Nivaya Resources Private Limited Vs DCIT (ITAT Delhi)
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) disposed of the assessee’s appeals for Assessment Years (AYs) 2020-21 and 2021-22 involving transfer pricing adjustments, addition under Section 68, and disallowance of education cess. For AY 2020-21, the Tribunal dealt with four issues, while for AY 2021-22 it considered transfer pricing adjustments relating to import of coal and interest on receivables.
The first substantive issue for AY 2020-21 concerned an addition of ₹25.50 crore under Section 68 in respect of an unsecured loan received from the company’s director. The assessee explained that the loan was credited through 11 cheques dated 31.03.2020, though the funds were actually received in the following financial year. It furnished confirmations, income tax returns, bank statements, assessment orders, salary certificates, and money transfer records relating to the lender, the source of the lender, and the further source of funds. The assessee also pointed out that assessments of the lender and the persons constituting the source of funds had been completed under Section 143(3) without any adverse findings. The Tribunal observed that the Assessing Officer had not conducted any meaningful enquiry into the genuineness or creditworthiness of the lender or the explained source of funds despite the documentary evidence. Holding that the assessee had discharged the onus under Section 68 by establishing identity, genuineness and creditworthiness, the Tribunal directed deletion of the addition.
