THE ASSISTANT COMMISSIONER OF INCOME TAX, NA vs. ARI CIRCLE, NAVSARIVS.M/S GROVE-TECH INFRACON PRIVATE LIMITED, SURAT

Captioned appeal filed by the Revenue, pertaining to Assessment Year (AY) 2015-16, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), Valsad [in short “the ld. CIT(A)”] in Appeal No. CIT(A)/VLS/939/17-18/1414 dated 08.11.2018, which in turn arises out of an assessment order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 [hereinafter referred to as the “Act”] dated 29.12.2017.

Grounds of appeal raised by the Revenue are as follows: 1.The ld. CIT(A) has erred in law and on facts and circumstances of the case by deleting addition of Rs.1,53,96,000/- made on account of unproved unsecured loan by observing that AO has made addition on presumptive & guess work. 2.The Ld. CIT(A) has erred in law and on facts and circumstances of the case by deleting addition of Rs.1,55,08,113/- on account of non-exist unsecured loan by observing that Assessing Officer's findings in the assessment order was based on mere presumption and without any concrete adverse evidence. 3.The Ld. CIT(A) has erred in law and on facts and circumstances of the case by deleting addition of Rs.44,46,876/- on account of unproved expenses.

Ground No. 1 raised by the Revenue relates to deletion of addition of Rs.1,53,96,000/- made on account of unproved unsecured loan.

Succinct facts are that assessee before us is a private limited company and engaged in the business of real estate. During the assessment proceedings, assessing officer observed that assessee received fund in the guise of unproved unsecured loan. On verification of details submitted by assessee, it was noticed by AO that assessee had received unsecured loan from different parties, the details of which are as under:

In the assessment order, the AO has discussed various courts decisions pertaining to requirements for cash credits explanations to be complied by the assessee and thereafter noted that the, unsecured loans received from three different parties viz:-1) Sunil Sumanbhai Patel (Rs.1,32,48,000), 2) M/s Moneydhara Stocks Services Pvt. Ltd., (Rs.8,70,000) and 3) Sumanbhai M. Patel

We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. Before us, Learned DR for the Revenue submits that CIT(A) has admitted additional evidences and additional submissions of the assessee on different footings and deleted the addition without providing an opportunity to the assessing officer to examine additional evidences and additional submissions of the assessee on different footings. The ld. DR pleads that during the assessment proceedings, the assessing officer provided a lot of opportunity to the assessee to furnish documents and evidences, but assessee took lot of adjournment and did not file the evidences and documents on time.

The Learned Departmental Representative (ld. DR), drew our attention towards paper book page no.178, wherein he pointed out that assessee submitted incomplete details and documents at the flag end, that is, last minute, on 29.12.2017. The Assessing Officer noted that assessee has submitted incomplete details and documents after taking a lot of adjournments. The assessing officer having gone through the incomplete documents and details framed the assessment order on 29.12.2017, that is, on the date on which the assessee has submitted the details and documents. Besides, assessee submitted additional evidence, during the appellate proceedings. Therefore, Assessing Officer did not get opportunity to examine the documents and details so filed by the assessing officer. Hence, the matter should be remitted back to the file of the Assessing Officer for examination and for making de novo assessment. On the other hand, Learned Counsel for the assessee, defended the order passed by the ld. CIT(A).

We find merit in the submissions of ld DR for the Revenue. We note that assessee submitted the details and documents before the Assessing Officer on Page | 4

From the above letter which was submitted by the assessee on 29.12.2017 before the Assessing Officer, it is abundantly clear that all deeds were not submitted before assessing officer and details of agricultural land holding were not submitted before the assessing officer ( see the remark put by the AO on the face of the above letter). The ld DR submits that these incomplete details were submitted by the assessee before the ld CIT(A), during the appellate proceedings, which were not sent to the assessing officer for his examination and comments, hence violated the provisions of Rule 46A of the Income Tax Rules. Besides, assessee submitted the details and documents on 29.12.2017, that is, on the date of making the assessment, therefore, the assessing Officer, at the assessment stage, does not get opportunity to verify these documents and details submitted by the assessee, as the documents and details were submitted by the assessee at the Assessment Year. 2015-16 Grove-Tech Infracon Pvt. Ltd. eleventh hour on 29.12.2017. Moreover, the ld. CIT(A) did not call the remand report from the Assessing Officer to verify these additional documents and details. Therefore, we are of the view that this issue should be remitted back to the file of the Assessing Officer for fresh examination.

In respect of ground no.2, (which relates to non-exist unsecured loan), the ld. DR for the Revenue submitted that assessee did not explain during the assessment stage about the seventh party namely, Dinesh M. Patel and Sanmukh Swami who were Non Resident Indian (NRI) Lenders. Besides, the documents submitted by the assessee during the assessment stage were incomplete. Therefore, the matter should be remitted back to the file of the Assessing Officer for fresh adjudication.

In respect of ground no.3, which relates to deletion of addition of Rs.44,46,876/- on account of unproved expenses. The ld DR submits that expenses debited in the profit and loss account, were not examined by the Assessing Officer. Therefore, ld. CIT(A) ought to take the remand report from the Assessing Officer, to the effect whether expenses have been debited to the profit and loss account or not, however ld. CIT(A) has not taken remand report from the Assessing Officer on this issue. Thus, ld. DR submits that proper details were not submitted to verify the transactions of these parties, during the assessment stage. However, these details were submitted at the last minute, that is on the date of making the assessment order, therefore Assessing Officer could not verify the details, hence the matter may be remitted back to the file of the Assessing Officer for fresh adjudication.

We have narrated the factual position in respect of three grounds raised by the Revenue, as narrated above. We find merit in the submissions of ld DR, therefore we accept the prayer of the ld DR and therefore, we set aside the order of CIT(A) and remand the various issues raised by the Revenue in the grounds of appeal before CIT(A) for fresh consideration by the assessing officer with a liberty to the assessee to prove his case by producing sufficient evidence/material to the Assessment Year. 2015-16 Grove-Tech Infracon Pvt. Ltd. satisfaction of the assessing officer. For statistical purposes the appeal of the Revenue is allowed.

In the result the appeal of the Revenue is allowed for statistical purposes.