ITO, NEW DELHI vs. M/S. GBL BUILDERS PVT. LTD., NEW DELHI

The Ld. CIT – A deleted the addition under section 68 by admitting the additional evidences filed by the assessee under rule 46A of the income tax rules, 1962. Assessee submitted income tax return of the depositor, confirmation of unsecured loans, bank statements of the depositor. He further deleted the addition of Rs. 10 Lacs also as assessee submitted the purchase and sale deed. However, the Ld. CIT – A asked for the remand report of the assessing officer, however, he submitted that additional evidences should not be Page | 2 admitted as the assessee was given sufficient opportunity during assessment proceedings. With respect to the loss of property, he further submitted that the assessee was given enough opportunity, which can be, examined from the assessment records, which was not availed by it. He therefore submitted that additional evidences should not be admitted.

With respect to the merits of the case, the Ld. AO submitted that bank account submitted do not show the transactions wherein the amounts of loan have been advanced. He further stated that photocopies of the bank statement also made in such a way that the first transaction seen is the cheque paid to the assessee by those persons and there is no reference made from which source of the amount is. He further stated that in the form of confirmation only the balances have been confirmed without giving copy of the account showing all the details of the transaction such as date of receipt of cheque etc. He further submitted the facts about each of the loan. He therefore submitted that even the additional evidences submitted by the assessee lacks credibility.

The Ld. CIT –A obtained rejoinder of the assessee wherein it was submitted that there is a complete bank account available of those parties. The assessee submitted certain answers to the points raised by the Ld. AO.

The Ld. CIT – A admitted the additional evidences and deleted the additions holding that loan creditors of the company are all the relatives of the directors and assessee has brought on record considerable evidence. He further stated that many of the loan creditors are being brought forward balance from earlier years and there has been repayment of such loans during the year. He further stated when the assessee has submitted enough evidences in the form of confirmation letters, bank statements, income tax particulars and the copy of the balance sheet of the loan creditors, Page | 3 and no enquiry being made by the Ld. AO that money directly or indirectly emanated from the assessee company and then brought is unsecured loan, the addition cannot be upheld. With respect to the addition of Rs. 10 Lacs he submitted that when the deed of purchase and sale of the property remains unquestioned the addition could not be made. Therefore, the Ld. AO aggrieved with the order of the Ld. CIT (A) has preferred appeal before us contesting the deletion of both the additions made by the Ld. CIT (A).

The Ld. departmental representative vehemently submitted that assessee has not submitted any details before the Ld. AO and furnished the some details before the Ld. CIT – A. Though Ld. CIT A has stated that Ld. AO has not made any enquiry on the details submitted by the assessee as additional evidences before him, however there is no enquiry made by the Ld. CIT – A on the details submitted by the assessee. He stated that CIT – A has accepted the submission of the assessee as it is. He stated that it is the duty of the Ld. CIT – A to conduct enquiry if AO has failed to do that. He therefore submitted that Ld. CIT – A has incorrectly deleted both the addition.

Despite notice to the assessee, none appeared before us on the appointed date of hearing. This appeal was last fixed for hearing on 19/12/2016 on that day also none appeared on behalf of the assessee. Even except on 8/12/2015, and after that, nobody is appearing on behalf of the assessee. This appeal is instituted on 9/12/2011 after that it is being adjourned repeatedly. Assessee has also submitted a paper book long back and therefore we proceed to decide the issue on the merits as per information available on record.

We have carefully considered the orders of the lower authorities as well as the contention of the Ld. departmental representative. We Page | 4 have also considered the paper book filed by the assessee. In the present case, the assessee has raised unsecured loan of Rs. 90 Lacs. Assessee did not furnish the requisite information before the Ld. assessing officer. Before the first appellate authority, assessee submitted the application for admission of additional evidence, which were admitted by the Ld. CIT (A). Though AO commented on some of the details submitted by the assessee before 1st appellate authority, however the Ld. CIT – A has held that as the Ld. AO could not point out any infirmity in the details submitted by the assessee he deleted the addition under section 68 of the act. Now coming to the facts of the case, in case of Mr. Ashwani Garg assessee has borrowed Rs. 1025000/–. He has total income of Rs. 166204/- as per his return of income. He has deposited Rs. 41182 in various saving schemes and has paid tax of Rs. 2 552/–. His conformation is only with respect to the closing balance. His bank statement submitted in the paper book shows that he has deposited Rs. 9.75 lakhs on 26/7/2005 and prior to that he has received a cheque of Rs. 10 Lacs. Further, the passbook shows further entry of Rs. 4 Lacs on 14/9/2005 however, on the same date there is a further credit in his bank account of the identical sum. However, sources of such deposit are not forthcoming from the orders of the ld CIT A. There is no information available about the source of the income for the credit for the money to be deposited with the assessee company. No enquiry has been made by the Ld. CIT – A or there is no evidence that how he has verified the creditworthiness and genuineness of these transactions. Similarly is the case with other depositors. Rs. 55 Lacs have been shown from Sri Sashi kant Mittal as proprietor gold craft international and Rs. 15 lakhs have been further shown as a director from him. The Ld. CIT – A has not recorded any finding about the source of such money. Similarly with the case of other persons too there is no finding by the Ld. CIT – A Page | 5