Splice Biotech Pvt. Ltd. Vs ITO (ITAT Pune)
ITAT Pune directed addition u/s. 68 of the Income Tax Act towards unsecured loans as appellate deliberately withhold information from NFAC and NFAC failed to examine the nature of transaction and passed order in perfunctory manner.
Facts- The assessee is a company engaged in the business of dealing, developing of properties and manufacturing-cum-trading of recycled betelnut. AO made addition of Rs. 5,20,00,000/- on account of unsecured loans received from various parties.
Being aggrieved by the order of assessment, an appeal was filed before the NFAC who vide impugned order deleted the addition by holding that the assessee had proved the genuineness of the transactions of purchase and sales of shares/unsecured loans. The NFAC had accepted the explanation of the assessee directed the Assessing Officer to delete the addition made u/s 68 of the Act. Being aggrieved, the Revenue is in appeal before us in the present appeal.
Conclusion- The appellant deliberately withheld the information from the Assessing Officer as well as the NFAC which is within exclusive knowledge of appellant to establish the genuineness of transactions of unsecured loans. It is nothing but a fraud played by the appellant against the Assessing Officer as well as the NFAC who are quasi judicial authorities employed for execution of the provisions of the Income Tax Act. Therefore, the principle of fraud can be squarely applied to the facts of the present case and principles of natural justice have no application. Applying the said doctrine, we have no hesitation to hold that the transaction of transaction of receipt of unsecured loans from the parties under consideration before us is void ab-initio, this is nothing but sham, make believe and colourful device adopted with excellent paper work with intention bringing the undisclosed income into books of account.
