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2022 (3) TMI 245 - AT - Income TaxAddition u/s 68 - assessee has taken unsecured loans from Jayesh K. Sheth and no confirmations in respect of the unsecured loans were submitted in respect of the certain parties - HELD THAT - We observe that as per the Balance Sheet submitted before us in the form of Paper Book clearly indicate that assessee has received ₹.30 lakhs from Jayesh K. Sheth and there is no other entry in the name of Jayesh K. Sheth anywhere in the Balance Sheet. We do not see the amount mentioned by the Assessing Officer as outstanding nowhere in the balance sheet. Therefore, we presume that Assessing Officer must have considered the interest also along with the outstanding advance. Since assessee has brought to our notice that it is only a flat advance received by the assessee not as unsecured loans - there is no independent finding or material available on record to show that the above said party has lent the money to the assessee as unsecured loans and since AO has issued show cause notice u/s.133(6) of the Act for which no response or any confirmations submitted by the assessee before the AO, therefore, we direct the assessee to file the confirmations from Jayesh K. Sheth for receipt as advance for the flat - we direct the AO on receipt of confirmation of the above said advance, we direct the Assessing Officer to delete the addition since it is not an unsecured loan and on submission of the above confirmation it proves that assessee has proved the genuineness of the receipt of the above said advance. Accordingly, Ground raised by the assessee is allowed for statistical purpose. Set off of unabsorbed business loss of earlier year - AO denied the profit declared by the assessee in the return of income filed u/s. 139 of the Act and while filing the return u/s. 153A of the Act, assessee has adjusted the profit declared u/s. 139(1) of the Act against in the unclaimed business loss and unabsorbed depreciation - HELD THAT - We noticed that Hon'ble Bombay High Court in the case of CIT v. B.G. Shrike Construction Technology Pvt. Ltd. 2017 (3) TMI 879 - BOMBAY HIGH COURT has held that the return filed u/s. 153A is a return furnished u/s. 139 and therefore the provisions of the Act which apply in case of return filed in regular course u/s. 139(1), would also continue to apply in case of return filed u/s. 153A - Thus claim not made in the return of income, the Court may lead to non entertainment of claim by the Assessing Officer. However, this restriction in the power of the Assessing Officer will not affect the power of the appellate Tribunal to entertain a fresh claim. - Decided in favour of assessee.
Issues Involved:
1. Addition of ?32,79,900/- under Section 68 of the Income Tax Act. 2. Non-allowance of set-off of unabsorbed business loss of ?3,00,970/- from earlier years. Issue-wise Detailed Analysis: 1. Addition of ?32,79,900/- under Section 68 of the Income Tax Act: During the assessment proceedings, the Assessing Officer (AO) observed that the assessee had taken unsecured loans from Jayesh K. Sheth but failed to submit confirmations for these loans. The AO issued a notice under Section 133(6) of the Act to the concerned parties, but no reply was received. Consequently, the AO added ?32,79,900/- to the assessee's income under Section 68 of the Act, stating that the assessee did not offer a satisfactory explanation about the nature and source of the sum. The assessee appealed before the Learned Commissioner of Income Tax (Appeals) [Ld.CIT(A)], who upheld the AO's decision, noting that Jayesh K. Sheth failed to respond to the notice under Section 133(6). The Ld.CIT(A) agreed with the AO that the unsecured loans from Jayesh K. Sheth were unexplained cash credits under Section 68 of the Act. The assessee then appealed to the Tribunal, arguing that the amount received from Jayesh K. Sheth was actually a flat advance and not an unsecured loan. The assessee presented audited financial statements and details of the flat advance to support this claim. The Tribunal observed that the balance sheet indicated a receipt of ?30 lakhs from Jayesh K. Sheth as a flat advance and not as an unsecured loan. The Tribunal directed the assessee to file confirmations from Jayesh K. Sheth regarding the receipt of ?30 lakhs as a flat advance. Upon receipt of such confirmation, the AO was directed to delete the addition, as it would prove the genuineness of the receipt. Thus, the ground was allowed for statistical purposes. 2. Non-allowance of set-off of unabsorbed business loss of ?3,00,970/- from earlier years: During the assessment proceedings, the AO noted that the assessee had declared an income of ?3,00,970/- in the return filed under Section 139 of the Act but declared NIL income in the return filed under Section 153A. The AO disallowed the set-off of unabsorbed business loss, stating that no fresh claim is allowed in the return filed under Section 153A. The assessee appealed to the Ld.CIT(A), arguing that the provisions of Section 153A allow for the assessment of total income afresh, and thus, claims not made in the original return could be made in the return filed under Section 153A. The Ld.CIT(A) dismissed the appeal, stating that the assessee cannot take advantage of a search operation to make a fresh claim. The assessee then appealed to the Tribunal, citing various judicial precedents, including the decision of the Hon'ble Bombay High Court in CIT v. B.G. Shrike Construction Technology Pvt. Ltd., which held that a return filed under Section 153A is treated as a return filed under Section 139, allowing for fresh claims. The Tribunal observed that the assessee had adjusted the profit declared under Section 139(1) against unclaimed business loss and unabsorbed depreciation in the return filed under Section 153A. The Tribunal, following the decision of the Hon'ble Bombay High Court, allowed the ground raised by the assessee, stating that the return filed under Section 153A is treated as a return filed under Section 139, and thus, the assessee is entitled to make fresh claims. Conclusion: The appeal filed by the assessee was allowed for statistical purposes, with directions to the AO to verify the confirmations regarding the flat advance and to allow the set-off of unabsorbed business loss as per the provisions applicable to returns filed under Section 139.
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