M/S GUPTESHWARAM RICE MILL PVT LTD,KAIMUR vs. DCIT, CIRCLE-3, GAYA

The assessee’s appeal for assessment year 2003-04, arises against the learned CIT(Appeals)-1, Patna’s order dated 14.06.2018, passed in case no. 238/CIT(A)-1/2006-07 involving proceedings u/s 143(3) of the Income Tax Act, 1961 ( in short the ‘Act’). Heard both the parties. Case file perused.

Coming to the former issue of Section 68 unexplained unsecured loan addition of Rs. 4,69,886/- made in both the learned lower authorities’ respective orders that this taxpayer had failed to prove identity, genuineness and creditworthiness of the credit parties, we find no merit to sustain the same since the same has come from the assessee’s four directors namely Avinash Tiwary, Shashi Nath Tiwary, Smt. Savitri Devi, Smt. Sharda Devi involving sum of Rs. 2.25,000/-, Rs. 94,602/-, Rs. 58,148/- and Rs. 92,136/-; respectively. Mr. Ajay Kumar has drawn strong support from the impugned addition that the assessee had M/s Gupteshwaram Rice Mill Pvt. Ltd. A.Y.: 2003-04 failed to satisfy the abovestated three basic parameters in a case involving unsecured loans. He fails to dispute that there is no indication as either of the lower authorities’ order as to whether they had called the assessee’s director or not whilst examining the impugned issue. We therefore, delete the impugned addition on this count alone.

Coming to the latter issue of disallowance of loans amounting to Rs. 2,41,676/-, we find that the same does not emanate from the assessment order dated 22.02.2006. Be that as it may, it shall be open to the assessee to take recourse to necessary rectification in case it is found that the impugned loss had been disallowed during the course of assessment. We reject the instant latter grievance in above terms.

This assessee’s appeal is partly allowed in above terms. Order pronounced in the Court on 15.09.2020