PCIT Vs R B Farms And Estates Pvt. Ltd. (Delhi High Court)
Delhi High Court held that addition of unsecured loans under section 68 of the Income Tax Act rightly deleted since the said amount is already disclosed before Income Tax Settlement Commission. Accordingly, appeal of revenue dismissed.
Facts- The present appeal has been preferred by the revenue. Notably, CIT(A) had allowed the Assessee’s appeal and set aside the additions made by the Assessing Officer u/s. 68 of the Act on account of unsecured loans reflected as ‘Receipts’ from two entities – M/s Earthworks Metallurgicals Private Limited [EMPL] and M/s Tachyons Trading Private Limited [TTPL].
The books of account of the Assessee for the Financial Year [FY] 2014-15 reflected that it had received a sum of ₹8.25 Crores from EMPL and ₹2.71 Crores from TTPL. Thus, in aggregate, the Assessee had received a sum of ₹10.96 Crores as unsecured loans, which the AO found were not accounted for. However, the said additions were deleted on the ground that one of Assessee’s group company had disclosed that it had generated unaccounted cash by inflating purchases, which it claimed that part of which had been infused as unsecured loans in the Assessee company through other entities. The said group company – M/s Anand Motor Products Private Limited [AMPPL] – had paid the tax on the said income. The disclosure made by AMPPL was accepted by the Income Tax Settlement Commission [ITSC] and, therefore, the unsecured loans, which is stated to have been received from the non-genuine entities, were duly explained.
