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TMI Blog2020 (9) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... file of the AO to allow the assessee opportunity to present his case. Under-valuation of closing stock - HELD THAT:- There has been no examination of the facts. What, then, is the basis for the Revenue to contend that the assessee had incurred a cost higher than ₹ 300/- per sq. ft. for the Township project? We could understand where the Revenue had based its charge of under-valuation w.r.t. the assessee s accounts, or found them unreliable, which is not so. The stated basis, as afore-noted, is wholly presumptuous. Thus, notwithstanding the fact that the assessee has not furnished the cost details, as it ought to have, we find no reason for remission. We have already observed that at no stage was the assessee called upon to prove his case. The onus to establish escapement of income is on the Revenue, which it has completely failed to, with there being no charge of the assessee being not cooperative, or having not, on asking, furnished the relevant details. It is a clear case of non-application of mind by the Revenue. It would therefore be unfair to call upon the assessee to, after lapse of a number of years, justify its case. The addition is without any basis, much les ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee, Shri Seth, would take us to page-2 of the assessment order. The same is charged by the bank for non-fund based facilities or other banking services provided by it, and has nothing to do with the interest on borrowing/s therefrom. The ld. CIT(A) has confirmed the disallowance on the basis of commercial expediency, misdirecting himself. 3.2 Sure, if that is the assessee s case, the absence of commercial expediency is irrelevant. But, then, where is the statement of his case by the assessee before any authority ? There is no reference thereto either in the assessment or the appellate order. But for Shri Seth submitting so before us, referring to the written submissions dated 30.7.2020 before the Tribunal, we would be equally unaware of the same. The primary burden to prove his return, and the claims prefer thereby, is on the assessee. His case of sufficient interest-free capital to fund the admitted non-business (purpose) advances, made on interest-free basis, has not been stated, much less substantiated before the Revenue s authorities, who have, we are afraid, also not applied themselves. How could they appreciate, much less counter, the assessee s case without being infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 75/- and ₹ 25/- respectively. Likewise, for a term loan, with the repayment thereof over time increasing the own capital component to that extent. It is, therefore, incorrect for the assessee to say that the entire interestfree advance of ₹ 114.02 lacs is financed by own (or interest free) capital ₹ 131.03 lacs, as indeed is the Revenue s claim to the opposite i.e., of the entire-free advance by bank borrowings. In fact, the stated figures are as at 31.03.2009, while the position could be different, even materially, as at the beginning of the year i.e., as on 31.03.2008, or during the year. 3.3 The matter, accordingly, i.e., in view of the foregoing, is remitted to the file of the AO to allow the assessee opportunity to present his case. Needless to add, the AO shall decide the issue in accordance with law, issuing definite findings of fact based on material on, or to be brought on, record. In view of the matter being factually indeterminate, the reference to case law by either side, made during the hearing, is inapposite and, in any case, of little consequence. We decide accordingly. 4. The second issue (Gd.2) is in respect of under-valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds of appeal (Gd. 6) before the ld. CIT(A) as well as the assessee s submissions thereto, reproduced at pg. 10 of the impugned order. The same, therefore, cannot be considered as complete to the same extent, i.e., would be at different stages of completion. The comparison fails on this ground as well. No doubt, the date (02.10.2008), as stated in the Grounds of Appeal as the date of sanction of the map of the Township project, being a public holiday, is clearly incorrect. It may perhaps be the date of commencement of construction, wrongly mentioned. The question, however, is if there is a valid basis for comparison, and which we find as not. The ld. CIT(A) has, again, misdirected himself, reproducing several case law deliberating section 145A. The said section provides for inclusion of tax, duty, or any other levy on the goods bought and sold, in the valuation of purchases, sales, and inventory thereof. How, we wonder, is the same relevant ? Again, sure, the assessee has not clarified the matter properly. The Revenue having raised the issue of valuation of one of his ongoing projects, the assessee ought to have provided the relevant details, i.e., the breakup of cost, j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the facts . What, then, is the basis for the Revenue to contend that the assessee had incurred a cost higher than ₹ 300/- per sq. ft. for the Township project? We could understand where the Revenue had based its charge of under-valuation w.r.t. the assessee s accounts, or found them unreliable, which is not so. The stated basis, as afore-noted, is wholly presumptuous. Thus, notwithstanding the fact that the assessee has not furnished the cost details, as it ought to have, we find no reason for remission. We have already observed that at no stage was the assessee called upon to prove his case. The onus to establish escapement of income is on the Revenue, which it has completely failed to, with there being no charge of the assessee being not cooperative, or having not, on asking, furnished the relevant details. It is a clear case of non-application of mind by the Revenue. It would therefore be unfair to call upon the assessee to, after lapse of a number of years, justify its case. The addition is without any basis, much less valid, as well as sans any factual finding, and deserves to be deleted. We direct so. Needless to add, the opening stock (for the following year) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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