A) decision, emphasizing that only sums found credited in the previous year can be added under section 68. The AO's argument about carry forward unsecured loans was dismissed as not supported by the law.
- The ITAT found no grounds to challenge the CIT (A) decision and dismissed the appeal filed by the AO for the assessment year 2010-11.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive understanding of the arguments presented, decisions made by the authorities, and the final ruling by the ITAT.