2017 (7) TMI 1376 - AT - Income Tax

Unexplained loan - addition u/s 68 - assessee could not produce the confirmation from the said party - CIT-A deleted addition - D.R. submitted that the Ld. CIT(A) has allowed the appeal without verifying the creditworthiness, genuineness of the transaction and identity of the creditor, therefore, matter may be restored to the AO to verify the same - HELD THAT - We find that during the course before the Ld. CIT(A), the assessee has submitted own bank statement reflecting the said payment, ledger account of lender and balance confirmation but Ld. CIT(A) has not called for the remand report or the Ld. CIT(A) has not verified these details. The Ld. CIT(A) has, simply relying upon the judgment of Nemi Chand Kothari vs. CIT 2003 (9) TMI 62 - GAUHATI HIGH COURT deleted the addition. Therefore, we reverse the finding of Ld. CIT(A) and restore this matter back to the file of AO and the AO is directed to decide the matter afresh, as per law. Appeal of the Revenue is allowed for statistical purposes.

Summary

Issues:
1. Appeal by Revenue against CIT(A) order for assessment year 2012-13.
2. Verification of creditworthiness, genuineness of transaction, and identity of creditor.
3. Decision on restoration of matter to AO for fresh assessment.

Analysis:
1. The appeal was filed by the Revenue against the CIT(A) order for the assessment year 2012-13. The case involved the assessee, a company engaged in various business activities related to agriculture and allied sectors. The dispute arose when the assessee failed to produce necessary documentation regarding a significant advance received from M/s. A.N. Enterprises amounting to ?6,00,00,000. This led to the Assessing Officer issuing a notice under section 133(6) of the Act to the lender, who did not respond, resulting in the AO making an addition to the income.

2. The matter was taken to the CIT(A), who allowed the appeal of the assessee. However, during the hearing, the Revenue argued that the CIT(A) had not properly verified the creditworthiness, genuineness of the transaction, and the identity of the creditor. The Revenue requested the matter to be sent back to the AO for further verification. The assessee did not object to this request, leading to a review of the case.

3. Upon reviewing the contentions of both parties, the Tribunal found that the CIT(A) had not adequately verified the details submitted by the assessee, including the bank statement, ledger account of the lender, and balance confirmation. The CIT(A) had relied solely on a judgment of the Hon’ble Guwahati High Court without seeking a remand report or verifying the crucial details. As a result, the Tribunal reversed the CIT(A) finding and directed the matter to be restored to the AO for a fresh decision in accordance with the law. The appeal of the Revenue was allowed for statistical purposes, emphasizing the need for a thorough assessment based on verified information.

This detailed analysis of the judgment highlights the key issues involved and the decision-making process leading to the direction for a fresh assessment by the Assessing Officer.