×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
This assessee’s appeal for assessment year 2014-15 arises against the Commissioner of Income Tax (Appeals)-15, Kolkata’s order dated 14.09.2017 passed in case No.10340/CIT(A)-15/16-17(1)/Kol, involving proceedings u/s/. 143(3) of the Income Tax Act, 1961; in short ‘the Act’.
Heard both the parties. We proceed to adjudicate assessee’s main appeal itself ITA No.2585/Kol/2018 with the consent of both the parties. The assessee’s stay application No.07/Kol/2019 is not pressed during the course of hearing therefore.
2. Coming to main appeal ITA No.2585/Kol/2018, Mr. Agarwal is fair enough in not pressing for the assessee’s first two substantive grounds challenging correctness of the both the lower authorities’ action disallowing donation / subscription as well as entertainment expenses of ₹1,445/- and ₹12,075/-; respectively. These two substantive grounds are dismissed as not pressed.
3. Next comes the assessee’s third substantive grievance that the Assessing Officer as well as the CIT(A) have erred in adding his loan amount from M/s Chakra Infrastructure Ltd. (hereinafter referred to as CIL) as unexplained cash credits u/s. 68 of the Act.
4. We advert to relevant facts as per para-6 pages 2 and 3 in assessment order dated 26.12.2016. The Assessing Officer had issued section 133(6) notice to CIL which stood returned back by the Postal Authority “left”. He then required the assessee to profile photo id , supportive documents, profit and loss account, balancesheet and return relating to the relevant previous year creditworthiness and the corresponding bank statement thereof.
5. Case file suggests that CIL’s director Shri, Pranab KR. Roy appeared before the Assessing Officer on 19.12.2016 alongwith voter ID card, muster data, director’s signatory details and unsigned confirmation of account in assessee’s name. He stated that CIL profit and loss account, balance-sheet, ITR and bank statement for financial year 2013-14 was not readily available. The Assessing Officer observes that assessee thereafter filed the other entities ledger copy as on 31.03.2014 with closing balance of ₹6,44,95,068/- after adjusting all credit / debit entries in the relevant previous years. He concluded in this fact that the assessee’s failure in getting even the confirmation from the other side invited unexplained cash credits addition u/s68 of the Act.
6. The assessee filed appeal. He placed on record additional submission as well during the lower appellate proceedings. The CIT(A) called for the Assessing Officer’s response. The assessee’s Assessing Officer submitted his remand report in the lower appellate proceedings. The CIT(A) holds that as per the Assessing Officer’s action raising various issues in the remand report, it emerged that Shri Roy had not filed his return for assessment year 2014-15. The assessee’s sale agreement with the said entity was unregistered firm, the Stock Exchange Board of India, SEBI had barred its director from capital market with further direction to refund investors money. The police had filed a case on 09.07.2014 and the department’s inspector had found its address as not correct; sufficiently indicated that the impugned addition had been rightly made during the course of assessment. This leaves the assessee aggrieved.
7. We have given our thoughtful contentions to rival pleadings against and in support of the impugned addition. The assessee’s detailed evidence i.e. copy of agreement, sale dated 24.11.2011, ledger account of CIL and its confirmation coming from other side alongwith the Assessing Officer’s remand report dated 28.08.2017; stand perused.
8. We notice from the Assessing Officer’s remand report that the assessee had stated purpose of the impugned sum to be regarding advance money stipulated in the agreement to sale with CIL involving of six storied building alongwith the land of Chakra Nayantara Hotel including furniture and fixtures for a consideration amount of ₹10 crores payable from time to time by 31.03.2014. He then stated that this deal could not materialize the Assessing Officer’s remand report deals with all the issue as under:-
“IV) Ground No.6
1. This ground relates to the addition of Rs.6,4495,068/- made by the Ld. AO.
2. The addition was made regarding loan &advance taken from M/s Chakra Infrastructure Ltd. amount of outstanding loan as on 31.03.2014 was Rs.6,44,96,068/-
3. In this regard, to verify the loan transaction, u/s. 133(6) notice was issued on 9.11.2016 which was returned back by the postal authority with the remark ‘that the loan creditor was not found” on the given address at M/s Chakra Infrastructure Ltd., Chakramadhumati, 40D North Purbachal, Haltu, Kalitala Link Road, Kolkat-700078.
4. The assessee was asked to produce the party. As per order sheet noting dated 19.12.2016, Sri Pranab KR. Roy, Director of M/s Chakra Infrastructure Ltd., submitted a photocopy of his ID card and one unsigned confirmation of account.
5. The documents which were called by 133(6) notice were not submitted by him like profit & loss account. Balance-sheet and bank statement of M/s Chakra Infrastructure Ltd.