1 I.T.A No. 2284/Del/2017
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: `F' NEW DELHI
BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER
AND
MS SUCHITRA KAMBLE, JUDICIAL MEMBER
I.T.A NO. 2284/Del/2017 (A.Y 2013-14)
DCIT (Exemption), Vs M/s. Ram Nath Memorial Trust
Circle Gaziabad. Society, Ram Bagh Colony,
Shastri Nagar, Sec-4, Meerut.
(PAN : AAATT 6054 B)
(APPELLANT) (RESPONDENT)
Appellant by Shri Surendra Pal, Sr. D.R
Respondent by Shri Rohit Agarwal, C.A.
Date of Hearing 07.11.2019
Date of Pronouncement 18.11.2019
ORDER
PER SUCHITRA KAMBLE, JM
This appeal is filed by the Revenue against the order dated 20/01/2017
passed by CIT(A)-Meerut for Assessment Year 2013-14.
2. The grounds of appeal are as under:-
1. "The Ld. Commissioner of Income Tax (Appeal) has erred in law and
on facts in allowing the appeal of the assessee after allowing inter
organization donation of Rs. 3,20,00,000/-.
2. The Ld. Commissioner of Income Tax(A) has erred in law on facts
allowing the appeal of the assessee after deleting the addition of
Rs.3,20,00,000/- ignoring the facts.
3. The Ld. Commissioner of Income Tax(A) has erred in law and on
facts allowing the Depreciation of Rs. 2,30,33,137/-.
4. Appellant craves leave to modify/amend or add any one or more
grounds of appeal.
5. The order of Ld. CIT(A) be cancelled and the order of the A.O.
Restored."
2 I.T.A No. 2284/Del/2017
3. The assessee is a society registered under the Societies Act with Registrar
of Society U.P. dated 15.11.1999 which was renewed for a period of five years
with effect from 15.11.2014. The assessee society was granted registration u/s
12A of the Income Tax Act, 1961. The return showing nil income was filed on
29.09.2013. The case was selected for scrutiny and notice u/s 143(2) dated
22.09.2014 as well as notice u/s 142(1) dated 09.04.2015 were issued and
served upon the assessee. In response to the notice and questionnaire FCA of
the Assessee attended the assessment proceedings and filed written
submission along with books of accounts, bill vouchers etc. The Assessing
Officer made observation that the bank accounts of the depositors submitted
by the assessee during the assessment proceeding shows that the money was
revolving among the parties from whom the assessee had taken loans. The
Assessing Officer further observed that the unsecured loans taken mere
accommodation interest and since the assessee did not produced the
depositors. The assessee has not been able to prove identity and genuineness
of the parties from whom it had taken unsecured loans of Rs.3,20,00,000/-
and treated the same loans as anonymous donations u/s 115BBC of the
Income Tax Act, 1961 and added the same to the income of the assessee by
directing charging of tax at maximum marginal rate. The Assessing Officer
further disallowed the claim of depreciation of Rs.2,30,33,137/- claimed as
application of income holding that the same is not allowable as the capital
expenditure on acquiring fixed assets has already been allowed in respective
years.
4. Being aggrieved by the assessment order, the assessee filed the appeal
before the CIT(A). The CIT(A) allowed the appeal of the assessee.
5. The Ld. DR submitted that the CIT(A) has not given the detailed
reasoning as to how money which were treated as loans does not fall under the
category of anonymous donations u/s 115BBC. The Ld. DR further submitted
that this issue may be remanded back to the file of the CIT(A) for proper
3 I.T.A No. 2284/Del/2017
adjudication. As regards ground relating to depreciation, the Ld. DR relied
upon the Assessment Order.
6. The Ld. AR submitted that during the course of assessment proceedings,
the assessee submitted the relevant documents in respect of loans taken from
various parties. The CIT(A) has taken cognizance of all these relevant materials
and held that the addition is not proper on part of Assessing Officer. The Ld.
AR also relied upon the decision of the Hon'ble Supreme Court in case of PCIT
vs. NRA Iron & Steel Pvt. Ltd.412 ITR 0161 (SC).
7. We have heard both the parties and perused all the materials available
on records. The CIT(A) held as under:
"Respectfully following the above cited judgments, 1 hold that the action of
the A.O. to make addition in the hands of the appellant, without issuing
summons or letters to the lenders as requested for by the appellant and
without making any further enquiries at her own, is unlawful. The
appellant has discharged the primary onus casted upon it to prove the
identity of depositors, genuineness of transactions and credit worthiness
of the depositors and therefore the unsecured loans accepted by the
appellant from 5 persons during the year under appeal are treated as
explained and substantiated. Mere non production of the depositors by the
appellant has wrongly been made a ground to make addition to make
addition u/s 68 of the Act. Further the action of the A.O. to treat the
deposits under reference as anonymous donations u/s 115BBC is
completely unlawful since all the loan creditors had opening balances and
had also filed copies of ITRs, Thus, by no stretch of imagination could
the AO treat these loans as anonymous donation u/s 115BBC. Now
coming u the failure to produce the depositor for the personal deposition
the same cannot be treated as a ground so as to make the addition of the
loans accepted from them during the year as anonymous donations u/s
115BBC. I therefore, delete the addition of Rs.3,20,00,000/- and direct the
AO accordingly."
The Hon'ble Apex Court in case of NRA Iron & Steel Pvt. Ltd. (supra)
categorically held that the Assessing Officer is duty bound to investigate the
credit worthiness of the creditors / subscriber, verify the identity of the
subscribers, and ascertain whether the transaction is genuine, or these are
bogus entries of name lenders. In the present case, the assessee has given all
the details which were required to prove the genuineness, credit worthiness
4 I.T.A No. 2284/Del/2017
and identity of the lenders which was totally ignored and has not been taken
cognizance by the Assessing Officer. The CIT(A) has taken the cognizance of the
evidences and has given a justified reason while deleting the said addition.
9. In the result, appeal of the Revenue is dismissed.
Order pronounced in the Open Court on 18th Nov, 2019.
Sd/- Sd/-
(N. K. BILLAIYA) (SUCHITRA KAMBLE)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 18/11/2019
Priti Yadav, Sr. PS *
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
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