DCIT CIRCLE-25(1), NEW DELHI V. TECHCOM TECHNOLOGIES PVT. LTD, DELHI

ITA 5044/DEL/2019

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The case involves the Deputy Commissioner of Income Tax (DCIT), Circle-25(1), New Delhi as the appellant and M/s. Techcom Technologies Pvt. Ltd as the respondent. The dispute arose from the assessment year 2012-13, where the AO had added unsecured loans amounting to Rs. 3,07,09,348 as income under Section 68 of the Income-tax Act, 1961, and disallowed interest on these loans amounting to Rs. 11,14,274. The CIT(A) had deleted these additions, leading to the revenue's appeal. The revenue contested the admission of additional documents by the CIT(A) without an opportunity for the AO to be heard, citing a violation of Rule 46A of the Income Tax Rules, 1962. The ITAT decided to remand the case back to the AO for a fresh examination of the issues.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 34775 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Laws Referred To: Income-tax Act, 1961, Income Tax Rules, 1962
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: PRIYA JUNEJA
• Keywords: Opportunity of being heard; Additional evidence; Source of fund
• Section: 143(3); 68; 13

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI SUDHIR KUMAR, JUDICIAL MEMBER ITA No. 5044/Del/2019 (Assessment Year: 2012-13) DCIT, Circle-25(1), New Delhi Vs. M/s. Techcom Technologies Pvt. Ltd, Y-40, Phase-II, Okhla Industrial Area, Delhi-110020 (Appellant) (Respondent) PAN:AAFCS3112H Assessee by : Ms. Priya Juneja, CA Shri Sameer Chopra, Adv Revenue by: Shri Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 10/02/2025 Date of pronouncement 21/03/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.5044/Del/2019 for AY 2012-13, arises out of the order of the Commissioner of Income Tax (Appeals)-9, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No.83/16-17 dated 15.03.2019 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 22.03.2016 by the Assessing Officer, DCIT, Circle-25(1), New Delhi (hereinafter referred to as ‘ld. AO’). 2. The main issue that is contested by the revenue in this appeal is challenging the deletion of addition made u/s 68 of the Act in the sum of Rs. 3,07,09,348/- in respect of unsecured loans received by the assessee. The inter connected issue involved thereon is disallowance of interest on such ITA No. 5044/Del/2019 M/s. Techcom Technologies Pvt. Ltd Page | 2 unsecured loans to the tune of Rs. 11,14,274/-. The revenue has also challenged that the ld CIT(A) had committed violation under Rule 46A of the Income Tax Rules, 1962 by admitting the additional documents submitted by the assessee without providing opportunity of hearing to the ld AO. 3. We have heard the rival submissions and perused the materials available on record. The assessee is engaged in the business of imports, exports, Distributors & Trading of computer hardware/software, computer components & parts, electrical goods, CDR Media, camera, mobile and other items allied to the trade. The return for AY 2012-13 was filed by the assessee company on 29.11.2012 declaring total income of Rs. 1,28,24,150/-. The assessee had taken unsecured loans from the directors and shareholders of the company and their relatives. The ld AO asked the assessee to furnish the details of unsecured loans along with proof of identity, genuineness, creditworthiness and source of funds of the loan received. The assessee furnished the PAN, income tax return, copy of bank statements and confirmation of accounts in case of all the lenders. Out of 19 lenders, ld AO has found that in 13 cases, the lenders did not have financial capacity to advance loan to the assessee i.e. amount of loan advanced were more than the return of income of the respective lenders. However, each loan reflected in the books of lenders is preceded/ succeeded by a credit entry of almost the same amount for which the assessee could not give proper explanation. Accordingly, the ld AO concluded that assessee has failed to prove the creditworthiness of the lenders and genuineness of the transaction in terms of Section 68 of the Act and proceeded to add unsecured loans in the sum of Rs. 3,07,09,348/- as income of the assessee. Since, the unsecured loans have been added, the interest paid on such loans to the tune of Rs. 11,14,274/- was sought to be disallowed by the ld AO. ITA No. 5044/Del/2019 M/s. Techcom Technologies Pvt. Ltd Page | 3 4. Yet another observation made by the ld AO that confirmation submitted by the assessee from the lenders were actually not signed by the lenders and hence, the genuineness of the transaction per se could not be proved. 5. The assessee submitted that it had furnished the names and addresses of the lenders, PAN of the lenders, copy of ITRs of the lenders, bank statement of the lenders and monies have been received through regular banking channels from the account of the lenders to the account of the assessee. The fact of giving loans by the lenders has been duly reflected in the balance sheet of the lenders. Accordingly, it was pleaded that assessee had proved all the three ingredients of Section 68 of the Act namely identity of the lenders, creditworthiness of the lenders and genuineness of the transaction. Further, it was pleaded that the lenders have sufficient credit balance in their bank account to advance loans to the assessee company. It was also pleaded that for the purpose of advancing loans to somebody, there is no requirement that lender should have declared more income in the income tax returns than the amount advanced to the assessee. It was also clarified from the bank statement of the lenders that though there were certain credit entries which preceded/ succeeded the entry of giving loan to the assessee company reflected in the bank account of the lender still, the same are not cash deposits made thereon. Hence, there is no scope for raising any suspicion thereon. It was pointed out that assessee company is a family owned company and hence, it thought it fit to raise funds through the share holders and directors and their relatives. It was also clarified that some of the family members are non-resident Indians settled overseas and are very well educated earning substantial income. It was also clarified that the family members have given and taken loans to and from during the year under consideration which in ITA No. 5044/Del/2019 M/s. Techcom Technologies Pvt. Ltd Page | 4 turn is given by different family members to the assessee thereby reflecting circulation of monies among each other. It was also submitted that the assessee had made 3 part payments during the year through account payee cheques to the said lenders. The interest paid on loan has been duly subjected to deduction of tax at source. Assessee also furnished the source of source and their details for each lenders as additional evidence before the ld CIT(A). Since, no remand report was called for by the ld CIT(A) from the ld AO, revenue is contesting the violation of provision of Rule 46A of the Income Tax Rules before us. When this was stated to the ld AR, he submitted that these details were submitted at the behest of the ld CIT(A). However, he fairly agreed that she has no problem if the documents are to be examined by the ld AO. Considering the totality of the facts and circumstances of the instant case, we deem it fit and appropriate to restore this appeal completely to the file of the ld AO for de novo adjudication in accordance with law qua the issue raised in the appeal. Needless to mention that assessee be given reasonable opportunity of being heard. The assessee is at liberty to furnish fresh evidences, if any, in support of its contentions. Accordingly, grounds raised by the revenue are allowed for statistical purposes. 6. In the result, the appeal of the revenue is allowed for statistical purposes. Order pronounced in the open court on 21/03/2025. -Sd/- -Sd/- (SUDHIR KUMAR) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:21/03/2025 A K Keot Copy forwarded to ITA No. 5044/Del/2019 M/s. Techcom Technologies Pvt. Ltd Page | 5 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "