ITO 23(2)(4), MUMBAI vs. MAHESH V. CHANDWANI, MUMBAI

During hearing of these appeals, Shri Suman Kumar, Ld. DR, strongly contended that both these appeals requires reconsideration at the hands of the Ld. Assessing Officer. On the other hand, Dr. K. Shivram, Ld. Sr. Advocate along with Shri Rahul K. Hakani, fairly agreed with the contention of the Ld. DR that the issue/issues requires reconsideration.

2.1. We have considered the rival submissions and perused the material available on record. In the appeal of the assessee, confirming the addition of Rs.34,50,000/- made u/s 68 of the Income Tax Act, 1961 (hereinafter the Act), being loan taken from eleven parties has been challenged. It was contended that the facts were not properly appreciated by the Assessing Officer as well as by the Ld. Commissioner of Income Tax (Appeal) as the lenders have confirmed the transaction and confirmation were filed along with copies of the PAN, income tax returns of the parties along with other details, required by the Assessing Officer. In the case of the Revenue, the Department has challenged deletion of addition of Rs.1,46,81,000/- made by the Assessing Officer u/s 68 of the Act on account of unexplained/unsecured loans as there was no basis to hold that the other parties were also not capable of advancing any loan to the assessee. In the light of this argument and the material evidence available on record, we are of the considered opinion, as agreed by ld. representatives from both sides that the issue’s requires reconsideration at the level of the Assessing Officer. The assessee is directed to establish the genuineness of the loan transaction along with the identity and creditworthiness of the parties. The Ld. Assessing Officer is directed to examine the claim of the assessee and decide afresh in accordance with law. The assessee be given opportunity of being heard.

In the appeal of the Revenue, the addition of Rs.27,71,715/- made on account of valuation of closing stock by adopting contradictory stand from the appellate decision for Assessment Year 2007-08 has been challenged. Considering the totality of facts and the circumstances narrated before us, this ground is also remanded back to the file of the Assessing Officer for fresh adjudication. Thus, the appeal of the assessee as well as of the Revenue is allowed for statistical purposes.

अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. आयकर आयु�त(अपील) / The CIT, Mumbai. 4. आयकर आयु�त / CIT(A)- , Mumbai 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR,