2019 (7) TMI 1968 - AT - Income Tax

Unsecured loan - CIT(A) also confirmed the action of the AO as the assessee failed to comply with the direction of the Tribunal to produce all the loan creditor - HELD THAT - At the time of hearing, when asked by the Bench, why the direction of the Tribunal was not complied with by the assessee, assessee did not give any satisfactory reply. We find that in the first round of proceedings, Tribunal has directed the assessee to produce all the creditors before the AO to confirm with the evidences that the amount has been repaid. Assessee has failed to produce all the creditors before the AO, therefore, the addition was again confirmed and was upheld by the CIT(A). We see no reason to interfere with the order of the CIT(A) and dismiss the ground of appeal of the assessee.

Summary

Issues:
1. Addition of Rs.45,29,020 under the head "unsecured loan" confirmed by CIT(A).
2. Failure of the assessee to produce creditors as directed by the Tribunal.

Analysis:
Issue 1: The appeal was filed against the CIT(A)'s order confirming the addition of Rs.45,29,020 under "unsecured loan." The Tribunal had previously remanded the matter to the Assessing Officer to verify the genuineness of the transaction and repayment to creditors. Despite directions, the assessee failed to produce creditors with evidence of payment. Consequently, the Assessing Officer repeated the addition, which was upheld by the CIT(A) due to non-compliance by the assessee. The Tribunal noted the failure of the assessee to comply with the direction, leading to the dismissal of the appeal.

Issue 2: The failure of the assessee to produce all creditors as directed by the Tribunal was a crucial aspect of the case. The Tribunal highlighted that the initial direction to verify repayment by producing creditors was not followed by the assessee. The non-compliance with the Tribunal's directive was a key reason for confirming the addition by the CIT(A). The Tribunal emphasized the importance of adhering to procedural requirements and dismissed the appeal based on the failure to produce necessary evidence, thereby upholding the decision of the CIT(A).

In conclusion, the Tribunal dismissed the appeal of the assessee due to the failure to produce creditors as directed, resulting in the confirmation of the addition under "unsecured loan." The case underscores the significance of complying with procedural directives and providing essential evidence to substantiate claims during assessments and appeals.