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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
This appeal by assessee is directed against the order dated 21.02.2024 of the Commissioner of Income Tax (Appeal), (National Faceless Appeal Centre (NFAC) Delhi for A.Y.2017-18. The assesse has raised following grounds of appeal:
“1.On the facts and circumstances of the case and applicable law, the Learned CIT(A) has erred in making confirmation of ITANo.191/Ind/2024 Sunita Kalantri reopening of the case U/s 148 of the Act and further initiating assessment proceedings of the case U/s 147 of the Act.
No opportunity was available due to portal issue during the assessment and the fact was brought into the knowledge of learned CIT(A). The learned CIT(A) also did not look at the circumstances of the case, the remand report was requested but the same was not provided by Learned Assessing officer even than the learned CIT(A) upheld the order made by learned Assessing officer which is bad in law. 3 The Learned CIT(A) has erred in making confirmation of the addition made by Learned Assessing Officer of Rs. 1500000/- On Account Of unexplained cash credit U/s 69A of the Act from M/S R.S. Udhyog Ispat. 4 The Assessee craves to add/amend/alter/substitute to any grounds of appeal
before or at the time of hearing of the case.”
2. Ld. AR of the assesse has submitted that the AO while framing the reassessment order has made an addition of Rs.15,00,000/- on account of unexplained cash credit shown in the name of M/s. R.S. Ispat Udhyog. The said addition was confirmed by the CIT(A) without appreciating documentary evidences produced by the assessee. Ld. AR has pointed out that the assessee received a sum of Rs.15,00,000/- on 15.11.2016 in his bank account with Orient Bank from M/s. R.S. Ispat Udhyog. The said amount was received as repayment of loan given by the assessee to M/s. R.S. Ispat Udhyog on 23.01.2015. He has referred to bank account of the assessee placed at page no.33 & 34 of the paper book and submitted that the entry of Rs.15,00,000/- is shown as on 23.01.2015 and the said entry is regarding the payment of this amount to M/s. R.S. Ispat Udhyog. Ld. AR then referred to the ITANo.191/Ind/2024 Sunita Kalantri confirmation dated 30.11.2022 placed at page no.30 of the paper book and submitted that the said entry of 23.01.2015 is shown in the ledger account details confirmed by the M/s. R.S. Ispat Udhyog. He has pointed out that the assessee filed the reply to explain the transaction during the assessment proceedings however, due to technical glitch in the web site of the department the reply could not reach to the AO. The CIT(A) has though called for remand report from the AO but the same was not submitted by the AO till the impugned order was passed by the CIT(A). Ld. AR has further submitted that the AO has made the addition because the summons issued to M/s. R.S. Ispat Udhyog were received back un- served with the remark “left” however, due to lapse of time there may be change in the address. He contended that once the assessee has given name and address of the creditors to the AO then failure on the part of the creditor to respond to notice issued by the AO would not justified adverse inference against the assessee. He has relied upon judgment of Hon’ble Supreme Court in case of Orissa Corporation Pvt. Ltd. 159 ITR 78 as well as the decision of Hon’ble Delhi High Court in case of CIT vs. Fancy International 166 taxman 183 and submitted that when the payment were made through account payee cheques and there is a time gap between the transactions and the summons issued by the AO then the possibility of party has moved from the place is not ruled out. The AO ought to have taken steps to search the party but no such steps were taken by the AO. He has also relied upon Hon’ble Madhya Pradesh High Court in case of CIT vs. Metachem Industries 245 ITR
ITANo.191/Ind/2024 Sunita Kalantri 160 and submitted that the Hon’ble High Court has held that once the assesse has established that the amount has been invested by a particular parson, responsibility of assessee is over and there is no requirement of the assesse to further show whether amount invested has been properly taxed in the creditor’s hands. Thus, Ld. AR has pleaded that the addition made by the AO and confirmed by the CIT(A) is not justified and the same may be deleted.
On the other hand, Ld. DR has submitted that the assessee has explained that this amount of Rs.15,00,000/- has been received back by the assessee for loan/advances given by the assessee to M/s. R.S. Ispat Udhyog on 23.01.2015. However, the details furnished by the assesse are not matching as entry of payment reflected in the HDFC Bank account does not show the nature of transactions of loan given to M/s. R.S. Ispat Udhyog. Further the transactions of receipt of this amount are reflected in the Oriental Bank account of the assesse. The AO has conducted an inquiry by issuing summons to M/s. R.S. Ispat Udhyog but the same was received back undelivered with remark ‘left”. Ld. DR has further submitted that the alleged confirmation filed by the assesse does not contain name of person who has signed the said confirmation and even the address and PAN of the parties are not mentioned therein. Therefore, it is very vague documents which cannot be accepted as the confirmation of the transactions by other party. The veracity of the documents is doubtful as recorded by the CIT(A) in the impugned order. Thus, Ld. DR has strongly supported impugned order of the CIT(A). Page 4 of 7
ITANo.191/Ind/2024 Sunita Kalantri 4. We have considered rival submissions as well as relevant material on record. The AO has made this addition of Rs.15,00,000/- on account of transactions of credit entry shown in the name of M/s. R.S. Ispat Udhyog. The AO has recorded in the assessment order that the assessee has not filed any reply in response to the notices and further the AO has issued summons u/s 131 of the Act to M/s. R.S. Ispat Udhyog but the same were received back un-served with the remark “left”. Based on these facts the AO has treated this transaction as unexplained cash credit and added to the income of the assessee. On appeal the CIT(A) has considered the explanation of the assessee for not filing the reply before the AO due to technical glitches and also called for remand report from the AO which was not submitted till the impugned order was passed. The CIT(A) has confirmed the addition made by the AO and recorded the reason that the assesse has failed to correlate the alleged advance given to M/s. R.S. Ispat Udhyog on 23.01.2015 and the transactions of receipt of Rs.15,00,000/- on 15.11.2016. The CIT(A) has specifically mentioned that advances of Rs.15,00,000/- to M/s. R.S. Ispat Udhyog requires an explanation which has not been furnished. Further it is claimed as advance which is in the nature of loan but the assesse has not received any interest on the said advance given to M/s. R.S. Ispat Udhyog. Therefore, the CIT(A) has doubted this claim of the assessee and confirmed the addition made by the AO.
4.1. Undisputedly the CIT(A) wanted to get entire facts and record to be verified and examined at the level of the AO by calling a Page 5 of 7
ITANo.191/Ind/2024 Sunita Kalantri remand report as mentioned in para 5.3 of the impugned order as under:
“5.3. A remand report was called for from the AO on 14/12/2023 based on the submissions of the appellant. Reminder was sent on 08/01/2024. However remand report has not been received.” 4.2 The addition has been confirmed by the CIT(A) due to short coming in the documents produced by the assessee being confirmation as well as the transactions reflected in the bank account of the assessee not giving a clear picture of nature of transactions and the name of parties. The CIT(A) thought it appropriate to call for a remand report after the proper inquiry to be conducted by the AO but the AO has not conducted any inquiry or submit any remand report. Therefore, in the facts and circumstances of the case when the documents are not giving a clear picture to substantiate the claim of the assessee that it was a loan earlier given by the assesse on 23.01.2015 which was received back on 15.11.2016 then the matter requires a proper verification and examination at the level of the AO. We find force in the contention of the Ld. DR that the confirmation of account filed by the assessee does not contains the necessary particulars of the person who has signed as well as address and PAN of the party. Accordingly in the interest of justice we set aside this matter to the record of the AO for fresh adjudication after conducting a proper verification and inquiry on this issue. The assesse is directed to ITANo.191/Ind/2024 Sunita Kalantri cooperate with the proceedings before the AO and produced all necessary details and record.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 30.07.2024.