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Facts
The assessee, M/s Mool Raj Vijay Kumar, a partnership firm engaged in wholesale trading, filed its income tax return for AY 2018-19 declaring Rs. 6,51,629/-. The Assessing Officer (AO) passed an order under Section 143(3) of the Income Tax Act, 1961, determining a total income of Rs. 18,96,933/- by making additions related to gross profit on stock shortage (Rs. 59,503/-), disallowance of salary expenses (Rs. 4,85,800/-), and unexplained unsecured loan (Rs. 7,00,000/-). The CIT(A) dismissed the assessee's appeal, leading to the present appeal before the Income Tax Appellate Tribunal.
Held
The Tribunal noted that the assessee was not represented during the hearing. After considering the arguments of the Departmental Representative and perusing the record, including the detailed order of the CIT(A), the Tribunal found no reason to deviate from the CIT(A)'s findings. The Tribunal confirmed all three additions made by the AO and upheld by the CIT(A), stating that the assessee failed to provide sufficient evidence to challenge them, especially regarding the creditworthiness for the unsecured loan.
Key Issues
1. Whether the addition of gross profit on alleged stock shortage based on survey findings was justified. 2. Whether the disallowance of salary expenses based on a partner's survey statement, disregarding audited accounts and employee confirmations, was justified. 3. Whether the unsecured loan could be treated as an unexplained cash credit due to failure to prove the creditworthiness of the lender.
Sections Cited
Section 143(3) of the Income Tax Act, 1961, Section 133A of the Income Tax Act, 1961, Section 68 of the Income Tax Act, 1961, Section 44AB of the Income Tax Act, 1961, Clause 31(a) of Form 3CD
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Income Tax Appellate Tribunal, ALLAHABAD BENCH, ALLAHABAD
Before: SHRI ANADEE NATH MISSHRA & SHRI SUBHASH MALGURIA
2018-19 against impugned appellate order dated 10/03/2023 (DIN & Order No.ITBA/APL/S/250/2022- 23/1050583147(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short].
The facts of the case, in brief, are that the assessee filed its return of income declaring total income of Rs.6,51,629/-. The Assessing Officer processed the return filed by the assessee and passed assessment order u/s 143(3) of the Act on 08/06/2021 and determined the total income of the assessee at Rs.18,96,933/- by making various additions. Being aggrieved, the assessee filed appeal in the office of learned CIT(A). Vide impugned appellate order dated 10/03/2023, the assessee’s appeal was dismissed by learned CIT(A). Being aggrieved further, the assessee has filed the present appeal in Income Tax Appellate Tribunal against the aforesaid impugned appellate order of learned CIT(A).
At the time of hearing, the assessee was represented by none. In the absence of any representation from the assessee’s side, we heard learned D.R. and perused the materials available on record. The learned D.R. placed reliance on the assessment order and the impugned order of the learned CIT(A). He placed further reliance on the written submissions in which prayer has been made to confirm the additions of Rs.59,503/-, Rs.4,85,800/- and Rs.7,00,000/- In the aforesaid written submissions, reliance was placed by learned D.R. on the following case laws:
(a) [2019] 412 ITR 161 (SC) Pr.CIT vs. NRA Iron & Steel (P.) Ltd. (assessment year 2009-10) (b) [2015] 230 taxman 268 (SC), Navodaya Castle (P.) Ltd. vs. CIT Dismissing SLP against [2014] 367 ITR 306 (Delhi) (c) [2014] 227 Taxman 373 (SC) N. Tarika Property Invest (P.) Ltd. vs. CIT dismissing SLP against [2014] 221 Taxman 14 (Delhi) (d) [2021] 277 Taxman 594 (SC), Sadiq Sheikh vs. CIT Dismissing assessee’s SLP against [2020] 122 taxmann.com 39 (Bom.) (e) [2018] 258 Taxman 160 (SC), Pavankumar M. Sanghvi vs. Income Tax Officer, Dismissing SLP against [2018] 404 ITR 601 (Gujarat) (f) [2014] 221 Taxman 143 (Andhra Pradesh) (Mag.) Gayathri Associates vs. Income Tax Officer (g) Smt Puja Grover vs. ACIT (I.T.A. No.140/A/2024) order dated 20/03/2025 (h) [2015] 375 ITR 123 (Calcutta), CIT vs. Maithan International (i) [2007] 291 ITR 278 (SC) CIT vs. P. Mohankala (j) [2012] 204 Taxman 135 (Allahabad) Sagittraious Builders &Colonisers v. CIT (k) [2019] 102 taxmann.com 392 (Delhi) Alfa Bhoj Ltd. vs. DCIT
We have heard learned Department Representative and perused the materials available on record. It is found that the learned CIT(A) has passed a detailed order after giving due consideration to the facts of the case, applicable law and decided precedents. The relevant portion of the order of the learned CIT(A) is reproduced as under:
4.1 Nothing has been brought for our consideration to persuade us to take a view different from the view taken by the learned CIT(A) in the aforesaid order. In view of the foregoing, the aforesaid additions of Rs.59,503/-, Rs.4,85,800/- and Rs.7,00,000/- are confirmed.
In the result, the appeal of the assessee stands dismissed.
(Order pronounced in the open court on 25/08/2025)