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Facts
The assessee, operating a petrol pump and tanker business, had additions made by the AO for unexplained unsecured loans (Section 68), interest thereon, unexplained bank credits, and disallowances for tanker expenses (Section 44AE) and other adhoc expenses, resulting in a total assessed income of INR 3.89 crores. The CIT(A) subsequently deleted these additions, leading the Revenue to appeal.
Held
The Tribunal observed that the assessee had passed away and the Revenue failed to bring the legal heir on record despite multiple opportunities. Therefore, the Tribunal dismissed the Revenue's appeal on procedural grounds, with liberty to recall the order if the legal heir is subsequently brought on record.
Key Issues
Deletion of additions for unsecured loans, unexplained cash credits, and disallowance of tanker expenses by the CIT(A), and the procedural issue of not bringing the deceased assessee's legal heir on record.
Sections Cited
Section 68, Section 44AE
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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL
Before: SHRI KUL BHARAT, SHRI KUL BHARAT & SHRI AVDHESH KUMAR MISHRASHRI AVDHESH KUMAR MISHRASHRI AVDHESH KUMAR MISHRA
ORDER
PER KUL BHARAT, JM :
The present appeal appeal filed by the Revenue is directed against the order irected against the order passed by Ld.CIT(A), Moradabad Moradabad dated 30.01.2017 for the assessment year for the assessment year 2012-13. The Revenue has raised following grounds of appeal: has raised following grounds of appeal:-
1. “That the Ld. Commissioner of Income Tax That the Ld. Commissioner of Income Tax (Appeal), Moradabad has (Appeal), Moradabad has erred in law and on the facts of the case in deleting the addition of erred in law and on the facts of the case in deleting the addition of erred in law and on the facts of the case in deleting the addition of Rs. 44,67,438/ Rs. 44,67,438/- made on account of unsecured loan are bogus cash made on account of unsecured loan are bogus cash credits of Rs. 37,25,628/ credits of Rs. 37,25,628/- & added back as unexplained cash credit & added back as unexplained cash credit u/s 68 of the I.T. Act, 1961 a u/s 68 of the I.T. Act, 1961 and disallowance of alleged interest nd disallowance of alleged interest paid to loan depositors of Rs. 7,41,810/ paid to loan depositors of Rs. 7,41,810/-.
2. That the Ld. Commissioner of Income Tax (Appeal), Moradabad has That the Ld. Commissioner of Income Tax (Appeal), Moradabad has That the Ld. Commissioner of Income Tax (Appeal), Moradabad has erred in law and on the facts of the case in deleting the addition of erred in law and on the facts of the case in deleting the addition of erred in law and on the facts of the case in deleting the addition of Rs. Rs. 3,25,30,988/ 3,25,30,988/- made on account of unexplained explained and and unaccounted credit entries in a unaccounted credit entries in assessee's various bank accounts. ssessee's various bank accounts. Page | 1
3. That the Ld. Commissioner of Income Tax (Appeal), Moradabad has That the Ld. Commissioner of Income Tax (Appeal), Moradabad has That the Ld. Commissioner of Income Tax (Appeal), Moradabad has erred in law and on the facts of the case in deleting the addition of erred in law and on the facts of the case in deleting the addition of erred in law and on the facts of the case in deleting the addition of Rs. 3,88,991/ Rs. 3,88,991/- made on account of disallowance out of tanker owance out of tanker expenses invoking the provision of 44AE. expenses invoking the provision of 44AE.
4. That the order of the Ld. Commissioner of Income Tax (Appeal), That the order of the Ld. Commissioner of Income Tax (Appeal), That the order of the Ld. Commissioner of Income Tax (Appeal), Moradabad is erroneous in law and on facts may be cancelled and Moradabad is erroneous in law and on facts may be cancelled and Moradabad is erroneous in law and on facts may be cancelled and the order of the Assessing Officer may be restored. the order of the Assessing Officer may be restored.
Any other grounds may be taken during the course of the hearing of er grounds may be taken during the course of the hearing of er grounds may be taken during the course of the hearing of the appeal may also be kindly allowed. the appeal may also be kindly allowed.”
At the time of hearing, no one attended the proceedings on behalf of the At the time of hearing, no one attended the proceedings on behalf of the At the time of hearing, no one attended the proceedings on behalf of the assessee. It is seen from the records that despite assessee. It is seen from the records that despite providing providing multiple opportunities to the assessee to the assessee, no one has been attending the proceedings on , no one has been attending the proceedings on behalf of the assessee. Therefore, the appeal behalf of the assessee. Therefore, the appeal of the Revenue is taken up for is taken up for hearing in the absence of the assessee and hearing in the absence of the assessee and is being adjudicated on the basis of adjudicated on the basis of material available on record. material available on record.
Facts giving rise to the present appeal are that the assessee filed Facts giving rise to the present appeal are that the assessee filed his Facts giving rise to the present appeal are that the assessee filed return of income on 27.09.201 .2012 through e-mode, declaring total income of INR , declaring total income of INR 14,29,470/-. The case was selected for scrutiny The case was selected for scrutiny assessment. The Assessing assessment. The Assessing Officer (“AO”) issued statutory notices to the assessee. In response thereto, statutory notices to the assessee. In response thereto, statutory notices to the assessee. In response thereto, Ld. Authorized Representative (“AR”) of the assessee attended the proceedings. Ld. Authorized Representative (“AR”) of the assessee attended the proceedings. Ld. Authorized Representative (“AR”) of the assessee attended the proceedings. The assessee is engaged in the business of petrol pump, sale of MS, HSD, The assessee is engaged in the business of petrol pump, sale of MS, HSD, The assessee is engaged in the business of petrol pump, sale of MS, HSD, lubricants and running tanker. lubricants and running tanker. During the course of assessment proceedings, ourse of assessment proceedings, the AO noticed that there the AO noticed that there were unsecured loan liability. Accordingly Accordingly, the assessee was called upon to explain the unsecured liability. The AO on the assessee was called upon to explain the unsecured liability. The AO on the assessee was called upon to explain the unsecured liability. The AO on the basis that the assessee failed to establish creditworthiness and genui the assessee failed to establish creditworthiness and genuineness of the assessee failed to establish creditworthiness and genui the transaction, made addition by invoking the provision of section 68 the transaction, made addition by invoking the provision of section 68 of the the transaction, made addition by invoking the provision of section 68 Income Tax Act, 1961 (“the Act”). Thereby, the AO added unsecured Income Tax Act, 1961 (“the Act”). Thereby, the AO added unsecured loan Income Tax Act, 1961 (“the Act”). Thereby, the AO added unsecured liability of INR 37,25,628 liability of INR 37,25,628/- and the interest expenditure thereon of INR and the interest expenditure thereon of INR 7,41,810/-. The AO further on treating the credit entries in different bank . The AO further on treating the credit entries in different bank . The AO further on treating the credit entries in different bank accounts of the assessee, made addition of INR 3,25,30,988.90/ accounts of the assessee, made addition of INR 3,25,30,988.90/- -. Further, he made disallowance out of tanker plying business of INR made disallowance out of tanker plying business of INR 3,88,991/ 3,88,991/- and adhoc disallowance is out of telephone, car and disallowance is out of telephone, car and unverified expenses of INR 37,270/ expenses of INR 37,270/- and INR 50,000/- respectively. Thus, he assessed the total income of the respectively. Thus, he assessed the total income of the respectively. Thus, he assessed the total income of the assessee at INR 3,89,04,160/ assessee at INR 3,89,04,160/-.
Aggrieved against this, the assessee preferred Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), appeal before Ld.CIT(A), who after considering the submissions, who after considering the submissions, partly allowed the appeal. Thereby, he partly allowed the appeal. Thereby, he deleted the addition related to unsecured loan and interest thereon, credit deleted the addition related to unsecured loan and interest thereon, credit deleted the addition related to unsecured loan and interest thereon, credit entries in the different bank accounts of the assessee and expenses related entries in the different bank accounts of the assessee and expenses related to entries in the different bank accounts of the assessee and expenses related tanker plying.
5. Aggrieved against th Aggrieved against the order of Ld.CIT(A), the Revenue has has filed appeal before this Tribunal.
We have heard Ld. Sr. We have heard Ld. Sr. DR for the Revenue and perused the material DR for the Revenue and perused the material available on record and gone through the orders of the authorities below. available on record and gone through the orders of the authorities below. We available on record and gone through the orders of the authorities below. find that it is noticed from the records that there is a letter placed on record by find that it is noticed from the records that there is a letter placed on record by find that it is noticed from the records that there is a letter placed on record by the Ld. Counsel for the assessee that it was intimating about the death of the for the assessee that it was intimating about the death of the for the assessee that it was intimating about the death of the assessee. The Revenue was asked to bring Legal Heir of the assessee on record assessee. The Revenue was asked to bring Legal Heir of the assessee on record assessee. The Revenue was asked to bring Legal Heir of the assessee on record Page | 3 which has not been done despite various opportunities. The appeal cannot not been done despite various opportunities. The appeal cannot not been done despite various opportunities. The appeal cannot proceed without bring on the record the Legal Heir of the assessee. We proceed without bring on the record the Legal Heir of the assessee. We proceed without bring on the record the Legal Heir of the assessee. We therefore, dismiss the appeal of the Revenue with a liberty to seek recalling of therefore, dismiss the appeal of the Revenue with a liberty to seek recalling of therefore, dismiss the appeal of the Revenue with a liberty to seek recalling of the order if they wish to proceed with the order if they wish to proceed with the matter against the Legal Heir of the the matter against the Legal Heir of the assessee. Grounds raised by the Revenue are accordingly, dismissed. assessee. Grounds raised by the Revenue are accordingly, dismissed. assessee. Grounds raised by the Revenue are accordingly, dismissed.
In the result, the appeal of the In the result, the appeal of the Revenue is dismissed.