INCOME TAX OFFICER-19(1)(5), MUMBAI V. HARISHKUMAR VASTIMAL MEHTA, MUMBAI

ITA 2247/MUM/2025

AI Insights

The case involves an appeal by the Income Tax Officer against the order of the CIT(A) which had deleted additions made on account of unexplained unsecured loans amounting to Rs. 4,40,06,619. The AO had initially added these amounts to the assessee's income for the A.Y. 2016-17, considering them non-genuine due to lack of sufficient evidence of their authenticity and creditworthiness. The CIT(A), however, found that the assessee had provided adequate evidence to prove the genuineness of the loans and the creditworthiness of the creditors, thus deleting the additions. The tribunal, upon reviewing the case, noted procedural lapses in the CIT(A)'s handling of new evidence and the absence of a remand report from the AO, leading to the decision to remand the case back for a fresh evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 778179 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2016-2017
• Appeal Filed On: 30-03-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: PANKAJ JAIN
• Keywords: Set aside; Additional evidence; Onus to prove
• Section: 143(3); 133(6)

Judgement Text

"IN THE INCOME-TAX APPELLATE TRIBUNAL“E” BENCH, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER & SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No. 2247/MUM/2025 (A.Y. 2016-17) Income Tax Officer – 19(1)(5), Room No. 502, 5 th Floor, Piramal Chambers, Lalbaug, Parel, Mumbai – 400 012, Maharashtra v/s. बनाम Harishkumar Vastimal Mehta Office No. 16, 2nd Floor, Kikabhai Mansion 7, Kika Street, Gulalwadi, Mumbai – 400 004, Maharashtra स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAMPM4020A Appellant/अपीलार्थी .. Respondent/प्रतिवादी Appellant by : Shri Pankaj Jain, AR Respondent by : Shri Hemanshu Joshi, (Sr. DR) Date of Hearing 30.07.2025 Date of Pronouncement 06.10.2025 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The present appeal is preferred by the Revenue against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to the assessment order passed u/s. 143(3) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 26.12.2018 for the Assessment Year [A.Y.]2016-17. Printed from counselvise.com P a g e | 2 ITA No. 2247/Mum/2025 A.Y. 2016-17 Harishkumar Vastimal Mehta 2. The grounds of appeal are as under:- 1. Whether on the facts and circumstances of the case and in law, the ld.CIT(A) erred in deleting the addition of Rs. 4,40,06,619/- made on account of unexplained unsecured loans by treating the loans taken from 21 creditors as a non-genuine loan? 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 4,40,06,619/- made on account of unsecured loans, without appreciating the fact that assessee has failed to respond to the notices sent u/s. 133(6) of the Act and discharged his primary onus to prove the identity, creditworthiness of the loans and creditors with documentary evidences or any confirmation, in spite of opportunities provided during the assessment proceedings ?” 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 4,40,06,619/ made by the on account of unsecured loans, without appreciating, the assessee has not even responded to final showcase notice Dated. 21.12.2018, to prove the genuineness of the transactions, but has not responded till the last date of forming the assessment order?” 4. Whether on the facts and the circumstances of the case and in law, the Ld.CIT(A) has erred in considered these written submissions alongwith the documentary evidences filed by the Assessee during the appellate proceedings without asking Remand Report from the Assessing Officer, as prescribed in rule 46A of Income-Tax Act, 1962?” 3. Brief facts of the case are that the return of income was filed declaring total income of Rs 4,89,230/-. The case was selected for scrutiny in respect of unsecured loans and sundry creditors to whom notices u/s 133(6) of the Act were sent by the AO. However,no confirmations were received from these parties. The assessee was also show caused to produce them before him which was also not complied.Accordingly, Rs. 4,40,06,619/-, being Unsecured loans and Printed from counselvise.com P a g e | 3 ITA No. 2247/Mum/2025 A.Y. 2016-17 Harishkumar Vastimal Mehta Rs. 92,46,533/-, being Sundry creditors were considered unexplained and non-genuine and added to the returned income. 4. In the subsequent appeal filed before the ld.CIT(A), the assessee furnished various details contending that during assessment proceedings, it submitted copies of income tax returns, details of unsecured loans and their bank statements evidencing the transactions. However, the AO did not take any cognizance of the details and simply proceeded to make the additions. During the course of appellate proceedings, the assessee filed various details in respect of unsecured loans and sundry creditors. The assessee again furnished confirmation letters, ITR-V acknowledgements, bank statements and ledger accounts of the parties of the unsecured loans evidencing identity, genuineness and creditworthiness. It also submitted the confirmation letters in respect of outstanding sundry creditors along with sample invoices as filed bank statements evidencing the creditworthiness of the lenders. After going through the above details, it was noted by the ld.CIT(A) that the assessee sufficiently discharged the onus to prove the genuineness, identity and creditworthiness and there was no reason to make any addition in this regard. Accordingly, the additions made by the AO were held to be not warranted and were deleted. Printed from counselvise.com P a g e | 4 ITA No. 2247/Mum/2025 A.Y. 2016-17 Harishkumar Vastimal Mehta 5. Before us, the ld. Departmental Representative has vehemently argued that the ld.CIT(A) was not justified in deleting both the additions by taking into consideration various information and details filed for the time before him and without calling for any remand report in terms of Rule 46A.On the other hand, the ld.AR has contented that most of the documents were already filed before the AO who did not take due cognizance of the same.More details filed before the ld.CIT(A) were only some clarificatory additional documents u/r 46A.Therefore,technical ground raised by the Revenue deserved to be dismissed. 6. We have carefully perused the records and duly considered the rival submissions. We find sufficient merits in the contentions of the ld.DR that the ld.CIT(A) took cognizance of various details,documents etc. filed for the first time by the assessee as already narrated in the paras 4 above. But he did not consider it necessary to call for remand report from the AO which does not appear to be justified and in accordance with the provisions of law.We strongly feel that the AO should have been afforded a reasonable opportunity to oppose and test the additional evidences. Printed from counselvise.com P a g e | 5 ITA No. 2247/Mum/2025 A.Y. 2016-17 Harishkumar Vastimal Mehta 6.1 In view of the foregoing, the impugned order is set aside, remanding the matter to the CIT(A), for deciding the appeal afresh afteraffording reasonable opportunity to both the sides in respect of the additional evidence filed before him in terms of Rule 46A. Needless to say that nothing is opined on the merits of the case by us and none of the observations made hereinabove shall, in any manner, prejudice the right of either of the parties in deciding the appeal afresh by the appellate authority. 7. In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 06/10/2025. Sd/- Sd/- NARENDER KUMAR CHOUDHRY PRABHASH SHANKAR (न्याययक सदस्य /JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai ददनाुंक /Date 06.10.2025 Lubhna Shaikh / Steno आदेश की प्रयियलयि अग्रेयिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. Printed from counselvise.com P a g e | 6 ITA No. 2247/Mum/2025 A.Y. 2016-17 Harishkumar Vastimal Mehta 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीलीय अयिकरण/ ITAT, Bench, Mumbai. Printed from counselvise.com "