Bansal Separators and Spares Pvt Ltd Vs ITO (ITAT Mumbai)
ITAT Mumbai held that addition unsustainable as assessee has proved the three ingredients engraved in section 68 of the Act and proved the satisfactory nature of the loan transactions. On the otherhand, AO has not brought any contrary material to show that loan received is bogus or accommodation entries.
Facts- Assessee is engaged in the business of Trader of Machinery and Machinery Parts. During the assessment proceedings the Assessing Officer observed that assessee has received unsecured loans from various parties.
Based on the informations submitted by the parties Assessing Officer observed from the financial statements that all these parties have meagre income and not provided the completed details as asked by the Assessing Officer and with regard to other parties who has not responded to the notices u/s. 133(6) of the Act, Assessing Officer observed that these notices were returned back and it shows that these parties are not in existence and further, he observed that even assessee has not submitted the relevant information specified in notices issued to them. Therefore, he came to the conclusion that the assessee has not established the identity, creditworthiness and genuineness of the transactions.
CIT(A) considered the issue and decided the issue in favour of the assessee. Being aggrieved, the present appeal is filed by the revenue.
Conclusion- Held that assessee has proved the three ingredients engraved in section 68 of the Act and proved the satisfactory nature of the loan transactions and the onus of proving shifted to the Assessing Officer. Since Assessing Officer has not given opportunity to the assessee and also not brought on record any material to prove the nature of transactions other than unsecured loans. Further, he stated that Assessing Officer has not properly verified the transactions.
After considering the submissions of both the parties, we are of the view that assessee has submitted all the relevant information before the Assessing Officer as well as Ld.CIT(A) and Assessing Officer has found certain short comings in the various documents submitted before him and however, has not brought any contrary material to show that the loan received by the assessee are bogus or accommodation entries. Therefore, there is no merit in the case built by the Assessing Officer and Ld.CIT(A) having coterminous power has appreciated the relevant information available before him and decided the issue in favour of the assessee and we are inclined to agree with the findings of the Ld.CIT(A).
FULL TEXT OF THE ORDER OF ITAT MUMBAI
1. This appeal is filed by the revenue against order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter in short “Ld.CIT(A)”] dated 19.10.2022 for the A.Y.2014-15.
2. Brief facts of the case are, assessee filed its return of income on 27.11.2014 declaring total income at ₹.13,55,940/-. The return was processed u/s. 143(1) of Income-taxAct, 1961 (in short “Act”). Subsequently, notices u/s. 143(2) and 142(1) of the Act were issued and served on the assessee. In response Authorised Representative of the assessee attended and submitted the relevant information as called for.
3. Assessee is engaged in the business of Trader of Machinery and Machinery Parts. During the assessment proceedings the Assessing Officer observed that assessee has received unsecured loans from the following parties: –
