SATYAM GENERIC PHARMA PRIVATE LIMITED,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX 13(2)(1), MUMBAI

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ITA 5407/MUM/2017Status: DisposedITAT Mumbai27 March 2019AY 2012-133 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that insufficient time was given to creditors to respond during remand proceedings. Therefore, the issue was remitted back to the Assessing Officer for proper inquiry, with an adequate opportunity for the assessee to be heard.

What were the facts?

The Assessing Officer made an addition on account of unexplained loans as confirmations could not be received. The CIT(A) upheld the addition, noting the assessee's non-appearance and insufficient time given to creditors during remand proceedings.

What were the issues?

Whether the addition on account of unexplained loans was justified given the lack of proper opportunity for the assessee and creditors to provide confirmations. Whether principles of natural justice were violated due to inadequate time for remand proceedings.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” Bench, Mumbai

Before: Shri Shamim Yahya (AM) & Shri Amarjit Singh (JM)

For Respondent: Shri Ashish Kumar
Hearing: 3.3.2019Pronounced: 27.3.2019

O R D E R Per Shamim Yahya (AM) :

This appeal by the assessee is directed against the order of learned CIT(A) dated 24.1.2017 and pertains to A.Y. 2012-13. The grounds of appeal read as under :- A) Principles of natural justice violated

1.

The Ld. C.I.T. Appeals erred in not furnishing the appellant the copy of the Remand Report for say of the appellant.

B) Addition on account of loans Rs.22,32,720/- U/s. 68 of the Act

2.

The Ld. C.I.T. Appeals erred in facts and in law in upholding the order of the A.O. making an addition of Rs. 22,32,7207- as unexplained.

3. The Ld. ITO erred in not granting proper opportunity to the appellant to represent in the Remand proceedings and also erred in not issuing summons to the loan creditors to prove the genuineness of loans to the appellant.

2 M/s. Satyam Generic Pharma Pvt. Ltd.

4. In view of the above, the Appellant prays that your Honours hold that the addition under section 68 amounting to Rs. 22,32,720/- is uncalled for and hence, the same may be deleted.

2. Brief facts of the case are that the Assessing Officer has treated some of the loans obtained as unexplained credits as the confirmation thereof could not be received. Before learned CIT(A) assessee submitted that the Assessing Officer had given very less time and proposed to submit the confirmation before the learned CIT(A). In terms of the provisions of Rule 46A, learned CIT(A) remanded the matter to the Assessing Officer. Assessing Officer noted that learned CIT(A) in his remand has given very short time. He gave the creditors even shorter time to respond to the notice u/s. 133(6). The Assessing Officer informed learned CIT(A) accordingly. Learned CIT(A) noted that facts of the remand and noted that the assessee did not appear before him despite several opportunities. Hence, he confirmed the addition.

3.

Against the above order, the assessee is in appeal before us.

4.

We have heard learned departmental representative and perused the record. None appeared on behalf of the assessee despite notice.

5.

Upon careful consideration, we note that the Assessing Officer has virtually given a few days notice for the creditors to respond to notice u/s. 133(6). In this view of the matter in our considered opinion proper time has not been given in this case. In our considered opinion learned CIT(A) should have acceded to the request of the Assessing Officer to give more time to the remand report. Hence, in the interest of justice remit this issue to the file of the Assessing Officer. The Assessing Officer directed to complete the enquiry with respect of the unexplained creditors in dispute. Needless to add assessee should be granted adequate opportunity of being heard.

3 M/s. Satyam Generic Pharma Pvt. Ltd.

6.

In the result, appeal filed by the assessee allowed for statistical purposes.

Order has been pronounced in the Court on 27.3.2019.

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