ITO Vs Forever Flourishing Finance & Investment Pvt. Ltd. (ITAT Mumbai)
The AO made additions under Section 68 treating ₹1.93 crore (sale proceeds of shares) and ₹2.39 crore (unsecured loans) as unexplained cash credits, alleging lack of creditworthiness and genuineness.
The CIT(A) deleted the additions, noting that:
- Share sale transactions were genuine and supported by past records, and merely because the buyer company was later struck off cannot invalidate earlier transactions.
- For loans, the assessee had furnished complete documentary evidence (PAN, bank statements, ITRs, financials), establishing identity, creditworthiness, and genuineness.
The ITAT upheld the deletion, emphasizing that AO cannot reject evidences without proper enquiry or contrary material. Suspicion based on low income of lenders or struck-off status of a company is insufficient. It also noted that some issues were already examined in original assessment.
Accordingly, the Revenue’s appeal was dismissed, and deletion of additions was confirmed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal is instituted by the assessee, directed against the order of Commissioner of Income Tax Appeals/ National Faceless Appeal Centre, Delhi [“the Ld. CIT(A)] dated 29.11.2024 for the assessment year 2020-21, arises from assessment order u/s 143(3) r.w.s 144B of the Income Tax Act, 1961 (“the Act”) dated 30.08.2022 passed by Assessment Unit, Income Tax Department. Grounds of appeal are as under:
“I. Addition u/s 56(2)(x)(b) of Rs. 28,07,480/-
1. The Ld CIT(A) erred in upholding order of Assessing Officer confirming the addition u/s 56(2)(x)(b) of the Act of Rs. 28,07,480/- (Rs. 1,07,07,480-79,00,000) being the difference between the actual consideration for purchase and the stamp duty value of the said property, without appreciating the complete facts of the case.”
2. At the outset, it is noticed that the present appeal is file with a delay of 238 days for which an affidavit stating reasons of delay has been filed by the Ld. AR of the assessee. It is submitted that the assessee is a senior citizen of 75 years of age and have no formal background in legal or tax matters. The assessee is completely unaware of the legal proceedings and process, thus was dependent on the Chartered Accountant, who is also a senior citizen of 76 years of age. The Chartered Accountant of the assessee has filed a rectification application u/s 154 of the Act against the impugned order of Ld. CIT(A)/NFAC dated 29.11.2024. Consequently, the order u/s 154 r.w.s 250 was passed on 30th June, 2025, which was served on e-mail of assessee’s Chartered Accountant, who was at Chennai at that time, thereafter, the Chartered Accountant travelled to Mumbai and has taken up the matter. It is submitted that the delay was not intended or due to any mala fide of the assessee, therefore, the delay in filing of appeal may be condoned. Considering the reasons stated by the assessee, which are supported by a duly sworn affidavit, which is found to be bona fide and unintentional, thus we deem it appropriate to condone the delay.
