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Facts
The revenue filed two appeals. In ITA No.21/RAN/2023, a survey revealed Rs. 1.88 crore in non-verifiable expenses, which the CIT(A) restricted to a 10% disallowance. In ITA No.94/RAN/2023, the AO disallowed sundry creditors and unsecured loans due to alleged non-cooperation from the assessee, but the CIT(A) deleted this disallowance.
Held
For both appeals, the Tribunal restored the issues to the file of the Assessing Officer for re-adjudication. For ITA No.21/RAN/2023, the assessee was given an opportunity to prove the expenses. For ITA No.94/RAN/2023, the Tribunal noted that the CIT(A) had considered evidence not presented before the AO.
Key Issues
Whether specific disallowances made by the AO or restricted by the CIT(A) regarding non-verifiable expenses, sundry creditors, and unsecured loans required fresh adjudication with proper opportunity to the assessee and consideration of all evidences by the AO.
Sections Cited
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Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI
Before: S/SHRI GEORGE MATHAN & RATNESH NANDAN SAHAY
O R D E R Per Bench
These are appeals filed by the revenue against the orders of ld CIT(A) These are appeals filed by the revenue against the orders of ld CIT(A) These are appeals filed by the revenue against the orders of ld CIT(A), Patna-3 dated 26.12.2022 3 dated 26.12.2022 in Appeal No. CIT(A), Jamsedpur/10210/2018 CIT(A), Jamsedpur/10210/2018-19 for the the assessment assessment year year 16 16-17and and order order of of ld ld CIT(A),Patna CIT(A),Patna-3 in Appeal
P a g e 1 | 4 Assessment Year:16-17 & 18-19 Nio.CIT(A),Patna-3/103423/2017-18 dated 26.2.2023 for assessment year 2018- 19.
Shri Khub Chand Pandya, ld Sr DR appeared for the revenue and Shri V.Jalan, ld AR appeared for the assessee.
for the assessment year 2016-17, it was submitted by ld Sr DR that there was a survey on the premises of the assessee on 5,10,2019. In the course of survey, the assessee had admitted the undisclosed income of Rs.1,88,12,008/- on account of discrepancy in the bills and vouchers most-specifically non-verifiable expenses. It was the submission that on appeal, ld CIT(A) estimated the disallowance at 10% of said unverifiable expenses. It was the submission that when Rs.1.88 crores itself was non- verifiable, the disallowance of 10% was not permissible.
Ld AR submitted that no portion of the expenses are unverifiable and all the expenses can specifically be proved.
We have considered the rival submissions. As it is noticed from the assessment order that in the course of survey, the assessee has specifically stated that he has Rs.1.88 croes on account of non-verifiable expenses and now ld AR submits that he is in a position to prove the expenses, in the interest of justice, the issues in this appealis restored to the file of the AO for readjudication after granting adequate opportunity of hearing. The assessee shall provide the P a g e 2 | 4 Assessment Year:16-17 & 18-19 bills and vouchers of all expenses in respect of the expenses incurred in the impugned assessment year before the AO.
In the result, appeal in stands partly allowed for statistical purposes.
relevant to assessment year 2018-19, it was submitted by ld Sr DR that the Assessing Officer had made disallowance of the sundry creditors and the unsecured loans. The assessee had not cooperated in the assessment proceedings even though multiple opportunities were given. It was the submission that the ld CIT(A) without considering the non-cooperation of the assessee on presumption basis has deleted the disallowance.
Ld AR submitted that the assessee has cooperated in the assessment proceedings and the AO has not asked for any of the details. It was the submission that the ld CIT(A) after appreciating the fact that the AO had not called for details deleted the addition.
We have considered the rival submissions. A perusal of the assessment order clearly shows that the AO has categorically admitted that a show cause notice has been issued to the assessee and even that remains un-responded. A perusal of the order of ld CIT(A) shows that the ld CIT(A) has considered the evidences which were not before the AO. This being so, in the interest of justice, the issues in this appeal are restored to the file of the AO for re-adjudication after granting adequate opportunity of hearing to the assessee.
P a g e 3 | 4 Assessment Year:16-17 & 18-19
In the result, appeal of the revenue in stands partly allowed for statistical purposes.
Order dictated and pronounced in the open court on 10/06/2025.
Sd/- Sd/- (RATNESH NANDAN SAHAY) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Ranchi; Dated 10/06/2025 B.K.Parida, SPS (OS) Copy of the Order forwarded to : 1. The Appellant :Dy.CIT, Central Circle, Jamshedpur 2. The respondent: Mahendra Gope, C Block, Qtr No.204, Madhusudan Complex, Mango, Jamshedpur 3. The CIT(A)Patna-3 4. Pr.CIT, 5. DR, ITAT, 6. Guard file. //True Copy// By order
Sr.Pvt.secretary ITAT, Ranchi
P a g e 4 | 4