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TMI Blog2023 (8) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with interest payable thereon during the relevant financial period securing by the loan account and at the end of the year there was no credit or unsecured loan was issued in the books of account of the assessee. After submission of documentary evidence and details of 9 loan creditors there is deliberation on the documentary evidences submitted by the assessee by the CIT(A) and thus, the Tax Authorities below did not discharge onus shifted on him by disapproving unsecured loan creditors. Therefore, the addition made by the AO and sustained by the ld CIT(A) is not justified and sustainable. Addition u/s 68 - amount received as advance against property - HELD THAT:- As cause of cancellation agreement to sale of property and other compensation etc to be given by one party to other is concerned. Firstly, these facts are not clear from the material available on record and secondly, these fact have no bearing on the glaring factual position that the assessee received advance and repaid back to the said entity due to cancellation of agreement. In such a situation, no addition can be made and sustained in the hands of the assessee by invoking deeming provision of section 68 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law and on facts in confirming the disallowance of Rs. 31,55,000/- u/s 68 for the amounts received as loans from Mrs. Vinita Surana Rs. 4,00,000/-, Mrs. Dhani Devi Surana Rs. 6,00,000/-, Mr. Radhey Shyam Khemka Rs. 1,60,000/-, Shree Lal Vijay Kumar Bagla HUF Rs. 2,75,000- M/s Bagla Co. Rs. 1,90,000/-, Mr. Rajesh Kumar Khemka Rs. 1,00,000/-, M/s Bagla Store Rs. 7,00,000/-, Mr. Harish Surana Rs. 2,40,000/- and Ms. Monika Surana Rs. 4,90,000/-ignoring the evidences placed on record to discharge the onus on the appellant. Hence the said addition must be deleted. He further submitted that the ld CIT(A) has also erred in law and on facts that in directing the assessing officer to disallow interest on above mentioned loans without issuing the statutory show cause of enhancement of income to the appellant. Thus the said directions given must be reversed. 4. The ld AR submitted that the loans received by the assessee through cheques on 19.06.2006 and 20.06.2006 were repaid through cheques on 19.09.2006 along with interest after deducting TDS @10.2 % therefore, no addition has called for in this regard on accounts of loans from 9 entities. The ld AR further drawing our attention towards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate order we note that the ld CIT(A) in para 5.5 recorded his findings and all pages 8 and 9 noted that considering the peculiar facts and circumstances of the present case the appellant company did not disclose even the primary fact of obtaining loans from the third parties. The document placed before the AO do not inspire confidence with reference to the creditworthiness of the 9 creditors. The ld CIT(A) deleted the addition pertaining to 2 creditors amounting to Rs. 6 lakhs confirming the reaming part of addition pertaining to 9 creditors of Rs. 31,55,000/- and also directed the AO to disallow the interest paid on the loan and credits claimed in the name of three creditors/ persons. 7. The ld AR placed vehemently reliance on the judgment of Hon ble High Court of Bombay in the case of PCIT Vs. Skylark Build reported as 2018-TIOL-2323-HC-MUM-IT and submitted when the sums and credits borrowed by the assessee has been repaid along with interest after deducting TDS during the same financial period then the invocation of section 68 of the Act is not valid and addition made there under cannot be held to be sustainable. In the present case, undisputedly the assessee obtained u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount received from M/s Rishi Promoters (P) Ltd. as advance against property ignoring the evidences placed on record. Hence the said addition must be deleted. He further submitted that authorities below have made confirmation of addition without any basis ignoring the fact that the assessee has submitted photo copy of ledger account of Rishi Promoters in books of the assessee for the year ended on 31.03.2007 showing receipt of advance against the period along with confirmation and also copy of account of such entities in the books of account of the assessee for the year on 31.03.2008 showing return of advance taken from the said entity but the ld AR submitted that the assessee also filed copies of balancesheet, profit and loss account and schedule of fixed assets as on 31.03.2008 of Rishi Promoters along with photo copy of PAN therefore, factum of receipt of advance during the relevant financial period and its return to the said entity during the next financial year is clearly established therefore, addition made by the AO may kindly be deleted. 10. Replying to the above, the ld SR. DR drawing our attention towards relevant part of the assessment as well as first appellate order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details of said advance amount includes assessee company at Sl No. 7 showing advance of Rs. 15 lakhs which the assessee has received back on cancellation of sale agreement with the said entity. So far as, cause of cancellation agreement to sale of property and other compensation etc to be given by one party to other is concerned. Firstly, these facts are not clear from the material available on record and secondly, these fact have no bearing on the glaring factual position that the assessee received advance and repaid back to the said entity due to cancellation of agreement. In such a situation, no addition can be made and sustained in the hands of the assessee by invoking deeming provision of section 68 of the Act and by alleging and considering the same as unexplained in the hands of the assessee. Accordingly, AO is directed to delete the impugned addition and thus, ground No. 4 of assessee is allowed. 13. The ld AR also submitted that the assessee does not want to press ground No. 5, hence, ground No. 5 of assessee is dismissed as not pressed. 14. In the result, appeal of the assessee is partly allowed. Order pronounced in the open court on 21/07/2023. - - TaxTMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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