DEPUTY COMMISSIONER OF INCOME TAX-1(1), RAIPUR V. CHHATTISGARH STATE POWER DISTRIBUTION COMPANY LIMITED, RAIPUR

ITA 156/RPR/2025

AI Insights

The case revolves around an appeal by the Deputy Commissioner of Income Tax-1(1), Raipur against the Chhattisgarh State Power Distribution Company Limited concerning the assessment year 2021-22. The primary issues were the additions made by the AO regarding unexplained interest income amounting to Rs.8,70,74,192 and unexplained expenditure amounting to Rs.8,58,16,078. The CIT(Appeals) had deleted these additions, which the revenue challenged in the Tribunal. The Tribunal, after reviewing the submissions and the AO's report, upheld the CIT(Appeals)'s decision, finding that the additions were not justified based on the evidence provided by the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714144 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2021-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Assessee Lawyers: PRAVEEN KHANDELWAL; PRAVEEN GOYAL
• Keywords: Unexplained cash credit; Unexplained expenditure
• Section: 68; 133(6); 69C

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ रायपुर मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.156/RPR/2025 Ǔनधा[रण वष[ / Assessment Year : 2021-22 The Deputy Commissioner of Income Tax-1(1), Raipur (C.G.) ........अपीलाथȸ / Appellant बनाम / V/s. Chhattisgarh State Power Distribution Company Limited Vidyut Seva Bhawan, Daganiya (C.G.)-492 001 PAN: AADCC6047K ……Ĥ×यथȸ / Respondent Assessee by : Shri Praveen Khandelwal & Shri Praveen Goyal, CAs Revenue by : Shri Ram Tiwari, CIT-DR सुनवाई कȧ तारȣख / Date of Hearing : 06.08.2025 घोषणा कȧ तारȣख / Date of Pronouncement : 06.08.2025 Printed from counselvise.com 2 DCIT-1(1), Raipur Vs. Chhattisgarh State Power Distribution Company Limited ITA No. 156/RPR/2025 आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM: This appeal preferred by the revenue emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 15.01.2025 for the assessment year 2021-22 as per the following grounds of appeal: “(1) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(Appeals) was justified in deleting the additions made by AO to tune of Rs.8,70,74,192/- on account of unexplained interest received from parties as unexplained cash credit u/s.68 of the Act relying upon the submission of the assessee and thereby ignoring the facts brought on the record by the AO. (2) Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) was justified in deleting the additions made by the AO to the tune of Rs.8,58,16,078/- on account of payments made u/s. 194J as un explained expenditure u/s 69C of the Act relying upon the submission of the assessee and thereby ignoring the facts brought on the record by the AO. (3) Any other ground which may be adducted at the time of hearing.” 2. As per the assessment order, there were two additions made by the A.O which are as follows: “(i) Unexplained interest received from parties (Unexplained cash credit u/s 68 of the Act) : Rs. 8,70,74,192/- As per assessment order, the assessee was asked to furnish list of parties from whom interest payments were received, agreement with parties, ITRs of parties and bank account statement highlighting payments received. The assessee in response to the same has submitted list of parties and supporting bank account statement only but failed to furnish ITRs of parties, transactions in lieu of which interest payment was received as well as agreement with parties. Hence, an amount of Rs.8,70,74,192/- was added to Printed from counselvise.com 3 DCIT-1(1), Raipur Vs. Chhattisgarh State Power Distribution Company Limited ITA No. 156/RPR/2025 the total income of the assessee as unexplained cash credit u/s 68 as per provision of section 115BBE of the Act. (ii) Payments made u/s 194J (Unexplained expenditure u/s 69C of the Act) : Rs.8,58,16,078/- As per assessment order, the assessee was asked to furnish list of parties to whom payments under 194J were made along with ITRs of parties, agreement with parties, nature of work done and bank account statement highlighting payments made. The assessee in response to the same has submitted list of parties and supporting bank account statement only but failed to furnish ITRs of parties, details of work done by the parties and agreement with the parties. Further, in order to verify the genuineness of the transactions notices u/s. 133(6) of the Act were issued to various parties but no confirmation has been received from any of the party. Hence, in absence of any valid documentary evidences and party confirmations an amount of Rs.8,58,16,078/- was added to the total income of the assessee as unexplained expenditure u/s. 69C as per provisions of section 115BBE of the Act.” 3. That with regard to the first addition i.e. unexplained cash credit u/s.68 of the Income Tax Act, 1961 (for short ‘the Act’) of Rs.8,70,74,192/, the Bench had directed the Ld. CIT-DR to obtain a report from the jurisdictional A.O who has commented regarding the same. That on this date of hearing, the CIT-DR read out the said findings of the A.O on this addition. The relevant paras of the report submitted by the A.O dated 02.07.20225 are extracted as follows. Printed from counselvise.com 4 DCIT-1(1), Raipur Vs. Chhattisgarh State Power Distribution Company Limited ITA No. 156/RPR/2025 From the above, it is observed that major portion of interest income on IT refund of Rs.9,25,27,166/- as per 26AS has already been accounted for Printed from counselvise.com 5 DCIT-1(1), Raipur Vs. Chhattisgarh State Power Distribution Company Limited ITA No. 156/RPR/2025 by the assessee in his books of accounts and offered for taxation. Therefore, addition made by the A.O NEAC on account of unexplained credit u/s. 68 of the Act is not warranted here.” 4. The Ld. CIT(Appeals)/NFAC had provided relief to the assessee by observing as follows: “From perusal of the facts and circumstances of this case, the appellant is sufficiently found proving the source of the interest income and there is found unjust implication of provisions of section 68, as the appellant itself offered the interest income as its income in the profit & loss account. Further, tie interest income offered by the appellant is significantly on account of interest on IT Refund, hence, there cannot be question of any unexplained credit. AO failed to rebut the submission of the appellant and failed to bring on record how the interest income is unexplained credit for the appellant. Therefore, the addition made by the assessing officer is incorrect and without appreciating documentary evidences submitted by the appellant. The addition of Rs.8,70,74,192/- is directed to be deleted. Ground no. 3 is allowed.” 5. The Ld. CIT-DR fairly conceded as per afore-stated report of the A.O and did not contest the relief provided by the Ld. CIT(Appeals)/NFAC. We, also, find no infirmity with the findings of the Ld. CIT(Appeals)/NFAC which is hereby upheld. Thus, the Ground of appeal No.1 raised by the revenue is dismissed. 6. That with regard to the second addition made by the A.O i.e. payment made u/s.194J of the Act i.e. unexplained expenditure u/s. 69C of the Act of Rs.8,58,16,078/-, the A.O submitted a report that was read out by the Ld. CIT-DR during the course of hearing. The relevant paras of Printed from counselvise.com 6 DCIT-1(1), Raipur Vs. Chhattisgarh State Power Distribution Company Limited ITA No. 156/RPR/2025 the said report dated 02.07.2025 regarding this addition is culled out as follows: Printed from counselvise.com 7 DCIT-1(1), Raipur Vs. Chhattisgarh State Power Distribution Company Limited ITA No. 156/RPR/2025 “Since the assessee company had provided the details of parties to whom payments made more than 5 lakh under the head professional charges. The total of the payment comes at Rs.6,01,88,784/- which is more than 70% of the total expenses claimed by the assessee company. Further, as per assessee's submission, out of total expenses incurred on account of professional charges more than 70% of the expenses are paid to various Government entities only.” 7. The Ld. CIT(Appeals)/NFAC had provided relief to the assessee by observing as follows: “From perusal of the facts and circumstances appearing of the case, this appeal is inclined to hold that appellant was sufficiently found discharging its onus before AO of providing the relevant details regarding these payments on professional accounts. AO is seen not found making any infirmity in these and addition was based solely for want of ITR of the parties enquired and the enquiries made from 05 parties are also found not confronted with the appellant. Therefore, in consideration of above discussion, this appeal is of considered view that action of AO in charging provisions of section 69C are unwarranted and the disallowance made of Rs.8,58,16,078/- u/s. 69C is directed to be deleted. Ground no. 2 is allowed.” 8. The Ld. CIT-DR fairly conceded as per the afore-stated report of the A.O and did not contest the relief provided by the Ld. CIT(Appeals)/NFAC. We, also, find no infirmity with the findings of the Ld. CIT(Appeals)/NFAC which is hereby upheld. Thus, the Ground of appeal No.2 raised by the revenue is dismissed. 9. Ground of appeal No.3 is only general in nature, hence requires no adjudication. Printed from counselvise.com 8 DCIT-1(1), Raipur Vs. Chhattisgarh State Power Distribution Company Limited ITA No. 156/RPR/2025 10. As per the above terms grounds of appeal raised by the revenue are dismissed. 11. In the result, appeal of the revenue is dismissed. Order pronounced in the open court on 06th day of August, 2025. Sd/- Sd/- ARUN KHODPIA PARTHA SARATHI CHAUDHURY (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; Ǒदनांक / Dated : 06th August, 2025. SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ /The Appellant. 2. Ĥ×यथȸ /The Respondent. 3. The Pr. CIT-1, Raipur (C.G.) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. Printed from counselvise.com "