DCIT, CIRCLE-1, PATNA V. BIHAR TRADE TOWER(JV), PATNA

ITA 105/PAT/2020

AI Insights

The case involves the Deputy Commissioner of Income Tax (DCIT), Circle-1, Patna as the appellant and Bihar Trade Tower (JV), Patna as the respondent. The appeal arises from an order under section 250 of the Income Tax Act, 1961, passed by the Commissioner of Income Tax (Appeals)-1, Patna. The primary issue in the appeal was the addition of an amount under section 68 of the Act, which pertains to unexplained cash credits. The Assessing Officer had initially added the amount to the income of the assessee, citing inability to establish the identity and genuineness of creditors. However, the CIT(A) reversed this decision, leading to the current appeal by the DCIT.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473719 (ITAT-PATNA)
• Duration Of Justice: 3 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2024
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-11-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 16-12-2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Source of fund
• Section: 250; 68; 133(6)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “PATNA BENCH, PATNA VIRTUAL HEARING AT KOLKATA Before Shri Duvvuru RL Reddy, Vice-President and Shri Sanjay Awasthi, Accountant Member I.T.A. No.105/Pat/2020 Assessment Year: 2016-17 DCIT, Circle-1, Patna ……………………………..........................……….……Appellant vs. Bihar Trade Tower (JV), Patna....……...…………………………………....…..Respondent 46/46, Patliputra Colony, Near Sahyog Hospital, Patna, Bihar – 800013. [PAN: AACAB0114D] Appearances by: Shri Ashok Kumar CIT, appeared on behalf of the appellant. Shri Soumitra Choudhury, Advocate, appeared on behalf of the Respondent. Date of concluding the hearing : November 25, 2024 Date of pronouncing the order : November 27, 2024 ORDER Per Sanjay Awasthi, Accountant Member: 1. This appeal filed by the revenue emanates from order u/s 250 of the Income Tax Act, 1961 [hereinafter referred to as the ‘Act’] dated 09.09.2020 passed by the Commissioner of Income Tax (Appeals)-1, Patna [hereinafter referred to as ‘CIT(A)’]. 2. The brief facts of the case are that the assessee is an AOP and is engaged in property development and filed its return of income declaring total income as Nil on 31.03.2017. The Assessing Officer picked the case for scrutiny for verifying the genuineness regarding share capital. It is seen from the order of the Assessing Officer that he asked for a number of documents/details in order to satisfy that the funds available with the assessee were verifiable on the grounds of identity and genuineness and also establishing genuineness of the transaction. The Assessing Officer I.T.A. No.105/Pat/2020 Assessment Year: 2016-17 Bihar Trade Tower (JV) 2 proceeded to record that the identity and genuineness of creditors could not be satisfactorily established and thereafter, added the impugned amount u/s 68 of the Act. 2.1 This matter was carried in appeal, whereby, the ld. CIT(A) has recorded a finding that the liability of the assessee in terms of discharging the onus cast on him for avoiding rigours of section 68 was duly complied with and he also proceeded to record that in case, the Assessing Officer was unsatisfied with the quality of documents submitted before him then he could have issued notices u/s 133(6) of the Act or conducting any other independent enquiry [page 8 of the impugned order of the ld. CIT(A)]. Needless to say, the assessee succeeded in first appeal, as a result of which the department is now in appeal before the ITAT through the following grounds of appeal: “i) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law by providing relief of Rs.4,44,00,000/- merely on the basis of make- believe balance sheet entries of lender entity and ignoring the fact that MV Hotels Pvt. Ltd. did not prove its creditworthiness and genuineness of the business transaction and source of fund for lending to the assessee. ii) On the facts and in the circumstances of the case, the Ld. CIT(A) failed to appreciate the facts that the assessee has failed to substantiate the source before the A.O during the assessment proceedings and admitted fresh evidence without complying with the provisions of Rule 46A(3) of the I.T Rules. iii) Any other grounds that may be urged at the time of hearing.” 3. Before us, the ld. DR took us through the Assessing Officer’s findings and vehemently argued that the assessee had provided inadequate documentation to establish the application of section 68 of the Act. He also mentioned that as per Ground No.2, the ld. CIT(A) was presumably swayed by the arguments of the assessee on account of documents which were not confronted to the Assessing Officer as specified under Rule 46A of the I.T. Rules. I.T.A. No.105/Pat/2020 Assessment Year: 2016-17 Bihar Trade Tower (JV) 3 3.1 The ld. AR vehemently protested this argument of the ld. DR and said that the same set of documents were submitted before the Assessing Officer and were also presented before the ld. CIT(A), therefore, the assertion that new material was made available to the ld. CIT(A), is not borne out from the records. 4. We have carefully considered the rival submissions and also gone through the orders of the authorities below. It is clear that the department has come in appeal on the ground that some fresh evidence was admitted before the ld. CIT(A), even though the ld. AR has vehemently refuted this assertion. However, it is felt that the assessee deserves a second round of proceedings to conclusively establish the facts regarding verifiability, or otherwise, of the impugned amount. For this purpose, we remand this matter back to the file of the Assessing Officer for fresh adjudication. Needless to say that the Assessing Officer will do well to conduct whatever enquiries are deemed necessary to assess the correct income of the assessee. The assessee would also be required to present the full facts to establish the genuineness of its transaction which, according to him, was always the case. 5. In the result, this appeal is allowed for statistical purposes. Kolkata, the 27th November, 2024. Sd/- Sd/- [Duvvuru RL Reddy] [Sanjay Awasthi] Vice-President Accountant Member Dated: 27.11.2024. RS Copy of the order forwarded to: 1. DCIT, Circle-1, Patna 2.Bihar Trade Tower (JV), Patna 3. CIT(A)- 4. CIT- , 5. CIT(DR), I.T.A. No.105/Pat/2020 Assessment Year: 2016-17 Bihar Trade Tower (JV) 4 //True copy// By order Assistant Registrar, Kolkata Benches "