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TMI Blog2023 (7) TMI 928X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Hence the genuineness of the transactions is also proved beyond doubt. All the three necessary ingredients of section 68 of the Act has been proved in respect of this loan transaction. Decided in favour of assessee. - Shri Chandra Mohan Garg, Judicial Member And Shri M. Balaganesh, Accountant Member For the Assessee : Mr. R.S. Samria, CA For the Department : Ms. Maimum Alam, Sr. DR ORDER PER M. BALAGANESH AM: This appeal in ITA No.4329/Del/ 2016 of the assessee arises out of the order of the Learned Commissioner of Income Tax (Appeals)-2, New Delhi, [hereinafter referred to as Ld. CIT(A) ] in Appeal No.312/2014-15 of CIT(A)-2 dated 31/03/2016 against the order passed by Ld. Dy. Commissioner of Income Tax, Circle-3(1), New Delhi (hereinafter referred to as the Ld. AO ) u/s 143(3) of the Income Tax Act (hereinafter referred to as the Act ) on 13/12/2010 for the Assessment Year 2008-09 as well as the Revenue has also filed Cross Appeal in ITA No.4911/Del/2016 for AY 2008-09. 2. The following grounds raised by the assessee as well as Revenue. ITA No.4911/Del/2016 1. learned AO has erred in treating the unsecured loans appearing in the bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal income of the lender was Rs. 3,05,25,201/- and not Rs. 12.23 lacs as is evident from page no. 89 of the submission dated 03.12.2013. The A.O has also failed to recognize as how can a company whose profit is Rs. 12.23 lacs is paying a tax of Rs. 33.55 lacs as is clearly evident from the copy of ITR submitted. 4. The appellant craves leave to add, alter, amend, and/or modify any of the aforesaid grounds before or at the time of hearing. ITA No.4329/Del/2016 The DCIT, Circle -5(1), New Delhi is hereby filing appeal in the above mentioned case before the ITAT, New Delhi on the following grounds of appeal. 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition amounting to Rs. 1.68.25.236/- as unexplained cash credit u/s 68 of the LT. Act, 1961, without appreciating the fact that Ld. CIT(A) himself upheld part addition us 68 of the LT. Act, 1961 to the tune of Rs. 1,81,90,701/- with the same kind of facts, which proves that the AO had rightly made addition u/s 68 of the LT. Act, 1961. 2. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee as additional evidences and stated as under: Loan from M/s Godavari Pvt. Ltd.: - (a) The assessee has filed confirmation letter dated 23/06/2008. On perusal of the same, it is noted that the same has been confirmed by the assessee company. The Ld. AO noted that assessee had filed ITR and Annual Report of this lender company but had not filed bank statement of the lender company and that on perusal of the Annual Report of lender company, it was noted that a sum of Rs. 2131.22 lacs has been reflected as interest free advances given to certain parties on commercial expediency, for which no break up has been provided. Accordingly, the Ld. AO concluded that documents filed by the assessee are not enough to prove the genuineness of the unsecured loan taken by the assessee. Loan from M/s Shearson Investment Trading Pvt. Ltd .:- The AO acknowledged that the said company is related to a group concern of the assessee and confirmation letter on 01/04/2008 is filed together with ITR and financial statements. However, he stated that the assessee had not submitted the bank statement. Later, the Ld.AO concluded that since the said lender company is a group company of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 950727 31.05.2007 25.00.000/- 2. 950730 04.06.2007 25,00,000/- 3. 154531 19.09.2007 15,00,000/- 4. RTGS 19.03.2008 30,00,000/- 7. Similarly the assessee has received various inter corporate deposits from M/s Godavari Pvt. Ltd. as under:- Sr. No. Ch. No. Date Amount Reed in Bank 1. 770588 19.04.2007 20,00,000/- Punjab National Bank 2. 625915 09.05.2007 25,00,000/- ICICI Bank 3. 625916 15.06.2007 25,00,000/- ICICI Bank 4. 625936 18.05.2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shearson Investment Trading Co. Pvt. Ltd. Aggrieved, the Revenue is in appeal before us. 11. At the outset, it is not in dispute that the assessee company is a sick industrial company and registered with erstwhile BIFR under sick industrial company (Special Provisions) Act, 1985 for rehabilitation since its net worth turned negative and fully eroded in year 1991. It is not in dispute that M/s Godavari Pvt. Ltd. and M/s Shearson Investment Trading Pvt. Ltd. are group concerns of the assessee company. Since, the assessee company is a sick industrial company and under the clutches of BIFR, the group companies had come forward to assist the assessee company by advancing interest free unsecured loans year on year from time to time. Whatever details that were available with the assessee company, the same were furnished by the assessee given the problems of shifting of accounts finance department from UP to Mumbai. 12. In respect of Loan from M/s Shearson Investment Trading Pvt. Ltd., we find that the assessee had furnished the following documents in respect of that parties:- (a) Ledger account of the assessee company as appearing in the books of the lender company. (b) C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company. These facts are duly confirmed by the lender company in its confirmation placed on record. Hence, identity of the lender, creditworthiness of the lender, and genuineness of the transactions are proved beyond doubt and hence no addition could be made for the same u/s 68 of the Act. 14. In respect of loan from Godavari Pvt. Ltd., it is not in dispute that the said lender company is a group company of the assessee. During the course of earlier hearings, this Tribunal had sought for the purpose of advancing interest free loans to the assessee together with Board Resolution passed by the Board of Directors of the lender company. These details were duly furnished by the assessee company. An affidavit duly notarized was also duly submitted before the Tribunal confirming the entire facts. The said facts states since assessee company is a sick company, it had to seek financial assistance from its group company M/s Godavari Pvt. Ltd. The assessee enclosed a requisition placed by it on Godavari Pvt. Ltd. to continue to extend financial assistance up to maximum extent of Rs. 10 Crores. The assessee also furnished the board minutes dated 04/04/2001 of the lender company agreeing t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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