Ahuja and Anand Buildwell Private Limited Vs DCIT (ITAT Delhi)
ITAT Deletes Section 68 Addition on Forfeited Loans Already Offered to Tax – Double Taxation Not Permissible
The Delhi ITAT deleted additions made u/s 68 in the hands of Ahuja and Anand Buildwell Private Limited in respect of unsecured loans received from Bhavishya Invest Serve Pvt. Ltd. and Nandini Tradex Pvt. Ltd. after noting that the assessee had subsequently forfeited the loans and already offered the amounts to tax in AY 2023-24. The assessee demonstrated through its profit and loss account and computation of income for AY 2023-24 that the forfeited loan amounts were included under “other income” and taxes had already been paid thereon. The Tribunal observed that taxing the same amounts again in AY 2020-21, being the year of receipt of loans, would result in impermissible double taxation.
The Bench also accepted the assessee’s contention based on the Supreme Court ruling in CIT vs. Excel Industries Ltd. that the dispute was revenue-neutral since the amounts had already suffered tax in a subsequent year at the same rate of tax. The Tribunal noted that the assessee had incurred losses in AY 2020-21 and filed a NIL return, whereas the forfeited amounts were ultimately taxed in AY 2023-24 when taxable income arose. Referring to the detailed breakup of “forfeited income” placed on record, including the specific amounts relating to Bhavishya Invest Serve Pvt. Ltd. and Nandini Tradex Pvt. Ltd., the ITAT directed deletion of the additions made u/s 68.
FULL TEXT OF THE ORDER OF ITAT DELHI
