BADRI NARAIN SHARMA,DELHI vs. ITO, WARD- 47(4), NEW DELHI

The facts of the case, in brief, are that the assessee is an individual and engaged in the business under the name and style of M/s. Dhan Cholia Sons. He filed his return of income on 24.112014 declaring total income of Rs.4,95,270/-. The Assessing Officer completed the assessment u/s 143 (3) on 29.12.2016 determining the total income at 56,71,051/- wherein he made addition of Rs.51,75,781/- u/s 68 of the IT Act on account of unsecured loans. In appeal the Ld. CIT(A) apart from sustaining the addition made by the Assessing Officer enhanced the income by Rs.2,21,31,100/- on account of bogus liability.

Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising following grounds of appeal :- 1. “That on the facts and in the circumstances of the case, the Ld. CIT(A) was unjustified for not deleting addition on account of unsecured loans when the appellant has duly submitted confirmation from unsecured loans with ITO wherein duly confirmed copy of account from unsecured loans had been enclosed and all the unsecured loans were old outstanding unsecured loans and no new loan was taken during the year under consideration.

The Ld. Counsel for the assessee at the outset submitted that the enhancement notice issued by the CIT(A) is dated 21.12.2018 fixing the case for hearing on 31.12.2018. However, the date of passing of the order by the CIT(A) is dated 20.12.2018. Therefore, on this account itself when the order has been passed before the issue of enhancement notice the enhanced income cannot be sustained.

So far as the addition sustained by the CIT(A) which has been made by the Assessing Officer is concerned, he submitted that since the assessee is 88 years old and quite ill he could not produce all the details before the CIT(A) for which he has passed the exparte order. Therefore, he has no objection if the matter is restored to the file of the Assessing Officer since both the lower authorities have failed to take note that all the unsecured loan creditors are old creditors and assessee has not taken any fresh loan during the current year. 6. The Ld. DR on the other hand heavily relied on the order of the CIT(A). 7. We have considered the rival arguments made by both the sides and perused the material available on record. Since the assessee before the CIT(A) has not filed the requisite details on the specified date, therefore, the Ld. CIT(A) passed the exparte order wherein he has sustained the addition made by the Assessing Officer. It is also apparent from the order of the CIT(A) that the date of order as mentioned by him at page 1 is 20th December, 2018 whereas at page 7 of the appeal order, it is mentioned that notice of enhancement was issued on 3 21.12.2018 fixing the case for 31.12.2018. Since no one attended on that date and no submission was also filed, therefore, enhanced the income by Rs.2,21,31,100/- on the basis of remand report obtained from the Assessing Officer. It is the submission of the Ld. Counsel for the assessee that the loan creditors added by the Assessing Officer are old outstanding creditors and therefore, could not be added u/s 68 of the IT Act for the impugned assessment year. Considering the totality of the facts of the case and in the interest of justice we deem it proper to restore the issue to the file of the CIT(A) with a direction to adjudicate the issue afresh as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised