Ravi Kumar Vs DCIT (ITAT Delhi)
Refund of Deposit from Company Not Unexplained Cash Credit- ITAT Delhi Deletes ₹1.63 Cr Addition
Delhi ITAT has given significant relief to Shri Ravi Kumar, by deleting an addition of ₹1.63 crore made u/s 68. The case arose when AO reopened the assessment on the ground that Assessee had made foreign remittances of ₹5.88 crore from his NRO account which were not reflected in his return of income. On verification, Assessee explained that the source comprised gifts of ₹4.63 crore from parents & brothers, & ₹1.63 crore received from M/s S. R. Credit Pvt. Ltd. as refund of earlier deposits. While AO accepted the gifts, he doubted the creditworthiness of S. R. Credit Pvt. Ltd. & made an addition of ₹1,63,33,500/- as unexplained cash credit
Assessee’s defence was that it’s a Refund & not fresh credit. Assessee placed reliance on multiple documents- Balance Sheets (FY 2014–15 & 2015–16) showing the deposit with S. R. Credit Pvt. Ltd. under “Deposits with Firms & Companies”, Form 3CD (Tax Audit Report) of S. R. Credit Pvt. Ltd. (FY 2016–17) showing repayment of ₹1.91 crore received & ₹2.26 crore repaid. & Bank statements of both assessee & the company showing contra entries. He argued that the transaction was not a loan or fresh credit, but a repayment of assessee’s own money deposited earlier. Thus, section 68 was not applicable
