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TMI Blog2012 (12) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of returns filed by the creditor Companies had also been filed, but they were of no avail to the assessee, as they did not make transparent the creditworthiness of the creditor Companies and only showed the income earned by them. The AO observed that in the absence of confirmations from the parties and the bank statement of the assessee, the unsecured loans of Rs. 75,25,000/- remained unexplained. It was, as such, that the AO added this amount to the income of the assessee Company u/s 68 of the I.T. Act, as unexplained credit. 4. The ld. CIT(A), by virtue of the impugned order, deleted the addition made by the AO. 5. Challenging the said action of the ld. CIT(A) before us, the ld. DR has argued that the ld. CIT(A) has erred in deleting the addition correctly made by the AO; that while doing so, the ld. CIT(A) failed to consider the fact that the assessee Company had failed to adduce any evidence in support of its claim of having raised two unsecured loans totaling to Rs. 75,25,000/-; that no such evidence had been produced by the assessee Company in the assessment proceedings, in spite of the fact that in the questionnaire dated 28.07.2008 issued by the AO to the assessee, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above mentioned two parties. But the assessee has neither furnished the bank statement nor the confirmations from the above mentioned two parties. The assessee company has simply confirmed the transaction on its letter head. Copy of e-returns filed by the above companies have also been filed but the same are of no help as it does not make transparent the creditworthiness of these companies. It only shows the income earned by the said companies. In absence of confirmations from the parties who have advanced loans and the bank statement from the assessee, the unsecured loans raised during the year of Rs. 75,25,000/- remain unexplained and added to the income of the assessee company u/s 68 of the Income Tax Act, 1961 being unexplained credit." 8. It is, thus, apparent that the addition was made for the absence of confirmations from the creditor parties of the assessee. 9. Before the ld. Commissioner (Appeals), in the written submissions filed by the assessee, it was, inter-alia, contended as follows: - "Further, without prejudice to what has been submitted herein-in-above, it is stated that as revealed from the impugned assessment order (last page of the order), the AO has obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h such compliance u/s 133(6) of the Act. As such, the AO did not submit any remand report to the CIT(A) despite reminders. The ld. CIT(A) deleted the addition on the basis of the confirmations and other supporting documents, explanations and copies of account, observing as follows: - "From the perusal of documentary evidence and submissions filed during appellate proceedings, it is more than clear that proper confirmation letters along with supporting documents, explanations and also copies of accounts have been furnished in respect of the two impugned loans. Not only the two parties have confirmed to have given these loans but also have submitted their PAN and also the exact nature of these loan transactions. In absence of any remand report, it is considered that nothing adverse has been noted by the Assessing Officer. In view of proper confirmation and detailed convincing narration and explanation regarding the transactions, I consider the impugned loans to be genuine and explained. The addition of Rs. 7,25,000/- is, therefore, deleted." 11. Though the Department has contended that the ld. CIT(A) has violated the provisions of Rule 46A of the I.T. Rules in admitting and takin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on money" Later on, during the course of assessment proceedings, the AO asked for certain information and explanation in respect of 'Loans and advances' which were duly submitted before him vide letter dated 04.11.2008 (refer to pages 16-34 of the paper book) It was submitted by the assessee company vide letter dated 04.11.2008, supra, before the AO that it had obtained 'loans and advances' from time to time from M/s Ashoka Mercantile Ltd. and M/s Sunrise Soya Products Ltd. for the business purpose. It, further, submitted before the AO the copies of accounts of the two parties in its books of accounts and also acknowledgement receipts of E-Returns of the said two parties i.e. M/s Ashoka Mercantile Ltd. and M/s Sunrise Soya Products Ltd. which provided PAN of the respective parties. The assessee company also filed copy of its bank account with State Bank of Bikaner and Jaipur, New Delhi where the receipts of the amount from the parties concerned are duly reflected. From the copy of the account of M/s Ashoka Mercantile Ltd. (refer to page 17 of the paper book) it would be evident that during previous year relevant to assessment year in reference the outstanding loan was only Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counts for the year ended 31.03.2006 f) Confirmation of amount paid and receipt to Daisy g) Copy of Bank Statements h) Details of amount received from Daisy against loan paid i) Details of Interest received on ICD as on 31.03.2006 SUNRISE SOYA PRODUCTS LTD. a) Copy of Letter to DCIT, Ghaziabad b) Copy of PAN CARD of Sunrise Soya Products Ltd. c) Copy of Acknowledgement Receipt of E-Return d) Copy of Annual Accounts for the year ended 31.03.2006 e) Confirmation of amount paid and receipt to Daisy f) Copy Bank Statements g) Copy of Assessment Order of A.Y. 2006-07 h) Copy of Ledger of Daisy Investment i) Details of ICD as on 31.03.2006 Copies of all the above documents have also been filed before us and are placed at pages 128 to 185 of the assessee's Paper Book. In the Index to the Paper Book, in accordance with Rule 18(3) of the ITAT Rules, 1963, it has been certified that all the aforesaid documents were: "Filed with AO by the creditors and copy to Assessee". This has nowhere been disputed by the Department. It, therefore, stands established that in the remand proceedings, the AO, exercising power under section 133(6) of the Act, required the assessee's creditors d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... long with interest thereon." 17. In both the confirmations, the names and addresses of the directors of the Companies stand also given. 18. The fact is that it was the creditor Companies who forwarded to the assessee, copies of all the above documents filed by them before the AO in the remand proceedings in compliance of the requirement of the provisions of section 133(6) of the Act, as stated by the assessee in the index to the Paper Book filed before us, as noted herein above. 19. It appears that, obviously, the AO was fully satisfied with the compliance made by the creditor Companies u/s 133(6) of the Act and it was hence, that no remand report was furnished, despite reminders by the CIT(A). After the compliance by the creditors, the AO was not left with anything further to say in the matter. 20. As such, there is no force in the contention on behalf of the Department that the ld. CIT(A) erred in admitting additional evidence in violation of the provisions of Rule 46A of the Rules. It is worthy of note that whereas the confirmations filed by both the creditor Companies in compliance u/s 133(6) of the Act in the remand proceedings are dated 25.06.2010 and were also received b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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