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Facts
The assessee's appeal was filed beyond the prescribed time limit due to business closure and lack of employees. The appeal challenges an addition of Rs. 46,00,000/- made under Section 68 for unexplained unsecured loans.
Held
The Tribunal condoned the delay in filing the appeal, considering the reasons provided. The issue of unexplained cash credit of Rs. 46,00,000/- was restored to the Assessing Officer for fresh examination.
Key Issues
Whether the addition of Rs. 46,00,000/- for unexplained unsecured loans is justified, and if the delay in filing the appeal can be condoned.
Sections Cited
250, 143(3), 68, 143(2), 142(1)
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Income Tax Appellate Tribunal, B BENCH,
Before: DR. MANISH BORAD & SHRI VINAY BHAMORE
Year: 2013-14 Swipe Telecom LLP, DCIT, Circle-5, Pune Unit No. T-3/T-4, Metro Pole Building, Next to Inox Vs. Theatre, Bundgarden Road, Camp, Pune-411001 Maharashtra PAN-AARCS7202C अपीलेंर्थी / Appellant प्रत्यर्थी / Respondent Assessee by: Shri Mahavir Jain Department by: Shri Ganesh B. Budruk-Addl. CIT Date of hearing: 15-12-2025 Date of Pronouncement: 18-12-2025 आदीश /ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER :- This appeal at the instance of assessee is directed against the order of Ld. CIT(A), NFAC, Delhi passed u/s 250 of the Income-tax Act, 1961 dated 18.07.2024 which is arising out of assessment order passed u/s 143(3) dated 28.03.2016 of the Act.
2. Registry has informed that the instant appeal is time barred by 291 days. Application with affidavit for condonation of delay stands filed. Main reason for delay is due to closure of the business of assessee LLP and no employees to look after the income tax matters. Disputes also going amongst Partners due to which tax litigation matters remained unattended. Order of Ld. CIT(A) is also ex- parte. Considering the reasons and also hearing the Ld. Departmental Representative (DR), we find that delay is not intentional.
We therefore taking a liberal approach and also placing reliance on the judgement of the Hon’ble Apex Court in the case of Collector, Land Acquisition vs. Master Katiji and Others(1987) 167 ITR 471(SC) (Supreme Court) and in the case of Inder Singh Vs State of Madhya Pradesh judgement dated 21.03.2025 (2025) INSC 382) condone the delay of 291 days and admit the appeal for adjudication.
4. Assessee has raised following grounds of appeal:-
1] The Ld. NFAC/CIT(A) has erred in confirming the assessed income of the appellant at Rs. 98,13,999/- as against the returned Income of Rs. 52,13,999/ The addition of Rs. 46,00,000/- made u/s. 68 for the unsecured loan is patently illegal, unsustainable in law and devoid of merits and the same may please be deleted.
2] The Ld. NFAC/CIT(A) has erred in dismissing the case ex-parte without considering the submissions made before the then CIT(A) during the course of physical hearing. The Id. NFAC ought to have appreciated the appellant could not respond to notices issued by NFAC, Delhi as the business of the appellant was completely closed and the appellant was inoperative since 2018 and there were no employees to look into the income tax matters.
2.1] The Ld. NFAC/CIT(A) erred in dismissing the contention of the appellant only on the ground that no submission was made without appreciating the facts explained in statement of facts and also the submission made before the then CIT(A). The matter may therefore please be set aside at appropriate level as it involves verification of evidences etc.
3] The Ld. NFAC/CIT(A) is not justified in making addition of Rs. 46,00,000/- u/s. 68 of the Act on account of unsecured loans obtained during the year alleging sources thereof are not sufficiently established.
3.1] The Ld. NFAC/CIT(A) erred in making addition of Rs. 46,00,000/- u/s. 68 of the Act on account of unsecured loans without considering the genuineness of the transactions which were incurred through banking channels.
4] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.
5. At the outset Ld. Counsel for the assessee submitted that impugned addition u/s 68 of the Act has been made for unexplained unsecured loans of Rs. 46,00,000/- He submitted that most of the details were filed before Ld. Assessing Officer (AO) but due to time constraint few details remained to be filed. Now these details are with assessee and if an opportunity is granted then these details can be placed before Ld. Jurisdictional Assessing Officer (JAO) for necessary examination. He also made reference to the Paper Book running into 66 pages.
6. On the other hand Ld. DR supported the order of the lower authorities but did not raise strong objection against the contentions of Ld. Counsel for the assessee for remitting the issue to the file of Ld. JAO.
We have heard rival contentions and perused the record placed before us. The only issue for our consideration is regarding addition of Rs. 46,00,000/- made u/s 68 of the Act for unexplained unsecured loan received by the assessee from following five parties.
Sr. No. Name Amount 1. Garg Ventures 5,00,000/- 2. Goyal Agro Food 16,00,000/- 3. Jodh Subh Traders Pvt. Ltd. 10,00,000/- 4. Suren Agarwal 5,00,000/- 5. Vasudev Khecharmal 10,00,000/- Total 46,00,000/-
We observe that the assessee LLP E-filed its return of income for A.Y. 2013-14 on 30.09.2013 declaring total income of Rs. 52,13,999/- after the case being selected for scrutiny through CASS, valid notice u/s 143(2) & 142(1) of the Act was served upon the assessee, various details called for by Ld. Assessing Officer (AO) were mostly submitted. Ld AO examined the unsecured loan totaling to Rs. 4,67,22,764/- The assessee made compliance to satisfy Ld. AO for the unsecured loan totaling to Rs. 4,21,22,764/- However for the unsecured loan received from alleged five parties referred above amounting to Rs. 46,00,000/- Ld. AO was not satisfied as certain details remained to be submitted by assessee. The observation of the AO on the alleged issue reads as under:-
The submission is considered but not acceptable Creditworthiness of these parties is not established.
Garg venturs - Return of income is not submitted. Therefore it is not proved that money given as unsecured loan is tax paid or not. Creditworthiness is not established by the assessee.
Goyal Agro Food- Return of income is not submitted for this party also. Therefore it is not proved that money given as unsecured loan is tax paid or not. Creditworthiness is not established by the assessee.
3. Jodh Subh Traders Pvt Ltd- Return of income, Balance sheet is not
Mantra Business LLP- Retuned income for AY 2013-14 is Rs 5,28,180/-. That is only tax paid money in the balance sheet. Remaining part is the contribution from the partners. Their balance sheet are submitted by the AR. Vishal Gupta has capital of Rs 9.23 Crore. Aman Gupta has capital of Rs 12.2 Crore. Therefore, the flow of fund is suo moto submitted by the AR which explanation is found satisfactory.
Nitesh Agarwal- Return of income for AY 2013-14 is Rs 8,70,617/- Balance sheet shows capital of Rs 29 Lakh. Therefore explanation given by the AR is considered as satisfactory..
Suren Agarwal- Return of income, Balance sheet is not submitted. Therefore it is not proved that money given as unsecured loan is tax paid or not. Creditworthiness is not established by the assessee.
7. Vasudev Khecharmal- Return of income, Balance sheet is not submitted. Therefore it is not proved that money given as unsecured loan is tax paid or not. Creditworthiness is not established by the assessee.
Summary of loan creditors who are not creditworthy and satisfactory explanation is not given by AR is as under-
Sr. Name Amount No. 1. Garg Ventures 5,00,000/- 2. Goyal Agro Food 16,00,000/- 3. Jodh Subh Traders Pvt. Ltd. 10,00,000/- 4. Suren Agarwal 5,00,000/- 5. Vasudev Khecharmal 10,00,000/- Total 46,00,000/-
We further observe that impugned order by Ld. CIT(A) is ex-parte. Before us Ld. Counsel for the assessee has filed certain details stating that due to time constraint assessee could not furnish these details before Ld. AO in order to explain the nature and source of alleged cash credit of Rs. 46,00,000/- The only prayer made by Ld. Counsel for the assessee
We therefore under the given facts and circumstances of the case restore the issue of unexplained cash credit u/s 68 of the Act at Rs. 46,00,000/- to the file of Ld. JAO for necessary examination in light of the details to be furnished by the assessee in the set aside proceedings. We direct the Ld. JAO to carry out the set aside proceedings for the limited purpose of adjudicating the issue of unexplained cash credit of Rs. 46,00,000/- received by the assessee from alleged five cash creditors referenced above. Needless to mention that proper opportunity of hearing shall be granted to the assessee. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause. Effective grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 18th day of December, 2025.