ITO Vs Bagaria Trade Impex (ITAT Jaipur)
ITAT Jaipur held that addition under section 68 of the Income Tax Act on account of unsecured loan is liable to be sustained since the assessee has miserably failed to establish the essential three ingredients as prescribed in section 68 of the Act. Accordingly, appeal of revenue allowed.
Facts- The assessee deals in wholesale trading in Galla Kirana items and also derives income from commodity trading in MCX/NCDEX. During scrutiny assessment proceedings, it was noticed that the assessee firm has obtained unsecured loans from various parties/firms/companies and the same were also squared up during the year under consideration with interest. Ultimately, the case of the assessee was assessed u/s. 143(3) of the Act making addition of Rs. 5,05,77,100/- u/s. 68 of the Act.
The assessee being aggrieved with the same preferred an appeal before the Ld. CIT (A), who in turn allowed the appeal of the assessee on jurisdictional issue without going into the merits of the case. Now, the revenue being aggrieved with the same preferred the present appeal before us.
Conclusion- Held that the present Bench do have any hesitation in holding that on merits the assessee has miserably failed to establish the essential three ingredients as prescribed in section 68 of the Act and dully discussed and confirmed by the various Hon’ble High Courts and Hon’ble Supreme Court as discussed (supra). As far as the finding of the Ld. CIT (A) that the assessment of the assessee should have been carried out as per the provisions of section 153C of the Act, We have gone through the order of the Ld. CIT (A) and facts of the case alongwith order of the AO. It is observed that the finding of the Ld. CIT (A) is erroneous as the case of the assessee false within the purview of section 148 of the Act and not in section 153C of the Act. In the result, appeal of the Revenue is allowed and order of the AO is confirmed. In the result, three appeals of the revenue are Allowed, with above remarks.
