M/S WINGS ECO HOMES (P) LTD,MUMBAI vs. DCIT-11(3)(2), MUMBAI

Date of Hearing 05.07.2022 Date of Pronouncement 07.07.2022 आदेश / O R D E R

PER PAVAN KUMAR GADALE JM:

“1. On the facts and circumstances of the case and in law the Ld. CIT(A) erred in upholding the addition made by the AO u/s 68 of Rs.29,00,000/- in respect of Unsecured Loans of 7 parties on the grounds that the parties have not responded to the notices or that the notices have returned un served.

2. On the facts and circumstances of the case and in law the Ld. CIT(A) erred in upholding the addition made by the AO of Rs.2,78,250/- in respect of interest paid on unsecured loans of the said 7 parties.

The brief facts of the case are that, the 2. assessee company is engaged in the business of manufacturing of garments and trading. The assessee has filed the return of income electronically for Asst.Year 2011-12 on 31.10.2011 disclosing a total income of Rs.69,21,280/- and the return of income was processed u/s143(1) of the Act. Subsequently, the case was selected for scrutiny under CASS and

3. ITA.No.2434/Mum/2019- M/s Wings Eco Homes (P) Ltd.v.DCIT notice u/s 143(2) and 142(1) of the Act were issued. In compliance of the notice, the AR of the assessee appeared from time to time and submitted the details. The Assessing Officer (A.O.) on perusal of the financial statements found that the assessee has obtained the share capital, share premium and unsecured loan in the current year and the details were called with supporting documents. The assessee was required to produce details, confirmations, PAN, and the reasons for increase in the share capital, share premium and unsecured loans and the direct and indirect expenses connected. The assessee has filed the submissions on 14.03.2014 dealt at para3.2 of the order. The Assessing Officer has discussed on the various aspects of evidences on the share capital and unsecured loans and relied on the judicial decisions. Finally the Assessing Officer has made addition as unexplained credits U/sec68 of the Act towards share capital of Rs28,00,000/-Sharepremium of Rs.6,72,00,000/,unsecuredloanofRs.3,12,35,608/.ad ditions in respect of share issue expenses of Rs.15.000/-,disallowance U/sec40(a)(ia) of the Act Rs.8,75,000/- and disallowance of depreciation of Rs.1,37,546/- and assessed the total income of

3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A). whereas the CIT(A) has considered the grounds of appeal, findings of the assessing officer and the submissions of the assessee along with the documents in support of the claims. The CIT(A) has called for comments of the Assessing Officer. The Asseessing officer in the remand proceedings has called for various details, clarifications and issued summons u/sec131 and notice u/sec 133(6) of the Act on the investors and loan creditors and statements were recorded. The Asseessing officer has forwarded the remand report dated 24-09-2018. The CIT(A) considered the comments of the A.O. in the remand report and the assessee objections and is of the opinion that, since the assessee could not produce the parties nor the response was received and the notices could not be served has sustained the addition of unsecured loans in respect of 7 parties aggregating to Rs.29,00,000/- and granted relief in the other grounds of appeal and partly allowed the appeal.

5. ITA.No.2434/Mum/2019- M/s Wings Eco Homes (P) Ltd.v.DCIT Aggrieved by the CIT(A) order, the assesee has filed the appeal with the Honble Tribunal.

4. At the time of hearing, the Ld.AR of the assessee submitted that the CIT(A) has erred in sustaining addition of Unsecured loan creditors of Rs29,00,000/- overlooking the facts that the assessee has submitted the information of the seven parties in the remand proceedings on the identity, genuineness, and credit worthiness of the parties and the assessee could not produce the parties for confirmation due to non availability of persons at the address. The assessee has a good case on merits and is filing application for the admission of additional evidence and prayed to consider the additional evidence and allow the assesse appeal. Contra, the Ld. DR supported the order of the CIT(A) and submitted that the assessee has not complied with the directions of the AO & CIT(A) and the additional evidence should be rejected.

6. ITA.No.2434/Mum/2019- M/s Wings Eco Homes (P) Ltd.v.DCIT issue as envisaged by the Ld. AR that the assessee for various reasons could not submit the information before the AO in the remand proceedings and in the appellate proceedings before the CIT(A) with the details of unsecured loan creditors. The assessee has filed an application for admission of additional evidence on the identity, geninuneness and credit worthiness of the parties by way of ledger account copies, Annual report and Bank statements before the Honble Tribunal. The Ld. AR prayed that this additional evidence play a vital role in the decision making of the case and prayed for an opportunity to substantiate before the lower authorities. We considering the facts, circumstances, provisions of law and to meet the ends of justice shall provide one more opportunity to the assessee to substantiate with the evidences. Accordingly, we admit the additional evidence and restore the entire disputed issues to the file of the A.O. to verify and examine the material information and decide on merits. Further the interest on unsecured loan pertaining to above parties is consequential, and this disputed issue is also restored to the file of the Assessing Officer. The assessee should be provided the adequate opportunity of hearing and shall cooperate