9911796707
TMI Blog2025 (2) TMI 861X X X X Extracts X X X X X X X X Extracts X X X X ..... by the department against the orders of Commissioner of Income Tax (Appeals), NFAC, [in short "Ld. CIT(A)"], Delhi, u/s 250 of the Income Tax Act, 1961 (in short "The Act"), for the AY 2018-19 dated 22.05.2024, which in turn arises from the order u/s 143(3) read with section 144B, passed by Income Tax Officer, NFAC, Centre, Delhi, dated 16.06.2021. 2. The grounds of appeal raised by the department are as under: 1. Whether on the facts and in the circumstances of the case, and in law, the ld. CIT(A) was justified in deleting the addition s of Rs. 9,06,15,711/- u/s 68 of the Income Tax Act?" 3. The brief facts of the case are that the assessee company had filed its return of income for the AY 2018-19 on 07.08.2018, declaring total income of Rs. 10,33,16,780/-. Subsequently, the case of assessee was selected for complete scrutiny through "CASS". Accordingly, statutory notices 143(2) and 143(1) are issued. After deliberations, the assessment came to became completed with certain additions: (i) Addition on account of unexplained cash credit u/s 68 for Rs. 9,06,15,711/- (ii) Addition u/s 40a(ia) for non-deduction of TDS for Rs. 58,000/- 3.1 After the aforesaid two additions, ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crease in share capital from Rs. 1,00,000/- to Rs. 65,70,000/- in the FY 2017-18, for which proof of genuineness of transaction like copy of bank statement are not produced by the assessee. 7. The aforesaid issues are deliberated in detail by the Ld. CIT(A), in the backdrop of circumstances, that when such information was sought to be furnished by the Ld. AO by a show cause notice dated 23.05.2021 and the assessee was required to submit such details by 31.05.2021, the said period was suffering with the peak of the second wave of the COVID pandemic, therefore, there was sufficient and reasonable cause for not producing the evidence before the Ld. AO, accordingly, Ld. CIT(A) had accepted the documentary evidences additionally furnished before him. Such evidence was forwarded to Ld. AO on 26.02.2024 for examination and remand report, a reminder was also further issued by the Ld. CIT(A) to Ld. AO on 03.04.2024, however, no remand report was submitted by the Ld. AO till passing of the appellate order by Ld. CIT(A). 8. Ld. CIT(A) have considered the grounds of appeal, statement of facts and submissions of the assessee from time to time including the additional evidence and then have de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now been produced, which was also remanded to the AO. The AO has not furnished any report. During the VC, the AR explained that the money actually came in FY 2018-19. The relevant ledger accounts showing reversal of entries have also been produced. No money actually came into the books in FY 2017-18 but was transferred in FY 2018-19, as seen from the relevant bank account: All details to show the genuineness of the loan taken from the director are available on record. There is no justification for treating this loan of Rs. 25,00,000/- as unexplained cash credit. Thus, the addition u/s 68 of Rs. 25,00,000/- being loan taken from the Director Shri Rakesh Agrawal is hereby directed to be deleted. (iii) RM Developer Rs. 18,00,000/-: This is an old unsecured loan in the books of the proprietorship concern which was taken over by the company during the present year. It is seen that the confirmation, copy of ITR and computation from this creditor was filed before the AO. The AO has doubted the genuineness of the loan amount as the relevant bank statement was not produced. The credit in the books of the company during the year is only a book entry and the loan was actually taken prior to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, which has then been transferred to the appellant. All details to establish the identity, genuineness and creditworthiness of this creditor are duly furnished and there is no justification for treating this amount as unexplained cash credit u/s 68. Thus, the addition u/s 68 of 5,00,00,000/- being loan received from Agrawal Infra-Shree Balaji JV is hereby directed to be deleted. (b) Unsecured loans from unrelated parties: (i) Vitality Steel Pvt. Ltd. Rs 1,93,46,365/-: This is an old unsecured loan in the books of the proprietorship concern which was taken over by the company during the present year. The total amount outstanding as per details submitted during the appeal proceedings is Rs. 2,14,35,772/- However, the AO has considered the total increase in unsecured loans from related parties as Rs. 5,78,42,443/-, which includes Rs. 2,14,35,772/- from Vitality Steel Pvt. Ltd. It is seen that the confirmation, copy of ITR and computation from this creditor was filed before the AO. The AO has doubted the genuineness of the loan amount as the relevant bank statement was not produced. The credit in the books of the company during the year is only a book entry and the loan was actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t had been filed during the assessment proceedings. The AO has not given any finding in the assessment order as to why the loan outstanding from this party is liable to be treated as unexplained cash credit u/s 68. In the absence of any finding in the assessment order regarding this creditor and in view of the prima facie onus having been discharged by the appellant regarding this creditor, there is no justification for adding the amount of Rs. 48,67,496/- as unexplained cash credit u/s 68. The addition of Rs. 48,67,496/- is directed to be deleted. To sum up, the entire addition u/s 68 of Rs. 9,06,15,711/- is hereby directed to be deleted and ground no. 2 and its sub- grounds are treated as allowed. 10. Before us Ld. CIT-DR representing the revenue submitted that the assessee failed to substantiate the identity and creditworthiness of the lenders / investors and genuineness of transactions with corroborative evidence before the Ld. AO, therefore, the additions u/s 68 of the Act are made. It is further submitted that additional evidence produced by the assessee are admitted by the Ld. CIT(A), whereas ample opportunity was given by the Ld. AO to assessee, therefore, the additions ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Rs. 9,40,833/- : From the facts on record, it is evident that this was an old unsecured loan in the books of proprietorship concern which was taken over by the company during the relevant year. The relevant documents relied upon by the assessee are confirmation, ITR, Computation of the lender. As per copy of audited balance sheet of the proprietorship concern M/s Agrawal Infrastructure, Raipur, which was taken over by the assessee company, it is apparent from schedule "C- Unsecured Loan" (page no. 81 & 86 of APB), that unsecured loan from Rakesh Agrawal HUF for Rs. 9,40,833/- was outstanding as on 31.03.2017. In view of such facts, we find substance in the finding of Ld. CIT(A), thus, we approve the same. (ii) Unsecured loan received from related party, Shri Rakesh Agrawal for Rs. 25,00,000/- : The assessee company had received an unsecured loan of Rs. 25,00,000/- on 31.03.2018 by way of a cheque from Shri Rakesh Agrawal, Director of the company. The cheque issued on 31.03.2018 was expired on 30.06.2018, in lieu of which a fresh cheque was issued bearing no. 086945, which were then released on 05.07.2018. In support of identity, creditworthiness of the lender and genuineness o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such facts, we concur with the decision of Ld. CIT(A) that the identity, creditworthiness of the lender and genuineness of the transaction is duly substantiated by the assessee on the basis of corroborative evidences, therefore, we uphold the same. (vi) Unsecured loan received from unrelated party, Vitality Steel Pvt. Ltd. - Rs. 1,93,46,365/- : The facts of this addition are identical to the facts qua the addition on account of unsecured loan from Rakesh Agrawal HUF (Para (i) supra), as the balance of this unsecured loan is brought in the books of assessee company on account of taking over of the business of proprietary concern M/s Agrawal Infrastructures, therefore, our decision therein to concur with the findings of Ld. CIT(A) in deleting the addition, shall apply mutatis mutandis on this addition also, consequently, we direct to delete the same. (vii) Increase in share capital- Rs. 64,70,000/-: During the year under consideration 6,47,000 shares having face value of Rs. 10/- and premium at Rs. 90 per share, were issued to Shri Rakesh Agrawal in lieu of part of shell consideration for taking over the running business of the proprietary concern, M/s Agrawal Infrastructure. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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