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2022 (1) TMI 486 - AT - Income TaxAddition u/s 68 - unsecured loans received - sole reason for confirming the addition was low income tax return in the year of issue whereas it was contended that it is not the case for the subsequent years - HELD THAT - For unsecured loans from Kaypee Mercantile Pvt. Ltd. subsequent to the receipt of the reply from the lender, the AO did not conduct any further enquiry. The report of the DDIT(Inv.), Kolkata relied upon by the ld. CIT(A) and the AO was much before 21.12.2017 i.e. with response to the letter issued by the DDIT(Inv.), Noida on 14.10.2015. It is apparent from the facts on record, while as per the report of 2015, the notice u/s 131 could not be served whereas during the assessment proceedings in 2017, the entire details have been submitted by the assessee. The response to the notice issued u/s 133(6) was full and comprehensive. The amounts have been received by the assessee on 27.07.2009 of ₹ 16,00,000/- and ₹ 18,00,000/- on 31.07.2009 as ICD bearing interest of 9%. The same has been repaid on 07.01.2014 along with the interest agreed upon. The date of search in the group was conducted on 26.08.2015. Having examined the receipt of loan independently disregarding the date of search, we find that the assessee discharge the onus, proved the receipt and repayment of the loan received along with the interest and the same is also been brought before the Assessing Officer during the assessment proceedings. Hence, the reasons given by the revenue authorities for treating the loan amount u/s 68 is factually and legally not valid. Hence, we hereby direct the addition made be obliterated. Unsecured loan received from Cindy Goods Supply Pvt. Ltd. - ITAT 2020 (2) TMI 1224 - ITAT DELHI has duly considered the identity of the company and found it to have been incorporated in the year 1995, the amounts have been accepted as genuine during the assessments completed u/s 143(3), the returned income range from ₹ 1.4 crores, ₹ 75 lacs, ₹ 11 lacs for the A.Y. 2012-13, A.Y. 2013-14 and A.Y. 2015-16 respectively proving that the lender company cannot be considered as a accommodation entry provider/paper company. The company has duly responded to notices issued u/s 133(6) to the revenue authorities. Further, the Director of the company namely, Mr. Vipul Kumar has confirmed the investments made in the assessee company during the statement recorded u/s 131 of the IT Act by the AO. Hence, keeping in view, the facts narrated above, we find that the observation of the revenue authorities holding that the identity, genuineness and creditworthiness of the lender company could not be proved is contrary to the facts on record. Hence, the addition made by the revenue authorities is liable to be obliterated. Addition of the 8% non-convertible, preference shares received by the assessee u/s 68 - Co-ordinate Bench of the ITAT 2020 (2) TMI 1224 - ITAT DELHI has considered the identity of the companies and found that Giri Financial Services Pvt. Ltd. to have been incorporated in the year 1995, the amounts have been accepted as genuine during the assessments completed u/s 143(3), the returned income range from ₹ 53.9 lacs, ₹ 9.16 lacs, ₹ 148 lacs for the A.Y. 2013-14, A.Y. 2014-15 and A.Y. 2015-16 respectively in the case of Giri Financial Services Pvt. Ltd. and in the case of Pabla Leasing Finance Pvt. Ltd. ₹ 30.85 lacs for the A.Y. 2013-14, Rs.(-) 52.22 lacs for A.Y. 2014-15 and ₹ 93.18 lacs for A.Y. 2015-16 which undisputedly proves that the investor companies cannot be considered as a accommodation entry provider/paper company. The company has duly responded to notices issued u/s 133(6) to the revenue authorities. Further, Shri Virendra Tripathy, Managing Director of M/s Pabla Leasing Finance Pvt. Ltd., has confirmed the investments made in the assessee company during the statement recorded u/s 131 of the IT Act by the revenue authorities. Mr. Anshul Mittal , Director of the company has submitted all the relevant details before the revenue authorities. Hence, keeping in view, the facts narrated above, we find that the observation of the revenue authorities holding that the identity, genuineness and creditworthiness of the lender company could not be proved is contrary to the facts on record. Hence, the addition made by the revenue authorities is liable to be obliterated.
Issues Involved:
1. Validity of notice under Section 153A of the Income Tax Act. 2. Compliance with provisions of Section 153D. 3. Addition of unsecured loans under Section 68. 4. Charging of interest under Sections 234A, 234B, and 234C. Issue-wise Detailed Analysis: 1. Validity of Notice under Section 153A: The assessee contended that the notice issued under Section 153A was void as jurisdictional conditions were not met. The Tribunal noted that a search and seizure operation under Section 132 was conducted, and notices under Section 153A were issued. The Tribunal referred to various case laws, including the Delhi High Court's decision in Kabul Chawla and the Bombay High Court's decision in Continental Warehousing, which discussed the scope of Section 153A. The Tribunal concluded that the Assessing Officer (AO) has the power to assess/reassess the total income for six years preceding the search, even if no incriminating material was found during the search. Thus, the notice under Section 153A was held valid. 2. Compliance with Provisions of Section 153D: The assessee argued that the AO and the appropriate authority did not comply with Section 153D. The Tribunal did not find merit in this argument, as the AO's power to assess/reassess under Section 153A was upheld, and no specific non-compliance with Section 153D was demonstrated. 3. Addition of Unsecured Loans under Section 68: The AO made additions under Section 68 for unsecured loans received by the assessee, questioning the identity, creditworthiness, and genuineness of the lenders. The Tribunal analyzed the evidence provided by the assessee, including PAN, bank statements, ITRs, and confirmations from lenders. The Tribunal found that the AO did not conduct further inquiries after receiving comprehensive responses from the lenders. The Tribunal also referred to the Co-ordinate Bench's decision in the case of Nimbus India Ltd., which had examined similar issues and found the transactions genuine. Consequently, the Tribunal directed the deletion of additions made under Section 68. 4. Charging of Interest under Sections 234A, 234B, and 234C: The assessee contended that interest under Sections 234A, 234B, and 234C should not have been charged without providing an opportunity to be heard. The Tribunal did not specifically address this issue in detail, as the primary focus was on the validity of the assessment and the additions made. However, the Tribunal's decision to delete the additions under Section 68 indirectly impacted the interest calculations, leading to a consequential relief for the assessee. Conclusion: The Tribunal allowed the appeals of the assessee, holding that the additions made under Section 68 were not justified, as the assessee had provided sufficient evidence to prove the identity, genuineness, and creditworthiness of the lenders. The validity of the notice under Section 153A was upheld, and the compliance with Section 153D was not found to be an issue. The charging of interest under Sections 234A, 234B, and 234C was indirectly addressed through the deletion of the additions. The Tribunal's decision was based on a thorough analysis of the facts, evidence, and relevant case laws.
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