ACIT Vs Rajiv Sharma (ITAT Delhi)
Summary: The Delhi Bench of the Income Tax Appellate Tribunal dismissed the Revenue’s appeal against the order of the CIT(A)/NFAC deleting an addition of Rs.1,55,91,879/- made under section 69A of the Income-tax Act, 1961 in Assessment Year 2019-20. The Revenue contended that the assessee had facilitated an accommodation entry involving M/s Aarohi Creations LLP and relied upon the alleged modus operandi of Shri Lokesh Kumar Khabya and Shri Sourabh Sethi, whose statements under section 132(4) were stated to have admitted providing bogus accommodation entries through various bank accounts. The Revenue also relied upon certain alleged suspicious movements in the bank account of the assessee’s father. The assessee, however, submitted that the reopening was based on an incorrect assumption that a fresh loan had been received during the year under consideration, whereas the Rs.1,50,00,000/- loan from Aarohi Creations LLP had actually been received during AY 2018-19 and was repaid during the current assessment year. The Tribunal accepted this distinction and found that the facts relied upon by the Assessing Officer were not supported by proper material. It therefore held that the Assessing Officer lacked jurisdiction to reopen the assessment. The Tribunal noted the reliance placed by the CIT(A) on Kelvinator India VS CIT, 320 ITR 569, concerning the requirement of tangible material having a live link with the facts of the case to establish escapement of income. The Tribunal further noted that the loan was received in AY 2018-19 and repayments aggregating to Rs.1,50,00,000/- were made during the relevant year through the assessee’s Standard Chartered Bank account. Interest at 9% per annum was also paid, including Rs.5,91,679/- on 29.06.2019. According to the Tribunal, the loan was obtained and repaid through banking channels and the transactions were reflected in the assessee’s books/returns. The Assessing Officer had also failed to bring corroborative material establishing that the loan was fictitious or that the amount represented unexplained money. Accordingly, the Tribunal declined to disturb the CIT(A)’s findings, upheld the deletion of the section 69A addition and dismissed the Revenue’s appeal. The Tribunal thus held that an amount representing a loan received in an earlier assessment year and subsequently repaid through banking channels could not, on the facts of the case, be treated as unexplained money merely on the basis of an incorrect assumption regarding the year of receipt and without adequate corroborative material.
