INCOME TAX ACT, 1961

Section 143(3) Section 69

Assessment - Addition to income - Alleged cash loan given by assessee after arranging from lenders - Assessee, a finance broker

The revenue had challenged the finding of CIT(A) deleting the addition of Rs. 1,85,72,100 out of the total addition made by AO under section 69 at Rs. 1,86,00,000. Tribunal observed that during the course of search carried out under section 132 on 23-3-2018 at MRJ group which included the assessee also, being main concern of the group and various documents were seized. The statements given by the assessee during the course of search proceedings also matches with the return of income filed during the assessment year under appeal in which it was claimed to have carried out the business of finance broker wherein the assessee acted as a broker between the lender and borrower and received brokerage on the transactions so happening between the two parties. CIT(A) after considering the facts of the case as well as referring to the statements given by the assessee during the course of search and placing reliance on judicial precedents, deleted the addition of Rs. 1,85,72,100 and sustained the addition of Rs. 27,900 being the brokerage @0.15% of the alleged addition of Rs. 1,86,00,000. Held: On perusal of the CIT(A)'s finding and the judicial precedents referred herein and also considering the fact that the assessee's business was confined to that of finance broker and this business had consistently been followed since many years and further since the AO had not brought any corroborative evidence on record by calling for necessary information from the various parties whose names were mentioned in the seized document, the case of the revenue becomes weak. Further, in the paper book, assessee had filed ledger account of various parties and the names of most of them were also appearing in the seized document BS-28 and the confirmation of accounts clearly reveal that there were regular transactions with these parties through account payee cheques with regard to the loan given by the lenders and received by the borrowers and the repayment made thereafter. No evidence have been brought on record that any of these parties have accepted to have taken loan in cash from the assessee. In these given facts and circumstances of the case and respectfully following the judicial pronouncements there was no reason to interfere in the finding of CIT(A) deleting the addition of Rs. 1,85,72,100.

Applied:Biren V Savla v. ACIT Central-II (2006) 155 Taxman 270 (Mum) and Asstt. CIT v. V. Kishore Lal Balwant Rai (2007) 17 SOT 380 (Chd-Trib) : 2007 TaxPub(DT) 704 (Chd-Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12

INCOME TAX ACT, 1961

Section 143(3) Section 69

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