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TMI Blog2022 (6) TMI 661X X X X Extracts X X X X X X X X Extracts X X X X ..... on unsecured loan - Since we have directed the A.O to delete the addition of unsecured loans in the abovePara-6, therefore the interest on the unsecured loan has to be allowed. Accordingly, we direct the A.O to delete the addition and allow the interest claim of the assessee on the unsecured loan creditor. Appeal of assessee allowed. - ITA No. 64 to 67/MUM/2022 - - - Dated:- 30-5-2022 - Shri M. Balaganesh (Accountant Member) And Shri Pavan Kumar Gadale (Judicial Member) For the Assessee : Mr. Himanshu Gandhi. AR For the Revenue : Ms. Samruddhi Hande. DR ORDER PER BENCH : These are the appeals filed by the assessee against the separate orders of Ld. Commissioner of Income Tax National Faceless Appeal Centre (NFAC), Delhi passed order u/s 143(3) and 250 of the Income Tax Act, 1961 (in short the Act ). Since the issues in these appeals are common and identical, hence are clubbed, heard and consolidated order is passed. For the sake of convenience, we shall take up appeal in ITA No. 64/Mum/2022, for A.Y 2011-12 as a lead case and facts narrated. The assessee has raised following grounds of appeal: 1. On the facts and circumstances of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se fully and truly all material facts relevant to the assessment year under consideration. In view of the above facts and circumstances, I have reasons to believe that the assessee has not disclosed fully and truly all material facts necessary for his assessment and R.10,87,534/- which was income chargeable to tax has escaped assessment within the meaning of section 147 of the I.T. Act, 1961. 2.1. Subsequently the A.O. has issued the notice u/s 148 of the Act and in compliance the assessee has filed letter dated 27.09.2017 to treat the return of income originally filed on 31.07.2011 as a due compliance. Further, the reasons recorded for reopening was provided to the assessee and the objections were filed. The Assessing Officer has issued notice u/s 143(2) and 142(1) of the Act along with questionnaire. The assessee has filed the details vide letter dated 27.09.2017 referred at page 3 Para 5 of the assessment order as under: The representative of the assesssee vide their letter dated 27.9.2017 submitted as a. The assessee has taken a loan from M/s Maniprabha Impex Pvt. Ltd. (MIPL) Rs.10,00.000/- on 20.4.2010 via RTGS b. Copy of assessee's bank statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction with the assessee is bogus you are requested to provide the same to the asessee for verification. 7. Before concluding that the loan is bogus inspite of several evidences to show that it is genuine, the assessee should get an opportunity to see the evidence and have cross examination of the parties concerned. 8. We therefore request you to accept the submission of the assessee and finalize the assessment which does not call for addition of the loan amount or interest thereon claimed by the assessee. 2.3 The assessee has submitted the details i.e confirmation of lender, bank account of statement and financial statements etc to substantiate genuineness, identity and creditworthiness of the loan creditor. Further, the assessee has paid interest on loan to the lender and was confirmed by the parties. But the AO was not satisfied with the information and explanations and notice u/sec133(6) of the Act was un served on the loan creditor and observed that the assessee has not satisfied the ingredients required u/s 68 of the Act and made addition of Rs.10,00,000/- as unexplained cash credit and also disallowed interest on unsecured loan claimed of Rs.87,534/- and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been discharged. Section 68requires the assessee to offer explanation as to nature source of credit which is done DV establishing identity, genuineness and creditworthiness of the creditor. 6. The LAO has not established any CASH TRAIL before drawing conclusion that the Loan is bogus. When transaction is through RTGS and copy of passbook is presented, no adverse conclusion can bedrawn without establishing any cash trail. 7. It is further submitted that the Assessing Officer disregarded all the evidences and proofs furnished by the assessee and no further enquiries have been made to disprove the evidences furnished by assessee. Mere general report of investigation wing on third party without making any further specific inquiry cannot be the base for terming explanation of any transaction as not satisfactory . 8. RETRACTED STATMENTS The alleged so called suspicious concern director Mr. Dharmichand Jain has retracted the statements recorded by DIT (Inv.) after the conclusion of search action at their premises and filed with it along with 2Affidavits with Income Tax Office on 23.01.2015 (copy attached herewith as Annexure 5). In the retracted statements filed w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned or bogus as alleged. 12. The assessee would also like to place reliance on following Judicial pronouncements which supports contention that once loan confirmations, ITR copies both parties passbook entries are submitted, they are sufficient proof to prove genuineness of transaction. 1) ACIT v. Shri Joitkumar B. jain, Mumbai ITAT / ITA No.5638/Mum/2017 dated 05.04.2019 - In view of the evidences furnished by the assessee, we are of the view that the assessee has discharged his onus of proving the identity, genuineness and creditworthiness of the creditors and fulfilled the requirement of ingredients of section 68 of the Act. Thus, the addition made us. 68 of the Act without any enquiry is liable to be deleted i. Relief sought In view of above facts and submissions and legal provisions supported by stated judicial decisions, we humbly request your Honor to grant following Relief: 1. Delete the additions made on account of unsecured Loan of Rs.10.00.000/-. 2. Delete the disallowance of interest of Rs.87534/- 3. Any other relief as your Honor may deem fit. 3.1. Finally, The Ld. CIT(A) was not satisfied with the material information and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntity, credit worthiness and the genuineness of the transactions. We are of the opinion that the assessee has discharged the burden of proof in filling the documents before the A.O and the CIT(A). But the A.O has taken the different view and over looked the explanations of the assessee. The Ld.AR has relied on the judicial decisions as under: 1. CIT Vs. Lovely Exports P Ltd, 216 ITR 196 (SC) 2. CIT Vs. Divine Leasing and Finance Ltd, 158 Taxman 440 (Del) 3. Hindustan Inks Resin Ltd Vs. DCIT, 60 DTR/8 (Guj) 4. DCIT Vs. GP International Ltd 325 ITR 25 (P H) 5. PCIT Vs. Adamine Construction Pvt ltd (2018) 99 taxmann.com 44 (Del) 6. PCIT Vs. Hitech Residency P Ltd, (2018), 96 T axmann.com 402/257 Taxmann 390 (Del). 6. Accordingly, we set-aside the order of the CIT(A) and direct the Assessing officer to delete the addition of unsecured loan and allow this ground of appeal in favour of the assessee. 7. On the second disputed issue, the A.O has disallowed the interest on unsecured loan. Since we have directed the A.O to delete the addition of unsecured loans in the abovePara-6, therefore the interest on the unsecured loan has to be allowed. Accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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