South West Drilling and Infrastructure Ltd Vs ACIT (ITAT Delhi)
ITGAT find that the facts and circumstances narrate in the order of the authorities below clearly indicate that it is classic case of circuitatious rotation of unaccounted money. The lender has no identity in as much it is nonexistent its sources of credits itself is share premium. So there is no creditworthiness of the lender company. It is a clear cut case of circuitatious rotation of unaccounted money and being such rotation of unaccounted money is absolutely not a genuine loan transaction. The authorities have duly dealt with the issues. In this view of the matter, we do not find any infirmity in the orders of the Revenue authorities below and hence we uphold the same.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of the Ld. CIT(A)-30, New Delhi, dated 18.05.2018 pertaining to Assessment Year 2014-15.
2. Grounds of appeal reads as under:-
“1. On the facts and in the circumstances of the case as well as in law the Ld. Commissioner of Income Tax (Appeals) grossly erred in holding that the impugned assessment order is valid in law.
2. On the facts and in the circumstances of the case as well as in law the Ld. Commissioner of Income Tax. (Appeals) grossly erred in upholding the addition of Rs.45,00,000/- U/s 68 of the Income Tax Act, 1961 made by Ld. Assessing Officer.
3. On the facts and in the circumstances of the case as well as in law the Ld. Commissioner of Income Tax (Appeals) grossly erred in capaciously rejecting the legally tenable documentary evidences, submission and judicial precedents relied by appellant.”
3. Brief facts of the case are that the assessee company is engaged in the business of transportation. Regarding unsecured loan, the Assessing Officer observed that during the year under consideration, the assessee company had received loans amounting to Rs.45 lakhs from M/s Satya Lakshmi Trade Link Pvt. Ltd. For A.Y. 2014-15, the company was shown to be a filling a return of Rs.31,154/- and also the bank account of the company clearly showed sequential credit and debit entries. Hence, the Assessing Officer enquired about the creditworthiness of the company to extend the loan and commission u/s 131(1)(d) was sent to Kolkata. Report of the DDIT(Inv.) was referred by the Assessing Officer in his order is as under:-
“Summons u/s 131 of the Income Tax Act, 1961 were issued against Principal Officer of the company.
..Neither the principal officer nor the Authorised Representative of the companies appeared at the office of the undersigned in compliance to the summons notice in case of Satya Lakshmi Trade Link Pvt. Ltd…. “
An inspector from the office of DDIT(Inv.), Kolkata was also deputed to enquire about the company. Relevant extract of the inspector’s report is reproduced below :
