M/S RAM NATH DEVELOPERS PVT.LTD.,JHANSI V. ACIT., CIRCLE-2(3)(1), JHANSI

ITA 231/AGR/2018

AI Insights

The case involves M/s. Ramnath Developers Pvt. Ltd., which appealed against the order of the CIT(Appeals)-2, Agra, concerning the assessment year 2014-15. The primary issue was the addition of Rs.8,00,000 as unsecured loans under section 68 of the Income Tax Act, which the Assessing Officer deemed not proved for genuineness and creditworthiness. The Tribunal noted the absence of representation for the assessee and decided the appeal based on the material available, restoring the matter to the Assessing Officer for further investigation.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 23188 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-10-2024
• Assessment Year: 2014-2015
• Appeal Filed On: 02-04-2018
• Other Referred Cases: Sunderesh Bhatia, Liquidator, ABG Shipping Yard Ltd. vs. Central Board of Indirect Taxes and Custom
• Laws Referred To: Income-tax Act, 1961, IBC
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: SHAILENDRA SRIVASTAVA
• Section: 143(3); 142(1); 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE: SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER AND SHRI P.C. YADAV, JUDICIAL MEMBER ITA No. 231/Agr/2018 Assessment Year: 2014-15 M/s. Ramnath Developers Pvt. Ltd., And/or RP appointed under IBC, B-36, Ramnath City, Lalitpur Road, Rajgarh, Jhansi(UP). PAN: AADCR9401N v. ACIT, Circle 2(3)(1), Jhansi (Appellant) (Respondent) Assessee by : None Revenue by : Sh. Shailendra Srivastava, Sr. DR Date of hearing : 08/10/2024 Date of Pronouncement: 07/11/2024 ORDER PER RAMIT KOCHAR, AM: This appeal is arising from order dated 30.11.2017 passed by learned CIT(Appeals)-2, Agra for the assessment year 2014-15, which, in turn, has arisen from the assessment order dated 29.12.2016 passed by the Assessing Officer u/s. 143(3) of the Income-tax Act, 1961. ITA No. 231/Agr/2018 2 2. Brief facts of the case are that assessee has filed return of income on 29.11.2014 declaring an income of Rs.2,81,020/-. Case of the assessee was selected for scrutiny and statutory notices u/s. 143(2) and 142(1) were issued. During the course of assessment proceedings, assessee was asked to submit details of unsecured loans along with address, PAN and copy of ITRs. Assessing Officer observed that the assessee has raised loans from Shri Vijay Tiwari and Mr. Aakash Samadhan Savaikar for Rs.3,50,000/- and Rs. 4,50,000/- respectively, which are not supported by the bank statements, confirmations and Income-tax Returns. The assessee submitted before the Assessing Officer as under : \"Shri Vijay Tiwari [AESPT1070K] has expired and therefore, we are unable to submit copy of his Bank a/c & ITR-V. His confirmation & copy of PAN as available with the assessee- company are enclosed. Mr. Aakash Samadhan Savalkar [DSZPS90300) has provided his confirmation only and has refused to provide his Bank Statement and ITR-V, Stating that they are personal documents and he shall submit them to Income Tax Department directly, when asked from him by the Department.” 3. Assessing Officer observed that the assessee has not proved the genuineness and creditworthiness of the loan providers Shri Vijay Tiwari and Sh. Aakash Samadhan Savaikar, as no copy of their ITRs ITA No. 231/Agr/2018 3 has been filed and the Assessing Officer made the addition of Rs.8,00,000/- on account of unsecured loan raised from Shri Vijay Tiwari and Aakash Samadhan Savaikar u/s. 68 of the Income Tax Act. Aggrieved, the assessee filed first appeal with ld. CIT(Appeals), which was dismissed, as the assessee could not produce copies of bank statements and copy of ITRs to prove the unsecured loans of Rs.3,50,000/- and Rs.4,50,000/- raised from the lenders, namely, Sh. Vijay Tiwari and Aakash Samadhan Savaikar and hence, genuineness of the transactions and creditworthiness of lenders could not be proved. Assessee still aggrieved, has filed second appeal before the Tribunal. 4. During the course of hearing, it was observed that the operational creditors, namely Khard Enterprises has filed petition for insolvency u/s. 9 of the IBC and the matter is pending with National Company Law Tribunal, Allahabad Bench, Prayagraj in CP(IB) No. 451/ALD/2019. The department was asked to file status report. The department has filed the report and has also issued letter to Registrar, NCLT, Prayagraj, which is reproduced as under : ITA No. 231/Agr/2018 4 “To, The Registrar, Hon'ble National Company Law Tribunal, 6/7-B, Panna Lal Road, Prayagraj -211002 Madam/Sir, Sub: Requisition of information in the case of M/s Ramnath Developers Pvt. Ltd. Insolvency application Status filed before NCLT - Reg. Kindly refer to the above mentioned subject. In the above context, as per available information M/s Ramnath Developers Private Limited had filed an application for insolvency/moratorium before the Hon'ble Bench of NCLT, Allahabad. Case of M/s Ramnath Developers Pvt. Ltd. is pending before Income Tax Appellate Tribunal, Agra and ITAT, Agra wants to know the status of the insolvency/moratorium proceedings of the above mentioned company. In this regard you are kindly requested to update this office about the latest status of said insolvency/moratorium proceedings. Yours faithfully Sd/- (A. K. Singh) Income Tax Officer-2(3)(5) Jhansi” 5. Vide order sheet entry dated 16.02.2021, directions were issued earlier by the Bench to bring the pendency of ITA No. 231/Agr/2018 with ITAT, Agra to the notice of IPR Professional, but despite efforts, nobody has represented the assessee before the Tribunal. ITA No. 231/Agr/2018 5 6. Learned DR has prayed for dismissal of appeal of the assessee on the ground that the assessee could not prove the genuineness and creditworthiness of the lenders. 7. We have heard ld. DR and perused the entire material available on record. We observe that the assessee has filed this appeal with the Tribunal and the petition for insolvency u/s. 9 of the IBC was filed with Hon’ble NCLT, Allahabad by operational creditors, M/s. Khard enterprises in CP(IB) No. 451/ALD/2019. The Bench at many occasions on 16.02.2021, 01.05.2024, 13.05.2024, 20.05.2024 and 03.06.2024 had made attempts by giving directions to the counsels of the assessee who were present and/or the department to intimate the RP about pendency of this appeal with the Tribunal, and/or called upon Assessing Officer to submit status report, but despite all efforts, none appeared on behalf of the assessee and this appeal is now decided based on the material on record. It is pertinent to mention at this stage the decision of Hon’ble Supreme Court in Sunderesh Bhatia, Liquidator, ABG Shipping Yard Ltd. vs. Central Board of Indirect Taxes and Custom. So now, we are proceeding to adjudicate this appeal on merits. ITA No. 231/Agr/2018 6 8. It is observed that the assessee has raised loan of Rs.3,50,000/- from Shri Vijay Tiwari and Rs.4,50,000/- from Sh. Aakash Samadhan Savaikar. During the assessment proceedings, assessee was called upon to prove the ingredients of section 68 of the Act by the Assessing Officer, viz., genuineness of the transactions and creditworthiness of the lenders. The assessee submitted as under : \"Shri Vijay Tiwari [AESPT1070K] has expired and therefore, we are unable to submit copy of his Bank a/c & ITR-V. His confirmation & copy of PAN as available with the assessee- company are enclosed. Mr. Aakash Samadhan Savalkar [DSZPS90300) has provided his confirmation only and has refused to provide his Bank Statement and ITR-V, Stating that they are personal documents and he shall submit them to Income Tax Department directly, when asked from him by the Department.” 9. The Assessing Officer did not accept the above contentions of the assessee, as the assessee has failed to prove genuineness of unsecured loans and creditworthiness of the lenders, although assessee has clearly stated that he is not able to obtain personal documents of Shri Aakash Samadhan Savaikar and the lender has submitted that he will submit confirmation directly to the department. Despite such categorical statement by the assessee, both the ITA No. 231/Agr/2018 7 authorities have not proceeded to issue notice to the lenders. It is equally true that the primary onus is on the assessee to prove the ingredients of section 68, but if the assessee has requested the authorities to verify directly, then it was incumbent on the authorities to have made necessary enquiries, the objective being to assess correct income to tax as per statutory provisions of Income Tax. Under these circumstances, it will be fair and in the interest of justice to both the parties that the matter can be restored back to the file of Assessing Officer for making necessary enquiries to arrive at the correct income in compliance of provisions of section 68. Thus, the matter is restored back to the file of Assessing Officer. 10. In the result, appeal is allowed for statistical purposes. Order pronounced in accordance with Rule 34(4) of the Income Tax Appellate Tribunal Rules, 1963 on 07/11/2024 at Agra/Bangalore. Sd/- Sd/- (P.C. YADAV) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 07/11/2024 *aks/- "