ACIT, Circle-28(1), New Delhi V. Radius Industries, New Delhi

ITA 7622/DEL/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0577 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2015-2016
• Appeal Filed On: 30-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: LALIT; INVOKING SECTION A IA OF
• Keywords: Unexplained cash credit; Rule of consistency; TDS; Bogus
• Section: 131; 68; 143(3); 40(b); 142(1); 40(a)(ia); 133(6); 143(1); 143(2); 48; 194A; 13

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH F: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO. 7280/DEL/2018 A.Y. : 2015-16 M/S RADIUS INDUSTRIES, VS. ACIT, CIRCLE 28(1), S-57, F.I.E.E., NEW DELHI OKHLA INDUSTRIAL AREA, PHASE-2, NEW DELHI (PAN: ) (ASSESSEE) (RESPONDENT) AND ITA NO. 7622/DEL/2018 A.Y. : 2015-16 ACIT, CIRCLE 28(1), VS. M/S RADIUS INDUSTRIES, NEW DELHI S-57, FIEE, OKHLA INDUSTRIAL AREA, PHASE-2, NEW DELHI (ASSESSEE) (RESPONDENT) ASSESSEE BY : SH. GAUTAM JAIN, ADV., SH. LALIT MOHAN, ADV. & SH. PIYUSH KAMAL, ADV. DEPARTMENT BY : SH. SURENDER PAL, SR. DR. O R D E R PER H.S. SIDHU, JM THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AND REVEN UE EMANATE OUT OF THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)- 10, NEW DELHI DATED 09.01.2018 PERTAINING TO ASSESSMENT YEAR 2015-16. SINCE THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON AND IDENTICAL, HENCE, 2 THE APPEALS WERE HEARD TOGETHER AND ARE BEING CONSOLI DATED BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE, BY FIRST DEALING WIT H ASSESSEES APPEAL NO. 7280/DEL/2018 (AY 2015-16) WHEREIN THE ASSESSEE HA S RAISED THE FOLLOWING GROUNDS:- 1. THAT THE LD. CIT(A) HAS ERRED BOTH IN LAW AND O N FACTS IN UPHOLDING ADDITION OF RS. 62,50,000/- REPRESENTING A LLEGED UNEXPLAINED UNSECURED LOANS RAISED BY THE ASSESSEE FROM THE FOLLOWING PARTIES BROUGHT TO TAX UNDER SECTION 68 OF THE ACT:- S.NO. NAME OF PARTIES AMOUNT (RS.) I) M/S MULTI BRAND TRADING CORPORATION 27,50,000/- II) GST CORPORATION LTD. 30,00,000/- III) PREM DUA 5,00,000/- TOTAL 62,50,000/- 1.1 THAT WHILE UPHOLDING THE ADDITION, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT ONCE THE ASSESSEE HAD PLACED ON RECORD CONFIRMATION ALONGWITH INCOME TAX PARTICULARS AND, THE LOANS HAD BEEN RAISED BY ACCOUNT PAYEE CHEQUES AND INTEREST THEREON HAD ALREADY BEEN DULY CREDITED TO TH E ACCOUNT OF THE PAYEES, THE INITIAL BURDEN OF THE ASSESSEE STOOD DISCHARGED AND THEREFORE, ADDITION SUSTAINED ON TH E GROUND THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE CREDITWORTHINESS OF THE ABOVE PARTY OR THEY HAD NOT COMPLIED WITH NOTICE UNDER SECTION 133(6) OF THE ACT I S NOT BASED ON CORRECT APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE ASSESSEE AND STATUTORY PROVISIONS OF LAW AND HENCE UNTENABLE. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS) HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN SUSTAINI NG DISALLOWANCE OF RS. 18,00,000/- REPRESENTING THE ALLEG ED EXCESS PARTNERS' REMUNERATION PAID TO THE PARTNER BY INVOKING CLAUSE (V) OF SECTION 40(B) OF THE ACT. 2.1 THAT THE FINDING OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) THAT 'THE PARTNERSHIP DEED MENTIONS THE MAXIMUM AMOUNT PAYABLE UNDER SECTION 40(B)(V) BUT NOT 3 THE AMOUNT THAT HAS BEEN MUTUALLY AGREED TO BE PAID AS REMUNERATION. THE QUANTUM OF REMUNERATION TO BE PAI D TO THE INDIVIDUAL PARTNERS IS LEFT UNDECIDED, UNSTIPULATED AND LEFT TO THE DISCRETION OF THE TWO PARTNERS TO BE DECIDE D AT A FUTURE PINT IN TIME' IS FACTUALLY AND LEGALLY MISCONCEI VED AND UNTENABLE. 2.2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT THE REMUNERAT ION PAID TO THE PARTNERS WAS IN TERMS OF THE DEED OF PARTNERSHIP DATED 01.04.2013 WHICH HAD BEEN ALLOWED CONSISTENTLY IN PRECEDING AND SUCCEEDING ASSESSMENT YEARS IN ASSESSMENTS FRAMED UNDER SECTION 143(3) OF THE ACT AND THEREFORE, DISALLOWANCE MADE IS ILLEGAL, INVALID AND UNTENABLE. 3 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 31, NEW DELHI HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING A DISALLOWANCE OF A SUM OF RS. 7,69,097/- REPRESENTING INTEREST PAID BY THE ASSESSEE BY INVOKING SECTION 40(A)(IA) OF THE ACT. 3.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT, PROVISIONS UL S 40(A)(IA) OF THE ACT READ WITH SECTION 194A OF THE ACT WERE INAPPLICABLE AND AS SUCH, DISALLOWANCE SO MADE IS NOT IN ACCORDANCE WITH LAW. 3.2 THAT IN ANY CASE SINCE THE PAYEE HAD PAID THE TAXE S ON THE INTEREST PAID BY THE ASSESSEE, NO DISALLOWANCE WAS WARRANTED IN VIEW OF SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT. 4 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) HAS ALSO ERRED IN FAILING TO APPRECIATE THAT THE LEARN ED ASSISTANT COMMISSIONER OF INCOME TAX WHILE FRAMING THE ASSESSMENT HAD ACTED IN EXCESS OF JURISDICTION AND MADE ADDITIONS WHICH ARE BEYOND THE SCOPE OF ASSESSMENT IN AS MUCH AS ADDITIONS HAD TO BE RESTRICTED TO THE ISSUES UNDE R THE COMPUTERIZED AIDED SELECTION OF SCRUTINY CASES AND, AS THE ADDITIONS MADE BEYOND THE SAID MATRIX WERE WITHOU T JURISDICTION. IT IS THEREFORE, PRAYED THAT ADDITION/DISALLOWANCES MA DE BY THE LEARNED ASSESSING OFFICER AND SUSTAINED BY THE LEARN ED 4 COMMISSIONER OF INCOME TAX (APPEALS) MAY KINDLY BE DEL ETED AND APPEAL OF THE ASSESSEE BE ALLOWED. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED E- RETURN FOR THE ASSESSMENT YEAR 2015-16 ON 26.09.2015 DECLARING AN INCOM E OF RS. 1,13,43,620/-. THE ASSESSING OFFICER PROCESSED THE RET URN U/S. 143(1) OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) ELECTRONICALL Y AT RETURNED INCOME AND CASE WAS SELECTED FOR LIMITED SCRUTINY THROUGH CASS . THE CASE WAS SELECTED FOR COMPULSORY SCRUTINY THROUGH CPC AS PER GUIDE LINES / PROCEDURE FOR SELECTION OF CASES FOR SCRUTINY. ACCORDINGLY, STATUTOR Y NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED ON 19.9.2016. SUB SEQUENTLY, AO ISSUED NOTICE U/S. 142(1) OF THE ACT AND IN RESPONSE TO T HE SAME THE AR FOR THE ASSESSEE APPEARED FROM TIME TO TIME AND SUBMITTED VA RIOUS DETAILS/ INFORMATION CALLED FOR AND EXAMINED THE SAME. DURI NG THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS DERIVED ITS INCOME UNDER THE HEADS INCOME FROM BUSINESS & PROFESSION ONLY. AS PER DETAILS FILED IN FORM 3CD, THE FIRM HAS TWO PARTNERS, NAMELY, SH. MANINDER JIT SINGH BIND RA AND SH. INDERPREET SINGH BINDRA. THE PARTNERS HAVE A PROFIT SHARE RATIO OF 60% AND 40% RESPECTIVELY. THE LIST OF 15 PERSONS FROM WHOM UNSECURED L OANS OF RS. 10,25,00,362/- HAVE BEEN TAKEN DURING THE YEAR I S MENTIONED AT PAGE NO. 2 OF THE ASSESSMENT ORDER. THE AR FOR THE ASSESSEE V IDE NOTICE U/S. 142(1) DATED 23.8.2017 WAS ASKED TO FILE THE CONFIRMAT IONS OF ALL PERSONS FROM WHOM UNSECURED LOAN WERE TAKEN AND JUSTIFY THEIR CREDITWORTHINESS TO ADVANCE LOAN BUT THE AR OF THE ASSESSEE FAILED TO PRODU CE ANY INFORMATION WITHIN TIME. THEREFORE, PENALTY U/S. 271(1)(B) WAS IMPOSED ON 24.10.2017. THEREAFTER, THE AR OF THE ASSESSEE FILED REPLY DATED 08 .11.2017 WHEREBY ITRS ARE ATTACHED WITH THE CONFIRMATIONS OF THE PARTI ES EXCEPT FEW. THE AR OF THE ASSESSEE VIDE NOTICE U/S. 142(1) DATED 10.11.2017 WAS AGAIN SPECIFICALLY ASKED TO FILE COPY OF ITR OF PARTIES WHOSE IT R HAVE NOT BEEN FILED. IN RESPONSE TO THE SAME, THE AR OF THE ASSESSEE FIL ED REPLY VIDE LETTER DATED 16.11.2017 WHEREIN THE AR OF THE ASSESSEE ASKED FO R SOME MORE TIME 5 TO FILE THE REQUIRED DETAILS. IN THE MEANTIME, NOTI CES U/S. 133(6) ALL DATED 10.11.2017 WERE ISSUED TO ALL THE PARTIES FROM WHOM UN SECURED LOANS HAVE BEEN TAKEN. SOME NOTICES HAVE BEEN RECEIVED BACK AS UN SERVED. ONLY TWO PARTIES NAMELY GST CORPORATION LTD. AND MUDIT JAIN CO NFIRMED THE TRANSACTIONS MADE WITH ASSESSEE BUT REFUSED TO ACCEPT THAT TH EY PROVIDED ANY UNSECURED LOAN TO THE ASSESSEE. THERE WAS NO RESPONSE FR OM REMAINING PARTIES FOR THE NOTICES U/S. 133(6) ISSUED TO THEM. IN THE MEANTIME, THE AR OF THE ASSESSEE PRODUCED THE ITR OF MOST OF THE PARTIES AS ASKED IN THE NOTICE DATED 10.11.2017. THE ITRS OF THE PARTIES WER E PERUSED AND THE CREDITWORTHINESS OF THE PARTIES WAS NOT FOUND TO BE LACKI NG AS THEIR RETURNED INCOME WAS NOT SUFFICIENT TO FINANCE SUCH HUGE AMOUNT OF LOANS. THERE WERE FOUR REMAINING PARTIES IN WHOSE RETURN NOT FURNISHED BY THE ASSESSEE EITHER. LIKE OTHER PARTIES (EXCEPT TWO MENTIONED ABOVE), THEY ALSO DID NOT RESPONDS TO THE NOTICE ISSUED U/S. 133(6). FURTHER, THE CONFIRMA TIONS FROM EITHER OF THESE PARTIES WERE NEVER PRODUCED TILL THE FAG END OF THE YEAR. FINALLY, THE ASSESSEE VIDE NOTICE DATED 06.12.2017 WAS SHOW CAUSED AS TO WHY THE UNSECURED LOANS AMOUNTING TO RS. 8,22,70,000/- TAKEN DU RING THE YEAR FROM 08 PARTIES MENTIONED AT PAGE NO.3 OF THE ASSESSMENT ORDE R SHOULD NOT BE DISALLOWED U/S. 68 OF THE I.T. ACT AS THE CREDITWORTHINE SS OF THE PARTIES IS NOT ESTABLISHED. IN RESPONSE TO THE SAME, THE AR OF THE ASSE SSEE DID NOT OFFER ANY EXPLANATION. ASSESSEE WAS GIVEN SEVERAL OPPORTUNIT IES IN THIS REGARD EARLIER TOO, VIDE NOTE SHEET ENTRY DATED 24.10.2017, NOTICE U/S. 142(1) DATED 1.11.2017 AND FINAL SHOW CAUSE NOTICE DATED 06.1 2.2017. AO OBSERVED THAT ASSESSEE NEVER BOTHERED TO EXPLAIN AND JU STIFY THE CREDITWORTHINESS AND COMPLETELY OVERLOOKED STATUTORY NOT ICES IN THIS REGARD. AO FURTHER OBSERVED THAT ASSESSEE HAS NOTHING MORE TO SAY ABOUT SUCH TRANSACTIONS. AS PER AO, ASSESSEE CLEARLY FAILED TO JUSTIFY THE GENUINENESS AND CREDITWORTHINESS OF THE UNSECURED LOAN TAKEN FROM TH E PARTIES. THE AR OF THE ASSESSEE NEITHER FILED THE COPY OF ITR NOR FILED THE BANK STATEMENT OF 6 THE PARTIES. NONE OF THE PARTIES EXCEPT TWO (WHICH ALSO REFUSED THAT ANY UNSECURED LOAN BEING GIVEN) AS MENTIONED ABOVE, REPLI ED TO THE NOTICE U/S. 133(6). HENCE, THE AR OF THE ASSESSEE HAS NOT ONLY FAILE D TO FURNISH THE DESIRED DETAILS BUT ALSO FAILED TO ESTABLISH THE CREDITW ORTHINESS AND GENUINENESS OF THE SAID UNSECURED LOANS. THEREFORE, RS. 8 ,22,70,000/- WAS ADDED TO THE INCOME OF THE ASSESSEE U/S. 68 OF THE ACT. FU RTHER, THE AO OBSERVED THAT ASSESSEE HAS DEBITED REMUNERATION AMOUNTIN G TO RS. 18,00,000/- TO THE P&L ACCOUNT AND THE SAME IS NOT ADMI SSIBLE FOR DEDUCTION AS PER THE PROVISIONS OF SECTION 40(B)(II) OF THE INCOME TAX ACT, 1961. THEREFORE, EXPENDITURE OF RS. 18,00,000/- ON ACCOUNT O F REMUNERATION WAS DISALLOWED AS PER THE PROVISIONS OF SECTION 40(B)(II) OF THE INCOME TAX ACT, 1961 AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. FURTHER, THE AO OBSERVED THAT IN TERMS OF PROVISIONS OF SECTION 40(A)(I A) OF THE ACT, THE TDS WAS NOT DEDUCTED IN RESPECT OF PAYMENT OF RS. 25,63, 657/- AND 30% OF THE SAID AMOUNT WHICH COMES TO RS. 7,69,097/- WAS DISALLO WED U/S. 40(A)(IA) OF THE ACT. ACCORDINGLY, THE ASSESSMENT WAS COMPLE TED BY THE AO AT RS. 9,61,82,720/- U/S. 143(3) OF THE ACT VIDE ORDER DATED 23.12.2017. AGAINST THE ASSESSMENT ORDER, ASSESSEE APPEALED BEFORE THE L D. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 24.09.2018 HAS PARTLY A LLOWED THE APPEAL OF THE ASSESSEE BY CONFIRMING SOME ADDITIONS. AGGRIEVED WITH THE IMPUGNED ORDER DATED 24.9.2018, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT LD. CIT(A) HAS ERRED IN UPHOLDING ADDITION OF RS. 62,50,000/- REPRESENTING A LLEGED UNEXPLAINED UNSECURED LOANS RAISED BY THE ASSESSEE FROM THE FOLLOWIN G PARTIES BROUGHT TO TAX UNDER SECTION 68 OF THE ACT:- S.NO. NAME OF PARTIES AMOUNT (RS.) I) M/S MULTI BRAND TRADING CORPORATION 27,50,000/- II) GST CORPORATION LTD. 30,00,000/- III) PREM DUA 5,00,000/- 7 TOTAL 62,50,000/- 3.1 LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT L EARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APP RECIATE THAT ONCE THE ASSESSEE HAD PLACED ON RECORD CONFIRMATION ALONGWITH I NCOME TAX PARTICULARS AND, THE LOANS HAD BEEN RAISED BY ACCOUNT PA YEE CHEQUES AND INTEREST THEREON HAD ALREADY BEEN DULY CREDITED TO TH E ACCOUNT OF THE PAYEES, THE INITIAL BURDEN OF THE ASSESSEE STOOD DISCHARGE D AND THEREFORE, ADDITION SUSTAINED ON THE GROUND THAT THE ASSESSEE HAS NO T BEEN ABLE TO PROVE CREDITWORTHINESS OF THE ABOVE PARTY OR THEY HAD NOT COMPLIED WITH NOTICE UNDER SECTION 133(6) OF THE ACT IS NOT BASED ON CORRECT APPRECIATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE ASSESSEE AND STA TUTORY PROVISIONS OF LAW AND HENCE UNTENABLE AND NEEDS TO BE DELETED. HE FURTHER SUBMITTED THAT LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS FURTHER ERRED IN SUSTAINING DISALLOWANCE OF RS. 18,00,000/- REP RESENTING THE ALLEGED EXCESS PARTNERS' REMUNERATION PAID TO THE PARTNER BY IN VOKING CLAUSE (V) OF SECTION 40(B) OF THE ACT. IT WAS FURTHER SUBMITTED THAT LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FURTHER ERRED IN HOLDING THAT 'THE PARTNERSHIP DEED MENTIONS THE MAXIMUM AMOUNT PAYABLE UNDER SECTION 40(B )(V) BUT NOT THE AMOUNT THAT HAS BEEN MUTUALLY AGREED TO BE PAID AS REMUNERATION. THE QUANTUM OF REMUNERATION TO BE PAID TO THE INDIVIDUA L PARTNERS IS LEFT UNDECIDED, UNSTIPULATED AND LEFT TO THE DISCRETION OF THE TWO PARTNERS TO BE DECIDED AT A FUTURE PINT IN TIME' IS FACTUALLY AND LE GALLY MISCONCEIVED AND UNTENABLE. HE FURTHER SUBMITTED THAT THE REMUNERATIO N PAID TO THE PARTNERS WAS IN TERMS OF THE DEED OF PARTNERSHIP DATED 01.04.20 13 WHICH HAD BEEN ALLOWED CONSISTENTLY IN PRECEDING AND SUCCEEDING ASSESSMENT Y EARS IN ASSESSMENTS FRAMED UNDER SECTION 143(3) OF THE ACT AND THER EFORE, DISALLOWANCE MADE IS ILLEGAL, INVALID AND UNTENABLE AN D NEEDS TO BE DELETED. HE FURTHER SUBMITTED THAT THE LEARNED COMMISSIONER OF INCOME TAX 8 (APPEALS) HAS ERRED IN UPHOLDING A DISALLOWANCE OF A SUM OF RS. 7,69,097/- REPRESENTING INTEREST PAID BY THE ASSESSEE BY INVOKING S ECTION 40(A)(IA) OF THE ACT. IT WAS SUBMITTED THAT PROVISIONS ULS 40(A)(IA) OF THE ACT READ WITH SECTION 194A OF THE ACT WERE INAPPLICABLE AND AS SUCH, DISA LLOWANCE SO MADE IS NOT IN ACCORDANCE WITH LAW. THAT IN ANY CASE SINCE THE P AYEE HAD PAID THE TAXES ON THE INTEREST PAID BY THE ASSESSEE, NO DISALLOWAN CE WAS WARRANTED IN VIEW OF SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT. IT WAS FURTHER SUBMITTED THAT THE ADDITIONS WHICH ARE BEYOND THE SCOPE OF ASSESSMENT IN AS MUCH AS ADDITIONS HAD TO BE RESTRICTED TO THE ISSUES UNDER THE COMPUTERIZED AIDED SELECTION OF SCRUTINY CASES AND, AS THE ADDITIONS MAD E BEYOND THE SAID MATRIX WERE WITHOUT JURISDICTION, HENCE, THE SAME MAY B E DELETED. IN SUPPORT OF HIS CONTENTION, HE FILED A COPY OF SYNOPSIS CO NTAINING PAGES 1-48 AND RELIED UPON THE VARIOUS CASE LAWS CITED THEREIN. HE FURTHER FILED A PAPER BOOK-II WHICH ARE THE COPIES OF VARIOUS DECISIONS ON THE ISSUE OF BURDEN OF ASSESSEE STOOD DISCHARGED AS ENTIRE EVIDENCE STOOD FURNISHED; THAT ONCE PART INTEREST HAS BEEN ALLOWED AS DEDUCTION, CREDITS CANNOT BE ADDED U/S. 68 OF THE ACT; THAT REVENUE HAS ACCEPTED THE TRANSACTIONS OF INT EREST PAYMENT AND REPAYMENT OF PRINCIPAL AMOUNT TO LENDERS IN SUBSEQUENT YEARS AND, THUS IN SUCH CIRCUMSTANCES NO ADDITION IS PERMISSIBLE AND ALLEGED EXCESS REMUNERATION PAID TO THE PARTNERS AND DISALLOWED BY INVOKING CLAUSE (V) OF SECTION 40(B) OF THE ACT. 4. LD. DR RELIED UPON THE ORDER OF THE LD. CIT(A) ON THE ISSUES IN DISPUTE AND RELIED UPON THE DECISION OF THE HONBLE SUPREME C OURT OF INDIA IN THE CASE OF PAVANKUMAR M. SANGHVI VS. ITO (2018) 97 TAXMA NN.COM 398 (SC) WHEREIN THE HONBLE SUPREME COURT OF INDIA HAS DISMISSE D THE SLP RULING THAT WHERE ASSESSEE RECEIVED LOAN FROM TWO COMPANIES, IN V IEW OF THE FACT THAT ON DATE ASSESSEE WAS GIVEN LOAN THERE WERE CREDIT EN TRIES OF ALMOST SIMILAR AMOUNTS AND BALANCE AFTER THESE TRANSACTIONS WA S A SMALL AMOUNT AND MOREOVER ASSESSEE FAILED TO PRODUCE THESE LENDERS FOR VERIFICATION, 9 IMPUGNED AMOUNT WAS RIGHTLY BROUGHT TO TAX UNDER SECTI ON 68. HE FURTHER RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX VS. NRA IRON AND ST EEL (P) LTD. (2019) 103 TAXMANN.COM 48 (SC) WHEREIN THE HONBLE SU PREME COURT REVERSES THE ORDER OF THE LOWER AUTHORITIES HOLDING THAT WHERE THERE WAS FAILURE OF ASSESSEE TO ESTABLISH CREDIT WORTHINESS OF INVEST OR COMPANIES, AO WAS JUSTIFIED IN PASSING ASSESSMENT ORDER MAKING ADDITION S UNDER SECTION 68 FOR SHARE CAPITAL / PREMIUM RECEIVED BY ASSESSEE COMPANY. M ERELY BECAUSE ASSESSEE COMPANY HAD FILED ALL PRIMARY EVIDENCE, IT COULD NOT BE SAID THAT ONUS ON ASSESSEE TO ESTABLISH CREDITWORTHINESS OF INVESTOR COMP ANIES STOOD DISCHARGED. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS, ESPECIALLY THE IMPUGNED ORDER; SYNOPSIS; PAPER BOOK FILED BY T HE ASSESSEES COUNSEL AND CASE LAWS RELIED BY BOTH THE PARTIES. AS REGARDS SUSTAINING OF ADDITION OF RS. 62,50,000/- ON ACCOUNT OF SUMS RECEIVED AS UNSECURED LO AN IS CONCERNED, WE FIND THAT THE AO HAS MADE SUM OF RS. 8,22,70,000/- ON ACCOUNT OF SUM RECEIVED FROM 08 PARTIES AS MENTIONED IN THE ASSESSMENT ORDER AT PAGE NO. 3 AND IN APPEAL LD. CIT(A) HAS PA RTIALLY DELETED THE ADDITION AND SUSTAINED THE ADDITION OF RS. 62,50,000/ -. WE NOTE THAT THE UNSECURED LOAN RECEIVED BY THE ASSESSEE HAS BEEN FULLY SUBSTA NTIATED NOT BY SUBSTANTIAL DOCUMENTARY EVIDENCE INCLUDING COPY OF AUDIT ED FINANCIAL STATEMENT, ACKNOWLEDGEMENT OF RETURN OF INCOME, CONFIRM ATION FROM LENDER, BANK STATEMENT OF LENDER, THEREFORE SUCH SUM COULD NOT IN LAW OR ON FACT BE HELD TO BE UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. IT IS NOTED THAT NO MATERIAL HAS BEEN LED BY THE AO TO EVEN ALLEGE THAT SUCH AMOUNT REPRESENTING UNSECURED LOAN ARE EMANATING FROM THE CO FFERS OF THE ASSESSEE COMPANY. IT IS FURTHER NOTED THAT THE LENDERS ARE CORP ORATE ENTITIES DULY ASSESSED TO TAX AND, HAVE MADE UNSECURED LOANS THROUGH B ANKING CHANNELS, WHICH FACT HAS NEITHER BEEN DENIED AND, NOR REBUTTED IN THE ASSESSMENT 10 ORDER, WHICH IS ALSO DULY CONFIRMED BY EACH OF THE LEND ER. IN VIEW OF ABOVE, WE ARE OF THE CONSIDERED VIEW THAT ASSESSEE HAS FURNISHED COMPLETE DETAILS AND EVIDENCES TO DISCHARGE THE BURDEN IN RESPECT OF UNSE CURED LOAN REFLECTING IN THE FINANCIAL STATEMENT OF THE ASSESSEE COMPA NY. THIS VIEW IS SUPPORTED BY THE HONBLE SUPREME COURT OF INDIA DECISI ON IN THE CASE OF EARTHMETAL ELECTRICAL (P) LTD. IN CIVIL APPEAL NO. 6 18 OF 2010 DATED 30.7.2010 WHEREIN THE ASSESSEES SLP WAS ALLOWED BY HOLDI NG THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE AO, T HEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENT IN ACCORDANCE WITH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE COMPANY. FURTHER IN THE DECISION OF THE HONBLE SUPREM E COURT OF INDIA IN THE CASE OF ORISSA CEMENT CORPORATION VS. CIT REPORTED I N 159 ITR 78 IT HAS BEEN HELD THAT IT IS FOR THE DEPARTMENT TO PURSUE A CR EDITOR PARTICULARLY ONCE THE ASSESSEE HAD DULY FURNISHED THE COMPLETE PARTICULARS OF THE PERSON FROM WHOM MONIES HAVE BEEN RECEIVED BY THE ASSESSEE. IN ABSENCE OF SUCH A BURDEN HAVING BEEN DISCHARGED, THE AO COULD NOT HAVE M ECHANICALLY PROCEEDED TO MAKE IMPUGNED ADDITION IN THE INSTANT CASE . IT IS A SETTLED LAW THAT NON-COMPLIANCE OF NOTICE ISSUED U/S. 133(6) OF THE ACT TO ALL THE ENTITIES GIVING UNSECURED LOAN CANNOT BE A BASIS TO MAKE THE ADDI TION U/S. 68 OF THE ACT. THE NATURE OF INCOME AND SOURCE OF INCOME CAN BE EX AMINED ONLY BY THE AO OF THE LENDERS AND NOT BY THE AO OF THE ASSESSEE. IN THIS CASE THERE IS LACK OF ENQUIRY BY THE AO TO REBUT THE BURDEN DI SCHARGED BY THE ASSESSEE AS NO ENQUIRIES WERE MADE EITHER FROM CORPORATE ENTIT Y PROVIDING UNSECURED LOAN OR ENQUIRY FROM AO OF SUCH CORPORATE ENTITY OR IT S BANKER OR REGISTRAR OF COMPANIES BY ISSUING NOTICE U/S. 131 OF THE ACT. WE FURT HER NOTE THAT THE JUDICIAL DECISIONS RELIED UPON BY THE LD. DR HAVE BEEN DULY CONSIDERED. IN OUR CONSIDERED VIEW, WE DO NOT FIND ANY PARITY IN THE FACTS OF THE DECISIONS RELIED UPON WITH THE PECULIAR FACTS OF THE CASE IN HAND. IN VIEW OF ABOVE, 11 WE DELETE THE ADDITION OF RS. 62,50,000/- ON ACCOUNT O F SUMS RECEIVED AS UNSECURED LOAN AND ERRONEOUSLY HELD AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT, WHICH WAS CONFIRMED BY THE LD. CIT (A) AND ACCORDINGLY, WE ALLOW THE GROUND NO. 1 TO 1.1 RAISED B Y THE ASSESSEE. 5.1 APROPOS GROUND NO. 2 TO 2.2 RELATING TO CONFIRMA TION OF ADDITION OF RS. 18,00,000/- ON ACCOUNT OF ALLEGED EXCESS REMUNERATION PAID TO THE PARTNERS AND DISALLOWED BY INVOKING CLAUSE (V) OF SECTION 40(B) O F THE ACT IS CONCERNED, WE FIND THAT THIS AMOUNT WAS DISALLOWED BY HO LDING THAT, THE PARTNERSHIP DEED DOES NOT SPECIFY THE AMOUNT OF THE RE MUNERATION PAYABLE TO THE PARTNERS AND AS SUCH, THE SAME IS NOT ALLOWABLE IN VIEW OF THE SECTION 40(B)(V) OF THE ACT. THE AO WAS OF THE VIEW THAT TH E EXPENDITURE INCURRED CANNOT BE ALLOWED AS DEDUCTION UNLESS THE PARTNERSHIP DE ED EITHER SPECIFIES THE AMOUNT OF REMUNERATION PAYABLE TO EACH INDIVIDU AL WORKING PARTNER OR LAYS DOWN THE MANNER OF QUANTIFYING SUCH REMUNERATION AND SIMILARLY, LD. CIT(A) IN APPEAL HAS SUSTAINED THIS DISALLOWANCE. WE NO TE THAT IN THE INSTANT CASE, REMUNERATION TO THE WORKING PARTNERS ARE DULY AUTHORIZED BY THE PARTNERSHIP DEED DATED 1.4.2013 (PAGE 1-12 OF TH E PAPER BOOK) AND SUCH PAYMENT HAS BEEN MADE AS PER CLAUSE 7 AND 8 OF THE DEED OF PARTNERSHIP, WORKING PARTNERS AND THE AMOUNT OF RE MUNERATION PAYABLE AND THE MANNER OF QUANTIFYING SUCH REMUNERATION IS TO BE DECIDED MUTUALLY BETWEEN THEM FROM TIME TO TIME. WE FURTHER NOTE TH AT THIS DISALLOWANCE IS CONTRARY TO THE PRINCIPLE OF CONSISTENCY AS NO DISALLOWANCE MADE IN THE PRECEDING YEARS I.E. FROM ASSESSMENT YEAR 2010-11 TO 2014 -15 AND ONLY FROM THE INSTANT ASSESSMENT YEAR I.E. AY 2015-16 THE AD DITION WAS MADE WHICH ACTION IS NOT TENABLE. THIS VIEW IS FORTIFIED BY T HE DECISION OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. E XCEL INDUSTRIES LTD. 358 ITR 295 (SC). RESPECTFULLY, FOLLOWING THE AFORESAI D PRECEDENT, THE ADDITION CONFIRMED BY THE LD. CIT(A) IS HEREBY DELET ED AND ACCORDINGLY, THE GROUND NO. 2 TO 2.2 RAISED BY THE ASSESSEE ARE ALLOWED. 12 5.2 APROPOS GROUND NO. 3 TO 3.2 RELATING TO CONFIRM ATION OF ADDITION OF RS. 7,69,097/- BY INVOKING SECTION 40(A)(IA) OF THE ACT IS CONCERNED, WE NOTE THAT SINCE ASSESSEE IS NOT LIABLE TO DEDUCT TDS ON IN INTEREST PAYMENT ON BORROWED LOAN AND THE SECOND PROVISO TO SECTION 40(A) (IA) OF THE ACT IS RETROSPECTIVE, THEREFORE, THE PROVISIONS U/S 40(A)(IA ) OF THE ACT READ WITH SECTION 194A OF THE ACT WERE INAPPLICABLE AND AS SUCH, DISA LLOWANCE SO MADE IS NOT IN ACCORDANCE WITH LAW. IN ANY CASE SINCE THE PAYEE HAD PAID THE TAXES ON THE INTEREST PAID BY THE ASSESSEE, NO DISALLOWAN CE WAS WARRANTED IN VIEW OF SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT. A CCORDINGLY, THE ADDITION CONFIRMED BY THE LD. CIT(A) IS HEREBY DELE TED AND ACCORDINGLY, THE GROUND NO. 3 TO 3.2 RAISED BY THE ASSESSEE ARE ALLOWED. ACCORDINGLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. REVENUES CROSS APPEAL 6. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT( A) ERRED IN DELETING ADDITION OF RS. 7,60,20,000/-. ALL THESE PARTIES DID NOT RESPOND TO THE NOTICE ISSUED U/S. 133(6 ). IT NEEDS TO BE THAT GENUINENESS, CREDITWORTHINESS AND IDENTITY OF LENDER/ CREDITORS ARE DEEPER AND OBSTRUCT IVE THAN MERE COMPLETION OF PAPERWORK OR DOCUMENTATION. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. C IT(A) ERRED IN NOT APPRECIATING THE FACT THAT DURING THE CO URSE OF ASSESSMENT PROCEEDINGS TWO PARTIES NAMELY GST CORPORATION LTD. AND MUDIT JAIN DID NOT CONFIRM THE TRANSACTION AND DENIED THAT ANY UNSECURED LOAN WAS GIVE N TO THE ASSESSEE WHICH WAS ALSO CONFIRMED DURING THE APPELLATE PROCEEDINGS AFFIRMS THAT ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME. 3. THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND ANY O F THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. 13 7. THE BRIEF FACTS IN THIS CASE HAVE ALREADY BEEN DISCUSSED IN ASSESSEES APPEAL, AS AFORESAID, HENCE, THE SAME ARE NOT REPEATE D HERE FOR THE SAKE OF BREVITY. 8. LD. DR RELIED UPON THE ORDER OF THE AO AND STATED THAT LD. CIT(A) ERRED IN DELETING ADDITION OF RS. 7,60,20,000/-, BECA USE ALL THESE PARTIES DID NOT RESPOND TO THE NOTICE ISSUED U/S. 133(6). HE FURT HER SUBMITTED THAT IT NEEDS TO BE THAT GENUINENESS, CREDITWORTHINESS AND IDENTI TY OF LENDER/ CREDITORS ARE DEEPER AND OBSTRUCTIVE THAN MERE COMPLETIO N OF PAPERWORK OR DOCUMENTATION. IT WAS FURTHER SUBMITTED THAT LD. CIT(A ) ERRED IN NOT APPRECIATING THE FACT THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS TWO PARTIES NAMELY GST CORPORATION LTD. AND MUDIT JAIN D ID NOT CONFIRM THE TRANSACTION AND DENIED THAT ANY UNSECURED LOAN WAS GIV EN TO THE ASSESSEE WHICH WAS ALSO CONFIRMED DURING THE APPELLATE PROCEEDING S AFFIRMS THAT ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME. IN VIEW OF ABOVE, HE REQUESTED TO CANCEL THE LD. CIT(A) ORDER ON THE ISSUE I N DISPUTE AND RESTORE THE ORDER OF THE AO BY ALLOWING THE APPEAL OF THE R EVENUE. 9. LD. COUNSEL FOR THE ASSESSEE HAS RELIED UPON THE ORDER OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE. 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS, ESPECIALLY THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). WE FIND THAT THE AO HAS OBSERVED THAT ONLY TWO PARTIES NAMELY G.S.T CORPORATI ON LTD AND MUDIT JAIN CONFIRMED THE TRANSACTIONS MADE WITH ASSESSEE BUT REFUSE TO ACCEPT THAT THEY PROVIDED ANY UNSECURED LOANS TO THE ASSESSEE. THERE W AS NO RESPONSE FROM THE REMAINING PARTIES IN RESPONSE TO NOTICE U/S 13 3(6). IT WAS MENTIONED IN THE ASSESSMENT ORDER THAT ITRS OF MOST OF TH E PARTIES WERE FURNISHED. IT WAS OBSERVED BY THE AO THAT ON PERUSAL O F ITRS THAT THE CREDITWORTHINESS OF THE PARTIES WAS LACKING AND THEY DID NOT HAVE THE CAPACITY TO FINANCE SUCH HUGE AMOUNTS OF LOANS. IT WAS ALSO MENTIONED IN 14 THE ASSESSMENT ORDER THAT THE AR OF THE ASSESSEE DID NOT FI LE THE BANK STATEMENT OR ITR OF THE PARTIES. THE AO HAS CONCLUDED TH AT THE ASSESSEE HAS FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTIONS A ND THE CREDITWORTHINESS OF THE LOAN-GIVERS. THE ASSESSEE FILED LI ST OF UNSECURED LOAN ALONG WITH ADDRESS DETAIL, CONFIRMATION OF LOANS ALONG WITH COPY OF LEDGER ACCOUNT, BANK STATEMENT AND ITR ACKNOWLEDGEMENTS. IT WAS SUBMITTED BY THE ASSESSEE THAT ONUS WAS DISCHARGED BY THE ASSESSEE AFTER THE NECESSARY EVIDENCE WAS FILED BY THEM. IT WAS FURTHER SUBMITTED TH AT ASSESSEE HAD VERBALLY EXPLAINED IN THE COURSE OF HEARING THAT BURD EN UPON ASSESSEE HAS BEEN DISCHARGED HAVING REGARDS TO EVIDENCE PLACED ON RE CORD. FURTHER, IT WAS SUBMITTED THAT OUT OF SUM OF RS.8,22,70,000/-, TH E SUM OF RS.5,85,20,000/- ARE EITHER FROM THE PARTNERS OR REL ATIVES OF PARTNERS (JIYA BINDRA, M.S. BINDRA (HUF) AND PREETINDER KAUR BINDRA ) AND THE REMAINING AMOUNT OF RS.2,37,50,000/- WAS RAISED FROM FIVE OUTSIDE PARTIES. OUT OF THE SAID FIVE PARTIES, A SUM OF RS.1.45 CRORES WAS RAISED FROM SHRI AMRIK SINGH CHAWLA ALONE AND INTEREST OF RS.17.17 LACS PAID TO HIM WAS ALLOWED BY THE AO. IT WAS STATED THAT THE LOAN WAS ALSO RAISED IN PRE CEDING YEAR FROM THE SAID PERSON WHICH WAS ACCEPTED BY THE AO AND THEREFORE NO ADVERSE INFERENCE COULD DRAWN. FURTHER, IN RESPECT OF THE REMAI NING FOUR PARTIES NAMELY PREM DUA, MULTI BOND TRADING CORPORATION, JB L INTERVENTION ASSOCIATES AND G.S.T. CORPORATION SUM AGGREGATING TO RS.9 2,50,000/- WAS RAISED WHICH WAS REPAID ALSO DURING THE YEAR. IT WAS FURTHER CONTENDED THAT IN RESPECT OF SUM RECEIVED FROM RELATED PARTIES INCLUDING PARTNERS AND ONE OUTSIDE PARTY IN THE RESPECT OF WHOM THERE WAS CLOSING OU TSTANDING BALANCE AT THE END OF YEAR, ASSESSEE HAS PAID INTEREST IN INSTANT YEAR AND PREVIOUS YEARS AND WHICH WAS DULY ALLOWED IN ASSESSMENT ORDER IN T HE INSTANT YEAR AND THE PREVIOUS YEARS. IT IS NOTICED THAT THE ASSESSEE HAD SUBMITTED LOAN CONFIRMATIONS, THE BANK STATEMENTS A ND THE ITRS OF THE 15 ARTIES BEFORE THE AO. THE ISSUE WAS EXAMINED IN RESPECT O F UNSECURED LOANS TAKEN AS UNDER:- MS. PREETINDER KAUR BINDRA - THE ASSESSEE HAS SHOWN UNSECURED LOAN OF RS.1,41,00,000/- T AKEN DURING THE YEAR FROM MS. PREETINDER KAUR BINDRA AND THE CLOSI NG BALANCE AS ON 31.03.2015 HAS BEEN SHOWN AT RS.2,78,12,418/-. IT WAS NOTED THAT SHE WAS THE ERSTWHILE PARTNER IN THE ASSESSEE FIRM AND HAS SHOWN R ETURNED INCOME OF RS.41 ,05,429/-. SHE IS COVERED AS A RELATED PARTY U/S 4 0A(2)(B) OF THE ACT IN THE TAX AUDIT REPORT. FURTHER, INTEREST OF RS.28,6 1,325/- PAID TO HER HAS BEEN ALLOWED BY THE AO. ON PERUSAL OF HER COMPUTATION OF INCOME FOR A.Y. 2015-16, IT IS NOTICED THAT SHE HAS SHOWN INTEREST FROM RADIUS INDUSTRIES AT RS.28,61,325/-. ON PERUSAL OF HER BALANCE SHEET, IT WAS NOTED THAT TOTAL OF HER ASSETS AMOUNTED TO RS.15,71,52,466/- WHICH INCLUDED LOANS AND ADVANCES OF RS.13,74,54,992/-. IN THE LIST OF LOANS AND ADVANCES, THE LOAN OF RS.2,78,12,418/- (CLOSING BALANCE AS ON 31.03.2015) GIV EN TO RADIUS INDUSTRIES IS APPEARING. THE ASSESSEE HAS ALSO SUBMITTED H ER BANK STATEMENT REFLECTING THE LOAN GIVEN TO THE ASSESSEE. THE ASSESEE HAS ALSO SUBMITTED COPY OF LEDGER ACCOUNT OF THE ABOVE CREDITOR I N THE BOOKS OF THE ASSESSEE. IT APPEARS THAT THE AO MADE ADDITION U/S 68 OF THE ACT IN RESPECT OF THE ABOVE LOAN ONLY BECAUSE THE SAID CREDITOR DID N OT RESPOND TO 133(6) NOTICE. CONSIDERING THE FACTS MENTIONED ABOVE, WE FIND THAT LD. CIT(A) HAS RIGHTLY OBSERVED THAT THE ASSESSEE HAS BEEN ABLE TO EXPLA IN THE IDENTITY, GENUINENESS OF THE TRANSACTION AND THE CREDITWORTHINESS OF THE CREDITOR AND THEREFORE ADDITION OF RS.1,41,00,000/- WAS DELETED, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART. 2. M.S. BINDRA & COMPANY (HUF) THE ASSESSEE HAS SHOWN UNSECURED LOAN OF RS.1,55,00,000/- T AKEN DURING THE YEAR FROM M.S. BINDRA & COMPANY (HUF) AND THE CL OSING BALANCE AS ON 16 31.03.2015 HAS BEEN SHOWN AT RS.4,84,39,657/-. IT WAS N OTED THAT SH. M.S. BINDRA, KARTA OF M.S. BINDRA & COMPANY (HUF), IS THE PARTNER IN THE ASSESSEE FIRM AND HAS SHOWN RETURNED INCOME OF RS.31,83,1 61/-. HE IS COVERED AS A RELATED PARTY ULS 40A(2)(B) OF THE ACT IN THE TAX AUDIT REPORT. FURTHER, INTEREST OF RS.31 ,76,786/- PAID TO HUF HAS BEEN ALLOWED BY THE AO. ON PERUSAL OF COMPUTATION OF INCOME OF HUF FOR AY. 2015-16, IT IS NOTICED THAT HUF HAS SHOWN INTEREST FROM RADIUS INDUSTRIE S AT RS.31 ,76,786/-. ON PERUSAL OF BALANCE SHEET AS ON 31.0 3.2015, IT WAS NOTED THAT TOTAL OF ASSETS OF HUF AMOUNTED TO RS.10,52, 31,554/- WHICH INCLUDED LOANS AND ADVANCES OF RS.4,84,39,657/- (CLOSING BALANCE AS ON 31.03.2015) GIVEN TO RADIUS INDUSTRIES. THE ASSESSEE HAS AL SO SUBMITTED BANK STATEMENT OF HUF REFLECTING THE LOAN GIVEN TO THE ASSESSEE. THE ASSESSEE HAS ALSO SUBMITTED COPY OF LEDGER ACCOUNT OF THE AB OVE CREDITOR IN THE BOOKS OF THE ASSESSEE. IT APPEARS THAT THE AO MADE A DDITION ULS 68 OF THE ACT IN RESPECT OF THE ABOVE LOAN ONLY BECAUSE THE SAI D CREDITOR DID NOT RESPOND TO 133(6) NOTICE. CONSIDERING THE FACTS MENTIONE D ABOVE, WE FIND THAT LD. CIT(A) HAS RIGHTLY OBSERVED THAT ASSESSEE HAS BE EN ABLE TO EXPLAIN THE IDENTITY, GENUINENESS OF THE TRANSACTION AND THE CRE DITWORTHINESS OF THE CREDITOR AND THEREFORE ADDITION OF RS.1,55,00,000/- WAS DELETED, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART. 3. JIYA BINDRA THE ASSESSEE HAS SHOWN UNSECURED LOAN OF RS.2,89,20,000/- T AKEN DURING THE YEAR FROM MS. JIYA BINDRA AND THE CLOSING BALANCE A S ON 31.03.2015 HAS BEEN SHOWN AT RS.2,04,31,760/--. IT IS NOTED THAT SHE IS THE RELATIVE OF THE PARTNER OF THE ASSESSEE FIRM. SHE IS COVERED AS A RELATED PARTY ULS 40A(2)(B) OF THE ACT IN THE TAX AUDIT REPORT. SHE HAS SHOWN HER RETURNED INCOME AT RS.18,44, 152/-. FURTHER, INTEREST OF RS.18,76,115/- PAID TO HER HAS BEEN ALLOWED BY THE AO. ON PERUSAL OF HER COMPUTATION OF INCOME FOR AY. 2015- 16, IT IS NOTICED THAT SHE HAS SHOWN INTEREST FROM RADIUS INDUSTRIES AT 17 RS.18,76,115/-. ON PERUSAL OF HER BALANCE SHEET, IT WAS NOTED THAT TOTAL OF HER ASSETS AMOUNTED TO RS.6,22,59,617/- WHICH INCLUDED L OANS AND ADVANCES OF RS.5,79,48,284/-. IN THE LIST OF LOANS AND ADVANCES, THE LOAN OF RS.2,04,31,760/-. (CLOSING BALANCE AS ON 31.03.2015) GIV EN TO RADIUS INDUSTRIES IS APPEARING. THE ASSESSEE HAS ALSO SUBMITTED H ER BANK STATEMENT REFLECTING THE LOAN GIVEN TO THE ASSESSEE. THE ASSESSEE HAS ALSO SUBMITTED COPY OF LEDGER ACCOUNT OF THE ABOVE CREDITOR I N THE BOOKS OF THE ASSESSEE. IT APPEARS THAT THE AO MADE ADDITION ULS 68 OF THE ACT IN RESPECT OF THE ABOVE LOAN ONLY BECAUSE THE SAID CREDITOR DID NO T RESPOND TO 133(6) NOTICE. CONSIDERING THE FACTS MENTIONED ABOVE, WE FIND THAT LD. CIT(A) HAS RIGHTLY OBSERVED THAT ASSESSEE HAS BEEN ABLE TO EXPLAIN THE IDENTITY, GENUINENESS OF THE TRANSACTION AND THE CREDITWORTHINESS OF THE CREDITOR AND THEREFORE ADDITION OF RS.2,89,20,000/- WAS DELETED, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART. 4. AMRIK SINGH CHAWLA THE ASSESSEE HAS SHOWN UNSECURED LOAN OF RS.1,45,00,000/- T AKEN DURING THE YEAR FROM AMRIK SINGH CHAWLA AND THE CLOSING BALA NCE AS ON 31.03.2015 HAS BEEN SHOWN AT RS.55,00,000/-. IT IS NOTED THAT SH. AMRIK SINGH CHAWLA HAS SHOWN RETURNED INCOME OF RS.80,82,860/-. FURTHER, INTEREST OF RS.17,17,396/- PAID TO HIM HAS BEEN ALLOWED BY THE AO . ON PERUSAL OF HIS COMPUTATION OF INCOME FOR AY. 2015-16, IT WAS NOTICED THAT HE HAS SHOWN INTEREST FROM RADIUS INDUSTRIES AT RS.17,17,396/-. THE ASSESSEE HAS ALSO SUBMITTED HIS BANK STATEMENT REFLECTING THE LOAN GIVEN TO THE ASSESSEE. THE ASSESSEE HAS ALSO SUBMITTED COPY OF LEDGER ACCOUNT OF THE AB OVE CREDITOR IN THE BOOKS OF THE ASSESSEE. IT APPEARS THAT THE AO MADE AD DITION U/S 68 OF THE ACT IN RESPECT OF THE ABOVE LOAN ONLY BECAUSE THE SAI D CREDITOR DID NOT RESPOND TO 133(6) NOTICE. CONSIDERING THE FACTS MENTIONE D ABOVE, WE FIND THAT LD. CIT(A) HAS RIGHTLY OBSERVED THAT ASSESSEE HAS B EEN ABLE TO EXPLAIN THE IDENTITY, GENUINENESS OF THE TRANSACTION AND CREDITW ORTHINESS OF THE 18 CREDITOR AND THEREFORE ADDITION OF RS.1,45,00,000/- WAS DELETED, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART. 5. J.B.L. INTERVENTION ASSOCIATES, NEW DELHI THE ASSESSEE HAS SHOWN UNSECURED LOAN OF RS.30,00,000/- TA KEN DURING THE YEAR FROM J.B.L. INTERVENTION ASSOCIATES AND THE CLOSING BALANCE AS ON 31.03.2015 AS BEEN SHOWN AT NIL. IT WAS NOTED THAT J.B .L. INTERVENTION ASSOCIATES IS PROPRIETY CONCERN OF KAPIL AGGARWAL HUF HAS SH OWN RETURNED INCOME OF RS.24,81,920/-. ON PERUSAL OF THE BALANCE SH EET OF J.B.L. INTERVENTION ASSOCIATES AS ON 31.03.2015, IT WAS NOTED TH AT TOTAL ASSETS AMOUNTED TO RS.29,08,75,855/- WHICH INCLUDED LOANS AN D ADVANCES OF RS.28,59,66,313/-. THE ASSESSEE HAS ALSO SUBMITTED BANK STAT EMENT OF THE CONCERN REFLECTING THE LOAN GIVEN TO THE ASSESSEE. THE ASSESSE E HAS ALSO SUBMITTED COPY OF LEDGER ACCOUNT OF THE ABOVE CREDITOR I N THE BOOKS OF THE ASSESSEE. IT IS NOTED THAT THE SAID LOAN WAS TAKEN ON 13.1 2.2014 AND THE SAME WAS RE-PAID ON 16.12.2014. IT APPEARS THAT THE A O MADE ADDITION U/S 68 OF THE ACT IN RESPECT OF THE ABOVE LOAN ONLY BECAUSE THE SAID CREDITOR DID NOT RESPOND TO 133(6) NOTICE. CONSIDERING THE FACTS ME NTIONED ABOVE, WE FIND THAT LD. CIT(A) HAS RIGHTLY OBSERVED THAT ASSESSEE HAS BEEN ABLE TO EXPLAIN THE IDENTITY, GENUINENESS OF THE TRANSACTION A ND THE CREDITWORTHINESS OF THE CREDITOR AND THEREFORE ADDITION OF RS.30,00,0 00/- WAS DELETED, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART. 10.1 KEEPING IN VIEW OF THE AFORESAID DISCUSSIONS, WE D O NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THE ISSUE S IN DISPUTE, HENCE, WE UPHOLD THE SAME AND ACCORDINGLY, REJECT THE GROUNDS RAI SED BY THE REVENUE. 19 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STAN DS ALLOWED AND APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED ON 17/09/2019. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 17/09/2019 SRBHATNAGAR COPY FORWARDED TO: - 1. ASSESSEE 2. RESPONDENT 3. CIT 4.CIT (A) 5. DR, ITA T ASSISTANT REGISTRAR, ITAT, DELHI BENCHES