Mere non submission of PAN details not lead to disallowance u/s 68 – ITAT

Mere non submission of the PAN details will not lead to disallowance u/s 68 – ITAT

In a recent judgment, ITAT Delhi has held that mere non submission of the PAN details will not lead to disallowance of cash credits u/s 68 of the Income Tax Act, 1961.

ABCAUS Case Law Citation:
4247 (2024) (08) abcaus.in ITAT

In the instant case, the Income Tax Department (ITD) had challenged the order passed by the CIT(A) / NFAC in deleting addition under section  68 of the Income Tax Act, 1961 (the Act) made by the Assessing Officer (AO) for not providing PAN Numbers of certain flats buyers.

The respondent assessee was a company engaged in the business of real estate development. During the year under consideration, it developed a project in collaboration with two other parties.

The AO found that fourteen parties bought the flats but failed to provide any justification for not adducing their PAN numbers. The AO opined that the sale figure remained unexplained due to the mandatory TDS not having been discharged. The AO added that the creditworthiness, genuineness and identification were missing which would result in an addition u/s 68 of the Act.

Aggrieved, the assessee preferred an appeal before CIT(A) and filed a detailed submissions before him. It was submitted that Section 68 of the Act could not be invoked for not mentioning the PAN numbers. It was further submitted that before the AO the evidence of PAN with regard to the fourteen flats buyers had indeed been filed twice over which he had not considered the same and ignored. It was further submitted that the aggregate amount could not be added in the hands of the Assessee in view of its having only part share in the total sale value of the flats.

The Tribunal noted that the AO made the addition by observing that the assessee had not provided the PAN details of the buyers of 14 flats.

The Tribunal opined that mere non submission of the PAN details will not lead to disallowance u/s 68 of the Act. The CIT(A) had considered the relevant facts on record and deleted the addition, since the assessee had already brought on record the relevant details before AO as well as CIT(A). Therefore, the ground raised by the revenue was dismissed..

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