KARNAVATI POLYBLENDS PVT. LTD.,AHMEDABAD vs. ACIT, CIRCLE-2(1)(2), AHMEDABAD

The brief facts leading to the case is this that the assessee company filed its return of income through electronic media on 30.09.2015 declaring total income of Rs. 31,93,250/- which was ultimately finalized under Section 143(3) of the Act inter alia making addition of Rs. 5,54,027/- under Karnavati Polyblends Pvt. Ltd. vs. ACIT Asst.Year –2015-16 - 2 - Section 68 of the Act which was in turn confirmed by the Ld. CIT(A). Hence, the instant appeal before us.

During the course of assessment proceeding it was found that the assessee was received of unsecured loan of Rs. 31,54,027/- from one Mahesh Tax Fab during the year under consideration; the same was reflected from the annual accounts and the Tax Audit Report in Form 3CD of the assessee. However, the said company Mahesh Tax Fab accepted only 25 lakhs of such unsecured loan which was also repaid by the assessee. In response to the show-cause issued to the assessee it was submitted that the assessee filed incorrect ledger extract of the said party from the books of assessee showing opening balance at Rs. 5 lakhs and closing balance of Rs. 1,38,624/-. The accountant of the assessee namely Mr. Rajkumar Sharma might have mixed up ledger extract and inadvertently produced the incomplete ledger account; the said Rajkumar Sharma was a science graduate and not an expert in accounts, rather has been conventionally writing books of account by experience and practice as of the plea of the assessee. In fact, the ledger extract of the party from the books of the assessee together with Form 16A (r.w.s. 194A) evidencing that the assessee has accepted and repaid in aggregate Rs. 25 lakhs with the loan creditor.

At the time of the hearing of the instant appeal, the Ld. Counsel appearing for the assessee submitted before us that though the assessee has been able to prove the nature and source of amount credited in the books of accounts of the assessee and submitted the ledger extract of this party from its books of accounts alongwith Form 16A, the same was not taken into consideration in its proper perspective by the Revenue. The assessee has filed the reconciliation of amount shown in Tax Audit Report. He, therefore, prays for an opportunity to place his case again before the Ld. AO upon filing of the reconciliation statement for proper adjudication of the matter.

We have heard the respective parties, we have also perused the relevant material available on records including balance sheet filed by the assessee as on 31.03.2015 togetherwith ledger account of the said Mahesh Tax Fab alongwith the Form 16A of the proprietor of the said company which shows that the assessee has been given unsecured loan of Rs. 25 lakhs and Rs. 1,54,027/- was the interest for such loan amount. The reconciliation statement of amount shown in Tax Audit Report is also on record before us. We, therefore, taking into consideration the entire aspect of the matter we find it fit and proper to provide a further opportunity of being heard to the assessee by the Ld. AO afresh when the assessee would