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Income Tax Appellate Tribunal, PUNE BENCHES “A” : PUNE
Before: SHRI RAMA KANTA PANDA & SHRI SATBEER SINGH GODARA
“NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/250/2023- 24/1060840299(1), dated 13.02.2024, involving proceedings u/s.144 of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties. Case file perused.
The assessee’s first and foremost substantive ground raised
in the instant appeal challenges both the learned lower authorities action confirming sec.41(1) cessation of liability addition of Rs.1 crore in the course of assessment dated 20.11.2019 as 2. ITA.No.403/PUN./2024 upheld to the extent of Rs.7,94,669/- in the CIT(A)-NFAC’s detailed discussion reading as under :
“6.2.(ii). As per the Assessment Order dated 20.11.2019, para-
8 it is stated that the total Current liabilities of the appellant stood
120s 10.0768,284/- and due to non- compliance of the appellant the AO treated Rs. 10.076 of Rs.100,00,000/- as unverifiable current liability which was not genuine. Further, during the remand proceedings with the Assessing Officer, the AO issued letter to 31 sundry creditors on test check basis, where the outstanding liability was of Rs.4 lakh and above. Out of the 31 creditors which were verified by the AO, one creditor, namely
Jayantilal and Co, whose balance was Rs.794669/-, stated that he had written off this amount as bad debt in his books. Since, this amount was written off by the creditor, it is treated as cessation of liability u/s 41(1) of I.T. Act, 1961, and the amount of Rs.794669/- is the income of the appellant for which the benefit will not to be given to the appellant. The AO has verified all the other creditors as appearing in Table no.2 of the remand report.
Therefore, the addition on account of unverified sundry creditors is reduced from Rs.1,00,00,000 to Rs.7,94,669/-. Hence, this ground of appeal is partly allowed.”
(iii) (Ground No.(c)- Addition of Rs.78,50,000/-on account of unsecured loans- A perusal of the Record and Remand report reveals that the following unsecured loans have been verified by the Assessing officer, during the remand proceedings :
3 ITA.No.403/PUN./2024
As per the remand report the unsecured loan of Rs.37,50,000/- has been verified by the Assessing officer. Hence the amount of Rs.37,50,000/- is held as verified. With respect to loan advanced by Sh. Dipali Santosh Kanade, it is seen that since the lender has filed the return of income and has advanced the loan of Rs.4,00,000/- through bank, it is held as genuine. As regards, the loan advanced by Sh. Yash Vijay Sarda, it is seen that there was an opening balance of Rs. 13.25 lakh and during the year further sum of Rs.7,00,000/- was advanced. This entire amount of Rs.20.25 lakh was returned to the lender during the year through bank. Hence, this amount is held explained, as the identity, creditworthiness and genuineness of the transaction is established. Therefore, out of the total addition of Rs.78,50,000/-, addition of Rs.30,00,000/-
(Rs.78,50,000- 48,50,000) is upheld. Therefore, the addition of Rs.78,50,000/- on account of unsecured loans is reduced to Rs.30,00,000/-.”
It is in this factual backdrop that the assessee’s first and foremost argument before us is that it has already added back the 4 ITA.No.403/PUN./2024 very sum of Rs.7,94,669/- in it’s books pertaining to assessment year 2022-2023. Faced with this situation, we accept assessee’s contention herein in principle and direct the learned Assessing Officer to verify this clinching fact and then ensure that the impugned addition is not made twice in it’s hands. We further clarify that in case it is found that the assessee’s books have actually written off the amount in assessment year 2022-2023; the addition made herein in assessment year 2017-2018 shall stand deleted in absence of actual write-off in herein very terms.
Next comes unsecured loans addition of Rs.78,50,000/- made in the course of above stated assessment and restricted to Rs.30 lakhs only in the lower appellate discussion.
We find that the assessee has given list of the corresponding 31 sundry creditors all along coupled with the corresponding confirmations and other relevant details thereof. The fact remains is that the learned lower authorities have prima facie adopted pick and choose method in partly accepting it’s explanation than rebutting the corresponding documentary evidence(s) filed. We thus deem it appropriate in these peculiar facts and circumstances that larger interest of justice would be made in case the learned Assessing Officer re-examines this issue of Rs.30 lakhs unsecured loan afresh. We make it clear before parting that it shall be the assessee’s own risk and responsibility only to plead and prove all the relevant facts within three effective opportunities before the 5 ITA.No.403/PUN./2024 Assessing Officer in consequential proceedings. Ordered accordingly.
This assessee’s appeal is allowed for statistical purposes in above terms.
Order pronounced in the open Court on 29.08.2023.