SHIVAM DEVELOPERS,AHMEDABAD V. THE DY.CIT, CIRCLE-3(1)(1), AHMEDABAD

ITA 2092/AHD/2024

AI Insights

The case involves Shivam Developers, who appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which upheld the AO's re-assessment order for the Assessment Year 2016-17. The AO had re-assessed the income, adding Rs.52,42,402 as unexplained unsecured loans. The Tribunal examined the explanations and documents provided by Shivam Developers, including details of fresh unsecured loans and interest credited, and found that the AO had overlooked significant components like accrued interest and TDS, leading to an erroneous addition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126518 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B.P. SRIVASTAVA
• Assessee Lawyers: S.N. SOPARKAR
• Keywords: TDS; Grounds of appeal; Dismissed; National Faceless Appeal; Loan account; Commissioner; Commissioner of Income Tax; Transactions; Deleted
• Section: 147; 20

Judgement Text

" आयकर अपीलीय अिधकरण,अहमदाबाद \u0012ायपीठ “ए“, अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD \u0016ी टी.आर. से\u001a\u001bल क ुमार, \u0012ाियक सद एवं \u0016ी नरे! \"साद िस#ा, लेखा सद क े सम%। ] ] BEFORE SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं /ITA No.2092/Ahd/2024 िनधा \u000fरण वष\u000f /Assessment Year : 2016-17 Shivam Developers 1, Shivam Monreve Bungalows Opp. Baabul Baag Party Plot Sindhu Bhavan Road Bodakdev, Ahmedabad–380 054 बनाम/ v/s. The Dy.CIT Circle-3(1)(1) Ahmedabad \u0013थायी लेखा सं./PAN:ABVFS 1174 R (अपीलाथ'/ Appellant) (\"( यथ'/ Respondent) Assessee by : Shri S.N. Soparkar, Sr. advocate and Shri Parin Shah, AR Revenue by : Shri B.P. Srivastava, Sr.DR सुनवाई की तारीख/Date of Hearing : 16/04/2025 घोषणा की तारीख /Date of Pronouncement: 25/04/2025 आदेश/O R D E R PER NARENDRA PRASAD SINHA, AM: This appeal by the Assessee is directed against the order dated 01.11.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as ‘CIT(A)’], for the Assessment Year (AY) 2016-17, arising from the assessment order dated 23.03.2022 passed under Section 147 r.w.s.144B of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] by the Assessing Officer [hereinafter referred to as ‘AO’]. ITA No.2092/Ahd/2024 Shivam Developers vs. Dy.CIT, Cir-3(1)(1) Asst. Year : 2016-17 2 2. Brief facts of the case are that the assessee has filed its return of income for AY 2016-17 on 15/10/2016 declaring total income of Rs.16,40,720/-. The original assessment was completed u/s.143(3) of the Act on 09/12/2018 at total income of Rs.16,40,720/-. Thereafter, the case was re-opened for the reason that the loan transactions were not verified and no loan confirmation was filed by the assessee. The re-assessment was completed u/s.147 r.w.s.144B of the Act on 23/03/2022 at total income of Rs.68,83,122/-, wherein the AO had made addition of Rs.52,42,402/- on account of unexplained unsecured loan. 3. Aggrieved with the order of the AO, assessee had filed an appeal before the first appellate authority which was decided by the Ld.CIT(A) vide the impugned order and the appeal of the assessee was dismissed. 4. Now the assessee is in second appeal before us by raising following grounds of appeal: “1. Ld. CIT(A) has erred in law and on facts in upholding the reopening of the case u/s.147 without any fresh information, when the required information under limited scrutiny is furnished and duly verified by the predecessor Assessing Officer. 2. Ld. CIT(A) has erred in law and on facts in upholding the addition of Rs.52,42,402/- being interest on unsecured loans taken during previous year as well as earlier previous years, though he has accepted the genuineness of the unsecured loans on which interest is paid. The appellant craves leave to add, amend, alter, edit, delete, modify or change the ground of appeal at the time of or before the hearing of the appeal.” 5. Shri S.N. Soparkar, Ld.Sr.Counsel appearing for the assessee did not press Ground No.1 and, hence, the same is dismissed as such. ITA No.2092/Ahd/2024 Shivam Developers vs. Dy.CIT, Cir-3(1)(1) Asst. Year : 2016-17 3 6. As regards Ground No.2 in respect of addition of Rs.52,42,402/- on account of unsecured loan is concerned, the Ld.Sr.Counsel submitted that the matter was duly explained by the assessee before the AO. The assessee had taken fresh unsecured loan of Rs.2.31 crores from 20 persons, the details and confirmation of which were produced by the AO. The AO had also accepted these fresh unsecured loans. However, there was increase in total unsecured loan balance by Rs.2,83,42,402/- during the year. The AO had treated the difference of Rs.52,42,402 (Rs.2,83,42,202 – Rs.2,31,00,000) as unexplained and made the addition. The Ld.Sr.Counsel explained that the amount of Rs.52,42,402/- represented interest credit during the year on the unsecured loans which were added to the closing balance. He submitted that the AO had failed to consider the accrued interest which remained unpaid during the year. According to the Ld.Sr.Counsel, there was no difference in the unsecured loan account and the addition made by the AO was not called for. 7. Per Contra, Shri B.P. Srivastava, Sr.DR appearing for the revenue relied upon the orders of authorities below. 8. We have considered the rival submissions and perused the material available on record as well as the orders of the authorities below. We find that, in the instant case, the assessee had explained the increase of Rs.2,83,42,402/- in the unsecured loan balance before the AO vide letter dated 11/03/2022 and made the following submissions: “Point No. 2 In respect of increase in unsecured loans by Rs.2,83,42,402, as per your notice, the break-up of the same is as under: ITA No.2092/Ahd/2024 Shivam Developers vs. Dy.CIT, Cir-3(1)(1) Asst. Year : 2016-17 4 Sl.No. Particulars Amount Rs. 1. Unsecured loans as per Groupings (Credits) 2,92,14,262 2. Less: TDS on interest 6,11,425 Sub-total 2,86,02,837 3. Less: Repayment of unsecured loans 2,60,435 4. Net increase in unsecured loans as per your notice 2,83,42,402 Break-up of unsecured loans as per Groupings is as under. Sl.No. Particulars Amount Rs. 1. Fresh Unsecured loans received during the year 2,31,00,000 2. Add: Interest credited for the year 6,11,262 3. Unsecured loans as per Groupings (Credits) 2,92,14,262 Party-wise amount of interest of Rs.61,14,262/- and TDS of Rs.6,11,425/- appearing in the above tables is given in Annexure B to our reply dated 21/02/2022. We have furnished confirmation of 40 parties in Annexure B-1 to our reply dated 21/02/2022. As stated above, we have received fresh unsecured loans to the tune of Rs.2,31,00,000/- from 20 parties. A copy each of groupings of unsecured loans from our books, details of unsecured loans containing particulars of documentary evidences, acknowledgement of return of income of last 3 years and bank statement reflecting loan entries of the lenders as indicated in the details of unsecured loans is enclosed and collectively marked as Annexure B. Due to paucity of time, we are still in the process of collecting the required information in respect of pending parties and will submit the same at the earliest.” 8.1. As explained by the assessee, the interest credit during the year was Rs.61,14,262/- on which TDS of Rs.6,11,425/- was made. Further, the assessee had made re-payment of loan of Rs.2,60,435/-. Thus, the TDS amount and re-payment amount adjusted with the interest credit of Rs.61,41,262/- explained the difference of Rs.52,42,402/- as noted by the AO. It appears that the AO has only considered the fresh loan of Rs.2.31 crores received during the year. The interest credit, the TDS on the interest and part re-payment as explained by the assessee was not at all considered by the AO. ITA No.2092/Ahd/2024 Shivam Developers vs. Dy.CIT, Cir-3(1)(1) Asst. Year : 2016-17 5 When we take into account the interest credit reduced by TDS and the re- payment, we do not find any difference in increase in unsecured loan balance of Rs.2,83,42,402/-. Therefore, the addition of Rs.52,42,402/- as made by the AO on account of difference in unsecured loan balance was not correct. Accordingly, the addition made by the AO is deleted. 9. In the result, the appeal of the assessee is allowed. Order pronounced in the Open Court on 25th April, 2025 at Ahmedabad. Sd/- Sd/- (T.R. SENTHIL KUMAR) JUDICIAL MEMBER (NARENDRA PRASAD SINHA) ACCOUNTANT MEMBER अहमदाबाद/Ahmedabad, िदनांक/Dated 25/04/2025 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS आदेश की \"ितिलिप अ#ेिषत/Copy of the Order forwarded to : 1. अपीलाथ$ / The Appellant 2. \"%थ$ / The Respondent. 3. संबंिधत आयकर आयु& / Concerned CIT 4. आयकर आयु& ) अपील ( / The CIT(A)- 5. िवभागीय \"ितिनिध , अिधकरण अपीलीय आयकर , अहमदाबाद /DR,ITAT, Ahmedabad, 6. गाड\u000f फाईल / Guard file. आदेशानुसार/ BY ORDER, स%ािपत \"ित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad 1. Date of dictation (word processed by Hon’ble AM in his laptop) : 23.4.2025 2. Date on which the typed draft is placed before the Dictating Member. : 24.4.2025 3. Date on which the approved draft comes to the Sr.P.S./P.S : 4. Date on which the fair order is placed before the Dictating Member for pronouncement. : 5. Date on which fair order placed before Other Member : 6. Date on which the fair order comes back to the Sr.P.S./P.S. : 25.4.25 7. Date on which the file goes to the Bench Clerk. : 25.4.25 8. Date on which the file goes to the Head Clerk. : 9. The date on which the file goes to the Assistant Registrar for signature on the order. : 10. Date of Despatch of the Order : "