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TMI Blog2024 (6) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... hat assessee/appellant be given opportunity to file additional evidence in support of his claim of identity of the parties who advanced loans and their creditworthiness alongwith genuineness of the transactions. In view of the provisions of the Rule 30 of the Appellate Tribunal Rules, 1963 and in the given facts and circumstances, the case is restored to the file of the Ld. AO who shall consider the additional evidence to be filed by the assessee/appellant before the Ld. AO within the period of 60 days from this order. The grounds of the appeal are allowed for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,95,03,247 17,79,671 2,11,04,951 Total 2,25,00,000 1,51,31,232 4. During the course of assessment proceedings, the assessee filed confirmation of the above loan parties alongwith copy of ITR and relevant page of the Bank Statement. In order to verify the identity, genuineness, creditworthiness and modes of operandi of the lenders, notice under section 133(6) was issued to the above-mentioned unsecured loan parties. 5. The matter was referred to the DIT (Investigation) Unit-1, Surat, vide letter dated 11.12.2017 stated that lenders parties are not available on the given address and no business activity was undergoing on the address of the unsecured loan parties. Hence, genuineness of the interest expenditure and identity of the unsecured loan parties remained unexplained. 6. Accordingly, a show cause notice dated 13.12.2017 was issued to the assessee. In response to the show cause notice, the assessee filed submissions vide letter dated 13.12.2017. In the said response, the assessee has given details of the financial documents and property of the unsecured loan creditors. The assessee has taken loan from the parties to utilize the same for business purposes. TDS has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(1)(c) was also initiated against the assessee. The said observation contained in the assessment order dated 27.12.2017 has been challenged under section 250 of "the Act" before the Ld. CIT(A). The First Appellate Authority i.e., the Ld. CIT(A) has dismissed the appeal vide impugned order dated 19.10.2023. Hence, the present appeal has been instituted on the following grounds: - "Addition/disallowance of Rs. 3,76,31,232/-: a. The learned CIT (A) erred in upholding the addition/disallowance aggregate of Rs. 3,76,31,232/-, being loan taken of Rs. 2,25,00,000/- during the year and Rs. 1,51,31,232/- being interest paid to 8 parties on loans of previous years (reduced from closing WIP by AO), without appreciating that assessee had duly discharged the burden of proof by producing all the primary evidence namely loan confirmation, ITR & audited financial, copies of bank statement of lenders, repayment details etc. in support of the loan parties, therefore the addition/disallowance sustained by the Id. CIT(A) is not justified. b. The learned CIT (A) failed to appreciate that loan parties are assessed to tax, transaction is by A/c payee cheques and all primary evidence were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nexistence of the parties is illegal because the Hon'ble ITAT has already found those parties are genuine and the order of the Hon'ble Tribunal was available before the Ld. CIT(A) and for that reasons the findings of the Ld. CIT(A) are perverse. ix. The documents which are necessary to prove the genuineness and creditworthiness of the parties from whom the unsecured loans were taken can be permitted under Rule 29 of the Appellate Tribunal Rule, 1963 and for that reasons, the application for additional evidence has been made by the assessee/appellant which may be considered by the Hon'ble Tribunal as there was justified reasons for non-production of said additional evidence before the Ld. AO by the assessee/appellant. 12. The Ld. AR on behalf of assessee has relied upon the following citations: - a. PCIT Vs. Ambe Tradecorp (P.) Ltd. [2023] 290 Taxman 471 (Gujrat) [05-07-2022]. b. DCIT Vs. Shri Jayesh R. Thakkar, ITA No. 3407/AHD/2015, A.Y. 2011-12, dated 16.10.2023, (Ahmd-Trib). c. H.R. Mehta Vs. ACIT, (Bombay)[2016] 387 ITR 561 (Bombay) [30.06.2016] d. CIT Vs. Kapoor Chand Mangesh Chand, [2013] 218 Taxman 157 (Allahabad) (Mag.) e. Pr. CIT Vs. M/s. Skylark Build ITXA No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the same time, AO stated these parties were not credit worthy. In this respect, the A.O had not placed on record any corroborative evidence to show that cash had been paid by the assessee to these parties for availing the loans and had not been able to establish the cash trail at all. On the contrary, the assessee had filed the entire documents, required to establish the identity of the creditors and their creditworthiness, as well as the genuineness of the transaction." 17. Thus, it is clear that in the case before the Ld. Coordinate Bench, the assessee has filed all the documents before the Ld. AO who had failed to consider the same, therefore, the same were duly considered by the Ld. CIT(A) and for that reasons, the Ld. Tribunal dismissed the appeal of the revenue against the order of the CIT(A). 18. Now the question before us is whether the assessee/appellant can be permitted to file additional evidence in order to establish the identity of the creditors and their creditworthiness as well as genuineness of the transaction. 19. The assessee/appellant has sought permission of the additional evidence under Rule 29 of Appellate Tribunal Rules, 1963. Therefore, let us examine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, will fall under clause (c) of sub-rule (1) of rule 46A of the Rules. In any view of the matter, we are of the opinion that in the instant case, the Appellate Assistant Commissioner should have considered the evidence produced by the assessee in regard to the loan of Rs. 40,000 from Champaklal Dalpatrai. In view of the above, we answer question No. 3 in the negative and in favour of the assessee. In view of the above answer to question No. 3, questions Nos. 1 and 2 need not be answered." 21. The Hon'ble High Court of Karnataka in ITA No. 506 of 2018, M/s. Google India Private Ltd. Vs. The Commissioner of Income Tax, order dated 17.04.2021 has been pleased to hold that if additional evidence is to be considered and allowed by the Tribunal, the parties to the proceedings or the affected party should be well aware of the said material/additional evidence, before the same is considered by the Hon'ble Tribunal. Para 19 of the judgement of the Hon'ble High Court of Karnataka in ITA No. 506 of 2018 referred (supra) is relevant and reproduced as under: "19. In the considered opinion of this Court, keeping in view Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 and also keep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ublic domain and that the evidence already produced was sufficient to substantiate the case of the assessee. In the absence of any contrary material brought on record by the revenue to oppose the allowing of the additional evidence, at this stage, we have no reason to disbelieve the contents of the application and genuineness of the claim of the assessee/appellant for producing additional evidence. 24. For the above reasons, we find reasons to allow the additional evidence to be filed by the assessee/appellant in order to establish the genuineness of the transactions. It is so because in case the judgment of the Ld. Coordinate Bench is to be considered wherein the identity of the parties, there creditworthiness and genuineness of the transactions were considered because the documents have already been filed before the Ld. AO, hence, the genuineness of the transaction needs to be established independently by the assessee for the relevant A.Y. 2015-16. For that reasons, the end of justice requires that assessee/appellant be given opportunity to file additional evidence in support of his claim of identity of the parties who advanced loans and their creditworthiness alongwith genuinen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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