M/S. GRAPECITY INDIA PVT. LTD.,DELHI vs. DCIT, NEW DELHI

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ITA 2724/DEL/2017Status: DisposedITAT Delhi14 December 2023AY 2010-11Bench: SHRI SHAMIM YAHYA (Accountant Member), SHRI CHALLA NAGENDRA PRASAD (Judicial Member)3 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal admitted the additional evidence as crucial for adjudicating the main ground regarding the loan waiver. The issue was remitted back to the Assessing Officer for fresh consideration.

What were the facts?

The assessee appealed against the CIT(A)'s order confirming additions to income, including a waiver of loan treated as income under Section 41(1). The assessee sought to submit additional evidence to prove the loan was utilized for acquiring capital assets.

What were the issues?

Whether the waiver of a loan, initially treated as revenue by the AO and CIT(A), should be considered income under Section 41(1) when the assessee provides evidence of its utilization for capital assets. The admissibility of additional evidence before the Tribunal.

Which sections of the Income-tax Act were involved?

Section 41(1),Section 36,Section 37,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘C’ : NEW DELHI

For Appellant: Shri Ashish Mendiratta, CA, Shri Rajat Jain, CA
For Respondent: Shri Sandeep Kr. Mishra, Sr. DR
Hearing: 12.12.2023

ASSESSEE BY : Shri Ashish Mendiratta, CA Shri Rajat Jain, CA REVENUE BY : Shri Sandeep Kr. Mishra, Sr. DR Date of Hearing : 12.12.2023 Date of Order : 14.12.2023

ORDER

PER SHAMIM YAHYA, ACCOUNTANT MEMBER :

1.

This appeal filed by the assessee is directed against the order of ld. CIT (Appeals)-16, New Delhi dated 28.03.2017 for the AY 2010-11.

2.

Grounds of appeal

taken by the assessee read as under :- “1. On the facts and circumstances of the case and in law the Ld. CIT (A) has erred in confirming the addition of Rs.2,09,15,950/- to the income of the assessee, on account of waiver of loan under section 41 (1) of the Income Tax Act, 1961.

2. On the facts and circumstances of the case and in law the Ld. CIT (A) has erred in confirming the addition of Rs.58,551/-

3. On the facts and circumstances of the case and in law the Ld. CIT (A) has erred in confirming addition of Rs.10,48,311/- to the income of the assessee, on account of ad-hoc disallowance of travelling expenses.

4. On the facts and circumstances of the case and in law the Ld. CIT (A) has erred in confirming the initiation of penalty proceedings by the Ld. AO under section 271(1)(c) of the Income Tax Act, 1961.”

3. At the outset, in this case, ld. Counsel of the assessee sought to file additional evidence under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 with regard to ground no.1. The submission in brief are as under :-

“With respect to the captioned matter, we humbly submit bills/vouchers in respect of utilization of loan of $4,67,000 (Rs.2,09,15,950/-) taken by the Assessee Company from Botech International Inc., British West Indies during the FY 2004-05 for the purpose of acquiring capital assets. This loan was waivered of during the FY 2009-10. In the assessment order passed u/s 143 (3) of the Income Tax Act, 1961 (“Act”), the Ld. Assessing Officer (“the Ld. AO”) made disallowance of Rs.2,09,15,950/- to the returned income of the assessee company. The Ld. Commissioner of Income Tax (Appeals) [“the Ld. CIT (A)”] in his order stated that Assessee company has not been able to establish that the loan was utilized for the purpose of acquisition of assets. The money received by the appellant company is held to be on revenue account, therefore, the waiver of loan by Botech International Inc. has resulted in cessation of liability for the assessee company u/s 41 (1) of the Act.”

4.

Furthermore, in respect of the above submission, ld. Counsel of the assessee has submitted copies of bills/vouchers in respect of utilization of adjudication of ground no.1 which is main ground here. Hence, in the interest of justice, we admit this additional evidence and remit the issue to the file of AO. The AO shall consider the issue afresh after taking into account the additional evidences being submitted by the assessee. Since the main ground is remitted to the AO, other grounds may also be considered by the AO, if considered necessary. Needless to add, assessee should be given adequate opportunity of being heard. Both the counsels have agreed to the above proposition. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on this 14th day of December, 2023.

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