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2022 (8) TMI 626 - AT - Income TaxReopening of assessment u/s 147 - Unexplained cash credit u/s 68 - M/s Abhinav Cooperative Group Housing Society is non-existent entity - HELD THAT - Assessee has produced several documents to substantiate contention that M/s Abhinav Cooperative Group Housing Society was in existent, ie The letter dated 26/12/2017 from M/s Abhinav Cooperative Group Housing Society written to A.O confirming the transaction of cash receipts, copy of the Assessee s letter dated 14/11/2018 along with audit report and financial of M/s Abhinav Cooperative Group Housing Society Ltd. since from 2008 onwards and also produced copy of ITR computation, balance sheet and tax audit report for Financial Year 2009-10. The above documents produced by the assessee along with paper book has neither disputed nor question by the Ld. DR. The above documents clearly negate the contention of the Department that the M/s Abhinav Cooperative Group Housing Society is nonexistent entity. Therefore, in our opinion, the Ld. A.O and the Ld.CIT(A) have committed error in finding the fact and making addition on the ground that M/s Abhinav Cooperative Group Housing Society is nonexistent entity. Therefore, in our considered opinion, the grounds of Appeal filed by the assessee are deserves to be allowed.
Issues:
- Appeal by the assessee against addition of unexplained cash credit - Appeal by the Revenue against deletion of addition by CIT(A) - Existence of M/s Abhinav Cooperative Group Housing Society Analysis: 1. Appeal by the Assessee: - The assessee contested the addition of Rs. 2,49,76,706 as unexplained cash credit under section 68, despite the matter being pending in ITAT on the same issue. The CIT(A) confirmed the addition, leading to the appeal. The Tribunal found that the Department claimed M/s Abhinav Cooperative Group Housing Society to be non-existent based on an enquiry. However, the assessee provided documents proving the existence of the society, including letters, audit reports, and financial statements. The Tribunal concluded that the addition was unjustified, as the society was proven to be existent, and allowed the assessee's appeal. 2. Appeal by the Revenue: - The Revenue appealed the deletion of the addition by CIT(A) based on the claim that M/s Abhinav Cooperative Group Housing Society was non-existent. The Tribunal noted that the existence of the society was thoroughly examined in the assessee's appeal, where it was established that sufficient evidence supported its existence. The Revenue failed to produce any evidence to counter this finding. Consequently, the Tribunal dismissed the Revenue's appeal, upholding the deletion of the addition. 3. Existence of M/s Abhinav Cooperative Group Housing Society: - The core issue revolved around the existence of M/s Abhinav Cooperative Group Housing Society. The Department contended that the society was non-existent, justifying the addition of the cash credit. However, the Tribunal found the documents provided by the assessee, including letters and financial records, to be credible evidence of the society's existence. As the Department failed to refute this evidence, the Tribunal concluded that the society was indeed existent, leading to the allowance of the assessee's appeal and the dismissal of the Revenue's appeal. In conclusion, the Tribunal ruled in favor of the assessee, allowing their appeal against the addition of unexplained cash credit. The Tribunal also dismissed the Revenue's appeal, upholding the deletion of the addition by CIT(A) based on the proven existence of M/s Abhinav Cooperative Group Housing Society. The judgment highlighted the importance of substantiating claims with concrete evidence and the need for thorough examination of factual assertions in tax assessments.
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