ARN INFRASTRUCTURE LTD.,,NEW DELHI vs. ACIT CENTRAL CIRCLE-28, NEW DELHI

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ITA 9164/DEL/2019Status: DisposedITAT Delhi05 April 2024AY 2014-15Bench: SHRI CHALLA NAGENDRA PRASAD (Judicial Member), SHRI M BALAGANESH (Accountant Member)4 pages

AI SummaryRemanded

Facts

The assessment for AY 2014-15 was completed ex-parte u/s 144, with an initial addition of Rs.16,86,98,197/- as unexplained credits u/s 68, representing all loans and advances in the balance sheet. The CIT(A) sustained a reduced addition of Rs.8,39,62,299/- and also upheld a penalty levied u/s 271(1)(c) of the Act. The assessee appealed these orders, arguing against the justification of treating loans and advances as unexplained credits and challenging the penalty.

Held

The Income Tax Appellate Tribunal remanded the quantum additions related to unexplained credits u/s 68, including other loans/advances and trade payable/expenses, back to the Assessing Officer for a de-novo verification with adequate opportunity for the assessee to be heard. Concurrently, the penalty levied u/s 271(1)(c) was set aside and restored to the AO for fresh adjudication along with the quantum assessment.

Key Issues

Whether loans and advances/other credits, including trade payables and expenses, constitute unexplained credits under Section 68 of the Act, and the validity of penalty levied under Section 271(1)(c) of the Act.

Sections Cited

Section 68, Section 144, Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “A” NEW DELHI

Before: SHRI CHALLA NAGENDRA PRASAD & SHRI M BALAGANESH

For Appellant: Shri Manu Gawri, CA &, Shri Madhav Gawri, Adv

Hearing: 09.01.2024

Assessee by Shri Manu Gawri, CA & Shri Madhav Gawri, Adv. Revenue by Shri Zafarul Haque Tanweer, CIT DR सुनवाईक�तारीख/ Date of hearing: 09.01.2024 05.04.2024 उ�ोषणाक�तारीख/Pronouncement on आदेश /O R D E R PER C.N. PRASAD, J.M.

These two appeals are filed by the assessee against the different orders of the Ld.CIT(A)-31, New Delhi dated 26.09.2019 for the AY 2014-15 in respect of addition sustained u/s 68 of the Act and also sustaining the penalty levied u/s 271(1)(c) of the Act.

Ld. Counsel for the assessee, at the outset, submits that in this case the assessment was completed u/s 144 of the Act on 23.12.2016 by treating the entire other loans and advances reflected in the balance sheet as unexplained credits u/s 68 of the Act.

On appeal the Ld. CIT(Appeals) sustained the addition to the extent of Rs.8,39,62,299/- out of Rs.16,86,98,197/-. Ld. Counsel submits that assessee furnished additional evidences before the Ld.CIT(A) and the Ld.CIT(A) though called for a remand report sustained the addition u/s 68 of the Act to the extent of Rs. 8.39 crores i.e. the credits received during the year ignoring the confirmations filed by the assessee. Ld. Counsel submits that Rs.8,39,62,299/- represents the entire other loans and advances received during the year and there is no justification in treating the entire other loans and advances appearing in the balance sheet as an unexplained credit u/s 68 of the Act.

Heard rival submissions, perused the orders of the authorities below. We observed that the assessment was completed u/s 144 of the Act making an addition of Rs.16,86,98,197/- appearing in the balance sheet as closing balance of other loans and advances. On appeal the Ld.CIT(A) sustained an amount of Rs.8,39,62,299/- being 2 the entire other loans and advances appearing in the balance sheet which was received during the year without examining what it contains. Therefore, taking the totality of facts and circumstances into consideration, we are of the view that this matter should go back to the file of the AO for denovo verification and accordingly we restored this addition to the file of the AO for examining afresh after providing adequate opportunity of being heard to the assessee.