GHEVERCHAND RIKHABCHAND JAIN ,MUMBAI vs. ACIT, CIRCLE 4(2)(1), MUMBAI

| आयकर अपीलीय अिधकरण ायपीठ, मुंबई |
IN THE INCOME TAX APPELLATE TRIBUNAL
“G” BENCH, MUMBAI

BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT
&
SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER

I.T.A. No. 6619 /Mum/2024
Assessment Year: 2014-15

M/s. Gheverchand Rikhabchand Jain
13/14, Kewal Industrial Estate
Senapati Bapat Marg
Lower Parel
Mumbai - 400013
[PAN: AABPJ4847P]
Vs
The Asst. CIT, Circle-4(2)(1),
Mumbai
अपीलाथ/ (Appellant)
 यथ/ (Respondent)

Assessee by :
Shri Dharan Gandhi – Advocate
Revenue by :
Shri Dr. Kishor Dhule, CIT D/R

सुनवाई की तारीख/Date of Hearing : 20/02/2025
घोषणा की तारीख /Date of Pronouncement: 25/02/2025

आदेश/O R D E R

PER NARENDRA KUMAR BILLAIYA, AM:

This appeal by the assessee is preferred against the order dated 26/11/2024 by NFAC, Delhi [hereinafter ‘the ld. CIT(A)’], pertaining to AY 2014-15. 2. The grievance of the assessee reads as under:-
“1.1. The Ld. CIT(A)- NFAC passed the order u/s.250 of the Income Tax Act, 1961
("the Act") is without providing proper opportunity of being heard. The Ld. CIT(A)-
NFAC failed to provide opportunity through video conferencing. The action of the Ld. CIT(A)- NFAC is against the provisions of law and against the principle of natural justice;
Despite being present for personal hearing, no personal hearing was granted and on the contrary in the impugned order, it has been written that none appeared and that the appellant is not interested. These findings and actions are completely irrational and arbitrary.
1.2. The Ld. CIT(A), has passed the order within 60 minutes of the scheduled personal hearing, by observing that the Appellant did not appear. This finding is baseless and incorrect
The Ld. CIT(A)- NFAC failed to consider that no show cause was issued to the appellant by the AO before making assessment and making addition of unsecured

I.T.A. No. 6619 /Mum/2024
2

loans and disallowing interest paid on the unsecured loans. Under the circumstances and facts of the case, and in law, the assessment so framed be held as bad and illegal, as the same is framed in flagrant breach of the principles of natural justice;
1.3. The Ld. CIT(A)- NFAC failed to consider the documents (including additional evidences) submitted by the appellant and merely alleged that the appellant has not submitted any documents and not cooperated during the appellate proceedings;
1.4. The Ld. CIT(A)- NFAC failed to call for the remand report from the Juri ictional AO (“the JAO”) inspite of specific request by the appellant and informing the Ld. CIT(A) that the appellant has submitted the documents to the AO and requesting the Ld. CIT(A)- NFAC to grant an opportunity to rebut the remand report findings (if any);
2.1. The Ld. CIT(A)- NFAC erred in confirming addition of unsecured loans of Rs.13,47,45,627/- u/s.68 of the Income-tax Act, 1961 accepted from various parties.
The addition is bad, illegal, void and against the provisions of law and is erroneous;
2.2. The Ld. CIT(A)- NFAC failed to appreciate the materials on record and that the identity and creditworthiness of the lenders are supported by documents and the appellant has discharged the primary onus;
3.1. The Ld. CIT(A)- NFAC erred in not adjudicating and thereby confirming the disallowance of total interest of Rs.2,85,20,550/- paid to the lenders on unsecured loan. The Ld. CIT(A) failed to appreciate the materials on record. The disallowance is bad, illegal, void and against the provisions of law and is erroneous;
3.2. Without prejudice to above, erred in not adjudicating that the interest disallowed is excessive;
4.1. Without prejudice to above, the Ld. CIT(A)- NFAC erred in not adjudicating and thereby confirming the disallowance of interest on the pretext that appellant has borrowed huge interest bearing funds which has been used for interest free advances;
4.2. The Ld. CIT(A)- NFAC ought to have appreciated that the appellant has not advanced interest free loans;
The Ld. CIT(A) has erred in making various comments on the alleged conduct of the Appellant. On the contrary, the Ld. CIT(A) has erred in passing a completely vague and irrational order, thereby pushing the Appellant to come to this Hon'ble Tribunal. The Appellant pray for cost of the present appeal.
5. The Ld. CIT(A)- NFAC failed to adjudicate the ground 5 of the appeal regarding erroneous interest levied u/s.234A and interest u/s.234B of the Income- tax Act, 1961”

I.T.A. No. 6619 /Mum/2024
3

the AO noticed that there were several loan creditors and the assessee was asked to prove the identity and creditworthiness of the lenders by producing ITRs, balance sheet, profit and loss account and was also asked to prove the genuineness of the transactions. The assessee furnished the details but were incomplete and not to the satisfaction of the AO. Therefore, the AO was of the firm belief that the assessee has failed to discharge the initial onus cast upon him by the provisions of Section 68 of the Act and made addition on account of bogus unsecured loans amounting to Rs. 13,47,45,627/-. The AO further disallowed the interest paid on the alleged bogus loans.
4.1. The assessee carried the matter before the ld. CIT(A) but the ld.
CIT(A) dismissed the appeal in limine observing that the assessee does not seem to be interested in pursuing his appeal.
5. The aforementioned observation of the ld. CIT(A) appeared to be against the facts of the case. A perusal of the documents furnished before us show that the assessee filed details before the ld. CIT(A) vide letter dated 30/01/2017 as acknowledged by the stamp of the office of the ld. CIT(A) on 01/02/2017. It was specifically mentioned in the letter that since the size of uploading documents in PDF Form was insufficient to upload. Therefore, documents were furnished physically. The assessee furnished the list of documents of loan account which are exhibited at page 73 to 76 of the paper book. Again on 23/08/2017, the assessee furnished additional evidence which are acknowledged by the office of the ld. CIT(A) on 28/08/2017 and after admitting the additional evidence, the ld. CIT(A) forwarded the application along with the additional evidence to the ACIT- 4(2)(1), Mumbai, vide letter dated
31/08/2017. The AO issued notice commencing the remand

I.T.A. No. 6619 /Mum/2024
4

proceedings on 21/09/2018 and vide letter dated 15/05/2024, during the course of the remand proceedings, asked the assessee to make available copies of all the submissions made before the ld. CIT(A). The assessee attended the proceedings but as mentioned elsewhere, the ld.
CIT(A) dismissed the appeal in limine for want of prosecution.
6. The evidence discussed hereinabove, go on to show that the ld.
CIT(A) has dismissed the appeal without even going into the documents and moreover without realizing that the remand proceedings are ongoing.
7. We are of the considered opinion that such act/omission on the part of the ld. CIT(A) is nothing short of harassment of the tax-payer.
Therefore, in the interest of justice, we restore the entire quarrel to the file of the AO. The AO is directed to decide the issue afresh after considering all the documents furnished by the assessee and after affording reasonable and adequate opportunity of being heard to the assessee.
8. In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Court on 25th February, 2025 at Mumbai. (SAKTIJIT DEY)

(NARENDRA KUMAR BILLAIYA)
VICE-PRESIDENT

ACCOUNTANT MEMBER

Mumbai, Dated 25/02/2025
*SC SrPs
*SC SrPs
*SC SrPs
*SC SrPs

I.T.A. No. 6619 /Mum/2024
5

आदेश की ितिलिप अेिषत /Copy of the Order forwarded to :

आदेशानुसार/ BY ORDER