DCIT Vs Axis Overseas Ltd (ITAT Kolkata)
Revenue challenged deletion of multiple additions, including ₹8.07 Cr u/s 68 on unsecured loans from Limelight Dealers Pvt Ltd & Rubycam Vyapar Pvt Ltd, ₹3.13 Cr addition @10% of jute purchases, ₹9.20 Cr u/s 68 on sale of unlisted shares, & ₹82,00,861/- u/s 40A(3) for alleged cash purchases.
Tribunal noted that both lenders had replied to 133(6), confirmed balances, & reflected Assessee as sundry debtor (shown as unsecured loan/sundry creditors in Assessee books), proving identity, genuineness & creditworthiness; AO’s reliance on an unverifiable inspector report & wrong inference on balance sheet entries was held baseless, following PCIT Vs Sreeleathers. On jute purchases, Tribunal upheld CIT(A)’s view that AO accepted sales as genuine & hence could not treat corresponding purchases as bogus, relying on Tulsyan & Sons; further, raw jute purchases qualify for Rule 6DD, negating 40A(3). On share-sale addition, Tribunal held AO ignored that investments were accepted in earlier years & sale proceeds came through banking channels; CIT(A) correctly found AO wrongly doubled the figure as ₹9.20 Cr instead of actual ₹4.70 Cr. On 40A(3), impounded vouchers were undated, unsigned, lacking seller details, termed “dumb documents,” & AO contradicted himself by alleging they were unrecorded yet making 40A(3) disallowance, which applies only to recorded expenses. Tribunal also rejected notional interest addition, reaffirming that only real income can be taxed. Tribunal found CIT(A)’s order fully reasoned & dismissed Revenue’s appeal in entirety.
