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Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI PRASHANT MAHARISHI
O R D E R PER PRASHANT MAHARISHI, A. M. 1. This is an appeal filed by the assessee against the order of the ld CIT(A), Ghaziabad dated 12.10.2017 for the Assessment Year 2014-15. 2. The assessee has raised the following grounds of appeal:- “1 That the ld CIT(Appeals) has erred in law and on facts in treating hat sufficient opportunities were granted despite the fact that the ld AO was not available at most of the dates/ times and assessment was completed without proper opportunity of being heard.
2. That the ld CIT(Appeal) has erred in law and on facts in rejecting the additional evidences under rule 46A treating that sufficient opportunities were granted despite the fact that the ld AO was not available at most of the dates/ times and assessment was completed without proper opportunity of being heard.
3. That the ld CIT(Appeal) has erred in law and on facts in confirming the addition of Rs. 26,00,000/-.
4. That the impugned appellate order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence.”
3. Assessee is an HUF who filed its return of income on 24/ 7 /2014 declaring total income of ₹ 27160/–. The case of the assessee was selected for scrutiny through CASS on the basis of the reason that large Page | 1 investment in property as compared to total income has been made by the assessee. Therefore, the issue was taken up for scrutiny and assessee was issued notice under section 144 of the income tax act after certain non-compliance. In response to that notice the assessee appeared before the assessing officer and stated that assessee has purchased the property amounting to ₹ 8 140000/– and paid stamp duty of ₹ 5 70000/– in which assessee has one third share of the property. The assessee explained that for the purpose of purchase of the property assessee has taken on loan of ₹ 26 lakhs from one private limited company and submitted its confirmation letter. However, the assessee did not produce the bank account and copy of the return of the lender or its permanent account number. The learned assessing officer issued summons to the director of that private limited company and also issued notice under section 133 (6) of the act however none appeared and therefore the learned AO who passed in order under section 143 (3) of the income tax act on 22/12/ 2016 determining the total income of the assessee at ₹ 2 627160. Thus addition of ₹ 26 lakhs under section 68 of the income tax act was made by the learned AO.
4. The assessee aggrieved with the order of the learned assessing officer preferred the appeal before the learned commissioner of income tax appeals. Before the learned commissioner of income tax appeal assessee made an application under rule 46A of the income tax act submitting the requisite information as a fresh evidence ( additional evidence). The learned commissioner of income tax appeals held that the application of the assessee is not maintainable as the assessee has failed to show sufficient cause. Even otherwise he held that the lender of ₹ 26 lakhs has filed return of income declaring nil gross income and Nil total income and further the notices were served by the AO at the address provided by the assessee of the lender which remain on complied with, the details furnished by the assessee do not substantiate the genuineness of the transaction and creditworthiness of the lender specifically when the return of income is filed at rupees Nil by the lender. Therefore he confirmed the assessment order. Hence, assessee aggrieved has preferred appeal before us.
The learned authorised representative submitted a paper book and stated that assessee has submitted the confirmation of loan and also stated the permanent account number of the lender. Further, the contra information account were also provided for. This was also substantiated by filing the income tax return copies of the lender for assessment year 2014 – 15 and 2015 – 16. He otherwise stated that the additional evidence submitted by the assessee has not been considered by the learned commissioner of income tax appeals in proper perspective and further no adequate opportunity was granted by the learned assessing officer. Even otherwise, he committed before us that the assessee is ready to go back to the office of the learned assessing officer and submit the requisite details.
The learned departmental representative vehemently stated that as assessee has not shown sufficient cause before the learned commissioner of income tax appeals and did not submit the requisite detail before the learned assessing officer the additional evidences have rightly been rejected by the learned commissioner of income tax appeals. Even otherwise, he stated that the lender has no source of income and therefore the genuineness of loan of ₹ 26 lakhs given to the assessee by the lender does not satisfy the requirement of section 68 of the income tax act.
We have carefully considered the rival contention and perused the orders of the lower authorities. Admittedly, the assessee has obtained a loan of ₹ 26 lakhs from a private limited company for purchase of property. Assessee has substantiated before us the transaction by submitting the above details in the form of contra accounts, permanent account number, confirmation and the income tax returns of the lender. However it is also true that the summons issued by the learned assessing officer remained uncomplied with and further the notice issued under section 133 (6) of the income tax act was not replied. This is because of the reason that assessee did not have sufficient opportunity before the learned assessing Page | 3