Case Law Details
ACIT Vs Highlight Infrastructure Pvt. Ltd (ITAT Ranchi)
The Income Tax Appellate Tribunal (ITAT), Ranchi, dismissed the Revenue’s appeals against the orders of the Commissioner of Income Tax (Appeals) [CIT(A)] for Assessment Year 2021-22. The appeals involved common issues concerning additions made in the hands of the assessee in relation to unsecured loans advanced to M/s Atibir Industries Company Ltd. and the estimation of commission income.
The assessee submitted that it formed part of the Atibir Group of cases and that, following a search and seizure operation, M/s Atibir Industries Company Ltd. had disclosed ₹25 crore representing the entire amount of unsecured loans received from various companies, including the loans advanced by the assessee. Based on this disclosure by the ultimate beneficiary, the CIT(A) deleted the additions made in the assessee’s hands.
The Revenue contended that the assessee had failed to establish the unsecured loans and its financial capacity to advance them, and sought restoration of the Assessing Officer’s order. However, the Tribunal observed that the CIT(A) had recorded a finding that the unsecured loans had already been admitted as income by M/s Atibir Industries Company Ltd. The Revenue failed to dislodge this finding of fact. Accordingly, the Tribunal upheld the deletion of the additions relating to unsecured loans.
Regarding the addition towards alleged commission or unexplained expenditure, the Assessing Officer had estimated commission at 5%, while the CIT(A) restricted it to 1%. The Tribunal noted that the Revenue had not produced any concrete material to demonstrate that the restriction to 1% was erroneous. Since the assessee had also not challenged the 1% estimation, the Tribunal upheld the CIT(A)’s decision.
As the facts in the connected appeal were identical, the Tribunal applied the same findings and dismissed both Revenue appeals.
FULL TEXT OF THE ORDER OF ITAT RANCHI
1. Both are the appeals filed by the revenue against the separate orders of the ld. CIT(A), Patna-3, Patna both dated 24/07/2024 for the A.Y. 2021-22. As all the issues in both these appeals relate to the common issues, therefore, they are being disposed off by this common order. As a lead case, we take up ITA No. 384/Ran/2024.
2. Shri Ashish Kumar Deharia, ld. CIT-DR is represented on behalf of the revenue and Shri Devesh Poddar is represented on behalf of the assessee.
3. It was submitted by the ld. AR that the assessee is a part of the Atibir Group of cases. It was the submission that certain additions had been made in the hands of the assessee representing unsecured loans given to M/s Atibir Industries Company Ltd and unexplained expenditure thereof. It was the submission that there was a search and seizure operation on the said Atibir Group and M/s Atibir Industries Company Ltd. has offered the entire unsecured loans received from various companies as its income by making a disclosure of ₹ 25.00 cores. It was the submission that as the entire unsecured loans which have been received by M/s Atibir Industries Company Ltd. which consists of the unsecured loans given by the impugned assessee, the addition is no more called for in the hands of the assessee. It was the submission that the ld. CIT(A) has given relief by considering these facts.
4. The ld. CIT-DR submitted that the assessee has not shown the unsecured loans and proof of its capacity to give such loans. The ld. CIT-DR supported the order of the Assessing Officer. It was a prayer that the order of the ld. CIT(A) be reversed.
5. We have considered the rival submissions. A perusal of the page No. 10 of the findings of the ld. CIT(A) which clearly shows that he has considered the fact that the unsecured loans have already been admitted in the hands of M/s Atibir Industries Company Ltd. who is the ultimate beneficiary of the bogus unsecured loans. This being so, the ld. CIT(A) has deleted the addition in the hands of the assessee. The revenue has not been able to dislodge this finding of fact as arrived at by the ld. CIT(A). As M/s Atibir Industries Company Ltd. has already ACIT Vs. Highlight Infrastructure & anr Appeal disclosed the entire unsecured loans received, the addition is no more called in the hands of the assessee and the order of the ld. CIT(A) stands upheld.
6. Further the revenue has also challenged the action of the ld. CIT(A) in restricting the addition made by the Assessing Officer representing the alleged commission/unexplained expenditure.
7. It was the submission by the ld. CIT-DR that the Assessing Officer had estimated the alleged commission at 5% and the ld. CIT(A) has restricted the said commission to 1%.
8. In reply, the ld. AR has submitted that the this Tribunal under similar circumstances has been estimated the income for commission @ 0.50%. It was, however, fairly conceded by the ld. AR that the assessee is not in appeal against the addition confirmed by the ld. CIT(A) regarding alleged commission.
9. We have considered the rival submissions. As the entire unsecured loans offered by the M/s Atibir Industries Company Ltd. as its income, obviously under these circumstances, the commission income could not have been added in the hands of the assessee. However, the ld. CIT(A) has restricted the commission @ 1%. The assessee has also not challenged this restriction of commission of 1%. The revenue has not been able to produce any concrete substance that 1% commission as restricted by the ld. CIT(A) is erroneous. This being so, the estimation as done by the ld. CIT(A) in respect of alleged commission income stands upheld.
10. In the result, this appeal of the revenue is dismissed.
11. As the facts and circumstances of another appeal i.e. ITA No. 385/Ran/2024 for the A.Y. 2021-22 are identical to the facts and circumstances of ITA No.384/Ran/2024, therefore, our findings given in ITA No. 384/Ran/2024 for the A.Y. 2021-22 shall apply mutatis mutandis in these appeals also.
12. In the result, both these appeals of the revenue stand dismissed.
Order pronounced in open court on 21/04/2026.
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