Case Law Details

Case Name : ITO Vs Rekha Bansal (ITAT Delhi)
Appeal Number : I.T.A.No.4455/Del/2013 & C.O. No. 43 /Del/2014
Date of Judgement/Order : 14/08/2015
Related Assessment Year : 2009-10
Courts : All ITAT (1730) ITAT Delhi (428)

Brief of the Case

ITAT Delhi held in the case ITO vs. Rekha Bansal that it is clear that the CIT (A) granted relief to the assessee on the basis of information received from the respective banks of the creditors u/s 133(6) wherein the CIT (A) found that the creditors had sufficient bank balance in their accounts before issuing cheques to the assessee. CIT (A) has drawn a logical conclusion that parties granting unsecured loans had sufficient bank balance in their accounts before issuing cheques to the assessee which shows genuineness of the transaction as well as creditworthiness of the alleged creditors. Hence addition made u/s 68 could not be held as sustainable.

Facts of the Case

The Revenue has raised following grounds in this appeal –

  • Whether CIT (A) error while deleting the addition of Rs. 28,75,000/- made by AO u/s 68 of the Income Tax Act, 1961 as the assessee failed to prove the genuineness of the unsecured loan
  • Whether CIT (A) error while deleting the addition when no confirmation has been filed either before the AO and the CIT(A)
  • Whether CIT (A) error while deleting the addition on the basis merely that payment has been made through banking channel when no other evidence has been filed to establish the genuineness of the transaction.

Contention of the Assessee

The ld counsel of the assessee submitted that the AO made addition u/s 68 of the Act without any basis. Ld. AR further submitted that as per details filed by the assessee on 17.10.2011, the assessee very well established that she has taken a loan of Rs. 15,75,000 from one Shri Manoj Kumar and of Rs.13 lacs from one Shri Uttam Singh in addition to other unsecured loans along with details/confirmation.

Ld. AR further submitted that the assessee vide her letter dated 31.10.2011 requested the AO to summon these creditors and inform their address but instead of making any further verification or examination or calling the respective creditors, the AO proceeded to make addition without any basis and wrongly held that these loans are not genuine.

Ld. AR further submitted that the CIT (A) rightly considered confirmation and other relevant evidence submitted by the assessee and rightly held that both Shri Manoj Kumar and Shri Uttam Singh had sufficient bank balance before issuing cheques to the assessee, therefore, impugned addition was deleted by the first appellate authority.

Contention of the Revenue

The ld counsel of the revenue submitted that the CIT(A) has erred in law and on facts in deleting the addition of Rs.28,75,000 made by the AO u/s 68 of the Income Tax Act 1961 as the assessee failed to prove the genuineness of unsecured loan. Ld. DR further contended that the CIT (A) was not justified in deleting the said addition when no confirmation has been filed either before the AO or before the CIT (A) and the addition was deleted merely on the basis that payment has been made through banking channel, specially when no evidence has been filed to establish the genuineness of the transaction.

Held by CIT (A)

The CIT (A) allowed the appeal of the assessee. It was held that notice u/s. 133(6) was issued to HDFC Bank for giving copy of the bank account of both Sh. Manoj Kumar and Sh. Uttam Singh being a/c number 07111000008105 and 02851570001060 respectively. These copies were received and it was noticed there from that both Sh. Manoj Kumar and Sh. Uttam Singh had sufficient bank balance in their accounts before issuing cheques to the appellant Smt. Rekha Bansal. In the light of the above evidence, the addition of Rs.28,75,000/- to the income of the appellant becomes untenable and the same is hereby deleted.

Held by ITAT

ITAT held that it is clear that the CIT (A) granted relief to the assessee on the basis of information received from the respective banks of the creditors in compliance to the notice issued to these banks u/s 133(6) of the Act wherein the first appellate authority found that the alleged creditors had sufficient bank balance in their accounts before issuing cheques to the assessee. It is also pertinent to note that prior to calling bank statement copies by way of notice u/s 133(6), the CIT(A) also issued summons to the respective creditors which were not complied and the CIT(A) also served a show cause notice proposing to impose penalty u/s 272A(1)(c). On the basis of information received there from the CIT (A) has drawn a logical conclusion that Shri Manoj Kumar and Shri Uttam Singh had sufficient bank balance in their accounts before issuing cheques to the assessee which shows genuineness of the transaction as well as creditworthiness of the alleged creditors.

In this situation, the addition made by the AO u/s 68 could not be held as sustainable and the same was rightly deleted by the CIT (A).

Accordingly appeal disposed of.

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Posted Under

Category : Income Tax (20858)
Type : Featured (3626) Judiciary (8910)
Tags : CA Deepak Aggarwal (390) ITAT Judgments (3704) Section 68 (137)