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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
This appeal filed by the Revenue is arising out of the order of Commissioner of Income Tax (Appeals)-11, Pune [in short CIT(A)], in appeal No. Pn/CIT(A)-11/DCIT Cen. Cir2, Thane/54/2015-16, dated 15.02.2017. The Assessment was framed by the Dy. Commissioner of Income Tax, Circle-2, Thane (in short ‘DCIT/ AO’) for the A.Y. 2012-13 vide order dated 27.03.2015 under section 143(3) read with section 153A of the Income Tax Act, 1961 (hereinafter ‘the Act’).
2. The only issue in this appeal of Revenue is against the order of CIT(A) deleting the addition made by AO of unexplained share capital/ loans amounting to ₹ 1.50 crores based on seized papers found during the course of search. For this Revenue has raised the following four grounds: - “1. Whether the Ld. CIT(A)-11, Pune erred in deleting the addition of Rs. 1,50,00,000/- on account of increase in share capital/loans as reflected in seized papers without appreciating the fact that the assessee failed to explain, substantiate and support either during the assessment proceedings or even during the appellate proceedings the sources of funds utilized for such investment?
The Ld. CIT(A)-11, Pune erred in law in admitting the additional evidence during the appellate proceedings. The assessee was given ample opportunities during the assessment proceedings to submit the same, however, the assessee failed to do so.
3. The Id. CIT(A)-11, Pune erred in law by passing the order u/s 250 without giving the AO an opportunity to cross verify the contention of the assessee.
The Appellant prays the order of the Id. CIT(A)- 11, Pune may be vacated on the above mentioned issue and that of the Assessing Officer be restores.”
Briefly stated facts are that search under section 132 of the Act was carried out on one SMC Group on 23.05.2012 and the assessee Shri Bhuleshwar T Mishra is also searched by the Department being one of the director and promoter of Rohit Infraprojects Pvt. Ltd. We have gone through the assessment order and observed that the assessee submitted following reply: - “As regards the CA certificate for introduction of capital in Rohit Infra Projects Private Limited we would like to state the said amount was transferred to the companies account by the assessee, however, the said amount was not towards share capital and the said point was realized during the course of audit hence the said amount was transferred to the loan account of the company.”
The AO rejected the contentions of the assessee by holding as under:
“c) As regards the CA certificate for introduction of Capital in Rohit Infra Projects Private Limited you have stated that the stated said amount was transferred to the companies account by the assessee, however the said amount was not towards share capital and the said point was realized during the course of audit hence the said amount was transferred to the loan account of the company.
You have also stated that CA had issued a certificate to the said extent as it was requirement of Union Bank of India to enhance the loan facility with the said bank and on the basis of the amount reflection in the bank account of the company CA treated the same as share application money and issued a certificate to that extent.
The explanation by you is without any supporting evidence to the explanation. You are requested to furnish the same.”
4. Before CIT(A) none was present, but CIT(A) relying on another case of assessee’s group in the case of GA Dubey for AY 2012-13 and reproducing substantial from the same, deleted the addition without any finding or narrating any facts. It means that the order of CIT(A) is non- speaking and without considering any facts. The assessee’s claim only is that this amount of ₹ 1.50 crores is on account of loan and not investment as share capital. Even if it is loan amount, the assessee is required to explain the sources out of which loan was extended or investments were made in Rohit Infra Projects Private Limited. However, it is noticed that the assessee has not appeared before learned CIT(A) and nothing to prove the sources of loan/investments in Rohit Infra Projects Private Limited has been filed before AO or before CIT(A). In entirety on facts and circumstances, we are of the view that this addition has to be restored back to the file of the Assessing Officer. The assessee is directed to file evidences in regard to this loan of ₹ 1.50 crores to prove the sources of advancing loan /investments in Rohit Infra Projects Private Limited. Needless to say, onus is on assessee to explain this loan/investment. In view of the above, we set aside the orders of the lower authorities and restore this issue to the file of the AO for fresh adjudication.
In the result, the appeal of the Revenue is allowed for statistical purposes. Order pronounced in the open court on 04-09-2018.