UDAY BUILDWELL P.LTD,NEW DELHI vs. ITO, WARD-27(2), NEW DELHI

In ground No.1 the assessee has challenged the order of the CIT(A) in confirming the addition of Rs.2,48,000/- on account of credit balance standing in name of Rajinder Prestress Concrete Industries.

Facts of the case, in brief, are that the assessee is a company engaged in the business of electrical civil contractors. It filed its return of income on 04.01.2016 declaring total income of Rs.1,30,500/-. During the course of assessment proceedings the Assessing Officer issued letter u/s. 133 (6) to M/s. Rajinder Prestress Concrete Industries since an amount of Rs.2,48,000/- is being shown by the assessee as creditor on account of the said party. It was replied by the creditor that there is no outstanding balance from the assessee in their books of account. The Assessing Officer, therefore, confronted the same to the assessee alognwith the ledger account of the assessee in the books of account of the creditor. In absence of any explanation to the satisfaction of the Assessing Officer he made addition of Rs.2,48,000/-.

In appeal the Ld. CIT(A) confirmed the addition by observing as under :-

Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal.

The Ld. Counsel for the assessee submitted that assessee does not know as to how an amount of Rs.2,48,000/-has been shown by the creditor as received through RTGS on 31.03.2014. He submitted that the purchase is not in doubt and the bank account of the assessee does not show any such payment to the said party. He accordingly submitted that the matter may be restored to the file of the Assessing Officer with a direction to summon the said party and verify the factual aspect.

The Ld. DR on the other hand heavily relied on the order of the CIT(A). He submitted that assessee could not substantiate either before the Assessing Officer or before the CIT(A) regarding the discrepancies. Therefore, the order of the CIT(A) should be upheld and the ground raised by the assesses should be dismissed.

I have considered the rival arguments made by both the sides and perused the material available on record. It is the submission of the Ld. Counsel for the assessee that when the purchases are not in dispute and the assesee’s bank account does not show any such transfer of money to the said party through RTGS therefore, the matter may be restored to the file of the Assessing Officer for fresh adjudication. Considering the totality of the facts of the case and in the interest of justice I deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one final opportunity to the assessee to substantiate its case and decide the issue as per fact and law. The assessee is also hereby directed to produce the said party before the Assessing Officer to substantiate its claim that no such amount has been paid by the assessee through RTGS and the amount of Rs.2,48,000/- was payable to the said party as on 31.03.2015. The ground raised by the assessee is accordingly allowed for statistical purpose.

In ground No.2 the assessee has challenged the order of the CIT(A) in confirming the addition of Rs.10,00,000/- made by the Assessing Officer on account of loan obtained from Mr. Saurabh Pratap Singh.

Facts of the case, in brief, are that the Assessing Officer during the course of assessment proceedings observed that assessee has accepted fresh unsecured loan of Rs.10,00,000/- from Mr. Saurabh Pratap Singh with PAN Number EAJPS9978E. He, therefore, issued notice u/s.133 (6) of the Act to the said party to furnish his bank account, ledger account of the assessee in its books of account, statement of affairs and income tax return form for assessment year 2015-16. Although the said party furnished all the details as asked for by the Assessing Officer and has confirmed that he has given loan of Rs.10 lacs, however, in absence of the bank statements supplied by the assessee, the Assessing Officer disbelieved the transaction and made addition of Rs.10 lacs to the total income of the assessee u/s. 68 of the IT Act. Although the ld. Counsel furnished the bank statement before the CIT(A), however, he rejected the same as new evidence which was not submitted before the Assessing Officer and the assessee has not made any application for production of the said new evidence under rule 46A. He accordingly confirmed the addition made by the Assessing Officer u/s. 68 of the IT Act.

Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal.

I have heard the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. I have also considered the Page | 5 decision relied on by the Ld. Counsel for the assessee in the case of Prabhavati S. Shah Vs. CIT reported in 231 TIR 1 wherein the Hon’ble High Court has held that the Appellate Assistant Commissioner should have considered the evidence produce by the assessee regarding the loan taken which were filed before him as additional evidence.

It is an admitted fact that the Assessing Officer in the instant case has obtained the information u/s. 133 (6) from the loan creditor namely Mr. Saurabh Pratap Singh who had confirmed to have given the loan of Rs.10 lacs to the assessee. He had also provided the ledger account in respect of the unsecured loan given by him to the assessee company which is admitted by the Assessing Officer in the assessment order itself. No doubt the said party had not given the bank statements before the Assessing Officer. However, the same was given to the CIT(A) during the appeal proceedings. The perusal of the bank statement of Mr. Saurabh Pratap Singh, maintained with Kotak Mahindra Bank and copy of which is placed at pages 58 of the paper book, clearly reveals an amount of Rs.10 lacs has been cleared transferred from the bank account of the loan creditor to Udai Builders Private Limited on 16.07.2014. Therefore, the Ld. CIT(A) in my opinion should have accepted the transaction as genuine and should not have rejected the same. Since there is no other allegation of the Assessing Officer regarding the identity and capacity of the loan creditor and the genuineness of the transaction and the addition was made only on account of Page | 6 non submission of the bank statement by Mr. Saurabh Pratap Singh and since the said statement was submitted before the CIT(A) which was not accepted by him and now that the bank statement clearly reveals the said transaction of Rs.10,00,000/- therefore, I am of the considered opinion that the CIT(A) was not justified in rejecting the said evidence and thereby sustaining the addition. I, therefore, set aside the order of the CIT(A) and direct the Assessing Officer to delete the addition. The ground raised by the assessee is accordingly allowed.

In the result, the ground of appeal No.1 is allowed for statistical purpose and ground of appeal No.2 is allowed. Order pronounced in the open court on 14.08.2019.