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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI INTURI RAMA RAO & SHRI S. S. VISWANETHRA RAVI
ORDER
PER INTURI RAMA RAO, AM:
This is an appeal filed by the Revenue directed against the order of ld. Commissioner of Income Tax (Appeals)- 8, Pune [‘the CIT(A)’] dated 05.09.2019 for the assessment year 2012-13.
The Revenue raised the following grounds of appeal :- “1. The order of the Ld. CIT(A) is contrary to law and to the facts and circumstances of the case.
2. The Ld. Commissioner of Income-tax (Appeal) has erred on the facts and circumstances of the case in restricting the addition to Rs. 23,62,287/- out of total addition of Rs. 5,18,61,834/- made in respect of unsecured loan u/s. 68 of the Act without appreciating the fact that assessee may have squared off and/or partly repaid certain loans as well as taken fresh loans during the year under consideration, which was remained to be verified in absence of such verification in remand proceedings before AO as well as the tax audit report u/s. 44AB.
3. The appellant craves to add, amend, alter or delete any of the above ground of appeal during the course of appellate proceedings before the Hon’ble Tribunal.”
3. Briefly, the facts of the case are that the respondent-assessee is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of execution of civil contracts. The return of income for the assessment year 2012-13 was filed on 24.09.2012 declaring Rs.Nil income. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-5(4), Pune (‘the Assessing Officer’) vide order dated 30.03.2015 passed u/s 143(3) of the Income Tax Act, 1961 (‘the Act’) at a total income of Rs.5,18,61,830/-. While doing so, the Assessing Officer made addition of unsecured loans appearing in the Balance Sheet for failure of the assessee to prove the genuineness, identity and creditworthiness of such credits appearing in the books of account.
4. Being aggrieved by the above assessment order, an appeal was filed before the ld. CIT(A), who vide impugned order deleted the addition to the extent of Rs.4,94,99,547/- by holding that the unsecured loans to the extent of Rs.4,94,99,547/- represents opening balance as on 01.04.2011.
Being aggrieved by the decision of the ld. CIT(A), the Revenue is in appeal before us in the present appeal.
The ld. CIT-DR submitted that the ld. CIT(A) without verifying the fact that a sum of Rs.4,94,99,547/- represents the opening balance of sundry creditors as on 01.04.2011, had granted the relief to the respondent-assessee. The ld. CIT-DR further submits that the ld. CIT(A) had failed to appreciate the fact that the respondent-assessee possibility of partly repay of loans outstanding in the beginning of the year and would have taken fresh loans during the year under consideration. 7. On the other hand, ld. AR submits that the relief granted by the ld. CIT(A) after calling for the remand report from the Assessing Officer which is extracted at pages no.9 and 10 of the ld. CIT(A)’s order. Therefore, no interference in the order of the ld. CIT(A) is called for. 8. We heard the rival submissions and perused the material on record. The issue in the present appeal relates to whether or not the ld. CIT(A) is justified in deleting the addition of unsecured loans to the tune of Rs.4,94,99,547/- by holding that these loans represent the opening balance of sundry creditors as on 01.04.2011. We have careful gone through the remand report submitted by the Assessing Officer which is extracted by the ld. CIT(A) at page no.9 and 10 of his order. The Assessing Officer in his remand report submitted that the respondent-assessee had failed to prove the genuineness, creditworthiness and identity of the sundry creditors. We do not find anything from the remand report of the Assessing Officer that the Assessing Officer had reached satisfaction that out of the sundry creditors of Rs.5,18,61,834/- appearing closing balance as on 31.03.2012 and a sum of Rs.4,94,99,547/- represents opening balance of the sundry creditors carried forward to this year i.e. assessment year under consideration. Nor is it apparent from the order of the ld. CIT(A) that the ld. CIT(A) had himself verified this fact. It appears that the ld. CIT(A) had driven by the fact that the claim had not been negated by the Assessing Officer in the remand report. It is also not clear from the order of the ld. CIT(A) as to the scope of the remand report called from the Assessing Officer. In these circumstances, we are of the considered opinion that the finding of the ld. CIT(A) is not based on any material, hence, we reverse the finding of the ld. CIT(A) on this. However, in order to meet the ends of justice, we remand the matter to the file of the Assessing Officer for de novo adjudication after affording