Delhi High Court
Commissioner Of Income Tax vs Flex Plastic And Packaging (P) ... on 14 March, 2007
Equivalent citations: (2007) 211 CTR Del 607
Bench: M B Lokur, V Gupta
ORDER
1. The Revenue is aggrieved by an order dt. 28th Feb., 2006 passed by the Tribunal, Delhi Bench 'F' in ITA No. 3044/Del/2002 relevant for the asst. yr. 1996-97.
2. The assessed had taken a loan of Rs. 35 lakhs from M/s Vandana Investment & Finance Company. The AO doubted the genuineness of this transaction and asked the assessed to show that it is genuine and that the party advancing the loan is creditworthy. In response, the assessed filed the bank statement of the sole proprietor of the firm which showed that she had Rs. 72 lakhs in her bank account at that point of time. This fact was completely glossed over by the AO.
Instead, the AO raised some doubt about why the assessed took a loan from a firm at Mumbai when it had taken an interest-free loan from its sister-concern in Delhi. On this basis, the AO rejected the contention of the assessed and came to the conclusion that the amount of Rs. 35 lakhs should be added to the income of the assessed under Section 68 of the IT Act, 1961.
3. In appeal, the CIT(A) took into consideration that the amount was paid by a demand draft and that the sole proprietor of the firm had given a confirmation and her PAN number and ward where she was assessed in Mumbai. The bank statement showed that she had a balance of Rs. 72 lakhs immediately before the issuance of the demand draft for the amount of loan taken. The CTT(A) held on these facts that the loan was a genuine transaction and that the creditor had the financial capacity to give a loan to the assessed.
4. The Revenue preferred an appeal before the Tribunal which rejected the contentions of the Revenue on the same reasoning as that given by the CIT(A). It accepted the contentions of the assessed and noted that in the event the AO was not convinced with the available material; he should have examined the matter further but instead of doing so he merely disbelieved the assessed.
5. We find that the AO glossed over certain facts which had been taken note of by both the CIT(A) as well as by the Tribunal. The assessed had provided the bank statement of the creditor which had shown sufficient balance at the relevant point of time and given all material particulars to the AO with regard to her creditworthiness and the genuineness of the transaction. On the facts of the case, both authorities held that the transaction was a genuine transaction. We cannot find any fault with the view taken by both the CIT(A) as well as by the Tribunal.
6. Under the circumstances, we are of the opinion that no substantial question of law arises for our consideration in this appeal. Dismissed.
