MRUGESH DHIRAJLAL DHANANI,AHMEDABAD vs. ITO, DAMAN WARD, DAMAN

Brief facts of the case are that the assessee is an individual and partner in M/s Prabhav Plastics, engaged in consultancy services. The assessee also derived income from business, house property and other sources. The assessee filed his return of income for AY 2015- 16 on 07.09.2015, declaring total income of Rs.6,59,870/-. The assessee purchased an immovable property for consideration of Rs.3,84,78,000/- along with five co-owners. The assessee’s share was Rs.57,71,700/- out of which Rs.45,00,000/- paid from unsecured loans from seven different parties and Rs.12,00,000/- paid from capital withdrawn from Prabhav Plastics (Current and Previous year), rental income, realization of FD and bank interest. During the assessment proceedings, the assessee filed confirmation statement, ITR copy of the lenders of unsecured loans, copy of the sale deed, cash flow statement and balance sheet of M/s Prabhav Plastics and bank account of the assessee from the above firm. Thus, the assessee discharged the initial onus caste upon him, however, the Assessing Officer (in short, ‘AO’) was not satisfied from the above explanation and thereby made addition of Rs.45,00,000/- and Rs.12,00,000/- as unexplained investments and added to the total income of the assessee and demanded the taxed thereon.

Aggrieved by the assessment order, the assessee filed appeal before the CIT(A) and also filed additional evidence under Rule 46A, namely, Audit Reports, capital accounts and bank statements. The Ld. CIT(A) has not entertained the above additional evidence on account that assessee failed to submit the above documents before the AO, thereby confirmed the additions made by the AO and dismissed the appeal filed by the assessee.

Aggrieved against the appellate order, the assessee is in further appeal before us, raising following Grounds of Appeal: “[1] The Ld. CIT(A) NFAC, Delhi was grievously erred in law and on facts by upholding the addition made by the Ld. AO as unsecured loan of Rs.45,00,000/- as unexplained credits u/s. 68 of the IT Act, 1961 which is illegal and bad in law. [2] The Ld. CIT(A) NFAC, Delhi was grievously erred in law and on facts by upholding the addition made by the Ld. AO of Rs.12,00,000/- as unexplained investment which is illegal and bad in law. [3] The Ld. CIT(A), NFAC, Delhi was grievously erred in law and on facts in not properly appreciating and considering various submissions, evidences and supporting documents placed on record during the course of assessment proceedings as well as appellate proceedings and not properly appreciating various facts and law in its proper perspective. [4] The appellant therefore requests your Honour to kindly delete the abovementioned additions made by the Ld. A.O. by upholding the same by the Ld. CIT(A) looking to the merits of the case and oblige. [5] The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.” 5. We have heard rival submissions and perused the materials available on record. The Ld. Counsel for the assessee filed before us a paper book containing 363 pages, wherein repayment of loans with ledger account, confirmations from parties and bank statements were filed as the additional documents, invoking Rule 29 of ITAT, Rules. The Ld. Counsel also submitted that the Ld. CIT(A) failed to consider the additional documents filed under Rule 46A. Thus, the Ld. Counsel requested one more opportunity be given to the assessee regarding the addition made by the AO. Since the repayment of loans from the seven creditors are filed before us, which are fresh documents which were not filed before the lower authorities as well

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