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TMI Blog2015 (4) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... unds raised in this appeal (supra) appear to have been raised before the learned CIT(A) or considered or addressed by the learned CIT(A) in the impugned order. In this factual and legal matrix of the matter, we are of the view that in the interest of equity and justice, the issue of the unsecured loan of ₹ 1.25 Crores taken by the assessee from M/s. Deccan Alloys Pvt. Ltd. requires to be examined and adjudicated afresh in respect of the application and invocation of the provisions of section 68 of the Act after affording the assessee adequate opportunity of being heard and to file details / submissions required. - Decided in favour of assessee for statistical purposes. - I.T. A. No.1436/Bang/2013 - - - Dated:- 1-4-2015 - Smt. P. Madhavi Devi AND Shri Jason P. Boaz JJ. For the Appellant : Shri K. Seshadri, C.A. For the Respondent : Shri P. Dhivahar, JCIT (D.R). ORDER Per Shri Jason P. Boaz, A.M. : This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-I, Bangalore dt.12.8.2013 for Assessment Year 2009-10. 2. The facts of the case, briefly, are as under :- 2.1 The assessee, in the business of tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt s substantial purchase (Rs.11.13 Crores) and Sale (Rs.4.42 Crores) with it were found acceptable by the departmental authorities. 2.6 The cheque dated 27 December 2008 became stale on 27 June 2009 only and the audited accounts had been signed / finalized on 4 May 2009 itself and therefore contrary to the claims of the CIT (Appeals), the cheque was not stale and could not have been reversed in the audited accounts / books. 3. UNPRESENTED CHEQUE APPERING IN BOOKS. 3.1 Conclusion of learned CIT (Appeals) that an unpresented cheque cannot be recorded in books of account is contrary to rules of accounting. 3.2 Learned CIT (Appeals) erred in stating that the appearance of the unpresented cheque in bank reconciliation statement is immaterial. 4. SECTION 68 Vs. Section 2(22)(e). Learned CIT (Appeals) having deleted the addition of Rs.;1.25 Crores made under Section 2(22)(e) in the assessment order erred in invoking section 68 with respect to the same item as : 4.1 Application of section 2(22)(e) implies that appellant s explanation on the source and nature of credit is satisfactory. 4.2 The very same explanation, on source and nature of credit found adequate in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prayed by the learned Authorised Representative that while the learned CIT (Appeals) has deleted the addition under Section 2(22)(e) of the Act, the addition by the learned CIT (Appeals) of ₹ 1.25 Crores as unexplained credit under Section 68 of the Act by invoking the provisions of section 251(1) of the Act, however, was not warranted in the facts and circumstances of the case and ought to be deleted or at the least is required to be set aside for de novo adjudication so that this issue can be entirely re-examined. 3.3.1 Per contra, the learned Departmental Representative supported the impugned order of the learned CIT(A) in invoking the provisions of section 251(1) of the Act to make the addition of the sum of ₹ 1.25 Crores as unexplained cash credit under Section 68 of the Act on the grounds that the power conferred on the appellate authority by Section 246 r.w.s. 250 of the Act indicates an amplitude and width which is co-terminus with that of the Assessing Officer. It is submitted that the appellate authority could substitute the order of the Assessing Officer by his own; and direct the Assessing Officer what to do; as has been held by the various judicial pron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said dividend will not be exempt under Section 10(34) of the Act since it was not subjected to tax as per the provisions of section 115- O of the Act. 3.4.2 On appeal, before the learned CIT(A), the assessee came up with additional evidence and a new claim that the cheque of ₹ 1.25 Crores received from M/s. Deccan Alloys Pvt. Ltd. dt.27.12.2008 was not encashed and had become stale. In the remand report furnished in this regard, the Assessing Officer observed that if the submission of the assessee is to be taken at face value, then the assessee ought to explain the sources for this excess asset over liability to the extent of ₹ 1.25 Crores. Taking note of the Assessing Officer remand report, the learned CIT(A) issued notice under Section 251(1)(a) of the Act calling upon the assessee to show cause why the addition of ₹ 1.25 Crores should not be made as unexplained credit under Section 68 of the Act, instead of deemed dividend under Section2(22)(e) of the Act. 3.4.3 After rejecting the technical objections raised by the assessee questioning his power to invoke the provisions in paras 3.11 to 3.15 of the impugned order by discovery of a new source of income un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143,772,575.29 Less : Current liabilities Provisions. 08 76,824,691.00 78,176,899.00 Net Current Assets 89,211,785.14 65,595,676.29 Total : 89,278,255.14 65,663,052.29 Schedules 1 to 14 forms an integral part of this accounts. ii) As seen that unsecured loan appears for ₹ 2,50,00,000 and same claimed to have been borrowed from the following parties :- M/s. Deccan Alloys Pvt. Ltd. : Rs.1,25,00,000 M/s. Bhuwalka Alloys Pvt. Ltd. : Rs.1,25,00,000 Total : Rs.2,50,00,000 iii) M/s. Deccan Alloys Pvt. Ltd. (DAPL) issued a cheque bearing No.971151 dated 27.12.2008 for ₹ 1,25,00,000 and the same has been shown as unsecured loan in the balance sheet as on 31.3.2009. Further, it is also stated that the said cheque has not been encashed even as on date and the amount appears in the Bank Reconciliation Statement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 68 of the Act instead of section 2(22)(e) of the Act. 3.4.4 On a careful and considered perusal of the findings of the learned CIT(A) extracted above (supra)and specifically sub-paras (iii), (iv) and (v) thereof, we find that these issues have never been before the Assessing Officer either in the course of assessment proceedings or were raised or considered or addressed by him in remand proceedings. We also find that not all the issues raised by the assessee in the grounds raised in this appeal (supra) appear to have been raised before the learned CIT(A) or considered or addressed by the learned CIT(A) in the impugned order. In this factual and legal matrix of the matter, we are of the view that in the interest of equity and justice, the issue of the unsecured loan of ₹ 1.25 Crores taken by the assessee from M/s. Deccan Alloys Pvt. Ltd. requires to be examined and adjudicated afresh in respect of the application and invocation of the provisions of section 68 of the Act after affording the assessee adequate opportunity of being heard and to file details / submissions required. It is ordered accordingly. 4. In the result, the assessee's appeal for Assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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