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2023 (5) TMI 36 - AT - Income TaxAddition u/s 68 - unsecured loan taken - assessee is one of the beneficiary of such accommodation entry from the list of beneficiary form various entity managed by Anand Kumar - HELD THAT - When assessee provided identity by giving complete addresses, GIR numbers/PAN as well as confirmation alongwith copies of assessment order wherever available and discharged his onus, no addition to be sustained. Loan was received and was repaid through banking channel and there is no allegation that any cash was deposited before issuing cheque to the assessee, in the account of lender. Lender has sufficiently owned money in the form of reserve and surplus of Rs. 11.94 crores. We direct the Assessing Officer to delete the addition of unsecured loan of Rs. 9.50 lacs. Addition of alleged commission paid made u/s 69C is also deleted. Appeal of assessee allowed.
Issues involved:
The issues involved in the judgment include dismissal of order without considering facts of the case, validity of reopening assessment, addition of unsecured loan under Section 68, addition of commission paid, and burden of proof on the assessee. Dismissal of Order without Considering Facts: The appeal by the assessee was directed against the order of the ld. CIT(A) for the Assessment Year 2011-12. The assessee raised grounds challenging the dismissal of the order without considering the facts of the case, which was deemed to defy natural justice. However, during the hearing, the assessee chose not to press these grounds, leading to their dismissal. Validity of Reopening Assessment: The case of the assessee was reopened based on information obtained during a search operation on an entry provider in Kolkata. The Assessing Officer proceeded with the assessment after issuing a notice under Section 148 of the Income Tax Act, 1961. The assessee was required to prove the identity, creditworthiness, and genuineness of the transaction, but the Assessing Officer made additions under Section 68 and Section 69C without accepting the assessee's submissions. Addition of Unsecured Loan under Section 68: The Assessing Officer added Rs. 9.50 lacs as unexplained income under Section 68 of the Act, alleging that the assessee failed to prove the legitimacy of the loan. The ld. CIT(A) upheld this addition, stating that the assessee did not discharge the burden of proof and introduced a bogus claim to evade taxes. However, the Tribunal later directed the Assessing Officer to delete this addition after considering the evidence provided by the assessee. Addition of Commission Paid: Additionally, the Assessing Officer made an addition of Rs. 19,000 as unexplained expenditure on account of commission paid. The ld. CIT(A) confirmed this addition, but upon further review, the Tribunal also directed the deletion of this amount, as the primary addition of the unsecured loan was found to be invalid. Burden of Proof on the Assessee: The Tribunal emphasized that the assessee had fulfilled their initial burden of proof by providing detailed information regarding the loan transaction. It was noted that the loan was repaid through banking channels and that the department had accepted the repayment in a subsequent year. The Tribunal highlighted that no independent investigation was conducted by the Assessing Officer, and the burden shifted to the revenue to provide further evidence, which was not done. In conclusion, the Tribunal allowed the appeal of the assessee, directing the deletion of the additions made by the Assessing Officer and confirmed by the ld. CIT(A) regarding the unsecured loan and alleged commission paid.
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