MEMANI INVESTMENT & FINANCE PVT LTD,MUMBAI V. INCOME TAX OFFICER-10(2)(4), MUMBAI

ITA 5531/MUM/2024

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Memani Investment & Finance Pvt. Ltd., an NBFC registered with the RBI, appealed against the order of the National Faceless Appeal Centre (NFAC), which had upheld an addition made by the Assessing Officer (AO) regarding an unexplained investment of Rs 5 lakh. This amount was initially treated as an accommodation entry based on incriminating papers found during a survey operation in another entity's case. The assessee contended that the amount was a loan, not an accommodation entry, and had been repaid with interest. The tribunal found that the assessee had not been given a proper opportunity to present its case at the appellate level and thus decided to remand the case back to the AO for a fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470554 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Assessment Year: 2011-2012
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASIF KAR MALI
• Assessee Lawyers: NARAYAN ATAL
• Keywords: Set aside; Opportunity of being heard; Unexplained investment; Principle of natural justice; Non compliance
• Section: 250

Judgement Text

"IN THE INCOME-TAX APPELLATE TRIBUNAL “K” BENCH, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER & SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No. 5531/MUM/2024 (A.Y. 2011-12) Memani Investment & Finance Pvt. Ltd. 2504, Shivshakti Apartments, Vastu Lane, Sundervan Complex, Andheri (West), Mumbai-400 053 v/s. बनाम ITO-Ward-10(2)(4),Mumbai R. No. 211, Aayakar Bhavan, M. K. Marg, Marine Lines, Mumbai- 400 020 \u0001थायी लेखा सं./जीआइआर सं./PAN/GIR No: AADCM3332P Appellant/अपीलाथ\u0014 .. Respondent/\u0015ितवादी Appellant by : Shri Narayan Atal, AR Respondent by : Shri Asif Karmali (Sr. DR) Date of Hearing 21.01.2025 Date of Pronouncement 24.01.2025 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The above captioned appeal has been filed by the assessee against the order passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] u/s 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for the Assessment Years [A.Y.] 2011-12. 2. Facts in brief are that the assessee is an NBFC registered with RBI engaged in the business of investment and finance. Based on certain incriminating papers found during survey operation in the case of one P a g e | 2 ITA No. 5531/Mum/2024 Memani Investment & Finance Pvt. Ltd. M/s Dayal Tours and Travels,it was found that the assessee had received a sum of Rs 5 lakh an accommodation entry.This amount was treated as unexplained investment in the hands of the assessee by the ld.AO on account of its non compliance in the assessment proceedings which was completed in ex parte order u/s 144/147 of the Act .In the subsequent appeal also there was no proper compliance from the assessee who either sought adjournments or made no response at all. Consequently, the ld CIT(A) dismissed the appeal on account of non prosecution thereof by the assessee by holding that it had nothing to say in its defence w.r.t. to the addition made. 3. In the course of hearing the ld.AR of the assessee has contented that the allegation of the appellate authority is not correct in as much the assessee had made a written submission dated 19.06.2019 contesting the addition made by the AO .It was denied that the impugned sum was an accommodation entry rather it was a loan given to a party who also paid interest thereon and also the amount was repaid on 11.11.2011. It was argued that the Ld. CIT(A) proceeded to pass ex parte order without giving effective opportunity of hearing to the assessee.The ld.DR has relied on the orders of authorities below. P a g e | 3 ITA No. 5531/Mum/2024 Memani Investment & Finance Pvt. Ltd. 4. We have carefully considered all the relevant facts of the case,the contents of the orders and rival contentions. It is evident from the contents of the impugned order that despite several opportunities of hearing allowed, there was no compliance by the assessee before the AO. Considering all the relevant facts of the case, we are of the view that following the principles of natural justice, it would be fair and judicious to allow a last opportunity of hearing to the assessee to explain the matter before authorities below in the interests of justice. During the hearing, the Bench proposed for restoration of the matter to the ld.Assessing Officer for a de novo consideration. The Revenue did not oppose this plea. Thus, in the in the interest of justice, we deem it appropriate to send back the case for fresh consideration. The ld. AO shall give proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in the set aside remand proceedings for de novo adjudication of the entire matter. Needless to state, the assessee will comply with notices and make available any details as deemed fit and sought by the Assessing authority . 5. Before parting with the subject,we would like to make it clear that setting aside the appeal for de novo consideration by us ,should not be construed in any manner affecting the merits of the case for which the P a g e | 4 ITA No. 5531/Mum/2024 Memani Investment & Finance Pvt. Ltd. ld.AO is duly empowered to take an independent decision in accordance with the provisions of law. 7. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 24/01/2025. Sd/- Sd/- ANIKESH BANERJEE PRABHASH SHANKAR \u001bाियकसद\u001d /JUDICIAL MEMBER) (लेखाकारसद\u001d/ACCOUNTANT MEMBER) Place: मुंबई/Mumbai िदनांक /Date. 24.01.2025 Dhananjay Sr.PS आदेश की \u0015ितिलिप अ\u001eेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0011 / The Appellant 2. \u0013\u0014थ\u0011 / The Respondent. 3. आयकर आयु\u0018 / CIT 4. िवभागीय \u0013ितिनिध, आयकर अपीलीय अिधकरण DR, ITAT, Mumbai 5. गाड फाईल / Guard file. स\u0014ािपत \u0013ित //True Copy// आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण/ ITAT, Bench, Mumbai. "