Loading judgment…
Facts
The Revenue challenged the deletion of an addition of Rs.2,43,40,180 by the CIT(A), arguing it was made by ignoring Section 45(3) of the IT Act, 1961. The addition related to the transfer of personal capital to the business capital account.
Held
The Tribunal held that the issue raised by the Revenue was not emanating from the impugned order and that the CIT(A) was justified in accepting the assessee's explanation. The Tribunal found no infirmity in the CIT(A)'s decision.
Key Issues
Whether the CIT(A) correctly deleted the addition by ignoring Section 45(3) of the IT Act, 1961, when the assessee transferred personal capital to the business.
Sections Cited
45(3), 263
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI
Before: SHRI VIKAS AWASTHY & DR. MITHA LAL MEENA
This appeal by the Revenue is directed against the order of learned Commissioner of Income-Tax (appeals)/National Faceless Assessment Centre (NFAC) [hereinafter referred to as “CIT(A)”dated 15.04.2024 which is arising of the assessment order dated 26.11.2019 passed by the Assessing Officer, Circle-2(1), Ghaziabad (in short “the AO) in respect of assessment year 2017-18 wherein the department challenged deletion of addition of Rs.2,43,40,180 based on remand report submitted by the Assessing Officer by ignoring the provisions of section 45(3) of the Act under following grounds of appeal:
1. Whether the Ld. CIT(A) appeal is correct in deleting the addition of ₹2,43,40,180 by accepting the remand report submitted by the AO by ignoring the provisions of section 45(3) of the IT Act 1961, as the assessee transferred his Personal Capital to the capital account of business.
2. That the appellant craves leave to add, modify, amend or delete any of the grounds of appeal
at the time of hearing and all the above grounds are without Bursitis to each other.
3. Prayer-it is prayed that the order of the Ld. CIT(A) may be set aside to the file of the assessing officer to decide the matter on merit after due verification of the details regarding transfer of Personal Capital to the capital account of the business.
Having heard both the sides, perusal of record and the impugned order, we find that the issue raised regarding ignoring the provisions of section 45(3) of the IT Act 1961, spread over in the grounds of appeal by Ld. CIT (A). Accordingly, the department appeal would be liable to be dismissed as not maintainable.
3. Further it is evident from the record that the learned CIT (Appeals) has decided the appeal on the merits of the case after considering the requisite submission and documentary evidence furnished by the assessee during the appellate proceedings and taking rebuttal of the Assessing Officer on record wherein the Assessing Officer has accepted the contention of the assessee in the remand report without any adverse remark. Thus, the Ld. CIT (A) was justified in accepting the explanation of the assessee regarding the investment of Rs.2,43,40,180 as the amount being transferred from his personal assets.
3. In the above view, we find no infirmity or perversity in the decision of the Ld. CIT(A) to the facts on record. The Impugned order of the Ld. CIT (A) is upheld.
Without prejudice to the above, it clarified that the right course available with the Department is to initiate proceeding under 263 of the AO’s ignorance in applicability of the provisions of section 45(3) of the IT Act 1961, but the department can not be permitted to raise new issue before the tribunal which has not been arising out of the orders of the lower authorities.
In the backdrop of the aforesaid discussion, the revenue appeal is dismissed. Order pronounced on 21/03/2025 in accordance with the Rule 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.