ACIT Vs Sanatan Merchants Pvt. Ltd. (ITAT Kolkata)
ITAT Kolkata Upholds Deletion of Loan & Share Capital Additions: Genuine NBFC Loans & Prior-Year Share Application Money Accepted
In this revenue appeal, ACIT challenged the deletion of additions made by AO in the case of Sanatan Merchants Pvt. Ltd for AY 2015-16. Assessee had declared income of Rs.31,41,530 & AO completed assessment u/s 143(3) by making additions of Rs.1,77,00,000 treating unsecured loans from three companies as bogus, together with an addition of Rs.50,00,000 towards alleged bogus share application money. Tribunal noted that Assessee had received loans of Rs.40 lakh from Shreshth Builders Pvt. Ltd, Rs.1.02 crore from Vinjyoti Tracom Pvt. Ltd & Rs.35 lakh from Govind Tie Up Pvt. Ltd, all through account-payee cheques, supported by confirmations, audited financials, PANs, MCA master data, NBFC registration certificates & bank statements of lenders. The loans were also repaid in subsequent years through proper banking channels & interest was paid after deducting TDS. Tribunal observed that CIT(A) had correctly appreciated that lenders had sufficient net worth to advance the loans, that transactions were genuine, & that AO made additions merely on presumption without rebutting the documentary evidence filed by Assessee.
On the issue of addition of Rs.50,00,000 towards share application money, Tribunal agreed that the said amount had been received in the immediately preceding year from Supreme Metal Trade Pvt. Ltd & Eminent Sales Pvt. Ltd, both active corporate entities with PAN, audited financials, bank statements, MCA filings & confirmations. As the money was not received during AY 2015-16, the addition made by AO was factually untenable. CIT(A) had also noted that parties had duly responded to notices u/s 133(6) & that AO ignored these evidences.
Tribunal held that CIT(A) had carefully examined the material, recorded detailed findings on identity, creditworthiness & genuineness, & correctly deleted both additions. Tribunal found no infirmity in the order of CIT(A) & accordingly upheld the deletion of Rs.1.77 crore of unsecured loans & Rs.50 lakh of share application money. The revenue’s appeal was dismissed.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
