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Judgment
ORDER
PER SATBEER SINGH GODARA, JM
This assessee’s appeal for assessment year 2016-17, arises against the Commissioner of Income Tax (Appeals)-7 [in short, the “CIT(A)”], New Delhi’s order dated 09.09.2019, passed in case no. 10470/465/CIT(A)-7/Del/2018-19, involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Heard both the parties. Case file perused.
We notice during the course of hearing at the outset that the assessee/appellant herein is aggrieved against both the learned lower authorities’ respective assessment findings dated 25.12.2018 making section 36(1)(iii) interest disallowance of Rs.37,87,111/-and further treated unsecured loans received from M/s. Raju Investment Pvt. Ltd. and M/s. Superb Developers Pvt. Ltd. amounting to Rs.96 lakhs and 117 lakhs; respectively, as unexplained cash credits, which stand upheld in the lower appellate discussion.
That being the case, learned counsel’s first and foremost submission before us is that the assessee’s security amount representing its alleged diversion of interest-bearing funds for non-business purposes i.e. Rs.3.24 crores happens to be much lesser than its interest free funds of Rs.1.95 lakhs and 34.01 lakhs i.e. assessee’s capital as well as reserves and surplus, respectively. Learned counsel accordingly submits that going by CIT vs. Reliance Utilities and Power Ltd. (2009) 313 ITR 340 (Bom), the necessary presumption in such an instance is of diversion of interest free than interest-bearing funds only. We notice that although the assessee’s legal pleading indeed carries merit in principle, there is no categorical finding to this effect either in assessment order or in the lower appellate discussion. We thus deem it appropriate in the larger interest of justice to direct the Assessing Officer for his afresh factual verification regarding assessee’s interest free funds within three effective opportunities of hearing subject to a rider that the appellant shall itself prove all the relevant possession at their own risk and responsibility. The assessee’s instant first and foremost substantive ground is accepted for statistical purposes.
Next comes the latter issue of unexplained cash credits addition invoking under section 68 qua its unsecured loans totaling to Rs.216 crores. The Revenue could hardly dispute that this is a recurring issue between the parties since the assessee has already succeeded in its appeal ITA No.267/Del/2019 for AY 2015-16 decided on 04.10.2019 wherein the learned coordinate bench deleted the identical addition regarding M/s. Raju Investment Pvt. Ltd. and M/s. Superb Developers Pvt. Ltd. amounting to Rs.2,68,00,000/- and Rs. 50 lakhs; respectively. We thus conclude that both the leaned lower authorities could not have treated the assessee’s unsecured loans in issue from the very twin entities as unexplained cash credits which stands deleted in very terms.
No other ground or argument has been pressed before us.
This assessee’s appeal is partly allowed in above terms.