KIRAN GUPTA,INDORE vs. ITO, MANDSAUR

Feeling aggrieved by appeal-order dated 12.03.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 26.11.2018 passed by learned ITO, Mandsaur [“AO”] u/s 143(3)/147 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2011-12, the assessee has filed this appeal on the grounds as mentioned in Form No. 36.

The background facts leading to present appeal are such that the assessee-individual filed original return of AY 2011-12 declaring a total income of Rs. 2,97,470/- on 30.03.2012. Subsequently, the AO, on the basis of information received from ADIT(Inv)-I, Udaipur collected from a search u/s 132 upon Chetak Group of Nimbahera, re-opened assessee’s assessment u/s 147 vide notice dated 28.03.2018 u/s 148 and called assessee to file return. In response, the assessee requested the AO to treat the original return as having been filed in response to notice u/s 148. The AO accepted assessee’s request. Thereafter, the AO issued notices u/s 143(2)/142(1) to scrutinize assessee’s case. Ultimately, the AO completed re- opened assessment vide order dated 26.11.2018 u/s 143(3)/147 after making two additions, namely (i) addition of Rs. 25,61,500/- on account of unsecured loan given to M/s U.B. Investment (prop. Shri Vikram Anjana), and (ii) addition of Rs. 1,00,000/- on account of unsecured loan given to M/s Uday Bheru Lal Anjana (proprietor Shri Manohar Lal Anjana).

Ld. AR for assessee made a vehement submission attacking the legality of proceeding done by AO as well as the merits of additions made by AO. Per contra, Ld. DR relied upon orders of lower-authorities.

Having heard learned Representatives of both sides and after perusing case record, we find that the AO re-opened assessment of assessee after recording following reasons:

Thus, the basis of re-opening adopted by AO was an information received from ADIT(Inv.)-1, Udaipur that the assessee has provided a bogus loan of Rs. 4,00,000/- during the financial year 2010-11 to Shri Vikram prop. of M/s U.B. Investment. Ld. AR for assessee submitted that the assessee has not given any loan during the financial year 2010-11 and the allegation made by AO is factually wrong. Ld. AR carried us to the assessment-order passed by AO to demonstrate that since there was no loan of Rs. 4,00,000/- given by assessee, the AO was unable to make any addition qua the alleged loan transaction of Rs. 4,00,000/-. The AO, however, made addition of loan of Rs. 25,61,500/- given to M/s U.B.

Resultantly, this appeal is allowed.