ASSISTANT COMMISSIONER OF INCOME TAX, KOLKATA vs. PARAGON HEIGHT PRIVATE LIMITED, KOLKATA

Shri Akshay Ringasia, ld AR appeared on behalf of the assessee. Shri Sanjib Kumar Paul, ld.Sr. DR appeared on behalf of the revenue.

Both appeals of the revenue are barred by 02 days each. Looking to the facts and circumstances of the case, delay of 02 days in filing both the appeals by the revenue is condoned and both appeals are admitted for hearing.

It was submitted by the ld.DR that there was a search on the premises of the assessee on 07.11.2017. The assessments in both the cases came to be completed on 31.12.2019 wherein the Assessing Officer has treated the unexplained loans taken by the assessee as bogus. It was the submission that the ld. CIT(A) deleted the addition by holding that the assessee has filed all documentary proofs and that the loans have already been repaid subsequently. It was submitted by the ld. Sr. DR that the Assessing Officer sent his Inspector for verification of the addresses of the creditors and such persons did not exist on record. It was further submitted that before the ld. CIT(A) the assessee claims that loans have been repaid. It was the submission that it was only just before the order of the ld. CIT(A), the assessee has repaid the loans that too without any interest. It was the submission that the orders of the ld. CIT(A) in both the cases is liable to be reversed.

It was alternative prayer that as the assessee has repaid the loans that too in 2024, the assessee could be directed to produce the creditors before the ld. Assessing Officer for examination.

In reply, ld.AR submitted that for the assessment year 2016-2017, the decision of Hon’ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd., reported in [2023] 454 ITR 212 (SC) would apply. It was further submitted that the documentary proofs have also been produced before the lower authorities. It was the prayer that the order of the ld. CIT(A) in both the cases is liable to be upheld.

I have considered the rival submissions. A perusal of the facts of the present case for A.Y.2016-2017, the assessee has not raised the issue of applicability of the decision of Hon’ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd., referred to supra before the ld.CIT(A) nor has the assessee raised his defense under Rule 27 of the ITAT Rules before the Tribunal. Therefore, the claim of the assessee that the decision of the Hon’ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd., referred to supra, would apply, cannot be considered in the absence of specific ground being raised before the Tribunal.

Coming to the merits of the case, a perusal of the order of the ld. CIT(A) shows that the ld. CIT(A) had been carried away with the fact that documents have been produced to prove the credits. The primary condition that is raised by the AO is that the addresses of the creditors are not correct. The creditors are not available at the address provided either. Ld. CIT(A) has also recognized that the loans have been repaid while disposing off the appeal of the assessee. This being so, I am of the view that in the interest of justice, issues in both the appeals are to be restored to the file of ld. Assessing Officer for readjudication as the assessee has repaid the loans recently. The assessee obviously has correct details of the creditors. The assessee shall produce the creditors for examination before the Assessing Officer. If the assessee fails to produce the creditors before the Assessing Officer, the Assessing Officer is at liberty to draw adverse inference. This is a case where assessee has repaid the loan without interest after a long time and the details of the creditors are known to the assessee. In these circumstances, both appeals of the assessee are partly allowed for statistical purposes.