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

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘F’ NEW DELHI

BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER

ITA No.1873/Del/2019 Assessment Year: 2015-16 Yarn Sales Corporation, Vs. Income Tax Officer, 4586, 1st Floor, Mahavir Ward-47(1), Bazar, Cloth Market, New Delhi Delhi PAN :AAAFY0192M (Appellant) (Respondent)

Appellant by Sh. Ruchesh Sinha, Advocate Ms. Suman Jain, Advocate Respondent by Sh. Toufel Tahir, Sr.DR Date of hearing 25.05.2022 Date of pronouncement 31.05.2022

ORDER PER SAKTIJIT DEY, JM:

This is an appeal by the assessee against order dated

20.12.2018 of learned Commissioner of Income Tax (Appeals)-16,

New Delhi, for the assessment year 2015-16.

under:

“1. That the Ld. CIT(A) is erred under the law while confirming addition to the extent of Rs.44,20,000/- u/s 68 of the Act as made by the A.O.”

ITA No.1873/Del/2019 AY: 2015-16

For the assessment year under dispute, the assessee filed its

return of income on 20.09.2015 declaring total income of

Rs.4,95,480/-. In course of assessment proceeding, while

examining the balance-sheet of the assessee the Assessing

Officer noticed that during the year under consideration, the

assessee has received unsecured loan aggregating to

Rs.4,38,53,500/- from various lenders. After examining the

details called for including the bank accounts of the lenders,

the Assessing Officer observed that loan of Rs.82,98,000/-

availed from one Mr. Ritesh Gupta is not genuine, as, he did

not have the creditworthiness to advance such loan.

Accordingly, he treated it as unexplained cash credit under

section 68 of the Act and added back to the income of the

assessee. The assessee contested the aforesaid addition before

learned Commissioner (Appeals).

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

ITA No.1873/Del/2019 AY: 2015-16

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/-.

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.

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

ITA No.1873/Del/2019 AY: 2015-16

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.

Ritesh Gupta in HDFC Bank as submitted in the paper-book.

Thus, he submitted, the reasons on which, learned

Commissioner (Appeals) has not accepted loan of

Rs.36,65,000/- as genuine is unsustainable.

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

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permission of the Bench to furnish them as additional evidences.

In this context, the assessee has also filed a separate application

dated 5th May, 2022 under Rule 29 of the Income Tax (Appellate

Tribunal) Rules, 1963 enclosing the additional evidences.

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.

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

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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.

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.

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

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ITA No.1873/Del/2019 AY: 2015-16

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.

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.

Grounds are allowed for statistical purposes.

Order pronounced in the open court on 31st May, 2022

Sd/- Sd/- (ANADEE NATH MISSHRA) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 31st May, 2022. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi 7 | P a g e