2023 (11) TMI 847 - AT - Income Tax

Unsecured loan received - addition made on doubting the lenders, creditworthiness and genuineness of the transaction and the identity of the lenders - HELD THAT - The assessee had received the amount from the lenders through the banking channels and the assessee has also produced audited financial statement of M/s Blush Equity P. Ltd. and audited financial statement of and M/s Glaxo Buildcon Pvt. Ltd. which shows that the lenders were having sufficient funds for advancing the loan to the assessee. Apart from the same, both the lenders have issued confirmation of the loan given to the assessee and also provided PAN ITR details. As assessee had repaid the above said loans (bank statements in support of repayment of the loan produced ), we find no reason for the authorities to doubt the lenders, creditworthiness and genuineness of the transaction and the identity of the lenders. Therefore, the above addition made by the A.O. which was confirmed by the CIT(A) is hereby deleted. Decided in fvour of assessee. Unexplained Sundry creditors - Assessee argued violation of principles of natural justice without considering the submission of the assessee - HELD THAT - It is the specific case of the assessee is that the A.O. and the CIT (A) have recorded incorrect facts and violated the principles of natural justice without considering the submissions of the assessee and also not considered the documents produced by the assessee in support of the contentions of the assessee, we remand the issue involved to the file of the A.O. with a direction to consider all the documents and the submissions made by the assessee and decide the issue afresh. Bogus salary paid to employees - HELD THAT - Assessee has provided the Adhar cards of the employees for the purpose of proving the identity and also details of the salary paid to the employees showing the names, post, amount on the signature of the receipt of the salary together with the confirmation and considering the quantum of the amount involved, we delete the disallowance made by the A.O. being the amount of salary which has confirmed by the CIT(A), accordingly we allow Ground of the assessee. Disallowance being 1/10 th of the various expense - HELD THAT - Since, the assessee had not provided any details or any satisfactory evidence with regard to the genuineness of the expenses and considering the nature of the expenses claimed and also the nature of business of the Assessee, in our opinion, the CIT(A) rightly restricted the disallowance to 1/10 th of the expenses claimed under the said head which is reasonable as well. Accordingly, we dismiss the Ground of the assessee.

Summary

Issues involved:
The judgment involves issues related to the confirmation of additions made by the Assessing Officer (AO) and upheld by the Commissioner of Income Tax (Appeals) (CIT(A)) regarding unsecured loans, sundry creditors, salary payable, and various expenses for the Assessment Year 2013-14.

Unsecured Loans Issue:
The appeal challenged the addition of Rs. 25,00,000 on account of unsecured loans received from two entities, which was confirmed by the CIT(A). The Appellant provided evidence of repayment and creditworthiness of the lenders, leading to the deletion of the addition by the Tribunal.

Sundry Creditors Issue:
The appeal contested the addition of Rs. 26,13,060 as unexplained sundry creditors, upheld by the CIT(A). The Tribunal remanded the issue back to the AO for reconsideration, emphasizing the need to review all documents and submissions provided by the assessee.

Salary Payable Issue:
The appeal challenged the disallowance of Rs. 58,000 claimed as salary payable, confirmed by the CIT(A). The Tribunal overturned the disallowance based on the evidence provided by the assessee, including Aadhar cards and salary details.

Various Expenses Issue:
The appeal disputed the disallowance of Rs. 1,56,325 (1/10th of total expenses) upheld by the CIT(A). The Tribunal upheld the CIT(A)'s decision, stating that the assessee failed to provide sufficient evidence regarding the genuineness of the expenses, leading to the dismissal of this ground of appeal.

In conclusion, the Tribunal partially allowed the appeal for statistical purposes, highlighting the importance of providing detailed evidence and documentation to support claims during tax assessments.