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Judgment
PER AMITABH SHUKLA, AM:
This appeal filed by the Assessee is directed against the order of Ld. Commissioner of Income Tax (Appeals)-30, New Delhi, dated 27.03.2025 arising out of assessment order dated 04.03.2022 passed under section 143(3) for the Assessment Year 2020-21. The word ‘Act’ herein this order would mean Income Tax Act, 1961.
The assessee has raised following grounds of appeal:-
1.The Commissioner of Income-tax (Appeals) - 30, New Delhi (hereinafter referred to as the CIT(A)) erred in upholding the action of the Assistant Commissioner of Income-tax, Central Circle - 1, Noida (hereinafter referred to as the Assessing Officer) in making an addition of Rs 11,00,000 as unexplained cash credit under section 68 of the Act, being amount received by the appellants as unsecured loan from Igance Infrastructure Private Limited.
2.The appellants contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have confirmed the action of the Assessing Officer in making the impugned addition inasmuch as he has not correctly appreciated the facts of the case in its entirety and hence, the addition of Rs 11,00,000 is bad in law and needs to be deleted.
3.The appellants further, contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have confirmed the action of the Assessing Officer inasmuch as the three litmus tests to section 68 of the Act, namely identity of the lender, genuineness of the transaction and creditworthiness of the lender stand discharged by the appellants and hence. the addition of Rs 11,00,000 is bad in law and needs to be deleted.
The only issue emanating from the above grounds of appeal is regarding the addition of Rs.11,00,000/- made by the ld. Assessing Officer u/s 68 of the Act. As per brief factual matrix of the case, the ld. Assessing Officer had noted that the assessee had shown receipt of an unsecured loan of Rs.11 lakhs from a company named IGANCE Infrastructure Pvt. Ltd.(IIPL) The ld. Assessing Officer noted that a search had taken place in respect of the appellant company pertaining to AY 2011-12 to AY 2017-18 and the impugned company figured as a suspicious party. The additions made by the ld. Assessing Officer qua said company were confirmed by the ld. CIT(A). The ld. Assessing Officer noted that the financials of IIPL were inadequately week in year under consideration to support advancement of any loan to the appellant. Accordingly, the Assessing Officer proceeded to add Rs.11 lakhs u/s 68 of the Act. Before the ld. First Appellate Authority, the appellant had pleaded that the addition made by the revenue in AY 2017-18 qua impugned entity stands deleted by a Co-ordinate Bench of this Tribunal. The ld. CIT(A) however confirmed the findings of the Assessing Officer observing in para-8.3, that the appellant had not provided specific details of the Tribunal order and/or how IIPL is covered by the tribunal judgment. In para-8.6, however he also noted that IIPL does not figure in the list of companies qua which relief was accorded.
The ld. Counsel vehemently argued against the decision of the Ld. CIT(A). It was stated that its case is fully covered by the decision of this Tribunal in ITA No.346/Del/2020 in its own case. It was submitted that IIPL was earlier known as M/s Ablaze Tour and Travel Pvt. Ltd. which appears in the chart at Sr. No.1 in para-4 of the decision of this Tribunal in ITA No.346/Del/2020. The ld. Counsel further placed on record bank account statements and financial statements of IIPL so as to veracity of loan of Rs.11 lakhs.
The ld. DR place reliance upon the order of lower authorities. It was argued that the decision of this Tribunal in ITA No.346/Del/2020 is distinguished since in AY 2017-18, the party had interest income and that no interest income is available is shown by IIPL during the year under consideration.
We have heard rival submissions in the light of material placed on record. At the outset, we have noted that IIPL thus appears as M/s Ablaze Tour and Travel Pvt. Ltd. in the order of this Tribunal for AY 2017-18 (supra). We have noted that there is sufficient evidence to indicate that IIPL was earlier known as M/s Ablaze Tour and Travel Pvt. Ltd. The appellant assessee has filed a small paper book containing details of ledger extracts, financials and bank statements, so as to indicate the genuineness of the loan. The argument of the Revenue that there is no connection between IIPL and M/s Ablaze Tour and Travel Pvt. Ltd. is also therefore not supported by facts on record. Considering the fact that the identity of IIPL earlier known as M/s Ablaze Tour and Travel Pvt. Ltd. stands established. We have further noted that the ld. Assessing Officer has merely made the impugned addition on his preconceived notion that because the impugned party appeared in the search documents, loan therefrom becomes a doubtful loan. The ld. Assessing Officer has not conducted any enquiry apart from drawing such a premature conclusion. In respectful compliance to the order of this Tribunal in ITA No.346/Del/2020(supra), facts and evidences placed on record by the appellant assessee, we are of the considered view that no case of any addition u/s 68 is made out in this case. We, therefore, set-aside the order of the lower authorities and direct the ld. Assessing Officer to delete the addition of Rs.11 lakhs.
In the result, the appeal of the assessee is allowed.