2021 (3) TMI 876 - AT - Income Tax

Jurisdiction of ACIT at principal place of business of assessee - Transfer of case u/s 127 - Addition u/s 68 - unsecured loans - main contention of the ld. AR is that all the necessary evidences regarding the assessment are in the Administrative Office situated at Margao, Goa and no details were available in the Mumbai registered office and that is why the assessee could not file any details before the AO at Mumbai - HELD THAT - Assessee filed its return of income on-line giving jurisdiction to ACIT, Circle-1, Margao, Goa and received first notice u/s. 142(1) of the Act at registered office situated at in Mumbai. Immediately, the assessee made petition to the concerned AO to transfer the file to the ACIT, Circle-1, Margao, Goa as the principal place of business falls within the jurisdiction of ACIT, Cirlce-1, Margao, Goa but however the AO rejected the same. The assessee filed evidences in the form of confirmations loans, copy of Income Tax returns of two Directors by way of paper book before us and on examination of the same, we note that the said evidences are crucial and necessary to decide the issue involved in the present appeal and also goes to the root of assessee as rightly contended by the ld. AR. In this regard an affidavit of General Manager of assessee filed before us stating the loan confirmations of two Directors Shri Mahendra Singh Gujaral and Miss Anjali Pathak received initially and were not in prescribed format and did not contain requisite details. The said details could not be filed before the CIT(A) in time as it were not in proper format - as stated the error/lapse in non-submissions of the confirmation loans in time before the CIT(A) is unintentional and is due to genuine reason of receiving the same late. We find that the addition made on account of other loans requires verification of details but however no details were filed before the AO and CIT(A) as it is evident from the assessment order as well as impugned order. We note that the details filed before this Tribunal by way of paper book are necessary for the fair adjudication of the issue involved and in the interest of justice taking into consideration the facts and circumstances of the case as rightly conceded by the ld. DR, we deem it proper to remand the matter to the file of CIT(A) for its fresh adjudication. Appeal of assessee is allowed for statistical purpose.

Summary

Issues:
Confirmation of addition of unsecured loans by CIT(A) for assessment year 2007-08.

Analysis:
1. The appellant, a private limited company engaged in the hotel business, filed its return of income for assessment year 2007-08. The AO proceeded ex-parte and completed the assessment under section 144 of the Act, adding unsecured loans under section 68 and estimating profit at 10%, resulting in total income of &8377; 3,49,61,101.
2. The appellant challenged the AO's order before the CIT(A), who deleted the addition on account of Share Capital and Share Premium but confirmed the addition of &8377; 1,33,75,752 for other loans due to lack of details filed by the appellant.
3. During the appeal before ITAT, the appellant submitted evidence of loan confirmations by two directors, crucial to the issue. The appellant faced challenges in submitting these details earlier due to the administrative office's location in Goa and requested the case to be transferred there, which was not considered by the AO.
4. The AO and CIT(A) provided opportunities for the appellant to submit evidence, but the appellant failed to do so. The ITAT noted that the necessary evidence was crucial for fair adjudication and decided to remand the matter to the CIT(A) for fresh consideration, allowing the appellant to submit additional evidence.
5. The ITAT emphasized the importance of the evidence provided by the appellant and acknowledged the unintentional lapse in submitting the details earlier. The matter was remanded to the CIT(A) for a fair adjudication, granting the appellant the opportunity to present additional evidence in support of their claim.
6. Ultimately, the ITAT allowed the appeal of the appellant for statistical purposes, emphasizing the need for a fair adjudication based on the evidence presented and the circumstances of the case.

This detailed analysis highlights the procedural history, arguments presented, and the ITAT's decision to remand the matter for fresh consideration, ensuring a fair adjudication based on the evidence provided by the appellant.