WHITE OCTOBER TECHNOLOGIES P.LTD,MUMBAI vs. ITO WD 7(3)(4), MUMBAI

The major additions in this appeal are on account of addition made towards unsecured loans and unexplained cash credit. At the outset, the Ld. Counsel for the assessee submits that in the course of assessment proceedings, the assessee could not produce the confirmations as the creditors did not co-operate with the assessee and did not confirm the credits for the reason that the assessee was not in a position to pay the loans. Therefore, he submits that in the course of assessment proceedings, the assessee could not file the confirmations. The Ld. Counsel for the assessee submits that assessee managed to make substantial payments to loan creditors and 3 therefore majority of the creditors agreed and submitted the confirmations. He submitted that these confirmations are now filed alongwith bank passbooks, bank statements, etc., as additional evidences before the Tribunal for admission. The Ld. Counsel for the assessee submits that assessee could not represent the matter before the Ld. CIT(A) and therefore Ld. CIT(A) passed an ex parte order partly allowing the appeal of the assessee. The Ld. Counsel for the assessee submits that all the loans were obtained by cheques and repaid by cheques. The Ld. Counsel for the assessee submits that the additional evidences filed now be admitted and restored to the file of the Assessing Officer for fresh adjudication. He submits that these additional evidences could not be filed before the Assessing Officer for the reason that the confirmations could not be obtained by the assessee from the creditors.

The Ld. Departmental Representative submits that sufficient opportunity was given to the assessee and infact remand report was also called for and based on the remand report the Ld. CIT(A) decided the issues, therefore he submits that the additions may be sustained.

We have heard the rival contentions and perused the orders of the authorities below. It is not in dispute that the assessee could not obtain confirmations from the creditors, therefore, could not submit before the Assessing Officer in the course of assessment proceedings. We also find that there is no representation from the assessee’s side before the Ld. CIT(A) and an exparte order was passed. These confirmations which were produced before us were also not 4 furnished before the Ld. CIT(A). In the interest of justice, we admit the additional evidences as we are convinced with the submissions of the assessee and the reasons for not furnishing these evidences before the lower authorities. These additional evidences are restored to the file of the Assessing Officer who shall examine the same and decide the issue regarding the additions towards unsecured loans and unexplained cash credit afresh in accordance with law after providing adequate opportunity of being heard to the assessee.

The assessee in its appeal also raised certain other grounds in respect of confirmation of additions towards car expenses, club expenses and foreign travel expenses. Since there was no proper representation before the Ld. CIT(A) to substantiate its claims, we feel that these issues also have to be examined afresh by the Assessing Officer. Thus, we restored all these issues to the file of the Assessing Officer for fresh adjudication who shall pass appropriate order after giving adequate opportunity of being heard.

In the result, the appeal filed by the assessee is treated as allowed for statistical purpose.