RVT Mansun Trading Pvt. Ltd., New Delhi V. ITO, Ward- 20(4), New Delhi

ITA 7855/DEL/2017

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1410 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 28-12-2017
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Deemed dividend
• Section: 2(22)(e)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘F’ NEW DELHI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA,ACCOUNTANT MEMBER ITA No.7855/Del/2017 Assessment Year: 2013-14 RVT Mansun Trading Pvt. Ltd., C/o M/s. Prekshit Mehta & Co., CAs, 3-4, Double Storey, New Rajinder Nagar, New Delhi – 1100 60 Vs. ITO, Ward-20(4), New Delhi. PAN :AACCR8632E (Appellant) (Respondent) ORDER PER SAKTIJIT DEY, JUDICIAL MEMBER: This is an appeal by the assessee against order dated 22.09.2017 of learned Commissioner of Income Tax (Appeals)-25, New Delhi for the assessment year 2013-14. Appellant by Shri Mrityunjay Kumar, CA Assessee by Shri Toufel Tahir, SR. DR Date of hearing 24.05.2022 Date of pronouncement 24.05.2022 2 ITA No.2900/Del./2019 2. The effective grounds raised by the assessee are as under: 1. Whether the Ld. A.O. has erred in law and facts of the case in making an addition of Rs.1,50,000/- as Deemed Dividend in the hands of the assessee company. 2. Whether the Ld. CIT(A) has erred in law and facts of the case in directing the Assessing Officer to take action for bringing to tax the unexplained credit claimed as loan from M/s. Cubical Consultants Private Limited u/s. 147/148 read with the provisions of Section 150 of the Income-Tax Act, 1961. 3. Briefly, the facts are, assessee, a resident company is stated to be engaged in the business of retail trading. For the assessment year under dispute, assessee had filed its return of income on 30.9.2013 declaring income of Rs.21,400. 4. In course of assessment proceedings, while examining material on record, Assessing Officer noticed that the assessee has long term borrowings from M/s. Cubical Consultants & Developers Pvt. Ltd., wherein, assessee happens to be a shareholder. Further, he observed that in the year under consideration, there is an increase in the amount of loan from M/s. Cubical Consultants & Developers Pvt. Ltd. to the extent of Rs.1,50,000. Observing that all the conditions of section 2(22)(e) of the Act are fulfilled, the Assessing Officer treated the 3 ITA No.2900/Del./2019 amount of Rs.1,50,000 as deemed dividend and added back to the income of the assessee. Assessee contested the aforesaid addition before the learned Commissioner (Appeals). 5. After considering the submissions of assessee in the context of facts and material on record, learned Commissioner (Appeals) agreed with the Assessing Officer that the loan availed of Rs.1,50,000 has to be treated as deemed dividend under Section 2(22)(e) of the Act. 6. Having held so, learned Commissioner (Appeals) observed that, though, assessee stated to have availed the loan/advance from M/s. M/s. Cubical Consultants & Developers Pvt. Ltd. in financial year 2010-11, however, assessee was unable to file any ledger account, documents and evidence in support of any receipt of loan/advance from the concerned entity. Thus, he concluded that the loan/advance from M/s. Cubical Consultants & Developers Pvt. Ltd. amounting to Rs.51,12,390 appearing in the books of the assessee as on 01.04.2010 has to be treated as an unexplained credit. Accordingly, he directed the Assessing Officer to undertake necessary action under Section 147/148 of the Act for bringing to tax such amount at the hands of the assessee. 4 ITA No.2900/Del./2019 7. Before us, learned counsel for the assessee submitted, the amount of Rs.1,50,000 cannot be treated as deemed dividend under Section 2(22)(e) of the Act as it is the interest accrued on the loan/advance availed from the concerned entity. As regards the directions of learned Commissioner (Appeals) to treat the amount of Rs.51,12,390 as unexplained credit in financial year 2010-11, learned counsel for the assessee submitted, before coming to such conclusion learned Commissioner (Appeals) has neither issued any show-cause- notice to the assessee nor has given an opportunity to the assessee to explain the facts. Thus, he submitted, since the departmental authorities have not properly examined the facts, the issues may be restored back. 8. Learned Departmental Representative, though, relied upon the observations of the Assessing Officer and learned Commissioner (Appeals), however, he fairly submitted that the issues can be restored back for fresh adjudication. 9. We have considered rival submissions and perused the material available on record. 5 ITA No.2900/Del./2019 10. As regards, the first issue relating to addition made of Rs.1,50,000 as deemed dividend, undisputedly, the Assessing Officer has treated it as loan/advance availed by the assessee during the year. However, before us, learned counsel for the assessee has vehemently submitted that the amount represents accrued interest on loan/advance availed by the assessee earlier. 11. In our view, aforesaid claim of the assessee requires factual verification. Since, the departmental authorities have not factually verified, whether the amount represents loan availed during the year or accrued interest, we restore the issue to learned Commissioner (Appeals) for fresh adjudication after due opportunity of being heard to the assessee. 12. As regards, the second issue relating to treating the credit of Rs.,51,12,390, appearing in the books of the assessee as on 01.04.2010 as unexplained credits, on a perusal of the impugned order of learned Commissioner (Appeals) it is not clear whether assessee was either issued a show-cause-notice to explain the facts or was given a reasonable opportunity to rebut the charges brought against him. When the credit, admittedly, does not relate to the impugned 6 ITA No.2900/Del./2019 assessment year, which was under appeal before learned Commissioner (Appeals) but relates to assessment year 2011-12, learned Commissioner (Appeals) should have allowed a proper opportunity of hearing to the assessee before issuing any direction to the Assessing Officer. 13. In view of the aforesaid, we are inclined to restore the issue to the file of learned Commissioner (Appeals) for fresh adjudication after due opportunity of being heard to the assessee. Grounds are allowed for statistical purposes. 14. In the result, appeal is allowed for statistical purposes. Order pronounced in the open court on 24 th May, 2022. Sd/- Sd/- (ANADEE NATH MISSHRA) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 24 th May, 2022. Mohan Lal Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi 7 ITA No.2900/Del./2019 Sl. No. Particulars Date 1. Date of dictation (Order drafted through Dragon software): 24.05.2022 2. Date on which the draft of order is placed before the Dictating Member: 3. Date on which the draft of order is placed before the other Member: 25.05.2022 4. Date on which the approved draft of order comes to the Sr. PS/PS: 25.05.2022 5. Date of which the fair order is placed before the Dictating Member for pronouncement: 26.05.2022 6. Date on which the final order received after having been singed/pronounced by the Members: 27.05.2022 7. Date on which the final order is uploaded on the website of ITAT: 30.05.2022 8. Date on which the file goes to the Bench Clerk 30.05.2022 9. Date on which files goes to the Head Clerk: 10. Date on which file goes to the Assistant Registrar for signature on the order: 11. Date of dispatch of order: