Case Law Details
Carissa Investment (P) Ltd. Vs ACIT (ITAT Delhi)
In this case assessee-company has been able to prove that both the creditors have availability of sufficient funds to give loan to the assessee-company in assessment year under appeal. Merely because income was low declared by both the creditors, is no ground to make the impugned addition against the assessee-company.
Considering the totality of the facts and circumstances of the case, it is clear that in the ledger account of both the creditors there are loans given to the assessee-company as well as assessee paid back the amounts to them. The debit of financial charges to the profit and loss account is not a relevant criteria to consider under section 68 of the Income Tax Act, 1961. Bank statements are part of the record which also did not show if any cash have been deposited in the bank accounts of the creditors for giving loan to the assessee-company. Their bank accounts clearly show that both the creditors have sufficient funds in their bank account and all the transactions are carried-out through banking channel only. Thus, the initial burden upon the assessee-company to prove the creditworthiness of the creditors and genuineness of the transaction have been established in the matter and burden upon assessee-company have been discharged. It may also be noted that A.O/CIT(A) did not do anything on the documentary evidences produced on record and no further enquiry have been made into the matter. Since the A.O. accepted the creditworthiness and genuineness of the transaction with the same creditors in subsequent assessment year as well, it’s stand proved on record that there were no justification for the authorities below to make any addition against the assessee-company. In view of the above discussion, we set aside the orders of the authorities below and delete the entire addition. Accordingly, appeal of the Assessee is allowed.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by assessee has been directed against the order of Ld. CIT(A)-2, New Delhi Dated 31.08.2016 for the A.Y. 2007-2008 on the following grounds :
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