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Facts
The assessee company was subjected to an assessment order where an addition of Rs. 3,19,50,000/- was made under section 68 of the Income Tax Act, 1961, for alleged unexplained cash credit. The CIT(A) upheld this addition. The assessee filed an application under Rule 29 to submit additional evidence, claiming the addition was based on a rectification entry for a preceding year's error and not a fresh cash credit.
Held
The Tribunal noted that the CIT(A) passed an ex-parte order. Considering the assessee's submission that the rectification entry could be easily verified from the audited balance sheet and their bonafide belief that no addition would be made, the Tribunal decided to remand the matter.
Key Issues
Whether the addition under section 68 for alleged unexplained cash credit is justified when it pertains to a rectification entry from a preceding year, and if additional evidence should be admitted for re-assessment.
Sections Cited
68, 143(3)
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Income Tax Appellate Tribunal, DELHI
Manikant Nutritions foods Vs. ITO Private Limited Ward 5(2)(2) 38, 2nd Floor, Amarpali Noida, Uttar Pradesh Apartments, Patparganj, New Delhi, 110092 PAN: AAICM0372L Appellant Respondent Assessee by Sh. Pratap Gupta, CA Revenue by Sh. Dheeraj Kumar Jain, Sr. DR Date of Hearing 19/08/2025 Date of Pronouncement 27/08/2025 ORDER
PER YOGESH KUMAR, U.S. JM:
The present appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals/ National Faceless Appeal Centre (‘Ld. CIT(A)/NFAC’ for short), New Delhi dated 09/12/2022 for the Assessment Year 2014-15.
The Grounds of Appeal are as under:-
“1. That Id CIT(A) without appreciating the correct facts of the case is not justified in law and facts and circumstances of the case in confirming the addition of Rs. 31950000/- made by Id assessing officer under section 68 of the Income Tax Act, 1961.” of the Income Tax Act, 1961 ('Act' for short) by making an addition of Rs.
3,19,50,000/- u/s 68 of the Act by holding that the credit liabilities shown by the Assessee company during Financial Year 2013-14 at Rs. 3,19,50,000/- is unexplained cash credit of the Assessee company.
Aggrieved by the assessment order dated 28/12/2016, the Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 09/12/2022, dismissed the Appeal filed by the Assessee. As against the order of the Ld. CIT(A) dated 09/12/2022, the Assessee preferred the present Appeal.
Assessee filed an Application under Rule 29 of the Income Tax Rules before the Tribunal which is reproduced as under:-
Assessment Proceedings it was explained to Ld. Assessing Officer by whom addition was made under section 68 of the Income Tax Act, 1961 that no amount has been received through banking channel during the year under consideration and it is only a rectification entryhas been passed in the year consideration of the error committed in the preceding year. Since the rectification entry can easily be fetched out from the audited balance sheet and Assessee company was under bonafide belief that no addition should have been made under section 68of the Income Tax Act as there was no banking transaction, copy of the documents mentioned in the Application could not be filed before Id Assessing Officer. Thus, Assessee filed the ledger accounts of the creditors and the letter of confirmation as additional evidence and sought for allowing the application filed under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963.
Per contra, the Ld. Ld. Departmental Representative submitted that even after providing sufficient opportunities, the Assessee failed to appear before the Ld. CIT(A) and therefore, objected for allowing the Application filed under Rule 29 of the Rules. on record. The Ld. CIT(A) has been passed ex-parte and the Assessee was under the impression that the rectification entry can be easily fetched out by the A.O. from the audited balance sheet and the Assessee was under the bonafide belief that no addition will be made by the A.O.
Therefore, those documents have not been placed before the A.O.
Considering the above facts and circumstances, we deem it fit to remand the matter to the file of the A.O. with a liberty to the Assessee to produce all documents and the A.O. is directed to frame the assessment de-novo after providing opportunity of being heard to the Assessee.
In the result, the Appeal of the Assessee is partly allowed for statistical purpose.
Order pronounced in the open court on 27th August, 2025