HI ROCK CONSTRUCTION COMPANY,MUMBAI V. ASST. COMMISSIONER OF INCOME TAX, BANDRA EAST

CO 1/MUM/2025

AI Insights

The case involves Hi Rock Construction Company, which faced an addition of Rs.36.75 crores as unexplained cash credit under section 68 of the Income Tax Act during the assessment year 2017-18. The AO initially made this addition due to insufficient evidence provided by the assessee to substantiate the loans taken. However, upon appeal, the CIT(A) deleted this addition after the assessee furnished adequate evidence in the remand proceedings, which was accepted by the AO. The revenue's appeal contested the deletion of the addition, while the assessee's cross-objection supported the CIT(A)'s decision. The Tribunal found no reason to disagree with the CIT(A)'s decision, given the AO's acceptance of the loans' genuineness in the remand report.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32055 (ITAT-MUMBAI)
• Appeal Type: Cross Objection
• Pronouncement Date: 27-02-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BISWANATH DAS
• Assessee Lawyers: BHUPENDRA SHAH
• Keywords: Unexplained cash credit; Onus to prove
• Section: 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E” MUMBAI BEFORE SHRI BR BASKARAN (ACCOUNTANT MEMBER) AND SHRI RAJ KUMAR CHAUHAN (JUDICIAL MEMBER) ITA No. 5851/MUM/2024 Assessment Year: 2017-18 Asst. CIT, Room No. 732, 7th Floor, Kautilya Bhavan, BKC, Bandra East, Mumbai-400051. Vs. Hi Rock Construction Company, 903-A, Gurukul Towers, CST No. 896, B 897, J.S. Road, Dahisar West, Mumbai-400068. PAN NO. AAFFH 6403 B Appellant Respondent C.O. No. 1/MUM/2025 (Arising out of ITA No. 5851/MUM/2024) Assessment Year: 2017-18 Hi Rock Construction Company, 903-A, Gurukul Towers, CST No. 896, B 897, J.S. Road, Dahisar West, Mumbai-400068. Vs. DCIT 42(1)(1), Kautilya Bhavan, BKC, Bandra (East), Mumbai-400051. PAN NO. AAFFH 6403 B Appellant Respondent Assessee by : Mr. Bhupendra Shah Revenue by : Mr. Biswanath Das, CIT-DR Date of Hearing : 08/01/2025 Date of pronouncement : 27/02/2025 ORDER PER BR BASKARAN, AM These cross appeals are directed against the order dated 21-09-2024 passed by Ld CIT(A), NFAC, Delhi and they relate to the assessment year 2017-18. The revenue is aggrieved by the decision of Ld CIT(A) in deleting the addition of Rs.36.75 crores made by assessee has filed appeal contending that the AO could not have filed the appeal after accepting the genuineness of the loans in the remand proceedings. 2. We heard the parties and perused the record. The AO noticed that assessee had taken loans from various persons to the tune of Rs.36.75 crores. Since the assessee did not furnish details to prove those loans, the AO assessed the above said amount as unexplained cash credit u/s 68 of the Act. The assessee challenge furnished various evidences to prove the cash credits by way of loan. Hence, the Ld CIT(A) called for a remand report from the AO. In the remand proceedings, the AO examined the loans vis that all the loans are proved. Based on the said remand report, the Ld CIT(A) deleted the addition. 3. We notice that the Ld CIT(A) has extracted the following final observations made by the AO in the remand report: “….In the light of the above observations and the supplementary evidence provided by the assessee, it can be said that the assessee has discharged its onus to prove the identity, creditworthiness and genuineness…” Accordingly, the Ld CIT(A) held as unde “6.3 In the remand report it is unequivocally and categorically stated that the source of loan received by the appellant has been found to be explained. Once the AO has given such an emphatic and conclusive finding there is no reason or basis to d Report. Hi Rock Construction Company ITA No. 5851/MUM/2024 18. The revenue is aggrieved by the decision of Ld CIT(A) in deleting the addition of Rs.36.75 crores made by the AO u/s 68 of the Act. The assessee has filed appeal contending that the AO could not have filed the appeal after accepting the genuineness of the loans in the remand 2. We heard the parties and perused the record. The AO noticed that assessee had taken loans from various persons to the tune of Rs.36.75 crores. Since the assessee did not furnish details to prove those loans, the AO assessed the above said amount as unexplained cash credit u/s 68 of the Act. The assessee challenged the same before the Ld CIT(A) and also furnished various evidences to prove the cash credits by way of loan. Hence, the Ld CIT(A) called for a remand report from the AO. In the remand proceedings, the AO examined the loans vis-a-vis the evidences and r that all the loans are proved. Based on the said remand report, the Ld CIT(A) deleted the addition. 3. We notice that the Ld CIT(A) has extracted the following final observations made by the AO in the remand report:- “….In the light of the above observations and the supplementary evidence provided by the assessee, it can be said that the assessee has discharged its onus to prove the identity, creditworthiness and Accordingly, the Ld CIT(A) held as under:- “6.3 In the remand report it is unequivocally and categorically stated that the source of loan received by the appellant has been found to be explained. Once the AO has given such an emphatic and conclusive finding there is no reason or basis to disagree from the Remand Construction Company 2 ITA No. 5851/MUM/2024 & CO No. 1/Mum/2025 18. The revenue is aggrieved by the decision of Ld CIT(A) in deleting the AO u/s 68 of the Act. The assessee has filed appeal contending that the AO could not have filed the appeal after accepting the genuineness of the loans in the remand 2. We heard the parties and perused the record. The AO noticed that the assessee had taken loans from various persons to the tune of Rs.36.75 crores. Since the assessee did not furnish details to prove those loans, the AO assessed the above said amount as unexplained cash credit u/s 68 of d the same before the Ld CIT(A) and also furnished various evidences to prove the cash credits by way of loan. Hence, the Ld CIT(A) called for a remand report from the AO. In the remand vis the evidences and reported that all the loans are proved. Based on the said remand report, the Ld 3. We notice that the Ld CIT(A) has extracted the following final “….In the light of the above observations and the supplementary evidence provided by the assessee, it can be said that the assessee has discharged its onus to prove the identity, creditworthiness and “6.3 In the remand report it is unequivocally and categorically stated that the source of loan received by the appellant has been found to be explained. Once the AO has given such an emphatic and conclusive isagree from the Remand 6.4 In view of the emphatic report given by the AO, duly approved and agreed to by the Range Head, accepting that the appellant has been able to successfully discharge its onus to prove the identity, creditworthiness and g addition made u/s 68 of the IT Act amounting to Rs.36,74.97,222/ deleted. In view of the discussion, these grounds of appeal of the appellant are allowed.” 4. We notice that the impugned addition has been mad assessment proceedings for want of evidences. In the remand proceedings, the assessee has furnished all the documents to prove the loan amount and hence the AO has categorically held that the assessee has discharged its burden to prove the loans in terms of sec.68 of the Act. We notice that the Ld CIT(A) has deleted the addition on the basis of the remand report given by the AO. Accordingly, we are of the view that the AO should not have filed this appeal, after accepting the loans Before us, no other material was placed to contradict the finding given by the AO in the remand report. Under these circumstances, we do not find any infirmity in the decision rendered by Ld CIT(A). Accordingly, we uphold his order. 5. The appeal of the assessee is only to support the order passed by Ld CIT(A). Hence it does not require separate adjudication. 6. In the result, the appeal of the revenue and the dismissed. Order pronounced in the ope Sd/ (RAJ KUMAR CHAUHAN JUDICIAL MEMBER Mumbai; Dated: 27/02/2025 Hi Rock Construction Company ITA No. 5851/MUM/2024 6.4 In view of the emphatic report given by the AO, duly approved and agreed to by the Range Head, accepting that the appellant has been able to successfully discharge its onus to prove the identity, creditworthiness and genuineness of the loan transactions, the addition made u/s 68 of the IT Act amounting to Rs.36,74.97,222/ deleted. In view of the discussion, these grounds of appeal of the appellant are allowed.” he impugned addition has been made by the AO in the assessment proceedings for want of evidences. In the remand proceedings, the assessee has furnished all the documents to prove the loan amount and hence the AO has categorically held that the assessee has discharged the loans in terms of sec.68 of the Act. We notice that the Ld CIT(A) has deleted the addition on the basis of the remand report Accordingly, we are of the view that the AO should not have filed this appeal, after accepting the loans in the remand report. Before us, no other material was placed to contradict the finding given by the AO in the remand report. Under these circumstances, we do not find any infirmity in the decision rendered by Ld CIT(A). Accordingly, we uphold 5. The appeal of the assessee is only to support the order passed by Ld CIT(A). Hence it does not require separate adjudication. 6. In the result, the appeal of the revenue and the CO of the assessee is Order pronounced in the open Court on 27/02/2025. Sd/- Sd/ RAJ KUMAR CHAUHAN) (BR BASKARAN JUDICIAL MEMBER ACCOUNTANT MEMBER Construction Company 3 ITA No. 5851/MUM/2024 & CO No. 1/Mum/2025 6.4 In view of the emphatic report given by the AO, duly approved and agreed to by the Range Head, accepting that the appellant has been able to successfully discharge its onus to prove the identity, enuineness of the loan transactions, the addition made u/s 68 of the IT Act amounting to Rs.36,74.97,222/- is deleted. In view of the discussion, these grounds of appeal of the e by the AO in the assessment proceedings for want of evidences. In the remand proceedings, the assessee has furnished all the documents to prove the loan amounts and hence the AO has categorically held that the assessee has discharged the loans in terms of sec.68 of the Act. We notice that the Ld CIT(A) has deleted the addition on the basis of the remand report so Accordingly, we are of the view that the AO should not in the remand report. Before us, no other material was placed to contradict the finding given by the AO in the remand report. Under these circumstances, we do not find any infirmity in the decision rendered by Ld CIT(A). Accordingly, we uphold 5. The appeal of the assessee is only to support the order passed by Ld of the assessee is /02/2025. Sd/- BR BASKARAN) ACCOUNTANT MEMBER Dragon Legal/Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Hi Rock Construction Company ITA No. 5851/MUM/2024 Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Construction Company 4 ITA No. 5851/MUM/2024 & CO No. 1/Mum/2025 BY ORDER, (Assistant Registrar) ITAT, Mumbai "