J S Exim Pvt Ltd, Chennai V. DCIT Circle-13(1), New Delhi

ITA 854/DEL/2020

AI Insights

J.S Exim Private Ltd. appealed against the order of the Commissioner of Income Tax (Appeals)-XXXVI, New Delhi, which upheld the additions made by the Assessing Officer under Section 68 of the Income Tax Act, 1961, for the Assessment Year 2013-14. The additions pertained to unsecured loans amounting to Rs. 21,45,40,000. The Tribunal found that the assessee had discharged the initial burden of proof regarding the identity and creditworthiness of the lenders through documentary evidence, including confirmations, income tax returns, and bank statements. It was noted that the loans were repaid either in the same financial year or in subsequent years. The Tribunal criticized the Assessing Officer for not conducting independent inquiries and relying on conjectures, leading to the reversal of the additions and remittance of the matter for verification of loan repayments.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121570 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 21-08-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 18-02-2020
• Other Referred Cases: K P Verghese vs. ITO, CIT vs. Daulatram Rawatmal, CIT vs. Ayachi Chandrashekhar Narsangji, CIT vs. Mahavir Crimpers, CIT vs. Karaj Singh, Panna Devi Chowdhary vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 131; 143(3); 201; 251; 208; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C” DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.854/DEL/2020 Assessment Year 2013-14 J.S Exim Private Ltd. No-55, Narayana Mudali Street Tamil Nadu -600079 Vs. Deputy Commissioner of Income Tax Circle-13(1) New Delhi. TAN/PAN: AABCJ8620P (Appellant) (Respondent) Appellant by: Mr. Amol Sinha, Adv. Respondent by: Mr. Waseem Arshad, CIT (DR) Date of hearing: 22 08 2023 Date of pronouncement: 04 10 2023 O R D E R PER PRADIP KUMAR KEDIA-AM: T he cap tione d ap peal has bee n filed by t he asses see against t he order of t he Co mmi ssi one r of Income T ax (A ppeals )-XXX V I, New D elhi [ ‘C IT (A) ’ in short] date d 09. 10.2 019 aris ing from t he assess me nt orde r dat ed 3 1. 03. 2016 passed by t he A ssessi ng O ffi cer (A O ) unde r Sect io n 143(3) of the I ncome T ax Act, 1961 (the A ct) conce rn ing AY 2013-14. 2. A s per t he grou nds of appeal, the assessee has cha l le nged t he addi ti ons o f Rs. 21 ,45, 40, 00 0/- ma de by t he A ssess ing O ff ice r un der Sect ion 68 of t he Act. 3. T he appe al i n the ins tant cas e has been f il ed belatedl y b y 61 da ys. T he assess ee has f iled an a ffidavi t to t he e ffect citing me dica l I.T.A. No.854/Del/2020 2 reas o ns for del a y in presenti ng the ap pea l. H avi ng re ga rd t o t he reas ons enumerated in t he a ffida vi t, w e obse rve that sufficien t caus e exists for con donatio n of s uc h s hort dela y. The dela y is thus condoned and t he ma tt er i s proc eede d for hea ri ng o n merits. 4. Br ie fl y s ta ted, t he assesse e duri ng t he ye ar u nde r c onsi de ra tion w as enga ged i n t he bus iness of lett i ng of c ommercial pr ope rt y and de ri vi ng income under various hea ds viz; business in come, i nco me fro m house propert y and inc ome from othe r s our ces’. F or t he A ssess me nt Y ea r 2013- 14 i n quest i on, the assessee-compa ny f ile d re tu rn of i nc ome declar in g to ta l i nc ome at Rs. 4, 94,44,6 40/ -. The cas e w as sel ect ed for s c rut in y a ssess me nt unde r Se ct ion 143( 3) of t he A ct. A s per par ag raph 2 of t he assess me nt ord er, the assessee has ad mi tt edl y a t tende d in the ass ess me nt proc ee di ngs from ti me t o ti me and fur nis hed the requis ite de tai ls /i nfor ma tion. 5. In the c ours e of a ssess ment proceed in gs, t he AO iss ued s how caus e not ice da te d 18. 03. 201 6 see ki ng explana tion on bona f id es of uns ecu re d l oa n of Rs. 21, 45, 40, 000/ - as appearing in the books of t he assessee-compan y. T he assess ee fi led vari ous documentar y eviden ces suc h as confir ma ti on, co py o f income tax retur n, bank sta tement and balance-sheet of the borrow ers as ta bulated i n the asse ss me nt or der. It w as i nter alia pointed ou t that l oans rec eived ha ve been pa rt ly re pa id dur ing t he year. T he assessee howe ve r obs erved that the cred itw orthiness / capac it y of the part ies t o le nd mone y t o t he assessee w ere not clea rl y es tablis he d. H aving regard to docu mentar y evidence s ad duced by t he assessee, t he A ssess ing O ffi cer ul ti ma te l y obs erve d th at t he se l en der c omp anies are e ither ha vi ng com mo n di re ct ors or having same e- ma il add ress e tc. Ba sed on t hese com mo n feat ur es and w it h reference t o t he f inanc ials of the l end er c ompan ies, I.T.A. No.854/Del/2020 3 the A ssessi ng O fficer opine d that t he mone y borr ow ed a nd credit s reco rded i n t he books a re not genuine an d the onus contempl ate d under Sec ti on 68 is n ot discha rg ed on fac ts by t he assesse e. T he A ssessi ng O fficer accordi ngl y invoked the provi si ons of Secti on 68 of the A ct a nd ma de a n ad dit ion of Rs. 21, 45,40, 000/- to the r et urne d inco me o f t he as sessee. T he i nc ome w as acc ordin gl y assess ed at Rs. 26, 39,84, 640/ -. 6. A gg rieve d, t he as sessee prefe rred appeal bef ore t he C IT (A ). The C IT (A ) i n the fi rs t appel late orde r obs erve d that th e assesse e has not appea red i n th e app el late pr ocee di ngs a nd t he ini ti al onus pl ace d upon t he ass essee unde r Secti on 6 8 has no t been discha rged. T he CIT (A ) as pe r par ag raph 5. 3 o f the appellate or der s i mu lta neo usl y obs erve d tha t the ap pea l i s being dec id ed j udic iousl y bas ed on ma teri al availabl e on record. T he C IT (A ) thus adopted t he obs erva tio ns of A O on me rits a nd a dj udicate d the iss ue agains t the assessee on merit s as w ell. In c onclu sion, t he C IT (A ) dec lined to inte rfere w ith the orde r of the A O a nd dis mis sed the appeal of t he assessee. 7. Fur th er a ggrie ve d, t he assess ee pre fe rred a ppeal bef ore the Trib una l. 8. T he l d. cou nsel for t he assess ee sub mitte d a t t he o uts et tha t t he re le vant details of all the le nde rs ha ve be en fu rnis he d b efore the A O incl uding the con fi rma tion, t he incom e tax ret urn, t he bank s ta te me nt and a lso the ba lance-s heet. T he ld. counse l thus s ubmi t te d that pa rt ic ul ars of all the lenders are available on re cord o f t he department a nd are fi li ng inco me t ax ret urns. T he bank account copy of the lenders w ould show the s ou rces fro m w hic h t he mo ne y w as lent to t he asse ssee. The balance-sheet o f the len ders also vouc hes I.T.A. No.854/Del/2020 4 the ove ra ll financ i al s tatus of the r es pec ti ve pa rti es. T he l d. c ounse l next su bmi tted t hat out of 36 part ies givi ng varie d amounts during the ye ar, the asses see had also avai led loans from tw o di recto rs also na me ly, B hag ya shree Ja in a nd S hri Raj es h S. Ja in. The assess ee- co mpan y ha d avail ed t he l oa n f rom t he D ir ec tors in the earlier years als o. T he fact of payme nt of i nteres t a nd als o pa rtia l repa ymen t of loans du ring the s ame FY 12-13 releva nt to A Y 2013-1 4 w as al so bro ught on r ecord. 8. 1 T he L d. Counsel sub mi tte d tha t the AO proceede d so lel y on surmises and conj ectu res. It w as submit ted t hat suspici on, at bes t, is mot he r of enqu ir y. T he A O could have ma de e nqu ir ies unde r s. 133(6) or unde r s. 131 of t he Act. T he AO di d not co ns id er i t exped ie nt to u se s uch tools to colla te the ev idenc es filed and onl y engag ed hi ms el f in irrele va nt cons id erat ions s uc h as commo n address, co mmo n di re ctors etc. of le nde r c os. H aving f ile d adeq uate evidence s of t he lende rs, the i nit ial bur den has been discharged re ga rding t he i de nt it y, genuinenes s and c re di tw orthiness of t he lenders a nd t he AO has simpl y co nve rt ed good proof into no p roof w ithout br in gin g any t angi bl e e viden ces exc ept the f in dings pre mi sed on sus p ic ion an d conj ec tu res. 8. 2 T he l d. cou nsel th us s ubmi t s that i n the li ght of these cli nching doc ument ar y evid ence s, the re w as no reas on for t he R eve nue to que st ion the bona f ide s o r th e capac it y of the lende rs, more s o, w here the A ss essin g O ffi cer has passe d the ge nerali ze d orde r w i th out point ing out an y defec t on suc h incisi ve documents place d t ow ards each l ende r parties . To rei te ra te, th e AO has not given any reference to any e nqu ir y under S. 133( 6) or u nder S. 131 of the Act and t hus no inde pen den t veri ficat ion w e re not deemed nec essa r y to rea ch an y I.T.A. No.854/Del/2020 5 logi cal conc lu sion. It i s not a case w here o nl y c onf ir ma ti on s ha ve been pro duced but it is a case w here the le nders are be in g cont inuous l y asses sed and coge nt do cumenta r y evidenc es, as poi nted out, have bee n pl aced to establis h t he bona f ides of the credit ent ries. 8. 3 T he ld. counsel next sub mi tt ed th at the A sse ssing O f fi ce r has proceed ed s impl y on ac count of extraneous c ons i de rations suc h as co mmo n ad dress, common e -mail, com mon d ir ect ors etc. 8. 4 T he l d. counsel t here af te r voci fe rous ly as serted that a part of the loans in the vi cini ty of 8. 97 cr. was also repai d duri ng the sa me ye ar a nd a ll the lo ans ha ve bee n event ua ll y repa id in t he next year or in s ubse que nt fi na nci al years as pe r the ta bul at ion furnished i n t hi s re ga rd. Th e fa ct of part re pa yme nt in the s ame ye ar was gl ossed o ver. The ld. couns el th us cla imed t ha t, i n ef fe ct, on eventua l repaymen t of loans, no be ne fit per se c an be sai d to hav e accr ued to the ass essee by obtaining all egedl y fict it i ous loa ns. T he repayme nt w ould also evenl y s ugges t that the lo ans received at the fi rst ins tance di d not emanate from the unaccounted coffers of t he A ssessee. R eferenc e w as ma de to s everal j udg me nts rendere d b y H on’b le Hi gh Cou rts of di ffe re nt j uris dici t ons and also that of ITA T to s uppor t such line of content i on. T he ld . cou nsel a lso s i mul taneousl y empha sized that the loans have bee n obta ined on c ommercia l c onside rat ions an d interes t acc rue d o n suc h loa ns h as been d ul y pa id to t he lende rs a fter deduc ti ng TD S at an app li cab le ra te. T he l d. co unsel thus s ubmit ted that t he infe re nc e draw n by t he A O in holding s uch c redit e ntries to be accommo dat i on e ntr y is sole ly f ounded upon s uspic io n and surmises in t ot al dis reg ar d o f fact ua l matr ix and he nce suc h a ction is w hol l y outsi de the sanc t io n of law a nd a mere ips i di xi t o f the AO in the a bse nce of an y inde pende nt in qui ry c ar ried out. I.T.A. No.854/Del/2020 6 8. 5 T he ld. counse l also s ubmi t te d that the C IT (A ) w hi le pass in g the or der o n mer it s oug ht to have t ake n these factors int o account w hich w ere dul y avai la bl e on t he rec ord of t he A O. The CIT (A ) th us has p er funct ori l y dis mi ssed the appeal of th e ass essee w i th out consi derin g the mater ial pl ace d o n rec ord des pi te adj udica tin g t he issu e on meri ts. 8. 6 T he l d. co unse l t hus submitt ed in co nclus ion t ha t i n th e light of the c ogent evid ences pl aced, fac tum of pa yme nt of int eres t on suc h loans a nd als o re pa yme nt of loans i tsel f, the adverse in fe rence drawn is a da mp s qu ib and wholl y unjus ti fied. The l d. couns el t hus ur ged for suitable rel ie f i n the matt er. 9. We ha ve ca refull y con si de re d t he ri va l su bmiss ions and perus ed the first appe lla te order as w ell as t he assess men t orde r. 10. T he c ont rovers y re volves a rou nd cor rect ness of a ddi ti on s ma de under s. 68 of the A ct tow ards credits a risi ng on acc ount of loans recei ved b y the as sessee from var io us parties during the ye a r. T he issu e is ess en ti all y a quest i on of fa ct and depen ds sq uarel y on t he fact ual mat rix a nd att enda nt preponde ra nce of p robabil it ies. H en ce, to adj ud icate the is sue, w e not ice a fe w facts ; (a ) that the ass ess ee h as fi led pa rt y-w ise confi rmati on, co py of IT re tu rns, f inancial state me nts an d ba nk sta te me nts. Th us, t he identi ty and s ource of c re dit entries a re exp lai nab le fro m the rec ord. (b) that th e loa ns are de mo ns t rat ed to have bee n obta ined on co mme rci al cons idera tions. The assessee has paid t he i nter est t o t he res pect ive pa rties and such interes t pa yments hav e bee n subj ec ted to TD S provisi ons. T he interes t i nc ome is a lso shown to be dec lared in I.T.A. No.854/Del/2020 7 the res pec ti ve returns of t he lende r c ompanies. (c ) t ha t the AO has not c ons i dered it necessar y to ma ke an y inde pen den t inqui ry w ith lend ers unde r Secti on 1 33(6)/ 131 of t he A ct. T he A O has pr oceeded to for mula te opini on on bona fi des of suc h loans on t he basi s of co mmon add ress, comm on ema il and co mmo n d irec tors hip etc w i th out a n y tr aces of i ndepe ndent enqui ri es fro m lende rs. Some i nfir mi ties w ere obse rved in respec t of few pa rt ies for non avail ab il i ty of th ei r bal ance -sheet w here s uch loans w ere alread y s quared up before the e nd of financial year etc. (d) tha t the assess ee cl ai ms to have re pa id a ll the l oa ns either i n t he fi na ncia l year rele vant t o A ssess ment Y ear 2013-14 its elf or in ne xt ye ars. The assessee categoricall y co ntends tha t all loans in que st io ns sto od ul timate ly repai d. 11. When the eviden ces plac ed on re cord a nd f act s eme rging ther ef rom a re d is p assi onatel y view e d, it appea rs t hat th e assessee has fi led mult iple and in- depth eviden ces o f the le nde rs about t he ir iden ti t y and gen uinenes s o f t ra nsa cti ons and c re ditw orthiness of res pect ive pa rties. T he loans obtained are found to be c ommer cia l in charac te r. The loans are also s tated to be repaid eit her during t he ye ar or i n the s ubs eque nt ye a rs. O n cons pe ct us such f acts re ad cu mula ti ve ly, the in iti al onus w hi ch la y up on t he assesse e s tood clear ly discha rged and onus was thus shifte d on the A O to dis pr ove the facts borne out . It is w holl y unco mpr ehens ible t hat w hile making suc h i nt ens e alle gati ons of a ccom modat ion l oa ns, t he AO did not choose t o carr y ou t an y in dependen t enqu ir y from the l enders. Such hi gh pit che d a ddi tions have been m ade on unprov ed allegations. In the a bsence a ny a dve rsa ri al facts com in g t o surface, the docu me nt ar y evidence s a nd confir ma ti on on the fact of le nding by lende rs ga ins I.T.A. No.854/Del/2020 8 credence. The on us of proof is more like a sw ingi ng p endulum. T he onus w as shif te d t o t he de pt t. f or br ing s ome th ing co ncrete a dve rse to the documen ta r y e vi de nces fil ed. In the a bsence of a ny enquiries w ith the pa rt ies or an y adve rs e mate rial, the onus so s hi ft ed on t he A O w as never fast ened back on th e ass es see. It is tr ite t ha t th e onus lies on one w ho alleges or ta kes a ple a on incorrect ness of the trans ac tion. T he observ at ions in K P V er ghese v s. IT O (19 81) 131 ITR 597(SC ) vouc hes such propo siti on. It is als o t rite that onus of pro vi ng t hat t he appa ren t is not real is on the party w ho cla ims it to be so as obs e rve d i n CIT vs. D aul atr am Raw atmal 87 ITR 349( SC ). In the abs ence of any suggest ion on an y a dve rs e surround in g ci rc ums ta nces or test o f human p roba bi lit ies, an y de pa rture from such pri nci ple is not pla usi bl e. 12. T he A ssess ee, in our view , has p la ced s ufficie nt evi dences to dis charge initia l onus to explai n the nat ure and source of loans. A part fro m the doc ume ntar y evi den ces, th e preponde rance of pro babili ties (i n the light of payme nt of i nter est ; re pa yment o f loans et c.) als o appea rs t o ti l t in favour of the asse ssee. A fte r a laps e of nearl y a deca de, it is not des irable to ignite an d i nstat e an enqui ry proceed ings at t he level of A O , more so, w he n the loans are s ta ted to be ha ve bee n repaid. We fi nd forc e in the plea t hat th e A O has dis cr edit ed t he loans pri ma ri l y on t he ba sis o f surmises and conj ectu res w hic h can not be counten ance d i n law . 13. A t t his junct ure, a tab ular st ate me nt of pa rt ywise Loan a va iled and repaymen t thereon, as sub mi tte d on behalf of the assessee wo uld be per ti ne nt at this point. I.T.A. No.854/Del/2020 9 S r . N o . N a m e F i n a n c i a l Y e a r 2 0 1 2 - 1 3 R e p a y m e n t i n s u b s e q u e n t F i n a n c i a l Y e a r ( F . Y . 2 0 1 3 - 1 4 a n d F . Y . 2 0 1 4 - 1 5 ) O p e n i n g B a l a n c e ( R s . ) I n t e r e s t ( R s . ) T D S ( R s . ) R e c e i v e d ( R s . ) R e p a y m e n t ( R s . ) C l o s i n g B a l a n c e ( R s . ) F i n Y e a r A m o u n t R e p a i d ( R s . ) C l o s i n g B a l a n c e ( R s . ) 1 . A g r a s a r E d u c a t i o n P v t . L t d . - 1 , 3 3 , 1 5 1 , 1 3 , 3 1 5 , 9 5 , 0 0 , 0 0 0 - 9 5 , 0 0 , 0 0 0 2 0 1 3 - 1 4 9 5 , 0 0 , 0 0 0 - 2 . A j o o b a W a t e r W o r l d P v t . L t d . - 8 4 , 2 3 0 8 , 4 2 3 5 3 , 0 0 , 0 0 0 - 5 3 , 0 0 , 0 0 0 2 0 1 3 - 1 4 5 3 , 0 0, 0 0 0 - 3 . A l p h a d e v e l o p e r s P v t . L t d . - 1 , 6 1 , 0 9 6 1 6 , 1 1 0 5 0 , 0 0 , 0 0 0 - 5 0 , 0 0 , 0 0 0 2 0 1 3 - 1 4 5 0 , 0 0 , 0 0 0 - 4 A v o n N i r m a n P v t . L t d . - 1 , 5 7 , 4 7 9 1 5 , 7 4 7 7 0 , 0 0 , 0 0 0 - 7 0 , 0 0 , 0 0 0 2 0 1 3 - 1 4 7 0 , 0 0 , 0 0 0 - 5 G h a r o n d a N i r m a n P v t . L t d . - 2 , 5 5 , 4 5 2 2 5 , 5 4 2 6 0 , 0 0 , 0 0 0 - 6 0 , 0 0 , 0 0 0 2 0 1 3 - 1 4 6 0 , 0 0 , 0 0 0 - 6 J a t a d h a r i B u i l d e r s P v t . L t d . - 2 , 4 4 , 6 0 3 2 4 , 4 6 1 6 5 , 0 0 , 0 0 0 - 6 5 , 0 0 , 0 0 0 2 0 1 3 - 1 4 6 5 , 0 0 , 0 0 0 - 7 K u b e r b u i l d m a r t P v t . L t d . - 2 , 6 0 , 7 1 2 2 6 , 0 7 1 6 0 , 0 0 , 0 0 0 - 6 0 , 0 0 , 0 0 0 2 0 1 3 - 1 4 6 0 , 0 0 , 0 0 0 - 8 P e o p l e C a r e H o s p i t a l s P v t . L t d . - 1 , 0 3 , 5 6 2 1 0 , 3 5 7 6 0 , 0 0 , 0 0 0 - 6 0 , 0 0 , 0 0 0 2 0 1 3 - 1 4 6 0 , 0 0 , 0 0 0 - 9 S i y a r a m C o n t r a c t o r s P v t . L t d . - 2 , 9 8 , 6 8 5 2 9 , 8 6 9 7 5 , 0 0 , 0 0 0 - 7 5 , 0 0 , 0 0 0 2 0 1 3 - 1 4 7 5 , 0 0 , 0 0 0 - 1 0 S p a r s h B e a u t y C a r e P v t . L t d . - 1 , 0 1 , 2 6 0 1 0 , 1 2 6 6 0 , 0 0 , 0 0 0 - 6 0 , 0 0 , 0 0 0 2 0 1 3 - 1 4 6 0 , 0 0 , 0 0 0 - 1 1 A h i l m i l E l e c t o r n i c s P v t . L t d . - 1 , 5 7 , 8 0 8 1 5 , 7 8 1 5 0 , 0 0 , 0 0 0 - 5 0 , 0 0 , 0 0 0 2 0 1 3 - 1 4 5 0 , 0 0 , 0 0 0 - 1 2 B a l g a p a l C o l d S t o r a g e s P v t . L t d . - 3 5 , 5 0 7 3 , 5 5 1 4 0 , 0 0 , 0 0 0 - 4 0 , 0 0 , 0 0 0 2 0 1 3 - 1 4 4 0 , 0 0 ,0 0 0 - 1 3 P u n y a h B u i l d i n g M a t e r i a l P v t . L t d . - 4 4 , 3 8 4 4 , 4 3 9 5 0 , 0 0 , 0 0 0 - 5 0 , 0 0 , 0 0 0 2 0 1 3 - 1 4 5 0 , 0 0 ,0 0 0 - 1 4 S p e e d y C o u r i e r S e r v i c e s P v t . L t d . - 4 4 , 3 8 4 4 , 4 3 9 5 0 , 0 0 , 0 0 0 - 5 0 , 0 0 , 0 0 0 2 0 1 3 - 1 4 5 0 , 0 0 ,0 0 0 - 1 5 K u b e r H a n d i c r a f t P v t . L t d . - 8 7 , 0 0 0 8 , 7 0 0 1 0 , 0 0 , 0 0 0 1 0 , 0 0 , 0 0 0 - - - - 1 6 R u p a M e r c h a n d i s P v t . L t d . - 3 , 0 4 , 0 0 0 3 0 , 4 0 0 4 0 , 0 0 , 0 0 0 4 0 , 0 0 , 0 0 0 - - - - 1 7 B a s e M e d i a P r o j e c t s P v t . L t d . - 7 , 7 4 , 2 4 7 7 7 , 4 2 5 1 , 5 0 , 0 0 , 0 0 0 - 1 , 5 0 , 0 0 , 0 0 0 2 0 1 3 - 1 4 1 , 5 0 , 0 0 , 0 0 0 - 1 8 D y n a m i c R e a l c o n P v t . L t d . - 9 , 9 7 , 8 0 8 9 9 , 7 8 1 2 , 9 0 , 0 0 , 0 0 0 9 0 , 0 0 , 0 0 0 2 , 0 , 0 0 , 0 0 0 2 0 1 3 - 1 4 2 , 0 0 , 0 0 , 0 0 0 - I.T.A. No.854/Del/2020 10 1 9 F a i r S e c u r i t i e s P v t . L t d . - 8 3 , 0 1 4 , 8 , 3 0 1 2 5 , 0 0 , 0 0 0 - 2 5 , 0 0 , 0 0 0 2 0 1 3 - 1 4 2 5 ,0 0 , 0 0 0 - 2 0 G e m I n f r a p r o j e c t P v t . L t d . - 7 3 , 9 7 3 7 , 3 9 8 5 0 , 0 0 , 0 0 0 - 5 0 , 0 0 , 0 0 0 2 0 1 3 - 1 4 5 0 , 0 0 ,0 0 0 - 2 1 K P C C o n s u l t a n t s P v t . L t d . - 7 3 , 6 4 4 7 , 3 6 4 4 0 , 0 0 , 0 0 0 - 4 0 , 0 0 , 0 0 0 2 0 1 3 - 1 4 4 0 , 0 0 ,0 0 0 - 2 2 M a c r o M e d i a D i g i t a l I m a g i n g P v t . L t d . - 5 2 , 0 0 5 , 2 0 0 3 0 , 0 0 , 0 0 0 - 3 0 , 0 0 , 0 0 0 2 0 1 3 - 1 4 a n d 2 0 1 4 - 1 5 2 0 , 0 0 , 0 0 0 1 0 , 0 0 , 0 0 0 - 2 3 P u r v a n i l T r a d e & c o m m e r c e P v t . L t d . - 1 , 0 0 , 5 0 0 1 0 , 0 5 0 2 0 , 0 0 , 0 0 0 2 0 , 0 0 , 0 0 0 - - - - 2 4 D i s h a r t h I n f r a p r o j e c t s P v t . L t d . - 5 , 8 9 , 7 5 0 5 8 , 9 7 5 1 , 2 0 , 0 0 , 0 0 0 1 , 2 0 , 0 0 , 0 0 0 - - - - 2 5 H a n i I n d u s t r i e s L t d . - 3 , 6 2 , 3 7 5 3 6 , 2 3 7 6 5 , 0 0 , 0 0 0 6 5 , 0 0 , 0 0 0 - - - - 2 6 K . S . T r a d e i n f r a P v t . L t d . - 3 , 2 0 , 1 2 5 3 2 , 0 1 2 6 5 , 0 0 , 0 0 0 6 5 , 0 0 , 0 0 0 - - - - 2 7 M a i n a k C o m t r a d P v t . L t d . - 3 , 1 1 , 5 2 5 3 1 , 1 5 2 5 9 , 0 0 , 0 0 0 5 9 , 0 0 , 0 0 0 - - - - 2 8 G l o b a l C a p i t a l m a r k e t & I N f r a s c t r u c t u r e s L t d . - 1 , 4 2 , 5 0 0 1 4 , 2 5 0 3 0 , 0 0 , 0 0 0 3 0 , 0 0 , 0 0 0 - - - - 2 9 A r u l P r o j e c t s a n d S e r v i c e s P v t . L t d . - 1 , 3 2 , 0 0 0 1 3 , 2 0 0 2 0 , 0 0 , 0 0 0 2 0 , 0 0 , 0 0 0 - - - - 3 0 B h a g y a s h r e e J a i n 4 4 , 5 0 , 0 0 0 - - 1 0 , 0 0 , 0 0 0 5 4 , 5 0 , 0 0 0 - - - - 3 1 G r e a t M e e r a F i n l e a s e - 6 , 5 3 , 7 5 0 6 5 , 3 7 5 1 , 0 0 , 0 0 , 0 0 0 1 , 0 , 0 0 , 0 0 0 - - - - 3 2 M S V F s c a l S e r v i c e s P v t . L t d . - 1 3 , 0 0 0 2 5 , 0 0 , 0 0 0 2 5 , 0 0 , 0 0 0 - - - - 3 3 R a j e s h S J a i n 4 0 , 9 0 , 0 0 0 1 , 3 0 , 0 0 0 - 4 3 , 4 0 , 0 0 0 8 4 , 3 0 , 0 0 0 - - - - 3 4 S u b h r e k h a V y p a r P v t . L t d . - - 2 5 , 2 5 0 5 0 , 0 0 , 0 0 0 5 0 , 0 0 , 0 0 0 - - - - 3 5 T r i s t a r A g e n c i e s P v t . L t d . - - 2 5 , 3 7 5 5 0 , 0 0 , 0 0 0 5 0 , 0 0 , 0 0 0 - - - - 3 6 V e n u s M e r i d i a n A g e n c i e s P v t . L t d . - - 9 , 9 0 0 1 5 , 0 0 , 0 0 0 1 5 , 0 0 , 0 0 0 - - - - 8 5 , 4 0 , 0 0 0 7 8 , 7 5 , 7 7 4 7 , 8 7 , 5 7 6 2 1 , 4 5 , 4 0 , 0 0 0 8 , 9 7 , 8 0 , 0 0 0 1 3 , 3 3 , 0 0 , 0 0 0 - 1 3 , 3 3 , 0 0 , 0 0 0 - I.T.A. No.854/Del/2020 11 14. A per usal of t abul ati on suggest s t hat t he al l loans t ak en have bee n eit her repai d in t he sa me fi nanci al year or in the s ubsequent yea rs. I n t hi s bac kdrop, i t ma y b e releva nt t o refer t o the j udici al di ct a echoe d i n the case of CI T vs. Ayachi C han drashekhar Narsangj i, 42 t axmann. com 251 (G uj . ); CI T vs. M ahavir Cri mpers, 95 t axmann. com 323 (Guj. ); CI T vs. Karaj Singh (2011) 1 5 taxm ann. com 70 (P &H ) a nd Panna Devi C howd hary vs. CIT, 208 ITR 849 (Bom ). In t hese jud g ments, the H on’bl e Hig h Court s have hel d i n c horus t ha t t he fact u m of repa yme nt of l oans ar e ent i tl ed t o great wei ght whi l e evaluati ng the bonafi des of l oa n t ransacti ons. Wher e the l oans i t sel f st ands repai d or substa nti all y r epaid and no mone y i s left at t he co mmand of t he assessee, t he nat ure of which mi ght require co nsiderati on, the whol e exer ci se i s fut il e at t hi s bel ated st age. T he repa yment i s t hus a rel evant circu mst ance for eval uat i ng t he bonaf ides of loa ns. 15. I n the l ight of del ineat i ons in preceding paragraphs, we fi nd ostensible rati onal e i n t he plea adva nce d on behal f of the assessee on f irst pri ncipl es. The plea is backed b y evi dences and whol e set of speaki ng ci rcu ms tances. In t he l i ght of th e document s fi led an d owi ng t o over whel mi ng f actu m of r epa yment carri ed out , we ar e of the opi nio n that t he i ni ti al onus w hich l a y upon t he assessee was ful l y di schar ged on the conto urs of Secti on 68 of the Act . The AO has rat her f ai led to shi ft the onus back on t he assessee in the absence of a n y i ndepe ndent i nqui r y a nd fi ndi ngs t hereof i n the assess ment or der. We t hus see no j ust if iable reason to endorse t he pr ocess of reasoni ng a dopt ed b y t he l ow er aut hori ties and fin d me rit i n the plea of the assessee. We t hus ar e i ncli ned t o re verse the i mpugned addi ti ons on fi rst prin ci ples. I.T.A. No.854/Del/2020 12 16. Fro m t he t abul ar s t at ement , we obser ve that a subst ant i al part of loans obtained fro m so me part i es st ood re pai d i n the sa me fi nancial year 2012- 13. The boanf ides of l oans t o the e xtent repa yment made i n the same fi nanci al ye ar 897.80 lakh t hus deser ves t o be accept ed wi t hout an y de mur . 17. I n t he si mi l ar vai n, howe ver, we si mul taneousl y note t hat t he AO or CIT( A) w er e not nec essaril y pri v y t o f act u m of repa yme nt of remai ni ng loa ns qua so me l enders i n the ver y next ye ar FY 2013- 1 4 and r e mai ni ng a mount i n FY 2014- 15. As noted in t he precedi ng par agr aph, such signifi cant fact of r epa yme nt t ransgr esses al l ot her consi derat i ons and pr ovi des consi derable support to the plea of bona f i des w he n i n conj uncti on wi th othe r e vi dences. It shall t hus be open t o Asses sing Of fi cer t o veri f y the fact of repa yment of loans in subse quent ye ars. 18. Hen ce, we consider it expedi ent t o r emi t t he mat ter back t o the fi le of t he AO for l i mit ed purp oses of veri fi cati on of aspect s of repa yment of loans w hi ch re mai ned out standi ng at the e nd of fi nancial ye ar 2012-1 3 r elevant to AY 201 3- 14 in quest io n. The assessee ma y demonst rate t he fac t of r epa yme nt of loans in the subsequent ye ars bef or e t he AO by adducin g it s ba nk st at e ment showing r epa yme nt , ledger of par ti es et c. Where, t he AO f i nds t he out standin g loans have bee n dul y dischar ged b y re payment i n t he subsequent year s, t he ad dit i ons made shall be reversed and delete d. Whi le d et er mi ni ng the issue, a r easonabl e opportu nit y shal l be gi ven t o t he assessee to adduce t he e vidences i n rel ati on t o repa yment of loans. 19. I n t er ms of f orgoi ng direct i ons, t he ma tt er i s re mi tt ed back t o I.T.A. No.854/Del/2020 13 the fi le of AO to r efr a me assess ment or der i n accordance wit h l aw. 20. I n the result , the appeal of the assessee i s all owed for stati sti cal purpose s. Order pronounced in the open Court on 04/10/2023 Sd/- Sd/- [CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /09/2023 Prabhat