DCIT Vs Shri Prahalad Rai Rathi (ITAT Jodhpur)
At the outset, we have no agitation in observing that the Ld CIT(A) rightly deleted the impugned additions of Rs. 1.62 crores made by the AO u/s 69C of the Act. It is not disputed that all the transactions have been carried out through banking channels only. Even all the transactions carried out with India Nivesh are through banking channels. The AO has nowhere established that the loss on occasion of share trading was a bogus or sham loss claimed. The attempt of AO to compare the balance amount of 1.62 crore with the share trading loss was an example of mere suspicion without any supporting material. Repayment of Rs. 1.62 crores was made through banking channel. The audited accounts were submitted and the AO completely failed to point out any discrepancy or error in the accounts which were not even rejected by him. The said provisions contemplate that any expenditure not accounted for or there is no source behind incurring such expenditure then only section 69C could be invoked. However, such is not the case of the AO as he failed to point out any expenditure incurred without source or which is unrecorded. Hence provisions of S.69C were wrongly invoked. We find no infirmity in order of the ld. CIT(A) while deleting the said addition.
FULL TEXT OF THE ORDER OF ITAT JODHPUR
The Revenue has filed this appeal challenging the order passed by Ld CIT(A), Ajmer dated 26-03-2018 for the assessment year 2015-16 raising therein following grounds of appeal.
‘On the facts and in law, the ld.CIT(A), Ajmer erred in:-
1. Deleting addition of Rs.1,47,01,596/- on account of unsecured loans treated as unexplained cash credit u/s 68 of the I.T. Act without appreciating the fact of the case.
2. Deleting addition of Rs.1,62,39,154/- on account of unsecured loans treated as unexplained expenditure u/s 69C of the I.T. Act, 1961 without appreciating the fact of the case that actual source of fund not explained by the assessee.
3. Deleting addition of Rs.s10,90,012/- on account of shortfall in NP without appreciating that from details of party-wise purchases and sales, difference of Rs.36,55,1 19/- arises which is gross profit earned by the assessee.’’
2.1 The facts relating to ground of Appeal no. 1 & 2 taken by the revenue against the deletion of addition of Rs. 1,47,01,596/- made by the AO on account of unsecured loans treated as unexplained cash credit u/s 68 of the Act and relating to ground of Appeal no. 2 against the deletion of addition of Rs. 1,62,39,154/- made by the AO on account of unsecured loans treated as unexplained expenditure u/s 69C of the Act are that the AO noticed share trading loss of Rs 1,73,42,965/- incurred in the transactions done through India Nivesh Securities P Ltd (India Nivesh) and asked the assessee to submit details of payment and source thereof. The assessee vide letter 14-1 1-20 17, explained that to make payment of security amount, he obtained loans from following parties:
