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TMI Blog2023 (1) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... of such lenders/ creditors are part of syndicate of accommodation entry provider. There is no evidence that credit/ advance in the books of assessee was result of some circular transactions. Now again adverting to the primary submissions of ld AR for the assessee that the assessing officer in fact has not made any addition either on account of disallowance of sundry creditors or unsecured loan, in fact such observation was the basis of rejection of books of account. As we have noted that the ld CIT(A) clearly held that the basis of rejection of books of account was not justified. We find that books of account of assessee was duly audited and no reference or whisper about the audited books were made no adverse remarks was made by auditor of assessee. no specific defect was pointed in the books of assessee as required under section 145(3) of the Act, thus, such rejection lacks the statutory conditions, which we do not approve. Hence, we do not find any infirmity or illegality in the order passed by ld CIT(A), which we affirms, with our additional observations. Thus, in view of the aforesaid discussions, we do not find any merit in the ground No.1 to 3 of appeal raised by the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission of the relevant details and evidences in respect of the sundry creditors of Rs.84,45,85,996/- and unsecured loans of Rs.26,32,52,300/-. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(Appeals) has allowed the relief of Rs.84,45,85,996/- towards the sundry creditors by observing that during the remand proceedings the assessee has submitted the confirmation, bank statements, ledger accounts etc. ignoring the fact that the creditor neither responded to the notices issued u/s 133(6) nor furnished the confirmation, bank statements, ledger accounts etc., the Ld. CIT(A) relied on the confirmation submitted by the assessee, whose genuineness and authenticity cannot be said to have been established in absence of production of the confirmation documents and evidence by the creditors. 2.1 The assessee has submitted the details of Mr. Inayat Munshi who is claimed to have paid an amount of Rs.41,40,04,000/- to IIFL on behalf of the assessee, M/s Salya India Pvt.Ltd., The assessee has not submitted any evidence to prove that the payment made by Mr. Inayat Munshi is on behalf of the assessee company. The assessee has also not submitted the required d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. The Assessing Officer noted that no details were furnished by assessee. Further, the assessee has shown unsecured loan of Rs.26.32 crores from Ridham Jewels Private Limited. The Assessing Officer also noted that assessee has debited expenses of Rs.59.132 crores. However, no evidence is provided to prove the genuineness of such expenses. The Assessing Officer instead of disallowing either sundry creditors or treating the said loan nongenuine and income of assessee or disallowing the expenses, rejected the books of assessee and disallowed the entire loss. The assessing officer simply recorded that outstanding liability of loan and sundry creditor and expenses is not proved, the books of accounts of assessee was rejected under section 145(3) and passed assessment order under section 143(3) of the Act on 26.03.2013. Aggrieved by the disallowance of loss and other passing remarks in the assessment order, the assessee filed appeal before Ld. CIT(A). Before Ld. CIT(A) the filed its detailed written submission. The assessee submitted that Assessing Officer treated the sundry creditors of Rs.84.45 crores has not genuine in absence of documentary evidence to prove the genuineness of incr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Assessing Officer passed the assessment order. The assessee further explained that from the date of show cause notice dated 20.03.2013, which was received on 23.03.2013, the assessee was having only one working day for filing confirmation before Assessing Officer. The assessee confirmed the loan of Rs.84.45 crores was paid in full in assessment year 2011-12. The assessment was completed in A.Y 2011-12 and Assessing Officer accepted repayment in assessment year 2011-12. Before Ld. CIT(A) the assessee filed confirmation letter dated 25.03.2013, ledger of M/s India Infoline Limited, contract note and bills, invoices of Rs. 20,000/-of accurate financial services and ledger account of Nirmal Bang Securities. The assessee contended that there was sufficient cause which prevented the assessee in producing such evidence, which was called upon by Assessing Officer as only one-day time period was allowed. Thus, it is a sufficient cause within the scope of Rule-46 of Income Tax Rules, 1962 for admission of additional evidence. The assessee reiterates that they were unable to file loan confirmation letter during the assessment proceedings as the assessee suffered huge loss and assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Infoline Ltd., confirmed that outstanding balance of assessee in their books stood as on 31.03.2010 was at Rs. 84.46 crores and on 31.03.2011 and 31.03.2012 it is Rs.0 Rs.0 respectively. The Assessing Officer accepted that on perusal of ledger account of opening balance is shown at Rs.84.45 crores on 31.03.2010 as outstanding and as on 31.03.2011, it was reduced to Nil . On the transaction of loan, the Assessing Officer reported that Ridham Jewels Private Limited informed that a total bridge loan of assessee was at Rs.29.22 crores during the financial year 2009-10 and the assessee was able to pay Rs.2.90 crores during the same financial year and remaining balance of Rs.26.23 crores was outstanding as on 31.03.2011. The bank statement of assessee was also furnished and on perusal of such bank statement, the Assessing Officer reported that an amount of Rs.2.90 crores was paid back on 20.11.2009. Thus, the amount of Rs.26.32 crores was pending in financial year 2009-10 relevant to assessment year 2010-11. The Assessing Officer further reported that return of Yogesh R Sancheti (proprietor M/s Ridham Jewels Private Limited) was enclosed and as per their return of income, sundry de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d whether loan amount is shown to the asset side of their balance-sheet. The assessee again in response to the remand report, filed their further rejoinder dated 16.03.2018 repeating the earlier stand taken by assessee. 7. The Ld. CIT(A) after considering the assessment order, various submission of assessee, remand reports dated 22.03.2016 and 07/08/2017 furnished by Assessing Officer and the rejoinder thereto, noted that Assessing Officer passed the assessment order by taking view that genuineness of sundry creditors and unsecured loan are not proved. During the appellate proceedings, the assessee furnished additional evidence to support its sundry creditors and unsecured loan along with profit and loss account. The Ld. CIT(A) held that considering the circumstances of the case, he was satisfied that assessee has sufficient cause for not furnishing such evidence during the assessment proceedings, therefore, keeping in view in the principle of natural justice, the additional evidences was admitted. The Assessing Officer was asked to furnish her comments by way of remand report on the additional evidence filed by the assessee during the appellate proceedings. The Ld. CIT(A) fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities carefully. The Ld. CIT-DR for the Revenue supported the order of Assessing Officer and submits that during the assessment, the assessee failed to prove the genuineness of sundry creditors and transaction of unsecured loan. The Assessing Officer made addition of Rs.84.45 crores on account of sundry creditor and addition of Rs.26.32 crores on account of unsecured loan. The assessee was offered opportunity to explain both the additions, but assessee failed to file confirmation of sundry creditors as well as conformation of lender about unsecured loan and genuineness of such transaction. The Ld. CIT-DR submits that Ld. CIT(A) deleted both the additions and erred in accepting the additional evidence produced by assessee, during the appellate stage. The Ld. CIT-DR for the revenue submits that matter may be remitted back to the file of Assessing Officer for adjudication of issue afresh in accordance with law. 9. On the other hand, Ld. AR for the assessee strongly objected against the submission raised by Ld. CIT-DR for the Revenue. The Ld. AR for the assessee invited our attention by referring the assessment order and would submit that no addition either on account of sundry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eport. On this direction of Ld. CIT(A) the Assessing Officer furnished remand report dated 22.03.2016 and dated 07.08.2017. In the remand report, the Assessing Officer accepted that India Infoline Limited vide their reply dated 08.05.2017, submitted copy of ledger account, copy of return of income, confirmation and also confirmed that they are registered broker for the assessee who had booked various shares for assessee. They have also confirmed the fact in the next assessment year 2011-12, the entire amount was repaid. On the reference of unsecured loan, the Ld. AR for the assessee submits that during the remand proceedings, the creditor furnished confirmation letter of balance of outstanding, their return of income, ledger account and bank statement. The Ld. CIT(A) after considering the remand report of Assessing Officer held that rejection of books of account was not justified and directed the Assessing Officer to delete the addition of disallowance of loss suffered by assessee. The Ld. AR for the assessee further submits that there was no addition under section 68 of the Act or otherwise about sundry creditors or unsecured loan. Therefore, the deletion of such amount is unwarra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. AR for the assessee strongly objected on the submission made by Ld. CIT-DR for the Revenue that the case relates to assessment year 2010-11 and the Assessing Officer as well as senior officer of Revenue has not taken any remedial action either section 147 or section 263 for examining such issue. Therefore, the Revenue cannot use the Tribunal as tool and technique for second innings even otherwise when no such addition either on account of sundry creditors or unsecured loan was made by Assessing Officer. Therefore, the Ld. CIT-DR for revenue has no right to improve case of Assessing Officer. The tribunal cannot consider new material or information which came to the notice of assessing officer after passing the assessment order. The appellate procedure is designed to adjudicate matter that were originally framed in the assessment order and new material cannot be considered. The issues were otherwise examined by ld CIT(A) after granting opportunity to the assessing officer and the assessee otherwise has fully discharged its onus on both the issues, on which the assessing officer made passing remarks, without making such additions. The support his various contentions, the ld AR fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haste. The assessee made prayed before ld CIT(A) to admit such evidence under Rule 46, as the assessee was prevented by sufficient cause. The additional evidences of the assessee was accepted by the ld CIT(A) by passing order on admissibility of such evidences. The ld CIT(A) referred all such evidences to the assessing officer for his remand report. The assessing officer initiated remand proceedings and issued notice under section 133(6) to India Infoline Limited as well as to Ridham Jewels. We find that both parties responded to the notices of the assessing officer and furnished requires details. On receipt of such requires details, the assessing officer filed his remand report dated 22.03.2016 and second report dated 07/08/2017. 15. We find that in the remand report dated 2.03.2016, on the issue of sundry creditors, the assessing officer reported that during the remand proceedings notices under section133(6) were issued to India Infoline Limited and Ridham Jewels Private Limited for seeking details and nature of transactions with assessee along with confirmation letters, bank statement, copy of return, balance-sheet and profit loss account. India Infoline Limited vide their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lance Rs.26.32 crores was recoverable. During the financial year, 2010-11, the assessee was able to pay Rs.20 lakhs on 29.04.2010, however, no documents was filed by lender whether remaining unsecured loan of Rs.26.12 crores was repaid by assessee and whether loan amount is shown to the asset side of their balance-sheet. We find that the ld CIT(A) after considering confirmations, audited financial statement, ledger account, return of income of lender and held that the claim of unsecured loan of outstanding cannot be denied and the genuineness of same cannot be doubted. The Ld. CIT(A) categorically held that books of assessee was rejected only on the ground of genuineness of sundry creditors and unsecured loan and that expenses were not proved. However, in the remand report, the Assessing Officer has not doubted the genuineness of such sundry creditors and unsecured loan. The ld CIT(A) held that the assessee has proved with supporting documents and there is no doubt about the genuineness of such transaction. We find that ld. CIT(A) on such observation held that rejection of books of account was not warranted. It was also held that when genuineness of sundry creditors and unsecured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we do not find any infirmity or illegality in the order passed by ld CIT(A), which we affirms, with our additional observations. Thus, in view of the aforesaid discussions, we do not find any merit in the ground No.1 to 3 of appeal raised by the revenue. 20. Now adverting to the ground No.4 of the appeal, which relates to enhancement of the assessment by Rs. 77.78 Crore. We find that during the hearing, though, no specific submissions were made by ld CIT-DR for the revenue, except for making prayer that the issue of the sundry creditors and loan may be restore to the file of assessing officer. 21. On the other hand, the ld AR for the assessee strongly objected to such submissions of ld CIT-DR for the revenue. The ld AR for the assessee again retreated and submitted that the assessing officer or ld DR for the revenue cannot use the Tribunal as tool and technique for second innings and Ld. DR for revenue has no right to improve case of Assessing Officer. The Tribunal cannot consider new material or information which came to the notice of assessing officer after passing the assessment order. The appellate procedure is designed to adjudicate matter that were originally framed in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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