Rupal Jain Vs ACIT (ITAT Delhi)
We notice that the assessee has not only discharged the primary onus by filing confirmation and the IT returns and balance sheet of the lenders, the assessee is also stated to have paid interest in most of the cases and deducted TDS thereon. Noticiably, the lenders are the family members and they are also filing their return of income declaring income which is in excess of money lent. The creditworthiness is thus reasonably established. Apart from these facts, as stated, the loans were also stood repaid in the subsequent assessment year which transcends all other considerations in the light of the decision of Hon’ble Gujarat High Court in the case of CIT vs. Ayachi Chandrashekhar Narsangji, (2014) 42 taxmann.com 251 (Guj.); CIT vs. Karaj Singh (2011) 15 taxmann.com 70 (P&H) & Panna Devi Chowdry vs. CIT, 208 ITR 849 (Bom.). Therefore when the facts are seeing hostically, we find that assessee has adduced evidences which supports the bona fides of money borrowed. We thus reverse the action taken by the Revenue Authorities under Section 68 of the Act and restore the position taken by the assessee.
FULL TEXT OF THE ORDER OF ITAT DELHI
The captioned appeal has been filed by the Assessee against the order of the Commissioner of Income Tax (Appeals), Meerut (‘CIT(A)’ in short) dated 23.12.2016 arising from the assessment order dated 20.03.2015 passed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2012-13.
2. The grounds of appeal raised by the assessee reads as under:
“A) The additions of Rs. 63,58,500/- u/s 68 of the Act on account of unsecured loan deserves to be deleted in toto on the following, inter alia, grounds.
1) BECAUSE on facts and in law and on grounds taken and basis adopted, the addition of Rs. 63,58,500/- u/s 68 on account of unsecured loans is unjustified and illegal.
2) BECAUSE the appellant filed the documents / proof (Confirmation Certificates, ITR, Bank A/c, statement of affairs, cash flow statement, etc. of the lenders) in support of the unsecured loans and duly discharged the prima facie onus u/s 68 of the Act in accordance with the law laid down by the Hon’ble Apex Court and also Jurisdictional High Court.
3) BECAUSE Appellant has duly explained the identity/genuineness/creditworthiness of all the lenders who gave unsecured loans and fully discharged the onus as required u/s 68 of the Act.
4) BECAUSE Ld. CIT (A) without considering the details/documents filed by the lender in pursuance of notices u/s 133(6) proceeded to make the additions in clear disregard of law of land and the facts of the case.
5) BECAUSE Ld. CIT (A) confirmed additions on conjecture & surmises and without considering the material on record.
6) BECAUSE the Ld. CIT (A) failed to appreciate the fact that the cheques representing unsecured loans were not encashed during the relevant previous year. The said cheques were only encashed in the subsequent years. Therefore, provisions of section 68 are simply not applicable.
7) BECAUSE the Ld. AO failed to provide reasonable opportunity to the Appellant and failed to provide the material gathered behind the back of the Appellant.
8) BECAUSE the provisions of section 144A are mandatory in nature and the directions given by Ld. Additional CIT have to be followed by the Ld. Assessing Officer.
B) The addition of Rs. 15,00,000/- made to the total income declared by the Appellant on account of capital introduced by the appellant deserves to be deleted in toto on the following, inter alia, grounds:
1) BECAUSE on facts and in law and on grounds taken and basis adopted, the addition of Rs. 15,00,000/- u/s 68 on account of capital introduced is unjustified and illegal.
2) BECAUSE Appellant has filed the documents / proof in support of the capital introduced during the year which were totally ignored by the I.T. Authorities. The Appellant received the cheque out of her debit balance in the capital account of the firm viz. Arihant Media Promoters. The copies of bank account, ITR, confirmation certificate from the said firm were duly filed by the Appellant during assessment as well as in first appeal. The Appellant has duly discharged the onus as required u/s 68 of the Act.
3) BECAUSE the I.T. Authorities failed to appreciate that the cheque representing capital introduced was only encashed by the Appellant after the end of relevant previous year. As such the provisions of section 68 are simply not applicable.”
3. Briefly stated, the assessee is engaged in the business of carrying out printing work as a proprietor of M/s. Arihant Print Solutions. The return filed by the assessee was subjected to scrutiny assessment. The Assessing Officer inter alia made additions to Rs.63,58,500/- under Section 68 of the Act on account of receipt of unsecured loans from various parties tabulated herein:
