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Facts
The assessee company received a loan of ₹1,25,00,000/- from M/s Natural Housing Private Limited, which was suspected to be an accommodation entry. The Assessing Officer made an addition of this amount under Section 68 of the Income-tax Act, 1961. The assessee appealed to the CIT(A), which was dismissed.
Held
The Tribunal noted that the assessee was given opportunities for hearing but did not effectively present its case, citing reasons like COVID impact. However, considering the circumstances, the Tribunal restored the appeal to the CIT(A) for fresh adjudication with a direction to the assessee to submit all details without seeking further adjournments.
Key Issues
Whether the addition made under Section 68 for unexplained cash credit is sustainable, and whether the assessee was provided adequate opportunity for cross-examination and hearing.
Sections Cited
143(3), 147, 148, 68, 133(6), 132
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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Truevalue Projects Pvt. Ltd, against the appellate order passed by the National Faceless Appeal Centre, Delhi [the learned CIT (A)] for A.Y. 2012-13 dated 24th August, 2023, wherein the appeal filed by the assessee against the assessment order passed by the Dy. Commissioner of Income Tax, Circle 1(3)(2), Mumbai (the learned Assessing Officer) dated 29th December, 2019, under Section 143(3) read with section 147 of the Income-tax Act, 1961 (the Act) making an addition on unexplained cash credit under Section 68 of
The assessee has raised following grounds of appeal: - “1. On the facts and circumstances of the case and in Law the Ld CIT (A) erred in reopening the case u/s 147 which is bad in Law.
2. On the facts and circumstances of the case and in Law the Ld CIT (A) erred reopening the case u/s 147 as there was no escapement of income for the year under appeal Secondly there is no live link or close connection between the formation of belief of income escaping assessment and material referred to for issuing notice u/s 148 of the Act.
3. On the facts and in the circumstances of the matter in the law, the Ld. CIT(A) without giving an adequate/reasonable opportunity, wrongly concluded that the appellant has not effectively pursued the appellate proceedings. Whereas, every facts of the case were fully explained in statement of facts alongwith Form 35 being an application for appeal of the Commissioner of Income tax (Appeals).
4. On the facts and circumstances of the case and in Law the Ld CIT(A) erred in not providing cross examination of the person whose statements were used against the assessee. The Id CIT(A) violated the principles of natural justice.
5. On the facts and circumstances of the case and in Law the Ld CIT(A) erred in not providing materials Ii She further submitted that the assessee has stated in form no.35 that assessee has submitted complete details of the company from whom the loans are taken. This was not considered by the learned CIT (A).
Iii It was further stated merely on the statement of Mr. Pravin Agarwal and his employees, the addition has been made. Therefore, the order of the learned CIT (A) is not sustainable.
Iv She further submitted that proper opportunity was not given for hearing before the learned Commissioner of Income-tax (Appeals).
The learned Departmental Representative submitted that assessee was given all the opportunities before the learned Assessing Officer for cross examination of Mr. Pravin Agarwal and at least on four occasions’ assessee did not make himself available. Therefore, the argument of non-availment of opportunity for cross-examination is devoid of any merit. He further submitted that assessee has taken bogus accommodation entry from Mr. Pravin Agarwal and himself has stated that it is an accommodation entry. Further, the assessee has not produced any of the evidences in the form of directors, etc of the lender company and therefore, mere relying on the paper documents addition could not have been deleted.
Looking at the circumstances and facts of the case, we find that if one more opportunity is given to the assessee to present its case before the learned CIT (A), no harm would be caused. Accordingly, we restore the appeal of the assessee back to the file of the learned CIT (A) with a direction to the assessee to submit whatever details it wants to submit before him and not to seek any further undue adjournments. The learned CIT (A) on pursuance of these submissions may decide the issue afresh. In view of this, we allow all the grounds of the appeal of the assessee to be decided afresh now by the learned Commissioner of Income-tax (Appeals).
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 29.02.2024.