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TMI Blog2022 (3) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... ort was forwarded to the AO for remand report and had duly been considered by the AO while conducting remand proceedings. Hence, the said contention also is untenable. Resultantly, ground Nos. 1 and 2 raised in the appeal by the revenue department stands dismissed. Addition on account of loan repayment u/s. 69 - HELD THAT:- We find that the ld. Commissioner while considering the issue in hand, thoroughly considered the factual position to the effect that actually the loans was received in the AYs 2009-10 and 2010-11, however, the same were repaid in the assessment year under appeal - There is no justification to invoke the provisions of section 69 of the act of repayment of loans taken earlier and the loans were duly recorded in the books of account and repayment was made through banking channel and also duly recorded in the books of account therefore, AO had wrongly applied the provisions of section 69 of the Act to the case of the Assessee. Addition of unsecured loan u/s. 68 - Assessee could not prove creditworthiness of the lenders during the assessment proceedings - HELD THAT:- If the ITR was not filed by the persons who had advanced money to the Assessee then the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... till existing and the Assessee had paid them by cheques. Such explanation of the Assessee was not found convincing by the AO who ultimately made the addition of ₹ 1,03,94,934/- as per provision of section 69C of the Act to the extent of ₹ 49,71,668/- on account of Radhey Shyam Cement Agency and of ₹ 54,23,266/- on account of Kataria Cement Agency. 2.3. The AO during the assessment proceedings also observed that the Assessee trust had repaid loans amounting to ₹ 4.79 crores to Nishyan Farms (P) Ltd. and ₹ 25 lakhs to Nishyam Developers (P) Ltd., which were taken during the previous year relevant to Assessment Year 2009-10 and 2010-11 respectively. In reply the Assessee could not file plausible explanation and the AO made the addition of ₹ 4.79 crores and ₹ 25 lakhs as unexplained expenditure u/s. 69 of the Act. 2.4. Further, it was also gathered by the AO that On verification/investigation by the Investigation Wing it was unearthed that the trust had received loan of ₹ 2.94 cores from Nishyam Farms (P) Ltd. which remained unpaid and therefore, the AO added the same to the income of the trust u/s. 68 of the Act. 2.5. On the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ld. CIT(A) be cancelled and the order of the AO be restored. 5. Heard the parties and perused the material available on record. Ground Nos. 1 and 2 of the appeal relates to same issue with regard to the deletion of addition of ₹ 1,03,94,934/- on account of unexplained expenditure u/s. 69C of the Act. 5.1. It was claimed by the revenue/department that ld. Commissioner ignored the report of ACIT, Circle Jhunjhunu regarding non-existence of parties i.e. Radhey Shyam Building Material and Kataria Cement Agency from whom the Assessee has claimed to have purchased construction material. Further, the valuation report on the basis on which unexplained expenditure of ₹ 1,03,94,934/- has been deleted, was not substantiated by the Assessee during the assessment proceedings. As per the case of the AO, a commission was issued to ACIT, Circle Jhunjhunu to conduct local inquiries with the suppliers from whom the Assessee trust claimed to have made purchases. The ACIT, Circle, Jhunjhunu vide report dated 05.02.2014 reported that no such suppliers namely Radhey Shyam Building material at CEERI Road and Kataria Cement Agency at Chirawa Road exist. Against which vide notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income.] Here assessee had spent the expenditure on building constriction and source of the expenditure was proved from books of accounts. Expenditures were duly recorded in the books of accounts. There is no dispute about it. Only dispute is that suppliers could not be traced, the Assessee explained the possibility of non-tractability of suppliers. Assessee filed valuation report, map and copy of cash memos. Transactions were duly recorded in the books of assessee. Source of expenditure is out of funds available and duly verifiable from the books of assessee. Assessing officer has wrongly made the addition of ₹ 1,03,94,934/- by invoking the provision of section 69C of the IT ACT. Merely because the party was not traceable could not in itself be a reason sufficient enough to draw adverse inference when the transaction was visible in the books. The matter needed further, inquiry on part of the A.O when the counsel had given all the details in this regard particularly when the amounts are already applied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said valuation report was not available, therefore, the Assessee filed the same along with application u/s. 46A of the IT Rules. Even otherwise said valuation report was forwarded to the AO for remand report and had duly been considered by the AO while conducting remand proceedings. Hence, the said contention also is untenable. Resultantly, ground Nos. 1 and 2 raised in the appeal by the revenue department stands dismissed. 5.8. Now coming to the ground No. 3. The revenue department has raised the issue that the ld. Commissioner has erred in law and facts in deleting the addition of ₹ 5,04,00,000/- on account of loan repayment u/s. 69 of the Act while ignoring the fact that the loans of ₹ 2,94,00,000/- and 2,99,50,000/- received from Nishyam Farms(P) Ltd. pertains to the Assessment Years 2009-10 and 2010-11 respectively. 5.8.1. We find that the ld. Commissioner while considering the issue in hand, thoroughly considered the factual position to the effect that actually the loans was received in the AYs 2009-10 and 2010-11, however, the same were repaid in the assessment year under appeal. The then ld. CIT(A) in Appeal No. 248/2011-12 and 2012-13 has already delete ..... X X X X Extracts X X X X X X X X Extracts X X X X
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