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Income Tax Appellate Tribunal, “A” BENCH, CHENNAI
Before: SHRI DUVVURU RL REDDY & SHRI S. JAYARAMAN
आदेश/ O R D E R
PER S. JAYARAMAN, ACCOUNTANT MEMBER:
The Revenue filed this appeal in against the order of Commissioner of Income Tax (Appeals)-3, Chennai in dated 30.06.2017 for assessment year 2004-05. The assessee filed a CO in CO No. 07/2018 against the same order.
While making the assessment for assessment year 2004-08 in the case of M/s. Ranads Fashions P Ltd., the assessee, the AO found that the assessee has taken a fresh loan from five persons totalling at Rs. 13,72,000/- during the assessment year. The assessee could not furnish any confirmation letter etc. Out of the five persons, the credits appearing in two persons names were disallowed in the earlier year also. Considering facts and circumstances, the Assessing Officer added the entire 13,72,000/- as income. Fom the details/evidences furnished for secured/unsecured loans during the course of assessment year 2003-04 and for this assessment year., the AO found that Rs. 29,25,880/- was over stated in the accounts which he held that it represented unexplained credits and accordingly made an addition. The assessee had debited Rs. 28,000/- towards interest on the loans/credits. Since, certain credits were added back, the Assessing Officer disallowed proportionate interest at Rs. 20,000/- and concluded the assessment. Aggrieved, the assessee filed an appeal before the CIT(A). The CIT(A) deleted the addition of Rs. 29,25,880/- and upheld the other additions.
Aggrieved, the Revenue filed this appeal pleading that the Ld. CIT(A) failed to note that Rs. 20 lakhs has rightly been included by the AO in the calculation of overstated balance in the accounts of both the Directors Shri R. Nadarajah and Shri Jamal Mohammed Meeran and that the name of Mr. Jammal Mohammed Meeran has been missed out inadvertently. The Ld. CIT(A) ought to have noted that Rs. 66,12,000/- mentioned as opening balance is just a typographical error and does not bear any effect to the calculation of the closing balance in the loan account as stated by the assessee etc. On the other hand, the assessee filed CO pleading that the CIT(A) went wrong in confirming the addition of Rs. 13,72,000/- as unproved credits and confirmed the disallowance on interest of Rs. 20,000/- without considering the evidence filed in support of the genuineness of loans. The CIT(A) also went wrong in not directing the AO to carry forward the set of loss brought forward from early years, the details of which were elaborated in Para 10 of written submission dated 18.03.2016 filed before him etc.
We heard the rival contentions and find that these issues require proper verification of facts and its associated circumstances. In view of that, we deem it fit to remit these issues back to the AO for a fresh examination.
The assessee shall place all the materials in its support before the AO and comply to the AO’s requirements as per law. The AO is free to conduct appropriate enquiry as deemed fit, but he shall furnish adequate opportunity to the assessee on the material etc to be used against it and decide the matter in accordance with law .
:-4-: CO No: 07/Chny/2018 5. In the result, the Revenue’s appeal and assessee’s CO are treated as allowed for statistical purposes.
Order pronounced on Monday, the 05th day of March, 2018 at Chennai.