AARTI JEETENDRA JUNEJA,MUMBAI vs. INCOME TAX OFFICER, MUMBAI

At the outset, the Registry has pointed out that the present appeal is barred by limitation by 215 days, whereas the Ld. AR submitted that, according to the assessee’s computation, the delay is 235 days. The assessee has filed a petition seeking condonation of delay supported by an affidavit. It is explained that the assessee was not conversant with the procedure for filing an appeal before the Tribunal and, therefore, the appeal could not be instituted within the prescribed period. The material placed on record also shows that the impugned appellate order was passed on 12.08.2024. The condonation affidavit states that the prescribed period expired on 11.10.2024 and that the appeal before the Tribunal was ultimately filed on 30.05.2025.

We have considered the explanation of the assessee and the submissions of the parties. The discrepancy between the computation of delay stated by the assessee and that reported by the Registry does not, in the facts of the present case, materially affect consideration of the prayer for condonation. Considering the explanation furnished in the petition and affidavit and in order to advance substantial justice, we are satisfied that sufficient cause has been shown for not presenting the appeal within the prescribed period. Accordingly, the delay in filing the appeal, as reported by the Registry at 215 days, is condoned, and the appeal is admitted for adjudication.

The brief facts of the case are that the assessee, an individual, filed his original return of income for A.Y. 2013-14 on 31.03.2014 declaring total income of Rs.1,83,720/- and agricultural income of Rs.2,35,173/-. The return was processed under section 143(1) of the Act. Subsequently, proceedings under 2 section 147 were initiated on the basis of information that during F.Y. 2012-13 the assessee had received an unsecured loan of Rs.2,93,00,000/- from M/s Marine Gems Pvt. Ltd., which was alleged to represent an accommodation entry. Notice under section 148 dated 23.07.2022 was accordingly issued.

During the reassessment proceedings, the Ld. AO called upon the assessee to establish the nature, source and genuineness of the unsecured loan, including the purpose and mode of receipt, bank statements, terms relating to interest and evidence regarding repayment. The Ld. AO observed that the requisite supporting evidence was not adequately furnished and that the assessee had not satisfactorily established the genuineness and creditworthiness of the transaction.

The assessee, however, submitted before the Ld. AO that the loan of Rs.2.93 crore was received on different dates through banking channels and that Rs.2.65 crore was repaid during the same financial year, leaving a balance of Rs.28 lakh. The assessment record also refers to the ledger account of M/s Marine Gems Pvt. Ltd. reflecting receipt of Rs.2.93 crore and repayment of Rs.2.65 crore. The Ld. AO was not satisfied with the explanation and ultimately treated the entire amount of Rs.2,93,00,000/- as unexplained cash credit under section 68, taxable under section 115BBE, determining the total income at Rs.2,94,83,720/-.

Being aggrieved, the assessee preferred an appeal before the Ld. CIT(A). Before the first appellate authority, the assessee furnished, inter alia, the ITR and confirmation of M/s Marine Gems Pvt. Ltd. The Ld. CIT(A), however, observed that the assessee had not furnished the financial statements, audit report, balance sheet, profit and loss account and relevant bank statements of the lender and, therefore, had failed to establish its creditworthiness and the 3 genuineness of the transaction. Consequently, the Ld. CIT(A) upheld the addition of Rs.2,93,00,000/- made under section 68 and rejected the relevant grounds of appeal. The assessee is now in appeal before us.

The Ld. AR submitted that the assessee has filed before the Tribunal a paper book comprising pages 1 to 170 containing material relevant for adjudication of the disputed unsecured loan. It was submitted that, in particular, APB pages 26 to 61 contain the confirmation of M/s Marine Gems Pvt. Ltd., relevant bank statement, income-tax return of M/s Marine Gems Pvt. Ltd., its balance sheets and the retraction affidavit of the Director of M/s Marine Gems Pvt. Ltd.

The Ld. AR further submitted that these documents have a direct bearing on the identity and creditworthiness of the lender and the genuineness of the loan transaction. It was fairly admitted, however, that no formal application for admission of additional evidence was filed before the Ld. CIT(A). The Ld. AR accordingly prayed that, instead of deciding the controversy on the basis of an incomplete evidentiary record, the matter may be restored to the file of the Ld. CIT(A) so that the relevant documentary evidence may be properly examined and the issues may thereafter be adjudicated in accordance with law.

Per contra, the Ld. DR relied upon the orders of the revenue authorities. The Ld. DR submitted that sufficient opportunities had already been granted to the assessee and that the assessee had failed to furnish the complete documentary evidence necessary to establish the genuineness and creditworthiness of the lender. It was pointed out that the Ld. CIT(A) specifically recorded that the financial statements and bank statements of M/s Marine Gems Pvt. Ltd. had not been furnished before him. The Ld. DR therefore submitted that the assessee should not be permitted to cure the deficiencies in 4 its case at this belated stage without following the prescribed procedure for admission of additional evidence.

We have heard the rival submissions and perused the material available on record, including the paper book filed by the assessee. The controversy essentially relates to the addition of Rs.2,93,00,000/- under section 68 of the Act in respect of the unsecured loan received from M/s Marine Gems Pvt. Ltd. The Ld. CIT(A) sustained the addition principally on the ground that, though the confirmation and ITR of the lender were produced, the assessee had not furnished its complete financial statements and bank statements and had therefore failed to establish the creditworthiness of the lender and genuineness of the transaction. Before us, the assessee has filed a paper book comprising pages 1 to 170. As submitted by the Ld. AR, APB pages 26 to 61 contain, inter alia, confirmation of M/s Marine Gems Pvt. Ltd., bank statement, ITR, balance sheets and the retraction affidavit of its Director. These documents are stated to have a direct bearing on the disputed transaction. At the same time, it is an admitted position that no application for admission of additional evidence was filed before the Ld. CIT(A). Thus, the complete evidentiary material now relied upon by the assessee was not placed before the first appellate authority for examination in accordance with the prescribed procedure.

Considering the totality of the facts and circumstances, we deem it appropriate that the issue be examined afresh by the Ld. CIT(A) after considering the relevant evidence in accordance with law. Accordingly, the impugned appellate order is set aside and the appeal is restored to the file of the Ld. CIT(A) for fresh adjudication. The assessee shall file an appropriate application for admission of additional evidence, together with the documentary evidence on which it seeks to rely. The Ld. CIT(A) shall consider such application in accordance with law, including the applicable requirements of Rule 46A of the Income-tax Rules, 1962, and shall afford appropriate opportunity to the Ld. AO wherever required. Thereafter, the Ld. CIT(A) shall adjudicate the grounds of appeal afresh by passing a reasoned order after granting reasonable opportunity of being heard to the assessee.

However, we cannot lose sight of the fact that the relevant documents were not properly brought on record before the first appellate authority through an appropriate application for additional evidence, resulting in avoidable continuation of the proceedings. Therefore, the restoration of the appeal is made subject to payment of cost of Rs.11,000/- (Rupees Eleven Thousand only) by the assessee. The said amount shall be deposited within two months from the date of receipt of this order with the Income Tax Department under the head “Other Receipt”. The assessee shall furnish the challan/evidence of such payment before the Ld. CIT(A), who shall verify the same before proceeding with the restored appeal.

We clarify that we have not expressed any view on the merits of the addition under section 68 of the Act or on the admissibility or evidentiary value of the documents filed before us. All issues and contentions of both sides are kept open for consideration by the Ld. CIT(A) in accordance with law.

In the result, the appeal of the assessee bearing ITA No. 4013/Mum/2025 is allowed for statistical purposes. Order pronounced in the open court on 2nd day of September 2026 Sd/- Sd/- (OM PRAKASH KANT) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 02/09/2026 SAUMYA Sr.PS Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 5. गाड�फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI