Manish Bearing Enterprises, New Delhi V. ACIT CIRCLE-46(1), New Delhi

ITA 2424/DEL/2019

AI Insights

The case involves Manish Bearing Enterprises, which appealed against the order of the CIT(A)-16, New Delhi, concerning an addition of Rs. 1,00,00,000 to their income, treated as unexplained credit under Section 68 of the Income Tax Act. The assessee had taken a loan from Sh. Basant Kumar Bangar, which was scrutinized by the Assessing Officer (AO) during a complete scrutiny under CASS. The AO was not satisfied with the explanations and documents provided by the assessee regarding the credit of the loan in their books, leading to the addition. The Tribunal examined the details of the transactions and the explanations provided, ultimately agreeing with the lower authorities that the creditworthiness of the lender and the genuineness of the loan were not satisfactorily established.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131799 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 30-11-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 18-03-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; TDS
• Section: 68

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL DELHIBENCH ‘E’, NEW DELHI Before Dr. B. R. R. Kumar, Accountant Member Sh. Yogesh Kumar US, Judicial Member ITA No. 2424/Del/2019 : Asstt. Year : 2015-16 Manish Bearing Enterprises, 62, Shardhanand Marg, New Delhi-110006 Vs ACIT, Circle-46(1), New Delhi-110002 (APPELLANT) (RESPONDENT) PAN No. AAAFM5405D Assessee by : Sh. Ajay Baheti, CA Revenue by : Sh. Amit Shukla, Sr. DR Date of Hearing: 01.12.2022 Date of Pronouncement: 22.02.2023 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the assessee against the order of ld. CIT(A)-16, New Delhi dated 15.02.2019. 2. Following grounds have been raised by the assessee: “The AO has erred in law and on facts in making addition of Rs. 1,00,00,000/- disregarding the confirmation filed by the loan creditors and all document produced.” 3. The assessee is in the business of trading of bearings. The assessee filed return of income 30.09.2015 declaring total income of Rs.24,72,690/-. The case was selected for complete scrutiny under CASS. ITA No. 2424/Del/2019 Manish Bearing Enterprises 2 4. The assessee had taken loan of Rs.1.5 crore from one Sh. Basant Kumar Bangar and paid interest amounting to Rs.5,87,500/- after due deduction of TDS. The AO being unsatisfied with the explanation offered by the assessee regarding credit of loan in the books of account of the assessee, invoked the provisions of Section 68 and made an addition on this account. 5. Aggrieved by the order of the AO, the assessee is in appeal before the ld. CIT(A). 6. In the instant case, the books of the assessee reflect unsecured loans from Bansant Kumar Bangur in 2 tranches of Rs.50,00,000/- and Rs.1,00,00,000/-. As the assessee could not establish the creditworthiness of the lender and the genuineness of the loan of Rs.1,00,00,000/-, the revenue treated the credit entries as unexplained credits u/s 68. 7. Before us, the ld. AR has taken us through the ITR of Mr. Basant Kumar Bangur for the A.Y. 2016-17 showing a returned income of Rs.2.08 crores, for the A.Y. 2015-16 the returned income was Rs.21 lacs. The lender received an amount of Rs.2 crores in tranches of Rs.1 crore on 13.08.2014 and on 15.11.2014. These amounts have been received from a company named M/s Agencies Rajasthan Pvt. Ltd. in which the assessee was a shareholder during the A.Y. 2015-16. In the said account of M/s Agencies Rajasthan Pvt. Ltd. a total amount of Rs.1.04 crores was deposited on 05.09./09.09/15.09/19.09/23.09.2014 i.e. before the date of giving the loan of Rs.1 crore on 17.11.2017. ITA No. 2424/Del/2019 Manish Bearing Enterprises 3 8. Thus, it can be found that the cash has been deposited in the account of M/s Agencies Rajasthan Pvt. Ltd. from there to the account of Sh. B. K. Bangur and from there to the account of the assessee. The ld. AR also argued that there was a gap of two months from the cash deposit in M/s Agencies Rajasthan Pvt. Ltd. ending with 23.09.2014 and receipt of the money into the account of Mr. Bangur and there were about 50 transactions between this time period. It was also argued that the source of payment was redemption of mutual funds. Having heard the arguments of ld. AR, we have gone through the details of the entries in the bank statement during the intervening period of two months and after going through the entries, we are unable to accept arguments of the ld. AR. 9. In the instant case, the loan was preceded by deposit of exact amount which was preceded by the cash deposits. The explanation offered by the assessee to explain the entries was not found to be satisfactory by the AO based on evidences in his possession which we affirm. 10. The provision of Section 68 reads as under: “68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year.” 11. Hence, on going through the peculiar facts of the entire material placed before us for the instant year, we decline to interfere with the order of the ld. CIT(A). ITA No. 2424/Del/2019 Manish Bearing Enterprises 4 12. In the result, the appeal of the assessee is dismissed. Order Pronounced in the Open Court on 22/02/2023. Sd/- Sd/- (Yogesh Kumar US) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 22/02/2023 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR