BOMBAY RAYON CLOTHING LIMITED,MUMBAI V. ASSESSING OFFICER NATIONAL FACELESS APPEAL CENTRE DELHI, DELHI

ITA 3392/MUM/2024

AI Insights

The case involves Bombay Rayon Clothing Limited, which appealed against the order of the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre, Delhi, concerning the assessment year 2018-19. The primary issue was the addition of Rs. 6.79 crores as cash credit under section 68 of the Income Tax Act, 1961, which the Assessing Officer initially added due to the non-existence of the lending company, M/s. Vivid Finance & Holding Pvt. Ltd. The assessee argued that the company was in the process of revival and could provide evidence to substantiate the loan's genuineness, identity, and creditworthiness. The Tribunal found that the assessee had not adequately presented these facts previously and thus provided an opportunity for a re-examination of the case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32162 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEYAQAT ALI AAFAQUI
• Assessee Lawyers: ROHAN DESHPANDE
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice
• Section: 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “B” BENCH : MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA No. 3392/Mum/2024 Assessment Year : 2018-19 Bombay Rayon Clothing Limited, 402, 4th Floor, Kamla HUB N.S. Road No.1, Juhu Scheme Vileparle (West), Mumbai PAN : AACCB6615M vs. Assessing Officer, National Faceless Appeal Centre (NFAC), Delhi (Appellant) (Respondent) Assessee by : Shri Rohan Deshpande Revenue by : Shri Leyaqat Ali Aafaqui Date of Hearing : 06-03-2025 Date of Pronouncement : 07-03-2025 ORDER PER B.R. BASKARAN, A.M : The assessee has filed this appeal challenging the order dt. 25-06-2024 passed by the Ld. Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟] and it relates to AY. 2018-19. The assessee is aggrieved by the decision rendered by the Ld.CIT(A) in confirming the addition of Rs.6.79 crores relating to cash credit added by the AO u/s. 68 of the Income Tax Act, 1961 („the Act‟). 2. The Ld. Counsel appearing on behalf of the assessee submitted that the assessee had taken a loan of Rs. 6.79 crores from a company, 2 ITA No.3392/Mum/2024 named, M/s. Vivid Finance & Holding Pvt. Ltd. The AO noticed that the above said company has ceased to exist and hence, the AO asked the assessee to prove the loan in terms of section 68 of the Act. Since the assessee did not give any valid explanation, the AO added the same u/s. 68 of the Act. Before the Ld.CIT(A), the assessee submitted that the name of the above said company was struck-off by ROC for non- filing of certain documents and the company is very much in existence. It was submitted that the said company is in the process of revival by filing necessary documents. However, since the assessee did not furnish any evidences to prove the identity, creditworthiness and genuineness of the loan. The Ld.CIT(A) also confirmed the addition made by the AO u/s. 68 of the Act. 3. The Ld.AR submitted that the assessee could not properly present the facts relating to the above said company before the tax authorities. He submitted that the assessee has repaid part of loans during the very same year and in the subsequent year. He submitted that the loans so repaid should not be added u/s. 68 of the Act as per certain decisions of the Hon‟ble High Courts. The Ld.AR submitted that the assessee would be in a position to prove the loan in terms of sec.68 of the Act. Accordingly, the Ld.AR prayed for an opportunity to present the facts properly before the AO. 4. We heard the Ld.DR and perused the record. Having regard to the submissions made by the Ld.AR, we notice that certain factual aspects relating to this loan was not properly presented by the assessee and hence the addition has been made by the tax authorities. The assessee now pleads that it would be in a position to furnish relevant details. Accordingly, we are of the view that, in the interest of natural justice, the assessee may be provided with one more opportunity to present its case properly. Accordingly, we set aside the order passed by the Ld.CIT(A) and restore all the issues to the file of the AO for examining 3 ITA No.3392/Mum/2024 them afresh. We also direct the assessee to fully co-operate with the AO for expeditious completion of the assessment. After affording adequate opportunity of being heard to the assessee, the AO may take appropriate decision in accordance with law. 5. In the result, both the appeals are treated as allowed for statistical purposes. Order pronounced in the open court on 07-03-2025 Sd/- Sd/- [SANDEEP GOSAIN] [B.R. BASKARAN] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 07-03-2025 TNMM Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst. Registrar I.T.A.T, Mumbai "