DCIT Vs Dipti Narendra Lulla (ITAT Pune)
46A Violated -CIT(A) Relief Without Enquiry Falls — ITAT Sends Back Rs.20-Cr Loan Additions for Fresh Verification
Pune Tribunal dealt with Revenue’s challenge to deletion of major additions relating to unsecured loans, interest & squared-up loans. Assessee, who took over the proprietary concern Grace Enterprises after her husband’s demise, had shown unsecured loans of Rs.5,16,85,602, interest of Rs.87,01,674 & squared-up loans of Rs.14,55,15,356. AO held that Assessee failed to establish identity & creditworthiness of many loan creditors, did not justify fresh loans received during the year, did not produce Form 15G in time, did not provide bank trail for several parties & therefore invoked s.68 & s.69.
CIT(A)/NFAC deleted all major additions, relying on confirmations, Form 15G, bank details, old balances, earlier assessments where similar creditors were accepted, & concluded that Assessee had discharged onus. CIT(A) accepted voluminous documents without calling for remand report.
Tribunal held that CIT(A)’s order suffered from non-application of mind, was cryptic, & violated Rule 46A. Large amounts were fresh loans during the year, such as Rs.1.50 Cr from Girish Traders, Rs.25 lakh from Pushpa D. Mulchandani, Rs.32 lakh increase from Siddhant Lulla, etc., as seen from the chart placed at page 10. These required independent verification of creditworthiness. CIT(A) had not examined purpose of the huge squared-up loans of Rs.14.55 Cr, nor verified creditors who were new or whose loan amounts surged significantly. Tribunal also noted that CIT(A) gave relief “at the stroke of a pen” without discussing three essential ingredients under s.68.
