Income Tax Appellate Tribunal - Delhi
Topline Buildtech Pvt. Ltd., New Delhi vs Dcit, Circle- 25(2), New Delhi on 13 April, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES "G" : DELHI
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND
SHRI L.P. SAHU, ACCOUNTANT MEMBER
ITA.No.6507/Del./2017
Assessment Year 2013-2014
M/s. Topline Buildtech Pvt.
Ltd., Flat No.104, Lower Ground The DCIT,
Floor, Westend Marg, Said Circle-25(2),
Undisclosed income-Ajab Marg,
vs C.R. Building,
Behind Saket Metro Station, New Delhi.
New Delhi. PAN AABCT5348L
(Appellant) (Respondent)
For Assessee : Shri R.S. Singhvi, Advocate
For Revenue : Shri Kaushlendra Tiwari, Sr.DR
Date of Hearing : 27.03.2018
Date of Pronouncement : 13.04.2018
ORDER
PER BHAVNESH SAINI, J.M.
This appeal by assessee has been directed against the order of the Ld. CIT(A)-43, New Delhi, dated 22nd September, 2017, for the A.Y. 2013-2014.
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ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
2. Briefly, the facts of the case are that the assessee- company filed return of income declaring loss of Rs.5,30,72,598/- and paid taxes at the book profit of Rs.6,42,609/-. The nature of business of assessee-company is civil construction as contractor and real estate development. The assessee-company filed required details before A.O. at assessment stage which have been examined by A.O. The A.O. made certain additions to the returned income and computed the income of the assessee-company accordingly. The assessee- company challenged the additions before Ld. CIT(A). The appeal of assessee-company has been partly allowed.
3. We have heard the learned Representatives of both the parties and perused the material on record. The assessee- company has raised three effective grounds of appeal which are decided as under.
ISSUE No.1 :
4. The assessee-company challenged the addition of Rs.18 lakhs under section 68 of the I.T. Act in respect of sundry 3 ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
creditor M/s. Transearch Consultations Pvt. Ltd. The A.O. on examining the details of sundry creditors and calling the information under section 133(6) of the I.T. Act found that there is a sundry creditor namely M/s. Transearch Consultations Pvt. Ltd. in a sum of Rs.18 lakhs. No reply have been received. In the absence of any documents on record, A.O. made the addition of Rs.18 lakhs in respect of this party under section 68 of the I.T. Act.
4.1. It was submitted before the Ld. CIT(A) that same is running account and there have been substantial movement in account during the year under consideration and as such there is no ground or basis for any addition under section 68 of the I.T. Act. Copy of the ledger account of the party was furnished before A.O. during the course of assessment proceedings. It was stated that there is no case of applicability of Section 41(1) of the I.T. Act, as the assessee-company has not written-off the creditor in its books of account and the same continued to be recognised as liability. In support of its contention, the 4 ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
assessee-company relied upon the decision of the Hon'ble Delhi High Court in the case of CIT vs. Shri Vardhman Overseas Ltd., (2011) 343 ITR 408 (Del.), Decision of Gujarat High Court in the case of CIT vs. Bhogilal Ramjibhai Atara (Guj.). The assessee- company argued before the Ld. CIT(A) the applicability of Section 41(1) clearly states that amounts should be written-off in the book before liability can cede and take form of income for the assessment relevant to financial year in which amount has been written off. The amount has been written off in subsequent financial year. However, A.O. has added the same under section 68 of the I.T. Act. The Ld. CIT(A) noted that no information has been furnished in respect of this party. Therefore, onus upon assessee-company had not been discharged to prove the genuineness of the amount in question. The argument that amount have been written back in subsequent year proves that amounts were not genuine in the first place. The Ld. CIT(A) accordingly confirmed this addition.
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5. Learned Counsel for the Assessee reiterated the submissions made before the authorities below and submitted that Section 68 is not applicable in respect of trade creditor and relied upon decision of the Hon'ble Delhi High Court in the case of CIT vs. Ritu Anurag Aggarwal (2010) 02 taxmann.com 134 (Del.) in which it was held as under :
3. "This finding of Assessing Officer remained undisturbed before the CIT(A) as well and has been accepted by the ITAT. Proceeding on this basis, the ITAT observed that the sales, purchases as well as gross profits as disclosed by the assessee have been accepted by the Assessing Officer.
4. Once this is accepted, we are of the opinion that the approach of the ITAT was correct inasmuch as the Assessing Officer did not consider this aspect while making additions of the sundry creditors under section 68 of the Income Tax Act. As there was no case for disallowance for corresponding purchases, no addition could be made under 6 ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
section 68 inasmuch as it is not in dispute that the creditors' outstanding related to purchases and the trading results were accepted by the Assessing Officer.
5. We are, therefore, of the opinion that no substantial question of law arises for consideration in this case. The appeal is accordingly dismissed."
5.1. He has also filed copy of the ledger account of the creditor to show that there is a heavy movement of the amounts in question. He has submitted books of account of assessee- company have been accepted by the A.O.
6. On the other hand, Ld. D.R. submitted that Section 41(1) have been applied by the A.O. Therefore, addition is correctly made.
7. We have considered the rival submissions. The A.O. noted in the assessment order that notice under section 133(6) have been issued to 05 sundry creditors including M/s. Transearch Consultations Pvt. Ltd., but no reply and 7 ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
documents have been furnished. In the absence of requisite information/documents, the A.O. made the addition of Rs.18 lakhs under section 68 of the I.T. Act. The assessee-company submitted before the Ld. CIT(A) that the same is running account of the creditor and there have been substantial movement in the account during the year under consideration. Copy of the ledger account was furnished before A.O. during the course of assessment proceedings. This fact has not been rebutted by the authorities below. It would mean that ledger account of the party was available before the authorities below and the A.O. in the assessment order also mentioned that assessee-company filed the details and documents and case have been discussed with the assessee-company. The assessee- company submitted before the Ld. CIT(A) that Section 41(1) would not apply because the liability have not been written back in the account. This fact is also not disputed by the authorities below. Copy of the ledger account is also filed on record which shows that during assessment year under appeal there were many transactions conducted between assessee-company and 8 ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
M/s. Transearch Consultations Pvt. Ltd.. This party/creditor has transferred Rs.33 lakhs on different dates in the account of the assessee-company through banking channel and similarly there are 04 debit entries of Rs.15 lakhs and the amount of Rs.18 lakhs was credit closing balance at the end of the year. On 31st March, 2014, the same amount was written off in the books of account and has been offered for taxation. These facts would support the explanation of assessee-company that amount in question was received through banking channel and there are various entries between the parties and only addition was made of the closing balance without disturbing the other entries in the account of the creditor. Addition of closing balance was, therefore, not justified on facts of case. Otherwise, the A.O. should have made full addition against the assessee- company of Rs.33 lakhs. The book results of the assessee- company have not been disturbed by the A.O. The decision in the case of CIT vs. Ritu Anurag Aggarwal (supra) would support the case of the assessee-company. The assessee-company has also written back the amount in question in subsequent year 9 ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
which is also supported by the ledger account of this party. Since the assessee-company has offered the same amount for taxation in subsequent year, therefore, if the said addition is maintained in the assessment year under appeal, it would amount to double addition. Otherwise also, it is a case of loss, therefore, when amount is surrendered subsequently for taxation, at the best, it could be a tax neutral exercise. Considering the totality of the facts and circumstances of the case, we do not find any justification to sustain the addition. We, accordingly, set aside the orders of the authorities below and delete the addition of Rs.18 lakhs. This issue is decided in favour of the assessee-company.
ISSUE NO. 2 :
8. The assessee-company challenged the addition of Rs.5 crores under section 68 of the I.T. Act in respect of unsecured loans from M/s. Maple Technology Ltd., and M/s. Marry Gold Overseas Limited. On examining the details of fresh unsecured loans taken during the year as per the audit report, 10 ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
it was found that assessee-company has taken unsecured loans at Rs.3.70 crores from M/s. Maple Technologies Ltd., and Rs.1.30 crores from M/s. Marry Gold Overseas Limited. The assessee-company was asked to furnish confirmation and supporting evidences to establish the genuineness of the loan and creditworthiness of lenders. The assessee-company has furnished the copy of the ledger account of M/s. Maple Technologies Ltd., and M/s. Marry Gold Overseas Limited, along with copy of their bank accounts. The A.O. issued notices under section 133(6) to both the creditors. In response to the same, both the lender companies sent their replies by post enclosing thereof confirmed copies of their ledger accounts, bank statements, ITR and balance-sheets. The A.O. on examining the same noted that both the companies have no fixed assets or trade/debtors/creditors. In the case M/s. Marry Gold Overseas Limited no revenue from operation is shown and against the claim of other income of Rs.41,53,247/-, the expenses of Rs.10,06,022/- have been claimed showing the net profit of Rs.31,47,225/- as against the gross total income in the 11 ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
ITR shown at Rs.19,36,810/-. Similarly, in the case of M/s. Maple Technologies Ltd., no revenue operation has shown and against the claim of other income of Rs.52,58,510/-, expenses of Rs.14,11,776/- have been claimed, leaving net profit of Rs.38,47,744/- against this income shown in the return of income of Rs.27,02,018/-. There is no fixed assets in the balance-sheet and there is no accumulated loss. In the bank statement of M/s. Maple Technologies Ltd., furnished for the period starting from 03rd October, 2012 to 28th March, 2013 for about six months, there are transactions totaling into more than Rs.10 crore which are neither justified by the receipt of Rs.52.85 lakhs shown in the P & L A/c nor by the size of its balance-sheet totaling to Rs.3.84 crores. In the case of M/s. Marry Gold Overseas Limited only one page bank statement for March, 2013, has been furnished. It is not only the volume of transactions but also manner of debits and credits reflected in the bank statements only to speak out one thing that they are receiving funds in round figures. The A.O. therefore, issued summons under section 131 of the I.T. Act to the creditor Shri 12 ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
Hitesh Garg, claimed to be the Director in both the Companies, who attended the proceedings before A.O. and his statement was recorded on oath under section 131 of the I.T. Act and he confirmed source of the amount was received on return of advances given to M/s. Divine Infracon P. Ltd. He informed that these advances were given against property in respect of which they were receiving rental income on regular basis. However, copy of the agreement was not furnished. The reply of the assessee-company was called for in which assessee-company submitted that loans are from unrelated party and if any, adverse inference is to be drawn, the same should be taken in the hands of the lender company. The A.O. did not accept thee explanation of assessee and treated both the amounts as unexplained loans under section 68 of the I.T. Act and made the addition of Rs.5 crores and also directed that this amount will be taxed separately as per the provisions of Section 115BBE of the I.T. Act and the same is not reduced from the claim of business loss.
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9. The assessee-company challenged the addition before the Ld. CIT(A) and reiterated the submissions made before the A.O. and submitted that all the documents are part of the record which confirm the transaction with the creditors. Both the creditors are assessed to tax and have confirmed their transactions directly to the A.O. under section 133(6) of the I.T. Act as well as statements of the Director was recorded under section 131 of the I.T. Act in which also he has confirmed giving loans to the assessee-company. The assessee-company made interest payment on the loan which was subjected to TDS. The A.O. considered payments of interests on these loans and accepted. The loans were taken through banking channel and appeared in the bank statement and balance sheet of the creditors. Therefore, no adverse inference should be drawn against the assessee-company. The assessee-company submitted that A.O. cannot ask the assessee-company to prove source of the source and relied upon the following decisions:
(i) CIT vs. Shiv Dhooti Pearls and Investment Ltd., (Del.) (2015) 64 taxmann.com 329 (Del.) (HC) 14 ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
(ii) CIT vs. Vrindavan Farms Pvt. Ltd., ITA.No.71/2015 dated 12th August, 2015 (Del) (HC)
(iii) Nemi Chand Kothari vs. CIT and Another (2003) 264 ITR 254 (Gau.) (HC)
(iv) CIT vs. Value Capital Services Pvt. Ltd., (2008) 307 ITR 334 (Del.) (HC) 9.1. It was further submitted that in the case of M/s.
Marry Gold Overseas Limited, the amount have been repaid in subsequent year. Therefore, it is not a case of unexplained credit. In the case of M/s. Maple Technologies Ltd., the amount has been written back and credited to other income. Therefore, it could not be undisclosed income.
10. Ld. CIT(A) however noted that the bank account of the lenders shows that the amount have been advanced on specific dates. On the date of the amount is transferred, just prior to the transfer, there is a deposit of the same amount in the account. The Ld. CIT(A) accordingly dismissed this ground of appeal of assessee-company.
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11. Learned Counsel for the Assessee reiterated the submissions made before the authorities below. He has submitted that addition have been made without appreciating the facts and material on record. Loans were raised from corporate entities and their identity is not disputed. The loans were taken through account payee cheque and interest was also paid on such loans after deduction of TDS. The A.O. made investigation directly from the creditors under section 133(6) of the I.T. Act, who have confirmed giving loans to the assessee- company with supporting documents. The A.O. also recorded statement of the Director under section 131 of the I.T. Act in which he has confirmed giving loans to the assessee-company. The assessee-company furnished all the documentary evidences of confirmations of loans on record which support the explanation of assessee-company of receipt of genuine amount in question. No cash was found deposited in the account of the creditors. The authorities below have not disputed the genuineness of the documents and A.O. also allowed deduction of interest on such loans. In case of M/s. Marry Gold Overseas 16 ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
Limited, the amount have been returned next year and in case of M/s. Maple Technologies Ltd., the amount have been written back in subsequent year, on which, tax have been paid. He has relied upon decision of the Hon'ble Supreme Court in the case of CIT vs. Orissa Corporation Pvt. Ltd., 159 ITR 78 in which it was held as under :
"In this case the assessee had given the names and addresses of the alleged creditors. It was in the knowledge of the revenue that the said creditors were the income-tax assessees. Their index number was in the file of the revenue. The revenue, apart from issuing notices under section 131 at the instance of the assessee, did not pursue the matter further. The revenue did not examine the source of income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the alleged loans. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the assessee could not do any further. In the premises, if the Tribunal came to the conclusion that the assessee had discharged the burden that lay on him, then it could not be said 17 ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion was based on some evidence on which a conclusion could be arrived at, no question of law as such could arise."
11.1. He has, therefore, submitted that assessee-company proved identity of the creditors and creditworthiness and genuineness of the transaction in the matter. Therefore, addition is liable to be deleted.
12. On the other hand, Ld. D.R. relied upon the orders of the authorities below and submitted that there was no fixed assets or the creditors and submitted that where mutual transactions were conducted through banking channel is no ground to consider the same as genuine transaction. He has relied upon decision of the Hon'ble Supreme Court in the case of Suman Gupta vs. CIT 2013-LL-0122-69 (SC) confirming judgment of Hon'ble Allahabad High Court in the case of Suman Gupta vs. ITO (Order dated 07.08.2012 in ITA.No.680/12) in which cash was found deposited in the account of the creditor. 18
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Similarly, the Ld. D.R. relied upon the decision of Hon'ble Gujarat High Court in the case of Blessing Construction vs. ITO (2013) 214 Taxman 645 (Guj.) in which it was found that where sizable amounts were deposited in cash in account of the depositors only before their withdrawal through cheques in favour of assessee, addition was justified.
13. We have considered the rival submissions. The A.O. found that there are fresh credits received by assessee-company from two creditors mentioned above. The assessee-company furnished copy of the ledger account, copies of their bank statements. The A.O. then issued notice under section 133(6) of the I.T. Act to both the creditors and both the creditors in their replies filed before A.O. confirmed giving of loans to the assessee-company which is supported by confirmed copies of their accounts, bank statements, ITR and balance-sheet. The A.O. however, noted that the creditors do not have any fixed assets or trade debtors/trade creditors and there were no revenue from the operation. The A.O. therefore, in order to verify 19 ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
the transactions, issued summons under section 131 to both the creditors and their common Director Shri Hitesh Garg who appeared before the A.O. in response to summon and confirmed the giving of loans to the assessee-company in his statement recorded under section 131 of the I.T. Act. The A.O. however, did not believe statement of this person because copy of the agreement was not filed. These facts and material on record clearly prove that identity of both the creditors are not in dispute because both the creditors are assessed to tax and have filed confirmation directly to the A.O. in response to notice issued under section 133(6) of the I.T. Act and also confirmed transaction with the assessee-company in the statement recorded under section 131 of the I.T. Act. The parties have been filed confirmed copies of their ledger account, bank statements, ITR and audited balance sheet in which the giving of loan to the assessee-company has been mentioned. All the transactions are routed through banking channel. Copies of the ledger account, income tax return, balance sheet and bank statement are filed on record. In the bank statements of the creditors, no cash was 20 ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
found deposited before giving loans to the assessee-company. If in the case of M/s. Maple Technologies Ltd., there were transactions conducted of Rs.10 crore would support the explanation of assessee-company that such creditor was having capacity to give loan of Rs.3.70 crores to the assessee-company. The assessee-company paid interest on these loans to the creditor, on which, TDS have been deducted. The A.O. accepted the claim of assessee-company and did not disallow interest paid on such loans. Both the creditors are unrelated and independent parties. In the case of M/s. Marry Gold Overseas Limited the amount have been returned in subsequent year and in the case of other creditor M/s. Maple Technologies Ltd., the assessee-company written back the amount in subsequent year and shown its income. Therefore, it would amount to double addition in assessment year under appeal. It is well settled law that assessee-company cannot be asked to prove source of the source. Even then the Director of both the companies in his statement confirmed that source of giving loans to the assessee- company was advanced return by M/s. Divine Infracon Pvt. Ltd. 21
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However, the A.O. did not believe the explanation of the creditor because copy of the Rent Agreement was not filed. The A.O. has summoned both the creditors under section 131 of the I.T. Act in order to verify the genuineness of the transaction in the matter. The A.O. may ask the creditor to explain the source but assessee-company cannot be asked to explain the source of the source. Since Shri Hitesh Garg was summoned as witness of the Department and in case, he did not produce the Rent Agreement subsequently, A.O. should explain as to what steps have been taken by the him against this witness of the Department for production of the Rent Agreement as per law. Therefore, if the A.O. has not taken any steps against his own witness, no adverse inference should be drawn against the assessee-company. Thus, the sole basis left for consideration is that Revenue doubted the creditworthiness of the creditors because of the low income reflected in their return of income and that they have no fixed assets or debtors or creditors. However, A.O. has not undertaken any investigation of the veracity of the documents submitted by the assessee-company. 22
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The bank statement of the creditors show that both creditors were having sufficient amounts in their bank accounts for giving loans to the assessee-company. The A.O. have not made any investigation and nothing has been brought on record if the amount of loan given by both the creditors actually received from the coffers of the assessee-company so as to enable it to be treated as undisclosed income of the assessee-company.
14. The Hon'ble Delhi High Court in the case of CIT vs. Shiv Dhooti Pearls and Investment Ltd., (Del.) (2015) 64 taxmann.com 329 (Del.) in which it was held as under :
"In terms of Section 68, assessee is liable to disclose only source(s) from where he has himself received credit and it is not burden of assessee to show source(s) of his creditor nor is it burden of assessee to prove creditworthiness of source(s) of sub creditors."
14.1. The Hon'ble Delhi High Court in the case of CIT vs. Vrindavan Farms Pvt. Ltd., ITA.No.71/2015 dated 12th August, 2015 (Del), in which it was held as under :
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"The sole basis for the Revenue to doubt their creditworthiness was the low income as reflected in their return of income. It was observed by the ITAT that the AO had not undertaken any investigation of the veracity of the documents submitted by the assessee, the departmental appeal was dismissed by the Hon'ble High Court.
14.2. The Hon'ble Gauhati High Court in the case of Nemi Chand Kothari vs. CIT and Another (2003) 264 ITR 254 (Gau.) in which it was held as under:
Held, (i) that the assessee had established the identity of the creditors. The assessee had also shown, in accordance with the burden, which rested on him under section 106 of the Evidence Act, that the said amounts had been received by him by way of cheques from the creditors which was not in dispute. Once the assessee had established these, the assessee must be taken to have proved that the creditor had the creditworthiness to 24 ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
advance the loans. Thereafter, the burden had shifted to the Assessing Officer to prove the contrary. The failure on the part of the creditors to show that their sub-creditors had creditworthiness to advance the said loan amounts to the assessee, could not, under the law be treated as the income from undisclosed sources of the assessee himself when there was neither direct nor circumstantial evidence on record that the said loan amounts actually belonged to, or were owned by, the assessee. The Assessing Officer failed to show that the amounts, which had come to the hands of the creditors from the hands of the sub-creditors, had actually been received by the sub- creditors from the assessee. Therefore, the Assessing Officer have treated the said amounts as income derived by the assessee from undisclosed sources."
14.3. The Hon'ble Delhi High Court in the case of CIT vs. Value Capital Services Pvt. Ltd., (2008) 307 ITR 334 (Del.) in which it was held as under:
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"Dismissing the appeal, that the additional burden was on the Department to show that even if the share applicants did not have the means to make the investment, the investment made by them actually emanated from the coffers of the assessee so as to enable it to be treated as the undisclosed income of the assessee. No substantial question of law arose."
14.4. The Hon'ble Gujarat High Court in the case of DCIT vs. Rohini Builders (2002) 256 ITR 360 (Guj.) held as under :
"The assessee was a firm, engaged in the business of dealings in land. During the assessment year under consideration the assessee had taken loans from various parties and during the course of assessment proceedings, the assessee had furnished the loan confirmations giving full addresses, G1R numbers/permanent account numbers, etc., of all the depositors. The Assessing Officer however issued summons to some of the creditors and also conducted inquiries into the genuineness or otherwise of the 26 ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
loans taken by the assessee. After considering the evidence, the Assessing Officer made an addition of Rs.12,85,000 to the returned income of the assessee. This was confirmed by the Commissioner of Income-tax (Appeals). On further appeal to the Tribunal the Tribunal held that the phraseology of section 68 of the Income-tax Act, 1961, was clear, that the Legislature has laid down that in the absence of a satisfactory explanation, the unexplained cash credit may be charged to income-tax as the income of the assessee of that previous year, that the legislative mandate is not in terms of the words "shall be charged to income tax as the income of the assessee of that previous year", that the unsatisfactoriness of the explanation does not and need not automatically result in deeming the amount credited in the books as income of the assessee. The Tribunal found that the assessee had discharged the initial onus which lay on it in terms of section 68 by proving the identity of the creditors by giving their complete addresses, GIR numbers/permanent account 27 ITA.No.6507/Del./2017 M/s. Topline Buildtech Pvt. Ltd., New Delhi.
numbers and the copies of assessment orders wherever readily available, that it had also proved the capacity of the creditors by showing that the amounts were received by the assessee by account payee cheques drawn from bank accounts of the creditors and the assessee was not expected to prove the genuineness of the cash deposited in the bank accounts of those creditors because under law the assessee can be asked to prove the source of the credits in its books of account but not the source of the source. Thus taking into consideration the totality of the facts and circumstances of the case, and, in particular the fact that the Assessing Officer had not disallowed the interest claimed/paid in relation to these credits in the assessment year under consideration or even in the subsequent years and tax had been deducted at source out of the interest paid/credited to the creditors, the Tribunal held that the Departmental authorities were not making the addition of Rs.12,85,000. On appeal to the High Court : 28
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Held, that considering the facts and circumstances of the case narrated by the Tribunal and the law explained by it, the appeal was liable to be dismissed."
14.5. The Hon'ble Supreme Court has dismissed the Special Leave Petition filed by the Revenue against this Judgment reported in (2002) 254 itr (St.) 275.
15. The decisions relied upon by the Learned Counsel for the Assessee squarely apply to the facts and circumstances of the case. Thus, the assessee-company proved the identity of the creditors, their creditworthiness and genuineness of the transaction in the matter. The decisions relied upon by the Ld. D.R. do not support the case of the Revenue. In view of the above discussion and evidence and material on record, we do not find any justification to sustain the addition. We, accordingly, set aside the orders of the authorities below and delete the addition of Rs.5 crores. This issue is decided in favour of the assessee- company.
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ISSUE NO.3 :
16. The A.O. while making the addition under section 68 of the I.T. Act noted that the same would be taxed separately under the provisions of Section 115BBE as the same would not be reduced from the claim of business losses. Though both the parties have made their respective contentions on this issue regarding applicability of these provisions to the case of assessee-company, however, we are of the view that since we have deleted the additions under section 68 of the I.T. Act, therefore, this issue is left with academic discussion only. No further finding is required. This ground of assessee-company is accordingly disposed off.
17. In the result, appeal of assessee is allowed.
Order pronounced in the open Court.
Sd/- Sd/-
(LP SAHU) (BHAVNESH SAINI)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Delhi, Dated 13th April, 2018
VBP/-
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ITA.No.6507/Del./2017 M/s. Topline
Buildtech Pvt. Ltd., New Delhi.
Copy to
1. The appellant
2. The respondent
3. CIT(A) concerned
4. CIT concerned
5. D.R. ITAT 'G' Bench, Delhi
6. Guard File.
// BY Order //
Assistant Registrar : ITAT Delhi Benches :
Delhi.