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01-03-2019, Om Shanti Realtors, Section 146, 12(2), 68, Tribunal Mumbai

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2 weeks 3 days ago #8727 by amit
Section - 146, 12(2), 68
Order Date - 01-03-2019
Favouring - Assessee
Court - Tribunal Mumbai
Appellant - ITO
Respondent - Om Shanti Realtors
Justice - SANDEEP GOSAIN, JM & N. K. PRADHAN, AM
Citation - 219Taxpundit157
Appeal No. - I.T.A. No. 5615/Mum/2017
Asstt. Year - 2013-14

Order

PER : Sandeep Gosain

The present Appeal has been filed by the revenue against the order of Commissioner of Income Tax (Appeals)-32, Mumbai, dated 20.06.17 for AY 2013-14 on the grounds mentioned herein below:-

(i) "On the facts and circumstance of case and in law, the Ld CIT(A) erred in granting relief with regards to the additions made u/s 68 of the Income Tax Act, 1961 ignoring the facts that assessee failed to prove the genuineness of the credits claimed to have availed by them."

(ii) "On the facts and circumstance of case and in law, the Ld CIT(A) erred in granting relief with regards to the additions made u/s 68 of the Income Tax Act, 1961 ignoring the facts that creditors who were claimed to have advanced loans are showing mearge income and hence lack of creditworthiness ."

(iii) "On the facts and circumstance of case and in law, the Ld CIT(A) erred in granting relief u/s 68 of the Income Tax Act, 1961 ignoring the factsthat apex court in the case of Sumati Dayal Vs CIT91995) 214 ITR 801 (SC) stated that burden of proof for establishing that the cash credits does not constitute the income of the assessee completely lies on the assessee and that the assessee's explanation with regard to the cash credits needs to be considered in view of the human probabilities."

2. As per the facts of the present case, the assessee is a partnership firm who is engaged in the business of real estate development. The assessee filed its return of income for the year under consideration on 28.09.13 declaring total income of Rs.NIL. The said return was scrutinized and the order was passed
u/s. 143(3) of the I. T. Act, 1961, on 30.03.2016. In the said assessment order, the A.O. added Rs. 15,43,74,600/- as ‘Unexplained Cash Credit’ u/s. 68 of the Act on account of the loans received from eight different companies and interest paid thereon. The addition of Rs. 15,43,74,600/- comprises of Rs. 14,30,00,000/- being ‘unsecured loans’ availed and Rs. 1,13,74,600/- being amount of interest paid’ on the said loans. Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties allowed the appeal of the assessee and deleted the additions made by AO.

Aggrieved by the order of Ld. CIT(A), revenue has filed the present appeal before us on the grounds mentioned herein above.

Ground No. (i) to (iii)

3. These ground raised by the revenue are inter related and inter connected and relates to challenging the order of Ld. CIT(A) in deleting the addition made by AO u/s 68 of the I.T. Act, therefore we thought it fit to dispose of the same by this common order.

4. Ld. DR appearing on behalf of the revenue relied upon the orders passed by AO and submi ted that Ld CIT(A) erred in granting relief with regards to the additions made u/s 68 of the Income Tax Act, 1961 by ignoring the facts that assessee had failed to prove the genuineness of the credits claimed to have availed by them It was also argued that Ld CIT(A) ignored the facts that creditors who were claimed to have advanced loans were showing mearge income and hence lack of creditworthiness. It was submitted that AO made the additions by relying upon the facts of the present case as some of the parties had not responded to the summons issued by the AO on given dates and thus, the identity and creditworthiness could not be proved, therefore additions were made u/s 68 of the I.T. Act by

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