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Before: Shri V. Durga Rao & Shri G. Manjunatha
O R D E R
PER V. DURGA RAO, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 8, Chennai, dated 09.03.2020 relevant to the assessment year 2012-13 challenging confirmation of disallowance made under section 68 of the Income Tax Act, 1961 [“Act” in short].
The appeal filed by the assessee is delayed by 88 days in filing the appeal before the Tribunal due to outbreak of COVID-19 pandemic and accordingly, the delay is condoned and admitted the appeal for adjudication.
Brief facts of the case are that the assessee filed its return of income for the assessment year 2012-13 on 29.09.2012 admitting a loss of ₹.2,72,56,611/-. The case was selected for scrutiny and the Assessing Officer has completed the assessment under section 143(3) of the Act by disallowing ₹.3,15,00,000/- being share application money received by the assessee. On appeal, the ld. CIT(A) confirmed the addition to the extent of ₹.2,10,00,000/- being four parties failed to furnish the bank account extract/other details.
On being aggrieved, the assessee is in appeal before the Tribunal. By filing confirmation letters along with bank statement from three parties, the ld. Counsel for the assessee has prayed for deleting the addition.
On the other hand, the ld. DR dutifully supported the order passed by the ld. CIT(A).
We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In this case, the assessee has totally received ₹.4,05,00,000/- during the year as share application money from various persons. Before the Assessing Officer, the assessee has produced confirmation only to the extent of ₹.90,00,000/- since most of the persons who have given share application money are living outside India and it was difficult to locate those people and get confirmation. Accordingly, the Assessing Officer disallowed the balance credit of ₹.3,15,00,000/- under section 68 of the Act for want of confirmation from the creditors. On appeal, the ld. CIT(A) issued notices under section 133(6) of the Act to all 9 investors to furnish confirmation along with their bank account statements, etc. Before the ld. CIT(A), out of nine investors, four investors could not furnish the bank account extract to the extent of ₹.2,10,00,000/-. Accordingly, the ld. CIT(A) confirmed the addition and deleted the balance amount.
6.1 Before us, the assessee has furnished bank statement/ extracts along with confirmation of the following persons: ₹.50.00 lakhs 1. Shri Ahamed Jalaludeen Jahuber Kamal ₹.75.00 lakhs 2. Shri Noohu Mohamed Ameer Fizel ₹.60.00 lakhs 3. Shri Mohame Fairoz Shri Habeeb Mohamed Mubarak Hussain has filed an affidavit by confirming the payment of share application money of ₹.25.00 lakhs and stated that he was unable to trace out the bank statement for the above said payment made by him as it relates to very old period and presently working at Dubai Airport Free Zone, Dubai, UAE. In view of the above facts and circumstances of the case, the confirmations and affidavit filed by the parties needs examination. Accordingly, we remit the matter back to the file of the Assessing Officer to examine and decide the issue afresh in accordance with law by affording an opportunity of being heard to the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 26th August, 2022 in Chennai.