SHRIDEVI PARK PRIVATE LIMITED,CHENNAI vs. ACIT COMPANY CIRCLE VI(4), CHENNAI

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ITA 1933/CHNY/2018Status: DisposedITAT Chennai25 November 2019AY 2003-0410 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found merit in the assessee's contentions. It noted that the assessee claimed the loans were received through banking channels and repaid by cheque, and that shares were allotted for share application money, supported by an affidavit, Form No. 2, and Annual Returns. The Tribunal also acknowledged the delay in the appeal proceedings before the CIT(A) and the lack of an effective opportunity for hearing. Consequently, the Tribunal held that the issues in the appeal needed to be restored to the file of the AO for framing a denovo assessment on merits. The Tribunal clarified that the primary onus remains on the assessee to prove the identity, creditworthiness, and genuineness of the transactions. If the assessee did not cooperate, the AO could adjudicate based on available material. The AO was directed to admit the assessee's evidence and provide an adequate opportunity of being heard. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, M/s. Shridevi Park Pvt. Ltd., filed an appeal against the order of the CIT(A)-15, Chennai, for Assessment Year 2003-04. The appeal arose from an assessment order passed by the AO under Section 143(3) read with Section 147 of the Income-tax Act, 1961. The AO had brought to tax unsecured loans totaling Rs. 25,44,388/- appearing in the assessee's balance sheet, primarily on the grounds that these were hand loans received in cash and the assessee failed to produce promissory notes, thus invoking Section 69D. The CIT(A) confirmed the AO's additions. The assessee contended that the loans were not received in cash, were not hundi loans, and were received through banking channels, with repayments made by account payee cheques. The assessee also claimed shares were allotted for share application money and provided supporting documents like an affidavit, Form No. 2, and Annual Returns.

What were the issues?

1. Whether the amounts totaling Rs. 25,44,388/-, representing unsecured loans and share application money, were correctly treated as unexplained cash credit under Section 68 and unexplained amounts borrowed on a hundi under Section 69D of the Income-tax Act, 1961, by the Assessing Officer and confirmed by the CIT(A)? Assessee's contentions: The assessee argued that the majority of these loans were not received in cash, nor were they hundi loans. They were received through banking channels, and repayments were made by account payee cheques. For share application money, shares were allotted, and supporting documents were filed. The assessee also argued that the CIT(A) failed to consider material evidence and that the appeal was pending for 10 years without proper hearing. Revenue's contentions: The revenue, through the learned DR, submitted that 10 years had passed, and the assessee was adopting delay tactics. The onus was on the assessee to prove genuine loans/deposits satisfying Sections 68 and 69D. The learned DR had no objection if the matter was restored to the AO for fresh adjudication.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 69D,Section 68,Section 271D,Section 269SS

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: SHRI RAMIT KOCHAR & SHRI DUVVURU R.L.REDDY

Hearing: 25.11.2019Pronounced: 25.11.2019

: Mr.G.Surya Narayanan, Adv. अपीलाथ. क1 ओर से/ Appellant by : Mr. Guru Bashyam, Addl. CIT /0यथ. क1 ओर से /Respondent by : 25.11.2019 सुनवाई क1 तार"ख/Date of Hearing : 25 .11.2019 घोषणा क1 तार"ख /Date of Pronouncement आदेश / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER:

This appeal filed by assessee is directed against appellate Order dated 27.02.2018 passed by learned Commissioner of Income Tax (Appeals)-15, Chennai (hereinafter called “the CIT(A)”), in for assessment Year (ay) 2003-04, the appellate proceedings before learned CIT(A) had arisen from assessment order dated 24.12.2007 passed by learned Assessing Officer (hereinafter called “the AO”) u/s.143(3) read with Section 147 of the Income-tax Act, 1961 (hereinafter called “the Act”). :- 2 -:

2. The grounds of appeal raised by assessee in memo of appeal filed with Income-Tax Appellate Tribunal, Chennai (hereinafter called “the Tribunal”) read as under:-

“1. The order of the commissioner of income tax (Appeals) in confirming the order of the assessing officer is highly illegal, improper, against the facts and circumstances of the case, against the material evidence on record, perverse and liable to be set aside.

2.

The authorities below failed to consider that Rs.14,82,488/- representing the share application money had been accounted for and the proper proof as to return of allotment in Form 2 and annual return filed with the

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