9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (10) TMI 593 - AT - Income TaxUnexplained cash credit u/s.68 - Creditworthiness of creditors and genuineness of the transactions were not established - CIT-A deleted the addition - HELD THAT - No mention of statement recorded under section 131 of the Act. Further from the submission dated 06/08/2019 filed by the AO through office of learned DR we find that the AO accepted the fact that pursuant to summons issued under section 131 statement of Director of Shreeji Aluminium Pvt Ltd. We find that even in the latest submission dated 12/07/2022 filed by the learned DR statement recorded u/s 131 is stated to be self-serving in nature which is not corroborated with balance sheet and profit and loss account. From the perusal of financials of Shreeji Aluminium Pvt Ltd. we find that the company has Revenue from operations - Further it has long-term borrowing from Karnataka bank Ltd. The company has fixed assets - We further find that the company has trade payables of Rs. 1, 83, 68, 844 in comparison to trade receivables of Rs. 5, 79, 22, 610. Therefore in view of the aforesaid financial position of Shreeji Aluminium Pvt Ltd. we do not agree with the submissions of the Revenue. As a result we find no infirmity in the aforesaid findings of the learned CIT(A). In respect of all the other entities the AO in its remand report gave similar reply that unsecured loan lender have advanced the fund on the same day or within 10 to 12 days on which they have received the same. In its latest submission dated 12/07/2022 the Revenue has made submission only regarding loan from Parul Mittal and submitted that the response under section 133(6) is self-serving and is not corroborated with balance sheet and profit and loss account. In respect of addition on account of Sheelaben Thummar Kirti Thummar HUF and Krushy Metal we find from the details available in the paper book that these are appearing as loans / deposits by the assessee s proprietary concern viz. Krushy trading company. Thus we find no infirmity in the findings of the learned CIT(A) that same cannot be added under section 68 of the Act. Loan from Ram Avtar Paper Ltd. we find from audited financial at page 191 and 192 of the paper book that the company has capital and reserves of Rs. 68, 17, 941 and short term borrowings from bank of Rs. 26, 91, 870. Further this entity has inventory of Rs. 30, 54, 584. Thus we are of the considered view that learned CIT(A) has correctly deleted the addition in respect of this entity. As regards payment from Suyash Mittal family it is the claim of the assessee that this is in respect of repayment of earlier loan. No material contrary to assessee s claim has been brought on record. Thus we are of the considered view that learned CIT(A) has correctly deleted the addition in respect of this entity. We find that the details of capital account of few loan lenders were not examined by the learned CIT(A) and these details are also not placed in the paper book. Further other aspects of the financial statement of the loan lenders have also not been examined by the learned CIT(A). Therefore we deem it appropriate to remand the addition pertaining to loan transactions of the assessee with Parul Mittal Sanjay Mittal Sons Shivakumar Sons HUF Vikas Mittal Sons and Ram Mittal HUF to the file of learned CIT(A) for de novo adjudication. The assessee is also directed to file all the details of the loan lenders in support of its claim for necessary examination by the learned CIT(A). The learned CIT(A) shall be at liberty to seek any other information / document for complete adjudication of this issue. Appeal by the Revenue is partly allowed for statistical purpose in view of our aforesaid findings. Issuance of notice under section 143(2) of the Act on the ground that the same is without jurisdiction - From the perusal of record we find that this issue was not raised by the assessee in its appeal before the learned CIT(A) and has been raised for the first time in the present cross objection against the Revenue s appeal. Though this fresh issue should have been raised by way of an application seeking admission of additional ground however the assessee has raised the same in the present cross objection. It is settled that being a legal issue same can be raised at any stage of proceedings. However since this legal issue was not raised and therefore was not considered by the CIT(A) thus we deem it appropriate to remand the issue arising in grounds no.2 and 3 raised in assessee s cross objection to the learned CIT(A) for necessary adjudication. Needless to mention that no order shall be passed without affording opportunity of being heard to both the parties. Grounds raised in assessee s cross objection are allowed for statistical purpose.
Issues Involved:
1. Deletion of addition as unexplained cash credit under section 68 of the Income Tax Act, 1961. 2. Jurisdictional validity of the assessment proceedings. Issue-wise Detailed Analysis: Issue 1: Deletion of Addition as Unexplained Cash Credit under Section 68 Background: The Revenue appealed against the deletion of an addition of Rs. 10,12,91,595 as unexplained cash credit under section 68 of the Income Tax Act, 1961. The assessee, a proprietary concern engaged in trading aluminum and copper, received loans from various entities. The AO made the addition based on the non-compliance of notices under section 133(6) and statements recorded during a search in the Bhanwarlal Jain group case, which suggested the provision of accommodation entries. Findings: - Little Diam: The assessee provided confirmation, bank statements, and returns of income. The AO relied on statements from the Bhanwarlal Jain group search. The CIT(A) noted that the lender attended summons under section 131, confirming the transaction. The Tribunal found no infirmity in the CIT(A)'s findings that the identity, genuineness, and creditworthiness were proved. - Meridian Jewellery Pvt Ltd.: Similar to Little Diam, the lender attended summons under section 131. The CIT(A) accepted the transaction's genuineness and creditworthiness, supported by the lender's financials. The Tribunal upheld the CIT(A)'s findings. - Ashok Kumar Jain: The AO added Rs. 1,10,00,000 based on the Bhanwarlal Jain group search. The CIT(A) noted the lender's attendance under section 131 and financials, proving the transaction's genuineness and creditworthiness. However, the Tribunal found discrepancies in the net worth details and remanded the issue to the CIT(A) for de novo adjudication. - Paresh Babulal Patel: The lender's financials showed sufficient capital and fixed assets. The CIT(A) accepted the transaction's genuineness and creditworthiness. The Tribunal found no basis in the Revenue's reliance on the lender's salary income to doubt the creditworthiness and upheld the CIT(A)'s findings. - Shreeji Aluminium Pvt Ltd.: The lender attended summons under section 131, confirming the transaction. The CIT(A) noted the financials, showing sufficient funds and creditworthiness. The Tribunal found no infirmity in the CIT(A)'s findings. - Other Entities: The CIT(A) examined the financials and net worth of other lenders, finding sufficient funds to lend the amounts. The Tribunal upheld the CIT(A)'s findings except for transactions with Parul Mittal, Sanjay Mittal & Sons, Shivakumar & Sons HUF, Vikas Mittal & Sons, and Ram Mittal HUF, which were remanded for de novo adjudication due to lack of detailed examination. Conclusion: The Tribunal partly allowed the Revenue's appeal for statistical purposes, remanding specific transactions for further examination. Issue 2: Jurisdictional Validity of the Assessment Proceedings Background: The assessee's cross objection challenged the jurisdictional validity of the assessment proceedings, claiming that the notice under section 143(2) was issued by an officer without proper jurisdiction. Findings: - The cross objection was delayed by 22 days, which was condoned by the Tribunal. - The legal issue regarding jurisdiction was raised for the first time in the cross objection. The Tribunal deemed it appropriate to remand the issue to the CIT(A) for necessary adjudication. Conclusion: The Tribunal allowed the assessee's cross objection for statistical purposes, remanding the jurisdictional issue to the CIT(A) for adjudication. Final Order: The Revenue's appeal was partly allowed for statistical purposes, and the assessee's cross objection was allowed for statistical purposes.
|
