2022 (12) TMI 745 - AT - Income Tax

Addition u/s 68 r.w.s 115BBE - unsecured loans - admission of additional evidences - HELD THAT - As carefully consider the report of the AO where initially the AO objected for the admission of additional evidences and subject to his reservations on the admission of additional evidences commented on the submissions of the assessee. In the light of the above report of the AO it cannot be said that the documents / details furnished by the assessee was not verified. Considering the factual report of the AO we do not find any reason to interfere with the findings of the CIT(A). The appeal filed by the revenue is accordingly dismissed.

Summary

Issues:
1. Deletion of addition on account of unsecured loans under section 68 r.w.s 115BBE.
2. Deletion of addition on account of disallowed interest under section 24 and unexplained expenditure under section 69C.
3. Allowance of additional evidences by CIT(A) and ignoring non-production during assessment proceedings.
4. Deletion of additions based on different facts from other cases.

Analysis:
1. The appeal pertains to the deletion of an addition by the Assessing Officer (AO) on account of unsecured loans under section 68 r.w.s 115BBE of the Income Tax Act, 1961. The AO raised concerns about the genuineness of the loan and interest payment made by the assessee, as the income shown by the lender did not match the interest paid by the assessee. No bank statements or repayment terms were provided by the assessee. The AO made the addition, which was later deleted by the CIT(A) based on the genuineness of the transactions and creditworthiness of the lender, Dayal Trust.

2. Another issue involved the deletion of an addition made by the AO on account of interest claimed under section 24 and disallowed as unexplained expenditure under section 69C. The assessee provided details of the loan payments, builder statements, bank statements, and confirmation of interest on the loan. The CIT(A) after receiving a remand report from the AO, found the transactions genuine and directed the AO to delete the additions. The revenue challenged this decision, but the Tribunal upheld the CIT(A)'s findings based on the verified documents and details submitted by the assessee.

3. The third issue raised was the allowance of additional evidences by the CIT(A) despite non-production during the assessment proceedings. The AO initially objected to the admission of additional evidences but later provided a report detailing the submission of returns, interest income, assessment orders, builder statements, and bank statements. The Tribunal found that the documents were verified by the AO, and there was no reason to interfere with the CIT(A)'s decision to allow the additional evidences.

4. Lastly, the AO had made additions based on different facts from other cases, which the CIT(A) considered and deleted after verifying the documents and details provided by the assessee. The Tribunal dismissed the revenue's appeal, upholding the CIT(A)'s decision based on the factual report of the AO and the genuineness of the transactions.