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Facts
The assessee filed an appeal against the order of the CIT(A) upholding additions made by the AO on account of unsecured loans and sales promotion expenditure. The assessee remained ex parte during the appellate proceedings before the ITAT, despite being granted opportunities.
Held
The Tribunal held that the assessee failed to furnish details for unsecured loans and did not provide reasons for non-submission. Since the assessee could not establish the identity, creditworthiness, and genuineness of the transactions, the additions were upheld. No new evidence was presented to rebut the CIT(A)'s findings.
Key Issues
Whether additions for unsecured loans and sales promotion expenses were justified, especially when the assessee remained ex parte and failed to provide supporting evidence and documentation.
Sections Cited
250, 115BBE, 68, 69C, 37(1)
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Income Tax Appellate Tribunal, “F” BENCH MUMBAI
Vallonne Vineyards Private Vs. CIT (Appeals), Circle Limited 14(1)(2), C/14/108, MIG Colony, Mumbai Kalanagar, Bandra (East), Aaykar Bhawan, Mumbai - 400051 Maharshi Karve Road, New Marine Lines, Church gate, Mumbai - 400020 PAN/GIR No. AACCV459M (Applicant) (Respondent) Assessee by None Revenue by Shri Akhtar Hussain Ansari, Sr. DR. Date of Hearing 24.02.2026 Date of Pronouncement 01.04.2026 आदेश / ORDER
PER SANDEEP GOSAIN, JM:
The present appeal has been filed by the assessee challenging the impugned order 15.07.2025 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi (NFAC) for the assessment year 2014-15. The following grounds are reproduced below: “The following grounds are being taken without prejudice to each other-
1. The learned CIT (Appeals) erred in completing the assessment by completely ignoring the details and documents submitted regarding the confirmation of unsecured loans of ₹ 1,07,27,000/-, vide submission and paperbook on 30.08.2023, in the course of appellant proceedings in the case of Mr. Devdas Naik, Shailendra Pai (HUF) and Karl Joseph Coelho.
2. The learned CIT (Appeals) has erred by upholding the additions of 1,07,27,000/- made by the AO in the original assessment order on the ground that the appellant has not furnished the complete information for establishing the identity, credit worthiness and genuineness of the unsecured loan creditors wherein all the information and documents required were submitted on record.
3. The learned CIT (Appeals) erred in law by upholding the view of the AO wherein the provisions of section 115BBE of the I.T Act, 1961 were applied whereas all the transactions were recorded in the audited books of accounts and also explained with evidences in the course of both appellate and original assessment proceedings.
The learned CIT (Appeals) has wrongly upheld the additions made by the AO on in respect of sales promotion expenditure of 26,79,679/-, on the ground that invoices and other relevant information with regard to these expenses were not submitted in the appellate proceedings whereas the extensive evidences and documents including invoices, debit notes, ledgers were submitted during the appellate proceedings vide submission and paperbook on 30.08.2023.
5. As regards the issue of excess sales promotion expenditure, the learned CIT (Appeals) erred in not appreciating that out of the total sales promotion expenditure of Rs.38,51,580/-, 1/3d portion amounting to 11,71,901/- was actually not debited to the Profit and Loss account and was as prepaid/deferred expenditure under assets in the Balance Sheet.
6. The learned CIT (Appeals) erred in completing the appellate proceedings without considering the facts, evidences, additional evidences, and submissions made оп 29.08.2023, 02.06.2025, 02.07.2025 and 09.07.2025 thereby compromising the principles of natural justice.
As regards the total additions of ₹1,18,98.901 u/s 68 and 69C and disallowance of ₹26,79,769 u/s. 37(1), the learned CIT (Appeals) has failed to appreciate that the transactions of unsecured loans and sales promotion expenses are genuine and explained and cannot be treated as unexplained.
8. The Appellant craves leave to add, alter, amend and/or withdraw any of the ground either before or at the time of hearing, as may be necessary. ”
None appeared on behalf of the assessee when the case was called repeatedly. From the records, we noticed that the assessee had not appeared even on previous occasions, and notice was served through email as well as through speed post at the address provided in Form 36, as per the report of the registry. Therefore, we draw an inference under the General Clauses Act that service has been duly effected, as 30 days have already elapsed from the date of issuance of notice.
On the other hand, the learned DR present in the court was ready with arguments. Therefore, we have decided to proceed with the hearing of the case ex parte.
4. From the records, we also noticed that the assessee remained ex parte even before the learned CIT(A), who had already granted four effective opportunities to the assessee. However, the assessee did not appear and only filed written submissions.
From the records, we further notice that in respect of unsecured loans availed by the assessee, no details have been furnished, and no reason for non-submission of the details during the assessment proceedings was provided by the assessee. It is settled law that where any credit appears in the books of account, the onus is on the assessee to establish the identity of the creditors, the creditworthiness of the creditors, and the genuineness of the transactions.
Since the assessee could not lead evidence in support of the above three essential ingredients, the additions made by the AO were upheld by the learned CIT(A).
Even otherwise, no new facts or circumstances or 7. documents have been placed on records in order to controvert or rebut the lawful findings so recorded by the Ld. CIT(A), therefore, we see no reasons to interfere into or to deviate from the findings so recorded by Ld. CIT(A), hence we dismiss the grounds raised by the assessee and uphold the order of Ld. CIT(A).
In the result, the appeal filed by the assessee stands dismissed with no order as to cost.
Order pronounced in the open court on 01.04.2026
SD/- SD/- (BIJAYANANDA PRUSETH) (SANDEEP GOSAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 01/04/2026 आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : अपीलार्थी / The Appellant 1. प्रत्यर्थी / The Respondent. 2. संबंधित आयकर आयुक्त / The CIT(A) 3. 4. आयकर आयुक्त(अपील) / Concerned CIT धिभागीय प्रधतधिधि, आयकर अपीलीय अधिकरण,मुम्बई/ DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6. आदेशानुसार/BY ORDER, सत्याधपत प्रधत //True Copy//
उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai