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Judgment
PER SUDHIR KUMAR, JUDICIAL MEMBER:
This appeal by the Revenue is directed against the orders of the National Faceless Appeal Centre Delhi [hereinafter referred to as [“Ld. NFAC”] vide order dated 23-12-2025 arising out the Assessment Order dated 23-04-2021 under section 143(3) r.w.s. 144B of the Income Tax Act, 1961 (in short “the Act”.
The Revenue has raised the following ground in appeal:
1.Whether on the facts and circumstances of the case and in law the Ld. CIT(A) has erred in deleting the additions of Rs.26,80,72,844/-made by the Assessing Officer under section 69C, without appreciating that the assessee failed to reconcile the foreign out ward remittances reported in Form 15CC with the purchases recorded in the books of account
2.Whether on the facts and circumstances of the case and in law the Ld. CIT(A) has erred in accepting the assessee’s plea of “totaling error” without any supporting bank certificate reconciliation statement SWIFT copies or import documentation thereby rendering the order perverse and contrary to evidence.
3.Whether on the facts and circumstances of the case and in law the Ld. CIT(A) has erred in deleting the additions of Rs.1,38,83,000/-made under section 68, without appreciating that the assessee failed to discharge the statutory onus to establish the identity, creditworthiness of the lender and genuineness of the transaction.
4.Whether on the facts and circumstances of the case and in law the Ld. CIT(A) has failed to appreciate that the assessee did not furnish any bank statement of the lender bank statement of the assessee showing receipt of funds sources of funds in the hands of the lender, loan agreement repayment details, or any evidence demonstrating the financial capacity of the director to advance Rs.1,38 crore.
5.The appellant craves leave to add to alter amend or withdraw any of the above grounds of appeal or to raise additional grounds at or before the time of hearing as may be deemed fit in the interest of justice.
The brief facts of the case are that the assessee company a public company incorporated on 11-04-2017 having CIN-U51909DL2017PLC315903 deals in non-ferrous metals primarily Aluminum and Lead. Apart from domestic purchase, the assessee company also imports Aluminum. The assessee company had filed return of income for the year under consideration on 31-10-2018 declaring total income of Rs.8,18,300/-. The case of the assessee was selected under CASS for the reason (i) Foreign outward Remittance (ii) Business Expenses. Accordingly, notice under section 143(2) of the Act was issued on 22-09-2019. Further notice under section 142(1) of the Act with questionnaire was issued on 25-11-2020. In the compliance of notice the assessee filed the reply. As per the information available with the department that during the course of search proceedings the assessee had made outward remittance as per Form 15CC to the tune of Rs.8539,76,844/-whereas the assessee had shown purchases in the P&L account vide note 15 as 139,56,45,000/-. The assessee had made outward remittance to the tune of 58,59,04,000/- only. The assessment proceeding was completed by the Assessing officer after making various additions and assessed the total income at Rs.28,58,62,130/-.
Aggrieved the order of the Assessing Officer the assessee preferred the appeal before the Ld. NFAC who vide his order dated 23-12-2025 allowed the appeal of the assessee. Being aggrieved the order of the Ld. NFAC the revenue is in appeal before the Tribunal.
Ground No. 1&2:
Ld. DR submitted that without giving the opportunity to the Assessing Officer the addition was deleted by the Ld. NFAC. The matter was not examined by the Assessing Officer because the assessee has not provided the detailed before him. He relied the order of the Assessing Officer. The Ld. NFAC while deleted the addition of Rs.26,80,72,844/- has observed in his order as under:-
6.2.4It is submitted that the total of all the remittances as per form 15CC as forwarded to the appellant by the AO works out to be only Rs.43,89,44,637/- and not Rs. 85,39,76,844/- as alleged by the Ld. AO. The Ld. AO appears to have made incorrect total of Rs. 85,39,76,844/- and compared the same with the amount appearing in audited financial of Rs.58,59,04,000/- (including shipping & clearing), to make an inference that the appellant had remitted something out of books also. Moreover, out of this total of Rs.43,89,444,637/- an amount of about Rs.8 Crores(approx.) represents duplicate entries i. e. same entry appearing twice and out of the compared amount shipping & clearing charges of Rs. 4,07,33,000/- which was paid in Indian Currency. Thus, the correct total of the remittances through ICICI Bank is Rs. 35,46,76,433/-, which is much below the expenditure in foreign currency of Rs 54,51,71,000/- as declared in the notes of audited financial statement. The appellant has submitted the relevant extract of audited financial and reconciliation of foreign remittance as per details furnished by the Ld.AO vis a vis the figure reported in audited financials, along with duplicate entries. These details give the clear picture of correct comparison of foreign remittance. The appellant had also filed rectification application u/s 154 in this regard which is still pending for disposal. Therefore, as the appellant has reconciled the correct amount, of remittances, keeping in view of the aforesaid facts the addition u/s 69C of Rs.26,80,72,844/- on account of alleged unexplained expenditure is hereby deleted. The grounds No. 3 and 4 of the appeal are, hereby ALLOWED.
The Ld. AR of the assessee submitted that the form 15CC was not filed by the assessee because it required, to be filed by the Authorised Dealer who makes remittance on behalf of the assessee to the overseas supplier, hence assessee will not able to explain about the form 15CC. The Form 15CC was available on the portal of the department and the assessee has made imports of about Rs.39.04 Crores and had done other transactions of high sea purchase for about Rs.15.47 Crores and shipping clearing bills of about Rs.4.04 Crores. As per the financial transaction reported by the assessee indicate that total transactions on foreign currency account should have been Rs.58.59 Crores as against which the remittance as per Form 15CC are Rs.85.39 Crores. The difference of these two transactions amounting to Rs.26.80 Crores which was added in the income by the Assessing Officer. He further submitted that very less time was provided by the Assessing Officer to furnish the documents. It is also submitted that due to lock down submissions could not made, in the meantime the Assessing Officer completed the assessment proceedings. The assessee explained the transactions before the Ld. NFAC that there were duplicate entries of the amount of Rs. 8 Crores.
The Ld. AR of the assessee also submitted that assessee moved the rectification application which was decided in the compliance of the Hon’ble High Court order and partly allowed without considering the argument of the assessee. The assessee has filed complete reconciliation of foreign remittance made in books of accounts and Form 15CC. The Ld. NFAC rightly deleted the addition made by Assessing Officer.
We have heard the parties and perused the material available on record. In the present case the Assessing Officer made the addition under section 69C of the Act. The assessee filed the audited financial statement before the lower authorities and on the basis of the audited financial statement the Ld. NFAC found that incorrect total Rs. 85,39,76,844/- made against the actual total of Rs.58,59,04,000/- and the difference was added in the income of the assessee. The Ld. NFAC also found that out of total of Rs.43,89,44,637/- an amount of Rs.8 Crores represents duplicate entries and on that basis the addition was deleted by the Ld. NFAC. The rectification application filed by the assessee has been rejected by the AO. We find that as per the audited financial statement the expenditure in foreign currency of Rs.54,51,71,000/- and the currency remitted through ICICI bank is Rs.35,46,76,433/-. The Ld. NFAC has examined this issue in the correct perspective and rightly deleted the addition based on the audited financial statement. We do not find any reasons to interfere with the findings of the Ld. NFAC, the grounds raised by the revenue are dismissed.
Ground no.3&4:
The Ld. Assessing Officer made the addition of Rs. 1,38,83,000/-under section 68 of the Act on the basis that confirmation of unsecured loan was not filed. The Ld. DR submitted that the assessee has failed to prove the creditworthiness and genuineness of the transaction. He also submitted that details of the bank account of the lender were not filed by the assessee. The ld. Assessing Officer also noted that the assessee has not filed the confirmation of loan from the Director. The Ld. NFAC delete the addition made by Assessing Officer observing as under:
6.5.2In this regard the Ld. AO the absence of the confirmation with respect to unsecured loan of Rs.1.38 Crores had added the said amount to the total income treating the same as unexplained income u/s 68 of the Act. The appellant has argued that the Ld. AO made the addition of Rs.1,38,83,000/- by assuming that since the confirmation had not been received during the assessment proceeding so that it is unexplained income u/s 68 and taxed the same u/s 115BBE of the Income Tax Act. The Ld. AO had not disputed any other aspect of the unsecured loan, the only reason for making disallowance was non-furnishing of confirmation from the lender. The appellant has submitted the confirmation from the director in respect of the unsecured loan amounting to Rs.1,38,82,692/- received during the year under consideration along with ITR as proof of credit worthiness in the year under consideration. Hence in view of the above, the addition made amounting to Rs.1,38,83,000/- is hereby deleted. The Ground No 8 of the appeal is therefore, ALLOWED.
The Ld. AR of the assessee submitted that the assessee has provided the detail of loan and also filed the confirmation of the loan from the lender. He also submitted that the identity, creditworthiness and genuineness was proved by the assessee. We have heard the parties and perused the material available on record. It is fact on record that the loan was granted by the Director of the Company namely Mr. Shrey Gupta, therefore the identity and genuineness was proved. The assessee also filed the confirmation of the unsecured loan on which basis the addition was deleted by the Ld. NFAC. The assessee has discharged his onus by filing the confirmation of the loan and ITR of the lender. The Ld. NFAC passed the reasoned order, which does not require any interference therefore, the grounds raised by the revenue are dismissed.
In the result, the appeal of the Revenue is dismissed.