What did the Tribunal hold?

The Tribunal found that the Assessing Officer did not provide a proper opportunity to the assessee to prove the genuineness of the loans. The matter was sent back to the Assessing Officer for fresh adjudication after the assessee furnishes necessary details and produces concerned persons.

The assessee received sundry loans totaling Rs. 11,95,951/-. The Assessing Officer made an addition of Rs. 11,19,265/- to the returned income, deeming the loans as undisclosed income, citing cash deposits in the bank account.

What were the issues?

Whether the addition made by the Assessing Officer on account of sundry loans was justified without providing a proper opportunity to the assessee to prove their genuineness.

Rakesh Rambali Shrivastav vs ITO | ITAT Mumbai 2018

Income Tax Appellate Tribunal, MUMBAI BENCHES “SMC”, MUMBAI

Before: Shri Joginder Singh,

For Appellant: Shri Aakriti Seth, Ms. N. Hemalatha-DR

Hearing: 04/01/2018

आदेश / O R D E R

The assessee is aggrieved by the impugned order dated 19/06/2017 of the Ld. First Appellate Authority, Mumbai, on the addition of Rs.11,19,265/- to the returned income of the assessee unjustifiably deeming the sundry loans received from various persons as undisclosed income of the assessee.

During hearing, the ld. counsel for the assessee, Ms. Aakriti Seth, contended that proper opportunity was not provided to the assessee as confirmation were duly filed by the assessee and thus the addition was unjustifiably made. The Ld. counsel also filed a list of confirmations from the concerned person along with relevant details. It was contended that the issue requires fresh adjudication. On the other hand, the ld. DR, Ms. N. Hemalatha, contended that this list was not fully furnished before the Ld. Assessing Officer and only part details were filed.

2.1. I have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee claimed to have obtained sundry loans of Rs.11,95,951/- during the relevant financial Year.

The assessee furnished the details like confirmations name and addresses along with PAN Card. On verification of the same, it was found that all the loans were below Rs.20,000/- and are in cash, therefore, their genuineness cannot be verified. On further verification, it was noticed that the assessee filed confirmation for the amount of Rs.11,35,735/- and there was no confirmation for Rs.60,216/-. However, the Ld. Assessing Officer made the addition. It seems that the addition was made on the basis of AIR information that there was cash deposit to the tune of Rs.29,25,000/- in the bank account. If the Ld. Assessing Officer was apprehensive of any mala-fide, nothing prevented him to examine the persons from whom such loans were taken. The genuineness of the loans was the duty of the assessee to explain. No persons should be condemned unheard, thus, without going into much deliberation, this appeal is sent to the file of the Ld. Assessing Officer to examine the claim of the assessee to his satisfaction. The assessee is directed to furnish the necessary details before the Ld. Assessing Officer and if so directed to produce the concerned persons before him.

Thus, the appeal of the assessee is allowed for statistical purposes.

Finally, the appeal of the assessee is allowed for statistical purposes.

This order was pronounced in the open court in the presence of ld. representative from both sides at the conclusion of the hearing on 04/01/2018.

RAKESH RAMBALI SHRIVASTAV,MUMBAI vs. INCOME TAX OFFICER 24(3)(4), MUMBAI

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