M/S. DYNAMIC INDUSTRIES LTD., ,HOWRAH vs. ITO, WARD - 1(3), KOLKATA , KOLKATA

This appeal is filed by the assessee against the order dated 30.01.2018 passed by CIT(A)-22, Kolkata for AY 2009-10.

The issue in Ground No.1 relates to the addition of Rs.4 lacs made by the AO and confirmed by Ld.CIT(A) on account of loan by treating the same as unexplained cash credit u/s 68 of the Income Tax Act, 1961 (in short “Act”).

The assessee in the present case is a company which is engaged in the business of manufacturing of ferrous items/ steels. The return of income for the year under consideration was filed by it on 25.03.2010 declaring a total income of Rs.7,31,579/-. As noticed by the AO during the course of assessment proceedings, the assessee company had received a fresh loan of Rs.4 lacs from M/s. Anjana Resource Pvt. Ltd. in the year under consideration. Since the assessee could not file the loan confirmation of the said creditor, the AO treated the loan received by the assessee from M/s. Anjana Resource Pvt. Ltd. as unexplained cash credit and made addition u/s 68 to that extent.

The addition made by the AO u/s 68 of the Act was challenged by the assessee in the appeal filed before the Ld.CIT(A). During the course of appellate proceedings before Ld.CIT(A), the confirmation letter issued by the concerned creditor giving all the relevant details was filed by the assessee. Ld.CIT(A), however, still confirmed the addition of Rs.4 lacs made by the AO u/s 68 of the Act by observing that the loan confirmation letter furnished by the concerned creditor had remained unverified by the AO.

I have heard the rival submissions and perused the relevant material available on record. As rightly contended by the Ld. Counsel for the assessee, the confirmation certificate of the concerned creditor filed by the assessee during the appellate proceedings for the first time should have been admitted by Ld.CIT(A) as additional evidences being relevant to decide the issue and an opportunity should have been given to the AO to verify the same. Even Ld. DR has not disputed this position and contended that the matter may be sent back to the AO for allowing him an opportunity to verify the confirmation certificate. The impugned order of Ld.CIT(A) on this issue is accordingly set aside and the matter is restored to the file of the AO for deciding the same afresh after verifying the confirmation certificate of the concerned creditor furnished by the assessee. Ground No.1 of the assessee’s appeal is accordingly treated as allowed for statistical purposes.

As regards, Ground No.2, it is observed that the issues involved therein relating to charging of interest u/s 234B & 234C of the Act, are consequential in nature. The AO is, accordingly, directed to allow consequential relief to the assessee on these issues.

In the result, the appeal filed by the assessee is allowed for statistical purposes.