2023 (9) TMI 376 - AT - Income Tax

Addition of protective basis - on-money consideration received in cash - HELD THAT - In the appeal filed by the assessee for the assessment year 2014-15 we had confirmed the addition on substantive basis therefore the question of prorata addition on protective basis does not arise. Thus the ld. CIT(A) had rightly deleted the addition. Hence this ground of appeal no. 2 stands dismissed. Addition of unsecured loans - assessee company had failed to discharge the onus of proving the identity creditworthiness and genuineness of unsecured loans as well as no details of the lenders were filed before the Assessing Officer - HELD THAT - It is only during the course of proceedings before the ld. CIT(A) the assessee company had provided the details of lenders. Based on which the ld. CIT(A) granted relief. Thus it is clear that the order of the ld. CIT(A) is based on the additional evidence filed before him for the first time. It is requirement of law as provided under Rule 46A of the Rules if the additional evidence is produced for the first time before the ld. CIT(A) the ld. CIT(A) should give an opportunity of examining this additional evidence to the Assessing Officer which the ld. CIT(A) had failed to do so. Accordingly this ground of appeal nos. 3 and 4 is remitted to the file of the ld. CIT(A) for de novo consideration in accordance with law.

Summary

Issues involved:
Cross appeals filed by the assessee and the Revenue against the order of ld. Commissioner of Income Tax (Appeals) for the assessment year 2013-14.

Addition of on-money consideration:
The Assessing Officer made an addition of Rs. 27,00,000/- on account of on-money consideration received, which was confirmed by the ld. CIT(A) based on impounded material. The ITAT upheld the addition as the amount was received by the assessee and not shown in the books of accounts, thus rightly brought to tax.

Disallowance of interest expenditure:
The Assessing Officer disallowed interest of Rs. 1,96,84,069/- as revenue expenditure, which the ld. CIT(A) allowed, stating it was incurred on loans borrowed and should be allowed as deduction. The ITAT remitted this issue back to the ld. CIT(A) to decide de novo considering the reasoning of the Assessing Officer.

Addition of unsecured loans:
The Assessing Officer made an addition of Rs. 2,72,14,448/- on account of unsecured loans, which was later relieved by the ld. CIT(A) based on additional evidence provided by the assessee. The ITAT remitted this issue back to the ld. CIT(A) for de novo consideration as the Assessing Officer was not given an opportunity to examine the additional evidence.

Separate Judgement:
The appeal filed by the assessee was dismissed, and the cross appeal filed by the Revenue was partly allowed for statistical purposes. The ITAT ordered the remittance of certain issues back to the ld. CIT(A) for de novo consideration in accordance with the law.