ACIT CIRCLE, NAJIBABAD V. AAA PAPER MARKETING LTD., NEW DELHI

ITA 7349/DEL/2019

AI Insights

The case involves an appeal by the Revenue against the order of the Commissioner of Income-tax (Appeals), Moradabad, which had deleted the additions made under Section 68 of the Income Tax Act, 1961. The additions pertained to unsecured loans taken by M/s AAA Paper Marketing Ltd. from various entities and individuals, which the Revenue contended were not genuine and lacked creditworthiness. The Tribunal examined the evidences provided by the assessee, including bank accounts, confirmations, balance-sheets, and income-tax returns of the creditors, and noted that these had been accepted in previous assessment years. The Tribunal also considered the remand report from the Assessing Officer, which did not contain any adverse comments on the evidences provided by the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 30496 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Other Referred Cases: PCIT v. NRA Iron & Steel Pvt. Ltd. (2019) 103 taxmann.com 48 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Unexplained cash credit; Depreciation; Principle of natural justice
• Section: 143(3); 48; 68

Judgement Text

"1 ITA no. 7349/Del/2019 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No. 7349/Del/2019 Assessment Year: 2014-15 ACIT, Circle, Najibabad. Vs M/s AAA Paper Marketing Ltd., 26/6, Ground Floor, East Patel Nagar, New Delhi. PAN: AACCS 4575 K APPELLANT RESPONDENT Assessee represented by None Department represented by Shri Subhash Kumar, Sr. DR Date of hearing 31.12.2024 Date of pronouncement 08.01.2025 O R D E R PER SATBEER SINGH GODARA J.M: This Revenue’s appeal for assessment year 2014-15 arises against Commissioner of Income-tax (Appeals), Moradabad’s order dated 21.06.2019 in case no. 27/Central Cir. I/KNP/2017-18, in proceedings u/s 143(3) of the Income- tax Act, 1961, hereinafter referred to as the ‘Act’. Case called twice. None appears at the assessee’s behest. It is accordingly proceeded ex parte. 2. The Revenue raises the following substantive grounds in the instant appeal: 2 ITA no. 7349/Del/2019 “1. \"Whether under facts and circumstances of the case the Ld. Commissioner of Income Tax(Appeal) was correct in law in deleting the addition made under Section 68 of the Income Tax Act, 1961 in respect of unsecured loan shown to have been taken at Rs.33,00,000/- from M/s Baghauli Sugar & Distillery Private Limited when the genuineness of the transaction and the creditworthiness of the said lender was not proved?\" 2. \"Whether under facts and circumstances of the case the Ld. Commissioner of Income Tax(Appeal) was correct in law in deleting the addition made under Section 68 of the Income Tax Act, 1961 in respect of unsecured loan shown to have been taken at Rs.60,67.544/- from Shri Pramod Agarwal when the genuineness of the transaction and the creditworthiness of the said lender was not proved?\" 3. \"Whether under facts and circumstances of the case the Ld. Commissioner of Income Tax(Appeal) was correct in law in deleting the addition made under Section 68 of the Income Tax Act, 1961 in respect of unsecured loan shown to have been taken at Rs.99,10,751/- from M/s Platonic Developers Private Limited when the genuineness of the transaction and the creditworthiness of the said lender was not proved?\" 4. \"Whether under facts and circumstances of the case the Ld. Commissioner of Income Tax(Appeal) was correct in law in deleting the addition made under Section 68 of the Income Tax Act, 1961 in respect of unsecured loan shown to have been taken at Rs.30,00,000/- from Smt. Priyanka Goel when the genuineness of the transaction and the creditworthiness of the said lender was not proved?\" 5. \"Whether under facts and circumstances of the case the Ld. Commissioner of Income Tax(Appeal) was correct in law in deleting the addition made under Section 68 of the Income Tax Act, 1961 in respect of unsecured loan shown to have been taken at Rs.1,72,72,669/- from M/s Marg Realcon Private Limited when the genuineness of the transaction and the creditworthiness of the said lender was not proved?\" 6. \"Whether under facts and circumstances of the case the Ld. Commissioner of Income Tax(Appeal) was correct in law in deleting the addition made under Section 68 of the Income Tax Act, 1961 in respect of unsecured loan shown to have been taken at Rs.2,75,80,750/- from M/s Neel Kamal Cineplex Limited when the genuineness of the transaction and the creditworthiness of the said lender was not proved?\" 3 ITA no. 7349/Del/2019 7. \"Whether under facts and circumstances of the case the Ld. Commissioner of Income Tax(Appeal) was correct in law in deleting the addition of Rs.34,00,589/- made on account of disallowance of depreciation when the genuineness of the documents such as Bills/vouchers relating to fixed assets were not authenticated by the assessing officer in his remand report ?\" 8. \"The appellant craves leave to amend or alter all or any of the aforesaid grounds of appeal and add any other ground of appeal.\" 3. Suffice to say, the Revenue’s 1st to 6th substantive grounds identically plead that the learned CIT(A) herein has erred in law and on facts in reversing assessment findings, treating the corresponding various unsecured loans received by the assessee in the relevant previous year, as lacking genuineness and creditworthiness, as the case may be. Learned DR further quotes PCIT v. NRA Iron & Steel Pvt. Ltd. (2019) 103 taxmann.com 48 (SC), that once the assessee has failed to prove the foregoing twin aspects of it’s loan sums, we ought to reverse the lower appellate findings deleting section 68 unexplained cash credits addition. 5. We have given our thoughtful consideration to the Revenue’s instant identical issue raised in its former six substantive grounds seeking to revive section 68 unexplained cash credit addition representing assessee’s unexplained loans received from various parties. We first of all note that the learned CIT(A) had duly sought a remand report from the Assessing Officer and therefore, it is certainly not an instance of violation of principles of natural justice on account of admission of assessee’s additional evidence submitted in the lower appellate proceedings. 4 ITA no. 7349/Del/2019 6. There could be hardly any difference on the merit as well as once it is clear from the learned CIT(A)’s detailed discussion from para 3.0 onwards that the assessee had duly filed all the relevant evidence (s) in the form of bank account, confirmations, balance-sheet and income-tax returns of these creditors who are regularly assessed along with their respective subsequent confirmations during remand proceedings as well as it is clear on test check basis (from para 4.3 page 4 of the lower appellate discussion). We further note that the learned assessing authority’s remand report had not made any adverse comments on the assessee’s detailed evidences filed before him. We also invited Revenue’s attention to para 3.6 of the lower appellate discussion that even creditworthiness of the concerned parties herein had been accepted in the preceding assessment years as well. 7. So far as the Revenue’s heavy reliance placed on NRA Iron & Steel Pvt. Ltd. (supra) is concerned, we conclude that the same is indeed distinguishable on facts as the instant case involves an instance of the Assessing Officer was indeed directed to verify the assessee’s detailed evidences in remand proceedings wherein no adverse inference was drawn. We further took the learned DR to the CIT(A)’s impugned lower appellate finding wherein assessee’s creditors concerned had duly responded to the Assessing Officer’s remand notices by filing the requisite details and therefore, it is concluded qua its former six substantive grounds that the learned CIT(A) has rightly deleted the corresponding section 68 5 ITA no. 7349/Del/2019 unexplained cash credit additions in the peculiar facts involved herein. Rejected accordingly. 8. We now proceed to deal with the Revenue’s seventh substantive ground seeking to revive depreciation disallowance of Rs. 34,00,589/- and it is clear from the lower appellate discussion in para 9.2 to 9.5 that the assessee had duly filed all the corresponding details of fixed assets’ acquisition thereof as well as the fact that they had been duly put to use as well in the relevant previous year. We thus reject Revenue’s instant last substantive ground as well in very terms. 9. This Revenue’s appeal is dismissed. Order pronounced in open court on 08.01.2025. Sd/- Sd/- (M. BALAGANESH) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "