ACTIVE ALLUMINIUM PRIVATE LIMITED,AHMEDABAD vs. ACIT, CIRCLE 1(1)(1), AHMEDABAD, AHMEDABAD

Whether the CIT(A) erred in law and in the facts of the case in confirming the order of the AO in confirming addition of Rs.1,33,70,000/- being unexplained investment u/s 68 of the Act?” Asst.Year –2016-17 - 2–

At the outset, we observe that the appeal is time barred by 49 days. The delay of 49 days is condoned on due consideration of facts and owing to smallness of delay causing no perceptible prejudice to other side.

The brief facts of the case are that the assessee filed its return of income for A.Y. 2016-17 on 28.07.2016, declaring a loss of Rs. 49,34,147/-. The assessee, engaged in the business of manufacturing aluminum sections, declared a gross profit of Rs. 2,53,295/- and a net loss of Rs. 93,50,424/- on a turnover of Rs. 1,16,06,952/- for the year under consideration. During the assessment, the Assessing Officer observed that the assessee had shown unsecured loans aggregating Rs. 1,33,70,000/- from three individuals, all of whom were Directors or related parties. Firstly, a loan of Rs. 57,60,000/- from Ms. Kokilaben Ravindrakumar Patel could not be substantiated with credible documentation, and her reported income over the past years did not support her capacity to lend such an amount. The Assessing Officer observed that no response was received from her despite notices issued under section 133(6). Similarly, a loan of Rs. 23,00,000/- from Shri Bharatkumar Ramdas Patel was also treated as unexplained by the Assessing Officer, as his income details and financial documents failed to justify his ability to extend such a loan. Finally, a sum of Rs. 53,10,000/- was shown as a loan from Shri Satishbhai Asst.Year –2016-17 - 3–

In appeal, CIT(Appeals) noted that despite issuance of several notices of hearing, none appeared on behalf of the assessee. Accordingly, the appeal of the assessee was dismissed with the following observations:

1 The appeal was filed by the assessee on 21/01/2019 in appeal no: CIT (A). Ahmedabad1/10457/2018-19 against the order u/s 143(3), Mumbai of the IT Act, 1961. In connection to the appeal, opportunities were provided to the assessee to substantiate his grounds of appeal on following dates:

2 It has been held by the Hon'ble Supreme Court in the case of B.N. Asst.Year –2016-17 - 4–

3 This appeal has been filed by the appellant claiming that the action of the Assessing Officer is not supported by facts and laws and that it is unjust. In such a situation, it is for the appellant to furnish submissions with relevant evidence(s), case laws, if any, to support the claim. The burden of proof is always on the person who makes the claim. In this case, it is the appellant who has made the claim by filing the appeal. Thus, in cases where a particular receipt is sought to be taxed as income, the initial onus is on the Assessing Officer to prove that it is taxable. Where, however, the assessee claims exemption, the burden is on the assessee to prove it to be exempt. In his petition assesse has raised 4 different grounds upon which Ground NO-1 and 2 talks about SECTION 68 OF THE ACT ADDITION OF RS. 1,33,70,000/-. Ground 2 and 4 are not separate ground which is talk about the grounds of appeal are independent from one other and without prejudice to one other and crave to add new grounds of appeal during the course of hearing and ground No.3 initiating penalty proceedings U/s. 271(1)(C) of the Act. Core of the issued of grounds which was already discussed in this order as in lack of any fallow up made by applicant to discharge his duty to respond against burden of proof his appeal can't be accepted. Same is the position in case of all allowances, deductions, claims or loss, etc. Since an appeal is nothing but the claim of the appellant that he has been unduly unjustifiably taxed, it is for the appellant to prove its case. The appellant has not availed any opportunity to do so.

In the end result, the appeal is DISMISSED.” Asst.Year –2016-17 - 5–

Before us, the Counsel for the assessee submitted that the assessee has substantial evidence to prove the genuineness of the transaction and the creditworthiness of the lenders. The Counsel for the assessee drew our attention to the Paper-Book filed before us and submitted that if given an opportunity of hearing, the assessee would be able to demonstrate the genuineness of the transaction. On going through the facts placed on record, and the quantum of additions made, in the interest of justice, the matter is hereby restored to the file of the Assessing Officer, for de-novo consideration. However, looking at the history of non-compliance, the assessee is directed to pay a cost of Rs. 5,000/- to be deposited with the Prime Minister Relief Fund.

In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 18/06/2025 (DR. BRR KUMAR) JUDICIAL MEMBER Ahmedabad; Dated 18/06/2025