YARN SALES COORPORATION ,NEW DELHI vs. ITO WARD - 47(1), NEW DELHI

The only effective ground raised by the assessee reads as under:

Briefly the facts are, the assessee is a partnership firm.

In course of proceeding before the first appellate authority, the assessee again furnished evidences already furnished before the Assessing Officer and claimed that the loan availed is genuine. On examining the evidences furnished, including two bank accounts of Mr. Ritesh Gupta in 2 | P a g e ICICI Bank and HDFC Bank, learned Commissioner (Appeals) accepted loan availed from the concerned person as genuine, except for an amount of Rs.36,65,000/-.

As regards the amount of Rs.36,65,000/-, learned Commissioner (Appeals) held that since, such loan transaction is not reflected in the bank account of Sh. Ritesh Gupta, the source remains unexplained, hence, cannot be accepted as genuine. Besides the aforesaid amount of Rs.36,65,000/-, learned Commissioner (Appeals) also upheld the addition of loan of Rs.4,50,000/- received from Sh. Ritesh Gupta, Rs.2,05,000/- from M/s. Adinath Capital Services and further amount of Rs.1,01,265/- received from Sh. Ritesh Gupta.

Before us, learned counsel appearing for the assessee submitted, both the Assessing Officer and learned Commissioner (Appeals) have not properly appreciated the evidences submitted by the assessee. He submitted, though, learned Commissioner (Appeals) has stated that she has examined the bank accounts of Sh. Ritesh Gupta held in ICICI Bank and HDFC Bank and the loan transactions of Rs.36,65,000/- is not reflected in the bank account, however, it is not a correct statement of fact. He submitted, learned 3 | P a g e Commissioner (Appeals) has completely overlooked the entries made in the bank account held in HDFC Bank, which clearly reflects the loan transaction of Rs.36,65,000/-. In this context, he drew our attention to a copy of the bank account of Sh.

As regards the balance loan amount of Rs.7,55,000/-, learned counsel submitted, though, in course of proceeding before the departmental authorities the assessee had furnished various documentary evidences to prove the genuineness of the loan transaction, however, the departmental authorities were not convinced. He submitted, without asking the assessee to submit further documentary evidences, in case, they were required to prove the genuineness of loan transaction, the departmental authorities have treated them as unexplained cash credit. He submitted, post conclusion of proceedings before the departmental authorities, the assessee has been able to gather further evidences to prove the loan transactions. Thus, he sought 4 | P a g e permission of the Bench to furnish them as additional evidences.

Learned Departmental Representative submitted, in case, certain evidences furnished by the assessee were not properly examined and if the assessee wants to furnish further evidences, let the issue be restored back to the Assessing Officer for fresh adjudication.

We have considered rival submissions and perused the materials on record. It is evident, though, the Assessing Officer has treated an amount of Rs.82,98,000/-, being loan availed from certain lenders, as unexplained cash credit under section 68 of the Act, however, learned Commissioner (Appeals) has granted partial relief to the assessee by sustaining the addition of Rs.44,20,000/-. It is further evident, the major component of the addition sustained by learned Commissioner (Appeals) is an amount of Rs.36,65,000/-, being loan availed from Sh. Ritesh Gupta. It is observed, while sustaining the aforesaid addition, learned Commissioner (Appeals) has given a factual finding that the transaction relating to loan availed of Rs.36,65,000/- is not reflected in the bank accounts of Sh. Ritesh Gupta. However, from the materials placed before us, it appears that the aforesaid amount of Rs.36,65,000/-, in fact, is reflected in the bank account of Sh. Ritesh Gupta held in HDFC Bank.

Thus, prima facie, it appears, certain facts/evidences brought on record by the assessee have apparently been overlooked by the departmental authorities while sustaining the addition. Even, as regards the balance additions sustained by learned Commissioner (Appeals), materials have been produced before us by way of additional evidence to prove that learned Commissioner (Appeals) did not give sufficient opportunity and the assessee was prevented by sufficient cause from submitting them before learned Commissioner (Appeals). Since, learned Commissioner (Appeals) decided the issue without giving the assessee adequate opportunity, therefore, we admit the additional evidences under rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963.

However, considering the fact that the departmental authorities never had an opportunity to examine such evidences, we are of the view that the issue needs to be restored back to the Assessing Officer for fresh adjudication. The Assessing Officer is directed to examine the bank account of Sh. Ritesh Gupta held in HDFC Bank to find out, whether the loan transaction of Rs.36,65,000/- is reflected in the said bank account. In case, assessee’s claim is found to be correct, then there may not be any difficulty in accepting the loan transaction. As regards the balance amount, the Assessing Officer, after verifying the additional evidences furnished by the assessee, may decide the issue in accordance with law.

Needless to mention, before deciding the issue the assessee must be afforded reasonable opportunity of being heard. At this stage, we must make it clear, the Assessing Officer in the fresh assessment, in pursuance to our directions, must confine himself to the addition sustained of Rs.44,20,000/- only.

In the result, the appeal is allowed for statistical purposes.