Madhuban Urban Credit Co–operative Society Pvt. Ltd. Vs DCIT (ITAT Nagpur)
The Income Tax Appellate Tribunal (ITAT), Nagpur, allowed the appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals) for Assessment Year 2018-19. The appeal involved additions towards unexplained investment, disallowance of commission expenses, classification of income, set-off of business losses, and deduction under Section 80P of the Income-tax Act.
Regarding the addition of ₹7,73,69,751 as unexplained investment, the CIT(A) had upheld the Assessing Officer’s order on the ground that the assessee failed to furnish evidence explaining the investments and bank transactions. The Tribunal, however, found that all the investments added by the Assessing Officer were already reflected in the assessee’s balance sheet. Since the investments were already disclosed, the Tribunal held that they could not be treated as unexplained investments and allowed the ground in favour of the assessee.
On the disallowance of commission expenses amounting to ₹78,87,998, the CIT(A) had sustained the addition because the assessee had not reconciled the figures appearing in Form 3CD, furnished confirmations from recipients, or established the genuineness of the expenditure. The Tribunal observed that the Assessing Officer had not conducted any enquiry into the genuineness of the commission payments despite having details of the payees. It held that the addition had been made merely on surmises without pointing out any defects and therefore deleted the disallowance.
