ITO, NEW DELHI V. SH. MUNISH KUMAR VERMA, NEW DELHI

ITA 1290/DEL/2017

AI Insights

The case involves cross-appeals by Munish Kumar Verma, the assessee, and the Income Tax Officer (ITO), concerning the assessment year 2012-13. The primary issues revolved around the addition of Rs. 95,00,516/- as unexplained loans under Section 68 of the Income Tax Act and an addition of Rs. 1,00,000/- concerning low withdrawals. The Assessing Officer had initially added a larger amount for both issues, which the CIT(A) later reduced. The Tribunal upheld the CIT(A)'s decision regarding the loan amount but confirmed the addition of Rs. 95,00,516/- as the assessee failed to prove the loans' genuineness. Regarding the low withdrawals, the Tribunal found the CIT(A)'s restriction of the addition to Rs. 1,00,000/- unjustified and directed its deletion.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 34033 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT KATOCH
• Section: 68; 133(6)

Judgement Text

"ITA No. 812/DEL/2017 [A.Y. 2012-13] Munish Kumar Verma Vs.The I.T.O ITA No. 1290/DEL/2017 [A.Y. 2012-13] The I.T.O Vs Munish Kumar Verma Page 1 of 9 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘E’ BENCH, NEW DELHI BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 812/DEL/2017 [A.Y. 2012-13] Munish Kumar Verma Vs. The I.T.O C-4, Brij Vihar, Pitampura Ward -40(3) Delhi New Delhi PAN – ABHPV 6099 C (Applicant) (Respondent) ITA No. 1290/DEL/2017 [A.Y. 2012-13] The I.T.O Vs Munish Kumar Verma Ward -40(3) C-4, Brij Vihar, Pitampura New Delhi Delhi PAN – ABHPV 6099 C (Applicant) (Respondent) Assessee By : None Department By : Shri Amit Katoch, Sr. DR Date of Hearing : 11.03.2025 Date of Pronouncement : 19.03.2025 ITA No. 812/DEL/2017 [A.Y. 2012-13] Munish Kumar Verma Vs.The I.T.O ITA No. 1290/DEL/2017 [A.Y. 2012-13] The I.T.O Vs Munish Kumar Verma Page 2 of 9 ORDER PER NAVEEN CHANDRA, A.M:- The above two cross appeal by the assessee and the Revenue are preferred against the order of the ld. CIT(A)-14, New Delhi dated 16.12.2016 for A.Y 2012-13. 2. The grievances of the assessee is two-fold: (i) The ld. CIT(A) erred in confirming the addition of Rs. 95,00,516/- out of addition made by the Assessing Officer u/s 68 of the Act on account of fresh unsecured loan; and (ii) The ld. CIT(A) was not justified in restricting the addition of Rs. 1,00,000/- on account of low withdrawal. 3. The grievances of the Revenue is also two-fold: i) the Ld. CIT(A) is not justified in restricting the addition of Rs. 3,19,32,924/- to Rs. 95,00,516/ on account of unexplained loans ignoring the findings of the AO that an amount of Rs. 3,17,94,429/- has been credited in the books of accounts during the year under ITA No. 812/DEL/2017 [A.Y. 2012-13] Munish Kumar Verma Vs.The I.T.O ITA No. 1290/DEL/2017 [A.Y. 2012-13] The I.T.O Vs Munish Kumar Verma Page 3 of 9 consideration in the garb of unsecured loans of which assessee could not prove the genuineness, identity and creditworthiness. ii) the Ld. CIT(A) is not justified in restricting the addition of Rs. 2,13,827/- to Rs. 1,00,000/- on account of low withdrawals ignoring the findings of the Assessing Officer. 4. As the issues involved emanates from the same order, both the appeals are heard together. None appeared on behalf of the assessee nor any adjournment was sought. The ld. DR was heard at length. Case records carefully perused. With the assistance of the ld. DR, it was decided to adjudicate upon the issues on the basis 5. Briefly stated, the facts of the case are that the assessee is an individual and engaged in the business of share trading and investing activities. The assessee filed its Return of Income on 29.09.2012 declaring NIL income and has claimed Rs 82,21,809/- as loss. Return was selected for scrutiny assessment through CASS and accordingly, statutory notices were issued and served upon the assessee. ITA No. 812/DEL/2017 [A.Y. 2012-13] Munish Kumar Verma Vs.The I.T.O ITA No. 1290/DEL/2017 [A.Y. 2012-13] The I.T.O Vs Munish Kumar Verma Page 4 of 9 6. On perusal of Balance Sheet of Assessee Company, the Assessing Officer noticed that the assessee has shown unsecured loans to the tune of Rs. 4,62,06,941/-. The assessee was asked to furnish complete evidence in the shape of confirmation, copy of ITR of each party and bank pass book from where they have given the loan to the assessee. 7. After considering the material furnished on record, the Assessing Officer came to the conclusion that the assessee has not furnished the proper information such as complete addresses of the persons from whom loans have been taken, their PAN not provided, the assessee gave incomplete /old addresses of the persons/parties to whom letter u/s 133(6) sent but received unserved either on one pretext or the other and the interest paid to some of the persons not shown/debited in the P&L account by the assessee in respect of unsecured loans received by the assessee during the year relevant to the assessment year under consideration. The AO ultimately held that a major part of the loans were non genuine and their creditworthiness have also not been proved. Therefore, an amount of Rs.3,19,32,924/- was added in the income of the assessee. The AO further added Rs 2,13,827/- on account of low withdrawal. 8. Aggrieved, the assessee went in appeal before the ld. CIT(A). ITA No. 812/DEL/2017 [A.Y. 2012-13] Munish Kumar Verma Vs.The I.T.O ITA No. 1290/DEL/2017 [A.Y. 2012-13] The I.T.O Vs Munish Kumar Verma Page 5 of 9 9. After considering the facts and circumstances and evidences produced before him, the ld. CIT(A) came to the conclusion which is as under: “I have considered the submissions of the appellant as well as the findings of the Ld. AO. On perusal of records it is noticed that the Ld. AO has made the addition on account of unsecured loans of Rs. 3,19,32,924/- but during the AY under consideration the appellant has received fresh loans of Rs. 95,00,516/- and unsecured loans amounting to Rs. 2,24,32,408/-(3,19,32,924 95,00,516) pertain to the earlier assessment years. As per the provisions of Section 68 of the Act the old unsecured loans cannot be considered as income of the year under consideration. In case the Ld. AO has some doubt about the identity, creditworthiness and genuineness of the transaction about the old unsecured loans he can take other remedial actions under the Act. In view of the above factual position the addition of Rs. 2,24,32,408/- u/s 68 of the Act deserves to be deleted. I order accordingly. Further, since the appellant has not satisfactorily established the identity, creditworthiness and genuineness of the transaction about the unsecured loans of Rs. 95,00,516/- taken during the year the addition is confirmed. Hence, the ground of appeal is partly allowed.” ITA No. 812/DEL/2017 [A.Y. 2012-13] Munish Kumar Verma Vs.The I.T.O ITA No. 1290/DEL/2017 [A.Y. 2012-13] The I.T.O Vs Munish Kumar Verma Page 6 of 9 10. The ld DR, assisting the Bench, explained the facts of the case. Canvassing the revenue’s appeal, the Ld DR argued that the CIT(A) has not considered that the loans were credited in the year under consideration and in absence of any proof of identity, creditworthiness of lenders and genuineness of the transaction, the entire loan should be confirmed u/s 68 of the I T Act. 11. We have heard the submissions of the ld DR and have carefully perused the materials on record. We find that the assessee, during the appellate proceedings before the CIT(A), filed several evidences in support of his claim which the CIT(A) forwarded to the AO for his comment. The CIT(A),on the basis of remand report and assessee’s rejoinder/explanation, ultimately held that major portion of loan amounting to Rs 2,24,32,408/- out of Rs 3,19,32,914/-, pertained to previous years and not the impugned assessment year. The CIT(A) recorded a finding of fact that only an amount of Rs 95,00,516/- pertained to fresh loans taken during the year and confirmed the same on account of absence of satisfactory establishment of identity, creditworthiness and genuineness of transaction. ITA No. 812/DEL/2017 [A.Y. 2012-13] Munish Kumar Verma Vs.The I.T.O ITA No. 1290/DEL/2017 [A.Y. 2012-13] The I.T.O Vs Munish Kumar Verma Page 7 of 9 12. Considering the facts of the case in hand in totality, we do not find any reason to interfere in the decision of the CIT(A). The CIT(A) has examined the facts and evidences of the case and has considered the remand report of the AO in detail. Accordingly, we sustain the addition of Rs. 95,00,516/- made u/s 68 of the Act. Thus, Ground No. 1 of the assessee is dismissed. The ground no 1 relating to the same issue of the Revenue is also dismissed. 13. Facts relating to Ground No 2 regarding low withdrawals are that the Assessing Officer made addition of Rs. 2,13,827/- which was restricted by the ld. CIT(A) to Rs. 1,00,000/-. 14. The ld. DR, assisting the Bench, relied upon the orders of the authorities below. 15. After hearing the submission and perusing the record, we find that the ld. CIT(A) was not justified in restricting the addition to Rs. 1 lakh. The addition on account of low withdrawal was itself made on estimate basis and the CIT(A) has failed to give any rationale for the said disallowance. We accordingly direct the AO to delete the addition on ITA No. 812/DEL/2017 [A.Y. 2012-13] Munish Kumar Verma Vs.The I.T.O ITA No. 1290/DEL/2017 [A.Y. 2012-13] The I.T.O Vs Munish Kumar Verma Page 8 of 9 account of low withdrawal. This ground of the assessee is allowed while the ground of the Revenue is dismissed. 16. In the result, the appeal of the assessee in ITA No. 812/DEL/2017 is partly allowed. The appeal of the Revenue in ITA No. 1290/DEL/2017 is dismissed. The order is pronounced in the open court on 19.03.2025. Sd/- Sd/- [MADHUMITA ROY] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 19th MARCH, 2024. VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi ITA No. 812/DEL/2017 [A.Y. 2012-13] Munish Kumar Verma Vs.The I.T.O ITA No. 1290/DEL/2017 [A.Y. 2012-13] The I.T.O Vs Munish Kumar Verma Page 9 of 9 Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order… 2. Date on which the typed draft Tribunal Order is placed before the Dictation Member 3. Date on which the fair Tribunal Order is placed before the other Member 4. Date on which the approved draft Tribunal Order comes to the Sr. P.S./P.S. 5. Date on which the fair Tribunal Order is placed before the Dictating Member for pronouncement 6. Date on which the signed order comes back to the Sr. P.S./P.S 7. Date on which the final Tribunal Order is uploaded by the Sr. P.S./P.S. on official website 8. Date on which the file goes to the Bench Clerk alongwith Tribunal Order 9. Date of killing off the disposed of files on the judiSIS portal of ITAT by the Bench Clerks 10. Date on which the file goes to the Supervisor (Judicial 11. The date on which the file goes to the Assistant Registrar for endorsement of the order 12. Date of Despatch of the Order "