ITO,WARD-25(3), DELHI V. TITAN PROJECTS P. LTD., NEW DELHI

ITA 6420/DEL/2018

AI Insights

The case involves an appeal by the Income Tax Officer against the order of the CIT(A)-23, New Delhi, which had deleted an addition of Rs. 32,11,00,000 as unexplained unsecured loans received by M/s Titan Projects Pvt. Ltd during the financial year 2012-13. The AO had initially made this addition under Section 68 of the Income Tax Act, 1961, questioning the creditworthiness and genuineness of the loan transactions. The CIT(A) found sufficient material to prove the identity, creditworthiness, and genuineness of the transactions, which the revenue challenged in the tribunal. The tribunal found that the AO was not given sufficient opportunity to examine the details and directed a re-examination of the documents.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470178 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JAYA CHAUDHARY
• Assessee Lawyers: TAPAS MISHRA
• Keywords: Set aside; Opportunity of being heard
• Section: 143(3); 68; 133(6)

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No. 6420/Del/2018 (Assessment Year: 2013-14) Income Tax Officer, Ward-25(3), New Delhi Vs. M/s Titan Projects Pvt. Ltd, 296, Forest Lane, Neb Sarai, Sainik Farms, New Delhi- 110068 (Appellant) (Respondent) PAN:AADCT7916L Assessee by : Shri Tapas Mishra, Adv Revenue by: Ms. Jaya Chaudhary, CIT DR Date of Hearing 12/02/2025 Date of pronouncement 27/02/2025 O R D E R PER MANISH AGARWAL, AM: 1. This appeal filed by the revenue against the order passed by the ld CIT(A)-23, New Delhi dated 18.07.2018 in appeal No. 146/2017-18 for AY 2013-14. 2. Brief facts of the case are that the assessment in this case was completed u/s 143(3) vide order dated 31.03.2016 wherein, an addition of Rs. 32,11,00,000/- were made as against returned loss of Rs. 20,238/- declared by the assessee in its return filed on 11.09.2013. The assessee has received loans from 4 companies totaling to Rs. 32,11,00,000/- and the amounts which received were invested in purchase of land at Diplomatic Enclave, New Delhi. During the course of assessment proceedings, the ld. AO in order to examine the genuineness and creditworthiness of the loan creditors have asked the assessee to file the necessary details. In response ITA No. 6420/Del/2018 M/s Titan Projects Pvt. Ltd Page | 2 the assessee has filed confirmation and copies of that portion of bank statements reflecting the date on which the loans were given to the assessee. Thus, notice u/s 133(6) were issued to the respective parties. They have filed replied before the AO however, in absence of any substantial income declared by these companies, the AO was of the view that the creditworthiness of the 4 companies is not established and therefore, by invoking the provisions of Section 68 of the Act, he made the addition of Rs. 32,11,00,000/-. In first appeal the ld CIT(A) after considering the submission of the assessee and materials available/ filed by the assessee before him, was of the view that the identity and creditworthiness as well as genuineness of the transaction is proved by sufficient material. He further observed that AO has ignored the fact that the lender companies having directors being member of family which promoted and took business of Indianbulls Group to Envious Heights and also ignored the fact that relevant balance sheet of the companies to show capacity to lend. Against such deletion the revenue is in appeal before us by taking grounds of appeal:- “1. On the facts and circumstances of the case the Ld. CIT(A) erred in deleting the addition u/s 68 of the Act amounting to Rs. 32,11,00,000/- being unexplained unsecured loans received during the F.Y. 2012-13 without appreciating the fact that the assessee has failed to establish the genuineness and creditworthiness of the parties.” 3. During the course of assessment proceedings the revenue vide letter dated 14.06.2024 has revised the grounds of appeal which reads as under:- “1. \"On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition u/s 68 of the Act amounting to Rs.32,11,00,000/- being unexplained unsecured loans received during the F.Y. 2012-13 without appreciating the fact that the assessee has failed to establish the genuineness and creditworthiness of the parties. ITA No. 6420/Del/2018 M/s Titan Projects Pvt. Ltd Page | 3 2. On the facts and in the circumstances of the case, in Ld. CIT(A) made the additions without calling for a remand report from the Assessing Officer and deleted the addition.. 3 The appellant craves, leave or reserves the right to amend modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal.\" 4. Revenue submits that the revised grounds of appeal may please be considered for decision in the instant case. Before us the ld DR submits that the assessee has not filed details with respect to the creditworthiness of the lender despite repeated requests made by the AO. The AO has issued summons to the parties also, who though had filed confirmations however, neither the complete bank statements were filed nor other relevant details to discharge the onus casted upon them to prove the creditworthiness of the lender were filed to the satisfaction of the AO. The ld CIT(A) while deleting the addition has made reference to certain material which was not filed before the AO nor any remand report was obtained by the ld CIT(A) on such documents. 5. The ld DR further submits that the confirmation etc filed by the respective parties does not contain their complete addresses and in some cases PAN was not there. The person who signed the confirmations were not the authorized person and the bank statement filed contained only the entry of date on which the amount were transferred to the assessee and complete statements were not filed and their financial statement shows that all the companies have meager income. The ld DR further submit that creditworthiness of the lender companies is to be established which in the instant case was not established before the AO and the documents filed before the ld CIT(A) were never confronted to the AO. In view of these facts the ld DR prayed for restoration of the matter to the file of the ld AO for examination of the details in depth. ITA No. 6420/Del/2018 M/s Titan Projects Pvt. Ltd Page | 4 6. Per contra the ld AR of the assessee vehemently supported the order of the ld CIT(A) and submitted that the assessee has discharged its burden by filing all the relevant details in order to establish the creditworthiness of the parties. Since, the companies are group companies and regularly assessed to tax and the transactions made through the banking channel which is not doubted therefore, their identity as well as genuineness of the transaction are established. He further submit that the ld AO has ignored all the vital facts before reaching to the conclusion that the assessee has failed to establish the creditworthiness of the parties whereas all the creditors have accepted the transactions and filed their Balance Sheet to support their capacity to give the loans to the assessee. He further submit that in the case of the 3 companies, the assessment were completed u/s 143(3) of the Act prior to the assessment of the assessee which is in appeal and in none of the cases any adverse remarks were given with respect to loan given to the assessee nor the source against such loan in their hands were doubted. He thus prayed for the confirmation of the order the ld CIT(A). 7. We have heard the rival submissions and perused the material available on record. From the perusal of the assessment order and replies filed by the assessee before the AO which are filed before us in the Paper Book, we find that the assessee on three occasions have filed the details. First response was dated 21.12.2015 wherein, the confirmations and ledger account of the loan creditors were filed. From the perusal of these confirmation we find that except in one confirmation from Vatika (formerly Planet East Estates Pvt. Ltd) address were not given. Even in case of Hasta Infrastructure Pvt. Ltd, PAN is also not available. Thereafter, vide letter dated 21.03.2016 the assessee submitted ITR, bank statement, computation along with balance sheet of the 4 creditors were submitted. On going through the details, we find that the bank statement filed were for the particular ITA No. 6420/Del/2018 M/s Titan Projects Pvt. Ltd Page | 5 date on which the loans were given to the assessee. With regard to the balance sheet it is seen that M/s Hasta Infrastrucrture Pvt. Ltd vide letter dated 04.03.2016 in response to notice u/s 133(6) of the Act vide filed the confirmed copy of account, balance sheet and bank statement. Likewise Planet Earth Estates Pvt. Ltd vide letter dated 04.03.2016 filed on 11.03.2016 filed confirmed copy of account only. M/s. Revati Infrastructure vide letter 04.03.2016 filed on 11.03.2016 had filed confirmation, ITR and balance sheet. Finally assessee vide letter dated 23.03.2016 filed the copy of bank statement, in respect of Artemisia Buildwell Pvt. Ltd. All these papers were available in the Paper Book filed by the assessee. Besides these, in the paper book the assessee has also filed the copies of the assessment orders and other documents such as the balance sheet in respect of Artemisia Buildwell Pvt. Ltd. It is relevant to state that the ld CIT(A) reached to the conclusion that all these companies have creditworthiness by placing reliance on their assessment orders and balance sheets. As observed above, part of these details were filed before the AO and remaining details were filed before the ld CIT(A) during the course of appellate proceedings. Before the AO, the assessee filed all the details at the very fag end of the assessment proceedings in the month of March when the time barring limit was about to expire and the AO has to complete the assessment on 31.03.2016. In the instant case, to establish the creditworthiness certain details were asked by the AO since October 2015 however, after expiry of almost 5 months, part of these details were filed before the ld AO leaving no time to AO to examine all the details to find out the creditworthiness of the creditors. Under these circumstances, the ld AO was of the opinion the lending companies have no creditworthiness. Looking to these facts we are of the view that AO was not provided sufficient opportunity to examine the details filed by the assessee before him nor the additional details filed before the ld CIT(A) were confronted by the ld CIT(A) before ITA No. 6420/Del/2018 M/s Titan Projects Pvt. Ltd Page | 6 reaching to the conclusion that all lender companies have creditworthiness and deleted the addition. Therefore, in the interest of justice, the matter is set aside to the file of the AO with a direction that all the documents be examined and decide the matter in accordance with law. Needless to say that the assessee be given reasonable opportunity of being heard in the matter. 8. As a result, the appeal of the revenue is allowed for statistical purposes. Order pronounced in the open court on 27/02/2025. -Sd/- -Sd/- (ANUBHAV SHARMA) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 27/02/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "