DCIT Vs Uflex Ltd. (ITAT Delhi)
Summary: The common order concerns five appeals filed by the Revenue and Uflex Ltd. for Assessment Years 2020-21, 2021-22 and 2022-23. The first case in source order is IT(TP)A No.272/Del/2026 for AY 2020-21. The Tribunal considered a common set of issues arising from search-related assessments, additions under section 68, section 69C, section 69A, section 14A read with Rule 8D, and transfer-pricing adjustments concerning corporate guarantees and delayed receivables.
For AY 2020-21, the assessee had filed its return declaring total income of INR 1,01,55,90,800/-. Following a search under section 132 on 21.02.2023, the assessment was nevertheless completed under section 143(3) read with section 144C(3). The assessee contended that, after the post-01.04.2021 search regime, the assessment ought to have proceeded under section 148. Relying upon the coordinate-bench decisions referred to in the order, including Homelife Buildcon (P.) Ltd. and Jamna Das Nikkamal Jain Saraf Pvt. Ltd., the Tribunal held that the assessment had to be completed under section 148 and that the assessment framed under section 143(3) was invalid and was quashed.
On the merits of the AY 2020-21 additions, the Tribunal deleted the entire INR 34.75 crore addition relating to unsecured loans under section 68. It held that the assessee had furnished documentary material establishing identity, creditworthiness and genuineness, including PAN, MCA records, RBI/NBFC registration where applicable, ITRs, audited financial statements, bank statements, loan agreements, confirmations, TDS records and repayment details. The Tribunal also noted that the loans had been repaid and that, in material instances, statements relied upon by the Revenue were not supplied for cross-examination and related to persons who were no longer directors when the loans were advanced. The Tribunal relied, among others, on Lovely Exports, Anshika Consultants, Paswara Papers, Kamdhenu Steel and Alloys, Laxman Industrial Resources, Mod. Creations, Vrindavan Farms, Agson Global and other authorities cited in the order. Consequentially, the alleged INR 69.50 lakh commission addition under section 69C was also deleted.
