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Facts
The assessee, an individual, filed a return declaring a total income of Rs. 1,97,75,080/-. The case was selected for scrutiny, and the AO made additions regarding business purchases, unsecured loans, GST penalty, and sundry creditors. The CIT(A) granted partial relief to the assessee.
Held
The Tribunal observed that the CIT(A) did not sufficiently verify the evidence presented by the assessee regarding purchases, unsecured loans, and GST penalty. Therefore, all these issues were remitted back to the AO for detailed verification.
Key Issues
Whether the CIT(A) erred in deleting additions related to purchases, unsecured loans, and GST penalty without proper verification, and if these issues should be remanded to the AO for further inquiry.
Sections Cited
143(2), 68, 69C, 115BE, 37(1), 46A, 271AAC(1), 270A, 144B, 234A, 234B, 234C
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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: SMT. BEENA PILLAI & SHRI GIRISH AGRAWAL
Per: Smt. Beena Pillai, J.M.: The present appeal filed by the revenue arises out of order dated 25/11/2024 passed by NFAC, Delhi, for assessment year 2022-23 on following grounds of appeal :
A.Y. 2022-23 Parvez Ahmed Khalkullah Choudhary “1. Whether in the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition relating to purchase from 2 parties namely Jivgiri Narbhegiri Goswami (PAN: AORPG1526N) and Sachin Patil (PAN: GCOPP3847L) for amounts Rs.93,97,740/- and Rs.4,66,11,795/- respectively in absence of submission of PAN wise data by the assessee to establish that no purchases have been made from the said parties.
2. Whether in the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting addition related to unsecured loans taken from Om Metal and Sattar Enterprises, totalling Rs.57,60,233/- despite failure of the assessee to discharge this onus of establishing creditworthiness and genuineness of transactions under question.
Whether in the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the disallowance of GST penalty despite the expense being penal in nature and hence not allowable u/s 37(1) of the Act.
Whether in the facts and in the circumstances of the case, the Ld. CIT(A) erred under rule 46A in considerting additional evidence filed during the appellate proceeding regarding GST penalty expense claimed, the details of which, as stayed by the AO in his assessment order was not furnished during the assessment proceeding.
The appellant craves leave to add, amend, alter substitute or modify any of the above grounds or add a fresh ground as and when found necessary either before or at the time of hearing.” Brief facts of the case are as under: 2. The assessee is an individual and for year under consideration had filed its return of income declaring total income at Rs.1,97,75,080/-. The case was picked up for scrutiny and notice u/s. 143(2) was issued to the assessee regarding following issues: “1. Business purchases 2. Details of assets and liabilities 3. High creditors/liabilities A.Y. 2022-23 Parvez Ahmed Khalkullah Choudhary 4. Default in TDS and such disallowance. ” 2.1 The assessee during the assessment proceedings did not furnish complete details in respect of the issues that was raised during the assessment proceedings except for details pertaining to GST penalty. Accordingly, addition was made by the Ld.AO in respect of all the issues raised therein.
S.No. Description Amount (in INR) 1. Income Tax Return filed by assessee u/s Rs.1,91,75,080/ 139 of the Act.
Addition on account of disallowance of Rs. 7,41,150/- GST Penalty 3. Addition on account of GST on Bogus Rs. 21,16,67,237/- purchase 7. Addition on account of unsecured loan Rs.7,89,86,241/- u/s 68 r.w.s 115BE of the Act 8. Addition on account of sundry creditors Rs.83,93,450/- u/s 68 r.w.s 115BE of the Act 9. Total income determined Rs. 31,89,63,158/ 6. Assessed u/s 143(3) read with section 144B of the Act at total income of Rs. 31,89,63,158/-. Interest u/s 234A, 234B and 234C is charged accordingly. Penalty 271AAC(1) of the Act is being initiated for addition on account of 68 & 69C r.w.s 115BE of the Act and Penalty 270A of the Act is being initiated for disallowance of expenses. Issued demand notice and challan.”
2.2 Aggrieved by the order of the Ld.AO assessee filed appeal before the Ld. CIT(A). 3. The Ld. CIT(A) after considering the submissions of the assessee and additional evidence filed by the assessee granted part relief. Aggrieved by the order of the Ld.CIT(A) revenue is in appeal before this Tribunal.
A.Y. 2022-23 Parvez Ahmed Khalkullah Choudhary 3.1 The Ld.DR submitted that in respect of the purchases made by the assessee during the year the assessee did not file any details pertaining to two parties being Jivgiri Narabhegiri Goswami and Sachin Patil. 3.2 The Ld.DR submitted that, without verifying establishing genuineness, creditworthiness of the transaction the addition was erroneously deleted only based on the submissions filed by the assessee. The Ld.DR further submitted that, in respect of unsecured loan taken from Om Metal and Sattar Enterprises totalling to 57,60,233/-, the assessee did not discharge its onus by filling details to establish creditworthiness and gennuiness of the transaction. The Ld.DR submitted that, the assessee treated GST penalty as an expenditure which is not allowable as per the proviso section 37(1) of the Act. It is thus submitted that, all the above additions stood deleted in the hands of the assessee based on the additional evidences filed during the assessment proceedings. 3.3 The Ld.DR submitted that, merely based on submissions of the assessee this additions stood deleted. He thus prayed for the issues to be remanded back for necessary verification before the Ld.AO. 3.4 On the contrary the Ld.AR submitted that all these details were furnished before this first appellate authority which was considered and appropriate relief was granted. The Ld.AR placed reliance on the orders of this Tribunal in assessee’s own case wherein similar additions were deleted. We have perused the submissions advance by both sides in the lights of records placed before us.
A.Y. 2022-23 Parvez Ahmed Khalkullah Choudhary 4. The Ld.AR at the time of hearing submitted that purchases were disallowed u/s.69C of the Act, from two parties. It is submitted that, identical issue was considered by coordinate bench of this Tribunal in assessment year 2020-21 in 1249/MUM/2024 dated 22/07/2024 wherein the additions stood deleted. In respect of the unsecured loans from the two parties totalling to Rs.57,62,233/-. It is however noted that though the assessee provided documentary evidences before the Ld. CIT(A) for which no further was verification carried out in order to ascertain the correctness of the those documents. 4.1 In respect of the payment made as GST penalty assessee has furnished evidences in support stating that this were not in the nature of penalty which is also been relied before us in the paper book page no. 163-165. 4.2 In our considered opinion all the above issues require to be verified in detail having regard to the evidences furnished by the assessee in accordance with law. It is noted that the Ld. CIT(A) did not verify the details either himself or called for a remand report. In the interest of justice we remit all these issues back to the Ld.AO for carrying out necessary verification. Needless to say that proper opportunity has been granted to the assessee. In the result appeal filed by the revenue stand partly allowed as indicated here in above.