M/s. Akar Laminators Ltd., Ahmedabad V. The Income Tax Officer, Ward-1(1)(4), Ahmedabad

ITA 342/AHD/2022

AI Insights

The case involves M/s. Akar Laminators Ltd., which appealed against the order of the Commissioner of Income-tax (Appeals), Ahmedabad-5, concerning the assessment year 2012-13. The primary issues in the appeal were the condonation of a significant delay in filing the appeal and the addition of Rs.4.93 crores to the assessee's income under Section 68 of the Income Tax Act, 1961, related to unsecured loans. The Tribunal found that the delay was due to the assessee's unawareness of the CIT(A)'s order, which was posted online but not checked regularly by the responsible accountant. The Tribunal also addressed the addition made under Section 68, which was contested by the assessee on grounds of the loans being genuine and the necessary details being provided. However, the Tribunal upheld the CIT(A)'s decision on the grounds that the assessee failed to prove the genuineness of the loans adequately.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124735 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 20-06-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 01-09-2022
• Other Referred Cases: Collector of Land Acquisition Vs. Mst. Katiji & Others, N. Balakrishnan Vs. M. Krishnamurthy
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Recovery proceedings; Additional evidence; Condonation of delay; TDS
• Section: 68; 133(6); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFOREMRS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND MRS. MADHUMITA ROY, JUDICIAL MEMBER ITA No. 342/Ahd/2022 नधा रणवष /Assessment Year: 2012-13 M/s. Akar Laminators Ltd., B-505, Infinity Tower, Corporate Road, Prahlad Nagar, Ahmedabad PAN : AABCA 2778 H Vs. Income-tax Officer, Ward-1(1)(4), Ahmedabad अपीलाथ / (Appellant) यथ / (Respondent) Assessee by : Shri Sunil Talati, AR Revenue by : Ms. Saumya Pandey Jain, Sr DR स ु नवाई क तार ख/Date of Hearing : 21.06.2023 घोषणा क तार ख /Date of Pronouncement: 24.08.2023 आदेश/O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER: This appeal is preferred by the assessee against the order of the learned Commissioner of Income-tax (Appeals), Ahmedabad-5 (hereinafter referred to as “CIT(A)”) dated 24.07.2018 passed u/s 250(6) of the Income- tax Act, 1961 (hereinafter referred to as “the Act”) for Assessment Year (AY) 2012-13. 2. The Registry has notified that the appeal has been delayed for filing by 1439 days. The Form No.36 filed by the assessee reveals that the ld. CIT(A)’s order was passed on 24.07.2018 and the appeal has been filed before us on 02.09.2022 resulting in a delay of 1439 days. The assessee has filed an application seeking condonation of delay stating the reason for the delay being non-receipt of the order of the ld. CIT(A), either in physical form or through email. The contention of the assessee was that the ld. CIT(A)’s 2 ITA No. 342/Ahd/2022 M/s. Akar Laminators Ltd Vs. ITO AY :2012-13 order was uploaded on the Income-tax portal, but due to lack of awareness on the part of the person who was responsible for looking after the Finance and Accounts of the Company, the Income-tax portal remained unchecked and, therefore, the assessee was unaware of any order pertaining to the impugned year being passed by the ld. CIT(A) in appeal. That it was only subsequently when the assessee received a mail on 21/08/22 of intimation made for the impugned year under Section 143(1) of the Act, the concerned person checked the portal and found the order passed by the First Appellate Authority for the impugned year. That immediately thereafter on the 02.09.2022 the assessee filed appeal to the ITAT. An affidavit of the Director of the assessee-company Shri Prajesh Shah, stating the above facts on oath, was filed before us and the contents of which are as under:- “I, PRAJESH SHAH, son of MANOJ BHAGWANDAS SHAH, aged about 43 Years, residing at A-203, Akansha, Sai Nagar, Opp. Abhilasha Appartment, Vasai West, Thane - 401202, in connection and continuation with the affidavit dated 02nd September 2022 filed in connection with condonation of delay in filing appeal for AY 2012-13, I hereby solemnly state and affirm as under: That I am the Director of M/s. Akar Laminators Ltd. (hereinafter referred as "Company") bearing PAN AABCA2778H. That the person who was responsible for looking after Finance and Accounts for the Company came to know about the first appeal order passed only when an email was received on 21/08/2022 in which intimation u/s 143(1) of the Income Tax Act, 1961 for AY 2012-13 was attached. On checking the outstanding demand tab on the e-filing portal and verifying the "For your Information" tab on the e-proceeding module, it came to my knowledge that the order in connection with the first appeal was passed. The said email was forwarded to Talati and Talati LLP Chartered Accountants on 28/08/2022.Thereafter appeal was filed on 02/09/2022. The said person responsible for Finance and Accounts seldomly checked the e- filing portal and came to know about the said order passed by the Ld. CIT(A)- 5, Ahmedabad after many days were passed which might be due to some 3 ITA No. 342/Ahd/2022 M/s. Akar Laminators Ltd Vs. ITO AY :2012-13 technical glitch which is occurring even in recent times where the order which is already passed by the officer gets reflected on the portal after many days. After that, in June 2021 the new e-filing portal was launched by the Government of India which had a bumpy start and consisted of many glitches which are being continuously resolved till date. There is a high probability that the order passed by the Ld. CIT(A)-5, Ahmedabad remained to be uploaded or even that the order uploaded on the e-filing website was not getting reflected due to some technical glitch. Whatever is stated hereinabove is true and correct to the best of my knowledge, information and belief and I fully standby and affirm the same. Solemnly affirm on oath today, 31 st day of March, 2023. For Akar Laminators Limited Sd/- Director” 3. The ld. Counsel for the assessee before us also filed the screenshot of the email received by it on 21.08.2022 from the Income-tax Department containing the intimation under Section 143(1) of the Act for the impugned year at paper-book page Nos. 6-8. This factual contention of the assessee, that it had not received any order of the ld. CIT(A) passed for the impugned year in physical form or by email and the fact that an intimation under Section 143(1) of the Act was made for the impugned year in August 2022 ,were confronted to the Ld.DR for her contention on the same, who sought time to confirm the aforesaid facts. The hearing on the condonation application filed by the assessee first took place on 18.05.2023, wherein a detailed order-sheet noting was made of the contention made by the assessee giving the reason for the delay and the time sought by the Department to respond to the application. The contents of the order-sheet entry are as under:- “The appeal filed by the assessee was noted to be time-barred by 1439 days. 2. The ld.counsel for the assessee drew our attention to an application filed before us dated 3.9.2022 requesting for condonation of delay along with 4 ITA No. 342/Ahd/2022 M/s. Akar Laminators Ltd Vs. ITO AY :2012-13 affidavit of the Director of the assessee-company and CA of the assessee- company. Referring to the same, he stated before us that reason for the delay was on account of the fact that the CIT(A)’s order dated 24.7.2018 was uploaded in the Income Tax Website through electronic mode and due to lack of awareness of the person who was responsible for looking after finance and accounts of the assessee company, the order could not be accessed then; that subsequently when an email was received regarding an intimation made by the Department under section 143(1) of the Act for the impugned year ie. Asst.Year 2012-13 on 21.8.2022, when the assessee-company was alerted to find out the fate of its appeal before the ld.CIT(A) against the assessment framed for the impugned year i.e. Asst.Year 2012-13, and it was then that Income Tax portal was accessed on 28.8.2022 and the order passed by the ld.CIT(A) way back on 24.7.2018 accessed by the assessee; that immediately thereafter an appeal was filed by the assessee on 2.9.2022. The claim of the assessee was that no physical copy of the order of the ld.CI(A) was served to it and that even up till now, no recovery proceedings or penalty proceedings have been initiated against the assessee for the impugned year. He pointed out that it was very strange that an intimation under section 143(1) of the Act was made for Asst.Year 2012-13, the impugned year, on 28.8.2022, which is well beyond the period prescribed for making the intimation as per the law. His plea was that this act of the Department itself demonstrated the adhocism exhibited in the e-proceedings being conducted by the Department. 3. To this plea of the ld.counsel for the assessee, the ld.DR stated that she needs time to verify the contentions made by the ld.counsel for the assessee, more particularly contention to the effect that no physical copy of the CIT(A)’s order was served on the assessee’s till date, though passed on 24.7.2018, and also the fact of the intimation under section 143(1) of the Act for the impugned year i.e. Asst.Year 2012-13 was made on21.8.2022 and email sent to the assessee on the same date. The ld.DR sought time to respond to the application seeking contention by the assessee. 4. Considering the above, the matter is adjourned to 1st June, 2023 being kept as part heard for hearing on the aspect of condonation of delay.” 4. Thereafter, on 21.06.2023, when the matter came up for hearing, the Department responded by way of written communication from the concerned Income-tax Officer to the DR stating that the order of the ld. CIT(A), though sent through Registered Post on the address available, was 5 ITA No. 342/Ahd/2022 M/s. Akar Laminators Ltd Vs. ITO AY :2012-13 returned back by the Postal Authority with the remark “NF”. The contents of the letter are as under:- “No. Jt.CIT(ITAT)-1/ 'A' Bench/Akar Laminations/23-24Dated 05.06.2023 The Dy/Asst. Registrar Income-tax Appellate Tribunal, A Bench, Ahmedabad Sir, Sub Appeal before the Hon'ble ITAT, Ahmedabad in the case of - M/s Akar Laminations Ltd - ITA No.342/A/2022 - A.Y.2012-13 - Comments on condonation filed by assessee Date of hearing: 07.06.2023 -reg. Kindly refer to the above. 2. The above referred appeal came up for hearing on 18.05.2023. During the course of hearing, it was observed by the Hon’ble Member, ITAT, A Bench, Ahmedabad that there had been a delay of 1439 days in filing the appeal before the ITAT by the assessee against the order No CIT(A)-5/ITO WO.1(1)(4)/ 10195/2017-18 dated 24.07.2018 of CIT(A)-5, Ahmedabad 3.During the course of hearing, the AR of the assessee has taken a plea that the above referred order of CIT(A) has not been served by the Department to the assessee. The Hon'ble Member, ITAT has directed the Sr. DR to inform them, in writing, the precise facts, after verifying the Department's case records. 4. In view of the above directions on inquiry with the O/o CIT(A)-5 Ahmedabad, it has been gathered that that the order dated 24.07.2018 of CIT(A) was sent through Registered Speed Post on the address available with the O/o of CIT(A)-5, Ahmedabad i.e. Akar Laminations Ltd, 406, Safal Prelude, Opp. AUDA Garden, S.G. Highway, Prahalad Nagar, Ahmedabad. The said envelope (cover) of Registered Speed Post has been returned back by the Postal Authority with a remark NF", which has been received in the O/o CIT(A)-5, Ahmedabad on 07.08.2018 (copy of envelope and acknowledgment enclosed herewith). 5. Considering the above facts of the case, I am directed by the Sr. DR to request your honour to kindly not to accept / consider the condonation 6 ITA No. 342/Ahd/2022 M/s. Akar Laminators Ltd Vs. ITO AY :2012-13 application so filed by the assessee for 1439 days delay in filing its appeal before Hon'ble Tribunal, Ahmedabad. Thanking you, Yours faithfully Sd/- Enct. As above (Ashish Dubey) Income-tax Officer (ITAT) 'A' Bench For Sr. DR, ITAT,'A' Bench, Ahmedabad” 5. In response to the above, ld. Counsel for the assessee responded by stating that, even as per the Department, the CIT(A)’s order remained undelivered to the assessee. The ld. Counsel for the assessee pointed out that, as per the letter submitted by the Department, the order had been served at the address of the assessee i.e. 406, Safal Prelude, Opp. AUDA Garden, S.G. Highway, Prahlad Nagar, Ahmedabad. He pointed out that it was at this address that the assessment proceedings had been undertaken and the assessment order had been passed; but the assessee had since then changed its address and the notices of the ld. CIT(A) for hearing were also sent at the changed address. Our attention was drawn to the notice of the ld. CIT(A) dated 23.03.2018 which was sent at the address B-505, Infinity Tower, Nr. Ramada Hotel, Corporate Road, Prahladnagar, Ahmedabad. The ld. Counsel for the assessee pointed out in the appeal filed to the ITAT, the assessee had mentioned this address only. That it was probably on account of the change of address, which was also in the knowledge of the ld. CIT(A), that the ld. CIT(A)’s order was not received physically and the assessee admitted to its fault of not accessing the Income-tax portal on which the order had been uploaded. He stated that the delay was for bona fide reasons since the assessee did not access the portal and became aware of the order only on receiving an email intimation made under Section 143(1) of the Act for the impugned year in 2022. Hence, though the order was passed by the 7 ITA No. 342/Ahd/2022 M/s. Akar Laminators Ltd Vs. ITO AY :2012-13 ld. CIT(A) in the year 2018, the assessee accessed the order only in the year 2022, after 4 years. Admittedly, the physical copy of the order was never served on the assessee and the same remained unserved due to change in address of the assessee which in all probability the ld.CIT(A) was aware of. The Ld.DR vehemently opposed the condonation of delay stating that clearly the delay was attributable to laxity on the part of the assessee in not accessing the IT portal on which it was posted by the department. 6. We have heard both the parties and gone through the material on record. The law of limitation, fixing life span of legal remedies , provides for delays to be condoned on courts being satisfied of existence of sufficient cause for the delay . This term” sufficient cause” has unanimously been held by courts to be interpreted liberally. Reference is made to the following observations of the Hon’ble Supreme Court in the case of Collector of Land Acquisition Vs. Mst. Katiji& Others 1987 AIR 1353: “1. Ordinarily a litigant does not stand to benefit by lodging an appeal late. 2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 8 ITA No. 342/Ahd/2022 M/s. Akar Laminators Ltd Vs. ITO AY :2012-13 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.” Reference is also made to the decision of the Hon’ble apex court in the case of N. Balakrishnan Vs. M. Krishnamurthy observing as under: “Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth 9 ITA No. 342/Ahd/2022 M/s. Akar Laminators Ltd Vs. ITO AY :2012-13 as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Could should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss.” What derives from various, decisions of Hon’ble Courts is that the reasons assigned by an applicant for explaining the delay is to be construed with a justice oriented approach. 7. In the present case we find that the assessee has made out a reasonable cause for the delay in filing the appeal. It is an admitted fact that the ld. CIT(A)’s order remained unserved to the assessee in physical form having been returned by the Postal Department with the noting “NF” [Not Found] and the reason for the same apparently is that the order was issued at an address where the assessee no longer resides and had shifted to another place which the ld. CIT(A) was aware of since one of the notices of hearing before him was served on that address. Be that so, the Ld.CIT(A) order was also uploaded on the Income-tax portal andthe assessee has fairly admitted to the lapse on the part of its accountant, who was handling these matters, for not having accessed the portal and thus the assessee remaining unaware of the passing of the order by the ld. CIT(A). This explanation does not to our view appear to be highly improbable considering the fact that not every persons is well versed with the technicalities of electronic system of assessments and appeal .And it has been demonstrated before us that when the assessee received an email containing intimation u/s 143(1) of the Act for the impugned year, on 21-08-22, the portal was accessed on 28-08-22 to find 10 ITA No. 342/Ahd/2022 M/s. Akar Laminators Ltd Vs. ITO AY :2012-13 out the fate of appeal for the year and immediately thereafter appeal was filed against the Order of the Ld.CIT(A) on 02-09-22. Thus apparently the assessee proactively resorted to the remedy of appeal on becoming aware of the fate of its appeal before the Ld.CIT(A). 8. The assessee surely derives no benefit by not filing the appeal. On the contrary, a huge addition of approximately Rs.5 crores has been made to the income of the assessee and the punishment to the assessee in the shape of tax liability is clearly disproportionate to the negligence if any for not filing appeal. Therefore, considering from all aspects, we think it fit to condone the delay and admit the appeal for adjudication. 9. This order was pronounced in the open court at the time of hearing of the appeal. 10. We shall now adjudicate the appeal on merits. 11. Ground No. 1 raised by the assessee reads as under:- “1. The Ld. CIT Appeal has erred in confirming the addition of Rs.4,93,91,784/- in respect of Unsecured Loan received without appreciating the facts of the case and details filed during the course of appellate proceedings. It is submitted that complete details with regard to identity, genuineness and creditworthiness of lenders were filed. On the facts and circumstances of the case, the addition made of Rs.4,93,91,784/- under Section 68 of the Act is incorrect and illegal both on facts and on law and the same be deleted. 12. The issue relates to the addition made to the income of the assessee to the tune of Rs.4.93 crores u/s 68 of the Act in relation to unsecured loans whose genuineness remained unproved. 13. As transpires from the orders of the authorities below, the assessee did not appear before the Assessing Officer, who therefore treated the increase 11 ITA No. 342/Ahd/2022 M/s. Akar Laminators Ltd Vs. ITO AY :2012-13 in the unsecured loans as reflected in the difference between the opening balance of unsecured loans and the closing balance of the unsecured loans amounting to Rs.4.93,91,784/- ,as the loans received during the year and in the absence of any confirmation of the same or any evidence filed to prove their creditworthiness, he treated the same as ingenuine and added it to the income of the assessee in terms of Section 68 of the Act. 14. Before the ld. CIT(A), the assessee first demonstrated the reasons for not appearing before the Assessing Officer and thereafter filed additional evidences in support of the addition made to his income of the assessee. The ld. CIT(A) admitted the additional evidences and sought a remand report from the AO. The remand report by the AO was given to the assessee for his comments. The assessee accordingly submitted a rejoinder to the remand report and after considering the same, the ld. CIT(A) upheld the order of the AO taking note of the findings of the Assessing Officer in his remand report. The order of the ld. CIT(A) at paragraph no. 5.5 of his order is as under:- “5.5. During the course of assessment proceedings, on verification of balance sheet, the AO observed that unsecured loan as on 31.03.2011 was Rs.7,38,86,347/- and as on 31.03.2012 it is Rs.12,32,78,131/- it means fresh loan accepted during the year is Rs.4,93,91,784/-. Accordingly, the AO requested the assessee to furnish copy of ledger account/address, PAN of person from whom unsecured loans & advances have been accepted including squared up account alongwith their confirmation and to prove identity, creditworthiness and genuineness with supporting evidence for fresh loanaccepted during the year. However, the assessee failed to prove the identity, creditworthiness and genuineness of the transactions. Accordingly, the AO made the addition u/s.68 of the Act amounting to Rs.4,93,91,784/-. In the remand proceedings, large number of discrepancies have been found by the A.O. The party-wise report of the A.O. is reproduced as under:- l. Particulars of terms of loan, rate of interest, repayment period, how the loan was arranged, other covenants etc. have not been furnished. m. In the Annexure to Form 3CD, 4 parties, namely (i) Rushabh Flexipack Ltd. (ii) Sharp Industries Ltd, (iii) SPL Technochem Ltd and 12 ITA No. 342/Ahd/2022 M/s. Akar Laminators Ltd Vs. ITO AY :2012-13 (iv) Valukko Infrastructure Ltd were named. In the letter dated 07.03.2015, 3 parties namely. (i) Sharp Industries Ltd, (ii) SPL Technochem Ltd and (iii) Videocon Industries Lid have been named. In the 3d submission which are now being considered as part of remand proceedings, 8 companies as referred in para 3 above have been named. There is no consistency whatsoever. n. Sharp Industries Ltd - The nature of transactions have not been explained. The ROI for AY 2012-13 shows Gross Total Income and Total Income as "Rs.0". Creditworthiness and genuineness of transactions do not stand proved despite a major increase in outstanding from Rs. 1,92,30,716.08 to Rs.8,90,37,373.08. For example. There is a large entry of Rs.6,21,19,581/- dated 31.03.2012 with the description "Akar Laminators Unit-I Cr. Bal TRF" which does not appear to be a bank transaction and has no explanation. Similar is the entry for Rs.27,95.950/- dated 31.03.2012 with the explanation "Sharp Industries Ltd - Vasai Branch - Being baltrsf from Vasai books". o. SPL Technochem Ltd- no evidences furnished. p. Videocon Industries Ltd - only ledger in the books of assessee furnished. There is a voucher entry of Rs.80,00,000 dated 03.11.2011 with entry as "Sharp Industries Ltd - Loan" which has not been explained. The key ingredients for proving the identity, genuineness and creditworthiness are lacking. q. Valukko Infrastructure Ltd v. As per Form 3CD, balances were squared up during the year.However, as per confirmation, the outstanding balance as on 31.03.2012 is Rs.23,30,127/-- vi. While the name of company appears in the list of unsecured loans asper Form 3CD, it does not figure in the list submitted with letter dated07.03.2015. vii. The ledger does not show any sale/purchase transactions. Hence, it is not known as to why it was not included in the list of unsecured loans submittedwith letter dated 07.03.2015. viii. The ROI shows that income during AY 2012-13 was "Rs.O". r. Rushabh Flexipack Ltd 13 ITA No. 342/Ahd/2022 M/s. Akar Laminators Ltd Vs. ITO AY :2012-13 v. As per Form 3CD, balances were squared up during the year.However, as per confirmation, the outstanding balance as on 31.03.2012 is Rs.55,00,000/- vi. While the name of company appears in the list of unsecured loans asper Form 3CD, it does not figure in the list submitted with letter dated07.03.2015 vii. The ledger shows two bank transactions of Rs.9 lakhs and Rs.46 lakhs dated 09.02.2012 and 10.02.2012 respectively, it is not known as to why it was not included in the list of unsecured loans submitted with letter dated07.03.2015. viii. The copy of ROI has not been furnished. s. Cat Cosmetics and Healthcare P Ltd t. Not shown in Form 3CD. v. It does not figure in the list submitted with letter dated 07.03.2015. vi. The ledger does not show any purchase / sale transactions. On01.04.2011, there is a ledger entry of Rs.5,20,61,394/- with narration as "Cat Cosmetics & Healthcare P Ltd- Dr baltr. vii. The ROI shows that income during AY 2012-13 was "Rs.0". ii. Ridhi Petrochem P Ltd- copy of ledger confirmation & ROI v. Not shown in Form 3CD vi. It does not figure in the list submitted with letter dated 07.03.2015. vii. The ledger shows purchase/ sale transactions among others. viii. The ROI shows that income during AY 2012-13 was "Rs.0" u. Swastik Bio-Agro Tech P Ltd - copy of ledger confirmation & ROI v. Not shown in Form 3CD. vi. It does not figure in the list submitted with letter dated 07.03.2015. vii. The ledger shows purchase / sale transactions among others. For example, a transaction dated 20.01.2012 for Rs.3,00,00,000 merely shows a narration as "Khetan Overseas Corporation". 14 ITA No. 342/Ahd/2022 M/s. Akar Laminators Ltd Vs. ITO AY :2012-13 viii. The ROI shows that income during AY 2012-13 was "Rs.0". v. Vision Agencies P Ltd v. Not shown in Form 3CD. vi. It does not figure in the list submitted with letter dated 07.03.2015. vii. The ledger shows certain transactions related to payments to ARCIL. viii. The belated ROI filed on 28.03.2014 shows that "tax payable" was Rs. 1,89,030 and was not paid although the return was late by over VA years. 4.4. Thus, there is large-scale discrepancies and inconsistencies in the various submissions of the assessee, which do not stand adequately explained. It is not known why the assessee keeps changing the figures and names of parties in each of the submission 4.5. Nevertheless, in respect of parties in respect of whom confirmations were provided by the assessee, notices us. 133(6) dated 09.10.2017 were issued at the addresses mentioned in the confirmation and sent through speed post. The notices were sent to (i) Sharp Industries Ltd. (a) Valukko Infrastructure Ltd. fill) Cat Cosmetics and Healthcare P Ltd. (v) Ridhi Petrochem P Ltd. (v) Swastik Bio-Agro Tech P Ltd, andivi) Vision Agencies P Lid However, all the notices were returned unserved 5.6. Considering the facts of the case, remand report received from the A.O. and rejoinder filed by the appellant, the AO is justified in making the addition u/s 68 of the Act amounting to Rs.4,93,91,784/-. Thus the addition made by the AO is confirmed and ground of appeal is dismissed.” 15. The contention of the ld. Counsel for the assessee before us was that the ld. CIT(A) had passed a cryptic order without considering the submissions and evidences made/produced by the assessee before him. He pointed out that the ld. CIT(A) had taken a note of the observations of the AO in his remand report that there were inconsistencies in the explanation of the assessee regarding the unsecured loans pointing out three unsecured loans at one point of time and changing it to four and subsequently to 8 15 ITA No. 342/Ahd/2022 M/s. Akar Laminators Ltd Vs. ITO AY :2012-13 unsecured loans. The ld. Counsel for the assessee contended that the facts were to the contrary that the assessee had explained to the ld. CIT(A) that the unsecured loans pertained to five parties only and the details of which were also filed before him. That the 8 parties referred to by the AO included the unsecured creditors and this fact was also explained to the ld. CIT(A). He also pointed out that from the details of unsecured loans submitted to the ld. CIT(A), it was explained to him that during the impugned year the assessee had taken unsecured loans only from one party i.e. Sharp Industries Ltd. whose loan had increased from Rs.1.92 crores to Rs.8.90 crores and the remaining unsecured loans had been returned by the assessee during the year resulting in no increase in unsecured loans for Rs.4.93 crores. He drew our attention to the details of unsecured loans placed before us at page No. 13 of the paper-book as under:- Akar C. LOANS FROM BODIES CRORPORATES 31.03.2011 31.03.2012 Rushabh Flexipack Ltd 0.00 55,00,000.00 SPL Technochem Ltd 0.00 6,97,776.00 6,97,776.00 SHARP INDUSTRIES LTD 0.00 1,92,30,716.08 8,90,37,373.08 Valuko Infrastructure Ltd. 69,14,873.00 VIDEOCON INDUSTREIS LTD 2,70,60,000.00 1,90,60,000.00 5,94,03,365.08 10,87,95,149.08 4,93,91,784.00 16. The ld. Counsel for the assessee contended that the confirmation of this one party i.e. Sharp Industries Ltd. had also been filed before the ld. CIT(A) along with copy of his return of income. That it was evident from the confirmation filed that all the transactions undertaken with the said party were majorly through banking channel or through balance transfer entries. That these balance transfer entries were also explained to the ld. CIT(A) as resulting on account of two branches, both of the assessee and of Sharp Industries Ltd., the balance of which was transferred to one account. 16 ITA No. 342/Ahd/2022 M/s. Akar Laminators Ltd Vs. ITO AY :2012-13 Our attention was drawn to the submissions made by the assessee explaining these transactions to the ld. CIT(A) vide paragraph no. 4.1 (c) of his written submission dated 19.04.2018, which is placed before us at page No.10 of paper-book-1, as under:- “c. As explained earlier the accounts of unsecured loan are in the nature of current account which shows loans taken as well paid and also having sales and purchase transactions. Similar is the case with Sharp Industries Limited. The company has two branches viz. Sharp Head Office Mumbai and Sharp Vasai Division. Whatever balance lying in Vasai Books of the same account are transfer at the year-end in this account to show the net balance. Similarly, Akar Laminators is having two branches Akar Ahmedabad H.O. and Akar Aurangabad. Whatever balance lying in Aurangabad books of the same account are transfer at the year-end in this account to show the net balance.” 17. The ld. Counsel for the assessee contended that the ld. CIT(A) had ignored all these submissions filed by the assessee explaining the parties pertaining to whom the unsecured loans were outstanding as at the beginning and at the end of the year and also the majority of the transactions undertaken with him alongwith evidences of confirmation of balance and also proving the identities of these parties. 18. The ld. DR, on the other hand, relied on the order of the ld. CIT(A). 19. We have heard both the parties and we agree with the ld. Counsel for the assessee that the ld. CIT(A) has upheld the addition made ignoring all the contentions made by the assessee before us. As is evident from the written submissions filed to the ld. CIT(A) along with documentary evidences filed and placed before us in the paper-book, the assessee, we find, had explained that the opening and closing balance of the unsecured loans pertained to only 5 parties listed as above and during the impugned year the assessee had returned all the unsecured loans, except that pertaining to Sharp Industries Ltd. from whom the substantial amount had been taken 17 ITA No. 342/Ahd/2022 M/s. Akar Laminators Ltd Vs. ITO AY :2012-13 during the year. Copy of confirmation of Sharp Industries Ltd. were filed reflecting all transactions through banking channel or through balance transfer entriesand the nature of which also explained by the assessee to the ld. CIT(A) as pertaining to balances of different branches of Sharp Industries Ltd. being transferred to one particular account. But, as we have noted, the ld. CIT(A) paid no heed to the submissions made by the assessee, but on the contrary taking note of the AO’s findings in the remand report, he confirmed the addition, though these findings of the AO in the remand report were suitably explained by the assessee in his submissions to the ld. CIT(A).The findings of the AO regarding inconsistencies in the number of unsecured loans was duly explained by the assessee as the AO having included unsecured creditors in the list of unsecured loans taking figure to 8 as opposed to the assessee pointing out that the unsecured loans pertaining to 5 parties only. The assessee, therefore, had clarified this position to the AO but the ld. CIT(A) took no notice of the same. As is evident from the details filed by the assessee, the increase in unsecured loans pertaining to only one party i.e. Sharp Industries Ltd. regarding which the assessee had also filed adequate evidences by way of confirmation and ITR. Since the assessee’s submission/explanations and evidences have not been adequately considered by the authorities below while confirming the addition, we consider it fit to restore the issue back to the AO to adjudicate it afresh after giving due opportunity of hearing to the assessee. Ground No.1 of the assessee’s appeal is, therefore, allowed for statistical purposes. 20. Ground of appeal No.2 reads as under:- “2. The Ld. CIT Appeal has erred in confirming the disallowance of Rs.3,50,000/- being Sales Promotion Expenses. On the facts and circumstances of the case, the disallowance of Sales Promotion Expenses confirmed of Rs 3,50,000/- be deleted.” 18 ITA No. 342/Ahd/2022 M/s. Akar Laminators Ltd Vs. ITO AY :2012-13 21. This issue relates to disallowance of Sales Promotion Expenses amounting to Rs.3,50,000/-. The same was disallowed by the Assessing Officer noting that no TDS had been deducted on the said payment and the assessee, therefore, was found to have violated the provisions of Section 40(a)(ia) of the Act. Before the ld. CIT(A), the assessee was unable to justify its claim and accordingly the ld. CIT(A) confirmed the addition. Even before us, the ld. Counsel for the assessee was not able to make out a case for the eligibility of assessee’s claim for Sales Promotion Expenses in the absence of TDS thereon. In view of the same, we see no reason to interfere with the order of the ld. CIT(A) confirming the disallowance of Sales Promotion Expenses to the tune of Rs.3,50,000/-. Ground of appeal No.2 is accordingly dismissed. 21. In effect, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 24/08/2023 at Ahmedabad. Sd/- Sd/- (MADHUMITA ROY) JUDICIAL MEMBER (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad;Dated 24/08/2023