SURYALAXMI ENTERPRISES P LTD.,CHENNAI vs. ITO CORPORATE WARD 6(3), CHENNAI

The only issue in this appeal of assessee is as regards to the order of CIT(A) sustaining the addition made by the AO of Rs.2.60 crores representing unsecured loans received from one of the Directors by invoking provisions of Section 68 of the Act. For this, assessee has raised numerous grounds numbering 1 to 9 and he fairly conceded that this is the only issue. The ld.counsel for the assessee stated that assessee filed complete details before the AO as well as the CIT(A), but he drew our attention to the findings recorded by the CIT(A), which reads as under:- “I find that the A.O. has gone to great length in analyzing the issue at hand and the point that is established is that all the 3 limbs required to be fulfilled for the purpose of discharging the onus u/s 68 of the Act have not be discharged. The AO's analysis shows that the credit worthiness of the loan give has not been established. Therefore, I am of the view that no interference is called for in A.O’s order which is well-reasoned and self speaking. Therefore, this is appeal is dismissed.”

The ld.counsel stated that practically the order of CIT(A) is a non-speaking order and even the AO has not properly considered the submissions of the assessee. The ld.counsel for the assessee before us tried to explain the sources and for this, he filed submissions dated 10.11.2017 running into 3 pages.

We have considered the submissions filed by the assessee dated 10.11.2017, which need to be examined by the AO. The assessee can file these submissions before the AO along with evidences and the AO can examine these evidences in regard to unsecured loan of Rs.2.60 crores received by the assessee company from one of its Director. For the sake of brevity, we are not reproducing the submissions of the assessee dated 10.11.2017. Going through the entirety of the facts of the case, we feel that the CIT(A) has not at all adjudicated the issue in light of submissions of the assessee but passed a non-speaking order. We have gone through the submissions and noted that these require verification at the level of AO. Hence, it is better and viable to send back the AO so that he can carry out necessary enquiries in regard to this unsecured loan received by the assessee company from one of its Directors amounting to Rs.2.60 crores. Hence, we set aside the orders of the lower authorities i.e., of the AO and the CIT(A) and remand the matter back to the file of the AO for fresh adjudication.

In the result, the appeal of the assessee is allowed for statistical purpose.