IRC (INDIA) LIMITED,KAROL BAGH, CENTREAL DELHI V. ACIT, CIRCLE-1(1), KOLKATA, KOLKATA

ITA 296/KOL/2024

AI Insights

The case involves IRC (India) Limited appealing against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, concerning the assessment year 2016-17. The primary issues in the appeal were the disallowance of cash payments for truck hire charges under section 40A(3) of the Income Tax Act, 1961, and the addition of Rs. 42,43,704 as unexplained cash credit under section 68 of the Act. The Assessing Officer had disallowed a significant amount of cash payments due to insufficient details provided in the required format and treated an advance from customers as unexplained cash credit, which was actually a loan from the directors. The Tribunal decided to restore these issues to the Assessing Officer for further verification, conditional upon the payment of a specified cost by the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32906 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUBHENDU DATTA
• Assessee Lawyers: VED JAIN
• Keywords: Unexplained cash credit
• Section: 250; 68; 40A(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No. 296/KOL/2024 Assessment Year: 2016-17 IRC (INDIA) LIMITED IRC House, Joshi Road, Karol Bagh, Central Delhi, New Delhi-110005. (PAN: AABCI4860L) Vs ACIT, Circle-1(1), Kolkata (Appellant) (Respondent) Present for: Appellant by : Shri Ved Jain, Advocate Respondent by : Shri Subhendu Datta, CIT, DR Date of Hearing : 03.03.2025 Date of Pronouncement : 03.03.2025 O R D E R Per Bench : This is an appeal filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “the Ld. CIT(A)”] vide order no. ITBA/NFAC/S/250/2023-24/1058920844(1) dated 20.12.2023 passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2016-17. 2. Shri Ved Jain, Advocate appeared on behalf of the assessee and Shri Subhendu Datta, CIT, DR appeared on behalf of the revenue. 3. It was submitted by the Ld. AR that in page 4 of the assessment order, the Assessing Officer has made the issue of the payments made by the assessee to various persons in respect of the truck hire charges. It was the submission that the amount to an extent of Rs.14,91,62,982/- has been 2 ITA No.296/KOL/2024 IRC (India) Ltd., AY: 2016-17 paid in cash. It was the submission that the Assessing Officer had asked the assessee to provide the details in a particular format. The assessee had provided the details of only Rs.16,24,340/-. Consequently, the Assessing Officer disallowed the balance of Rs.14,75,38,642/- by invoking the provisions of section 40A(3) of the Act. It was submitted that the details would run into more than 3000 pages. The details were provided before the ld. CIT(A) but again the details were not provided in the format as prescribed by the Assessing Officer. The Ld. CIT(A) had confirmed the assessment order. It was the submission that the issue may be restored to the file of the Assessing Officer for reverification and the assessee would be in a position to provide the details in the format as required by the Assessing Officer. It was further submitted by the Ld. AR that there is a second issue which is in regard to an addition of Rs.42,43,704/-, which was in respect of an amount shown as advance from customers, which was treated as unexplained cash credit by invoking the provisions of section 68 of the Act. It was the submission that this was not actually advance from customers but was loan from the directors of the assessee company. It was the submission that even the details were produced before the Ld. CIT(A), but the Ld. CIT(A) did not consider the explanation and confirmed the addition. It was the submission that this issue may also be restored to the file of the Assessing Officer in so far as the Ld. CIT(A) has held that the assessee has not proved the identity and genuineness of the customers from whom the advances were received whereas this did not relate to the customers but related to the directors of the assessee company. 4. In reply, the ld. CIT, DR vehemently supported the orders of the Assessing Officer and the Ld. CIT(A). It was the submission that adequate opportunity had already been granted to the assessee and the assessee has failed to comply so, no second opportunity should be granted. It was, 3 ITA No.296/KOL/2024 IRC (India) Ltd., AY: 2016-17 therefore, fairly agreed by the ld. CIT, DR that should the issues be restored to the file of the Assessing Officer then cost was to be levied. 5. We have considered the rival submissions. The fact remains that the assessee had been factually granted fair opportunity and the assessee had failed to provide the details within time in the prescribed manner. We are of the view that the assessee can be granted another opportunity to represent its case before the Assessing Officer by providing all details as called for by the Assessing Officer. This being so, the issues in this appeal are restored to the file of the Assessing Officer for re-adjudication subject to a payment of cost of Rs.25,000/- to be deposited under the head A/c. 500 to the Department in a challan within 60 days from the date of this order and the proof of such payment is to be produced before the Assessing Officer when the matter is posted for hearing by the Assessing Officer. Should the assessee fail to make the payment of the cost within the stipulated time and produce the receipt thereof, the order of the Ld. CIT(A) shall stand confirmed. 6. In the result, the appeal of the assessee is partly allowed for statistical purpose with the directions given above. Order dictated and pronounced in the open court. Sd/- Sd/- (Rakesh Mishra) (George Mathan) Accountant Member Judicial Member Dated: 3rd March, 2025 JD, Sr. P.S. 4 ITA No.296/KOL/2024 IRC (India) Ltd., AY: 2016-17 Copy to: 1. The Appellant: IRC (INDIA) LIMITED 2. The Respondent. ACIT, Circle-1(1), Kolkata 3. CIT(A), NFAC, Delhi 4. Pr. CIT 5. DR, ITAT, Kolkata. 6. Guard file. True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata "