UNITYUPLIFT HOMES LLP,MUMBAI vs. ITO WARD 29(3)(4), MUMBAI

This appeal by the assessee is directed against the order passed by the National Faceless Appeal Centre, Delhi [‘CIT(A)’] under section 250 of the Income-tax Act, 1961 (‘the Act’) for the assessment year 2013- 14. The impugned appellate order arises from the assessment order dated 28.03.2016 passed by the Assessing Officer under section 143(3) of the Act.

The grounds raised by the assessee, in substance, challenge the confirmation of additions made under section 68 of the Act amounting to ₹61,00,000 in respect of Shri Ashish Shah and ₹48,20,000 in respect of Smt. Vandana Dayal Bhojwani.

Briefly stated, the assessee is engaged in the business of building and development. It filed its return of income for the year under consideration on 26.11.2013 declaring nil income. During scrutiny assessment proceedings, the Assessing Officer examined the unsecured loans appearing in the books of account. As the assessee, according to the Assessing Officer, could not furnish complete supporting evidence and the notices issued under section 133(6) of the Act did not elicit satisfactory compliance, the Assessing Officer treated unsecured loans aggregating to ₹2,73,20,000 as unexplained cash credits under section 68 of the Act.

In the appellate proceedings, a remand report dated 29.11.2024 was obtained from the Assessing Officer. On the basis of the documents furnished and the remand report, the learned CIT(A) accepted the loans from Shri Gautam Zaveri and Smt. Veena Zaveri in full. In the case of Shri Ashish Shah, out of the total loan of ₹75,00,000, the learned CIT(A) accepted ₹14,00,000 and sustained the balance addition of ₹61,00,000. In the case of Smt. Vandana Dayal Bhojwani, out of the total amount of ₹1,23,20,000, the learned CIT(A) accepted ₹75,00,000 and sustained the balance addition of ₹48,20,000. The assessee is in appeal against these two surviving additions.

The learned Authorised Representative submitted that, in the case of Smt. Vandana Dayal Bhojwani, a cheque for ₹46,80,000 was received by the assessee but the same was dishonoured and, therefore, the amount was never credited in the assessee’s bank account. It was 2

In respect of Shri Ashish Shah, the learned Authorised Representative submitted that the assessee had furnished its bank account before the Assessing Officer and that the relevant entries would establish the amount actually received. It was submitted that, if considered necessary, the Assessing Officer may also call for the relevant bank statement directly from the concerned bank and verify the transaction. The learned Authorised Representative prayed that the matter may be restored for this limited verification.

The learned Departmental Representative relied upon the orders of the lower authorities. He submitted that the learned CIT(A) had already granted relief to the extent supported by the material available in the remand proceedings and that the balance additions were rightly sustained for want of corresponding bank evidence. He, however, left the factual verification to the Bench.

We have heard the rival submissions and perused the material available on record. The controversy before us is confined to the addition of ₹61,00,000 relating to Shri Ashish Shah and ₹48,20,000 relating to Smt. Vandana Dayal Bhojwani. The learned CIT(A) sustained these amounts principally because the corresponding movement of funds was not established from the bank statements produced during the remand proceedings.

In the case of Smt. Vandana Dayal Bhojwani, the specific contention now raised is that a cheque of ₹46,80,000 was presented but was dishonoured and, consequently, the amount was never credited to the assessee’s bank account. This contention goes to the root of the addition because section 68 presupposes the existence of a sum credited in the books of the assessee. Whether the impugned cheque was actually dishonoured, whether any provisional credit was reversed, and what amount, if any, was ultimately realised are matters capable of direct verification from the assessee’s bank account, the cheque-return memo and the relevant books of account. These aspects require factual verification by the Assessing Officer.

In the case of Shri Ashish Shah, the assessee claims that its bank statement had been submitted before the Assessing Officer and contains the relevant entries. In the interest of justice, the Assessing Officer shall verify the amount actually received by the assessee from Shri Ashish Shah from the assessee’s bank account and the corresponding books of account. If the material already available is considered insufficient, the Assessing Officer may call for the relevant bank statement and transaction details directly from the concerned bank in accordance with law. The assessee shall also furnish the confirmation, PAN, return of income and such other supporting evidence as may be available to establish the identity and creditworthiness of the creditor and the genuineness of the transaction.

In view of the above, we set aside the impugned order only to the extent of the additions of ₹61,00,000 relating to Shri Ashish Shah and ₹48,20,000 relating to Smt. Vandana Dayal Bhojwani and restore these issues to the file of the Assessing Officer for limited verification in terms indicated above. If, on verification, it is found that the cheque of

In the result, the appeal filed by the assessee is allowed for statistical purposes.