VINAYAKAANJNEY IMPEX PRIVATE LIMITED,RAJKOT V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2(1), RAJKOT, RAJKOT

ITA 172/RJT/2024

AI Insights

The case involves Vinayakaanjney Impex Pvt. Ltd., the appellant, contesting an addition of Rs. 45,00,000 made under Section 68 of the Income Tax Act, 1961, by the Assessing Officer, which was upheld by the CIT(A). The addition was based on the grounds that the assessee did not furnish satisfactory details in response to a show cause notice regarding the source of the funds. The assessee argued that the amount was received and repaid through banking channels, and additional evidence was submitted during the appellate proceedings, which was not considered by the CIT(A). The Tribunal found that the CIT(A) had not adhered to the principles of natural justice by not providing these additional evidences to the Assessing Officer for comments and thus decided to remit the matter back for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712776 (ITAT-RAJKOT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Other Referred Cases: PCIT vs. Ambe Trdecorp (P.) Ltd. (2022) 145 taxmann.com 27(Guj)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV; LD.
• Assessee Lawyers: D.M. RINDANI; LD
• Keywords: Set aside; Additional evidence; Principle of natural justice
• Section: 144; 143(3); 68

Judgement Text

" आयकर अपीलȣय अͬधकरण, राजकोट Ûयायपीठ, राजकोट। IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं/.ITA No.172/RJT/2024 Ǔनधा[रण वष[ / Assessment Year: 2017-18 Vinayakaanjney Impex Pvt. Ltd. Jay Meenagali, Mandvi Chowk, Nava Naka Road, Rajkot-360 001 बनाम/ Vs. Assistant Commissioner of Income-tax, Circle-2(1), Rajkot, Aayakar Bhavan, Race Course Ring Road, Rajkot-360 001 èथायीलेखासं /.जीआइआरसं /.PAN/GIR No.: AACCV 0318 D (अपीलाथȸ /Appellant) (Ĥ×यथȸ /Respondent) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri D.M. Rindani, Ld. AR राजèव कȧ ओर से/Revenue by : Shri Abhimanyu Singh Yadav, Ld. Sr-DR सुनवाई कȧ तारȣख /Date of Hearing : 21/07/2025 घोषणा कȧ तारȣख /Date of Pronouncement : 28/07/2025 आदेश / O R D E R PERDR. A. L. SAINI, AM; Captioned appeal filed by the assessee, pertaining to assessment year (AY) 2017-18 is directed against the order passed by the National Faceless Appeal Centre (NFAC)/Learned Commissioner of Income-tax(Appeals) [in short ‘Ld.CIT(A)/NFAC’], under section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), dated 13.03.2024, which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3) of the Income Tax Act,1961, vide order dated 28.12.2019. 2. At the outset Ld. Counsel for assessee submitted that Assessing Officer has made addition to the tune of Rs.45,00,000/- u/s 68 of the Act holding that Printed from counselvise.com ITA No.172/RJT/2024 (AY :17-18) Vinayakaanjney Impex Pvt. Ltd. 2 assessee has not furnished any details in response to the show cause notice. On appeal before Ld. CIT(A), the assessee submitted additional evidence, however, the Ld.CIT(A) has confirmed the addition made by the Assessing Officer. The Ld. Counsel submitted that assessee has submitted additional evidences during appellate proceedings before CIT(A), which were not remitted back to the file of Assessing Officer by Ld.CIT(A) for remand report. However, so far as the facts are concerned, the assessee received the amount of Rs.45,00,000/- through banking channel vide paper book page-40 and assessee has also repaid part amount during the same assessment year to the tune of Rs.17,60,000/-. Therefore, if the assessee has repaid part amount through banking channel in the same year then in that circumstances no addition made u/s 68 of the Act should be made. For that Ld. Counsel relied on the judgment of the Hon’ble jurisdictional High Court in the case of PCIT vs. Ambe Trdecorp (P.) Ltd. (2022) 145 taxmann.com 27(Guj) wherein Hon’ble court held “where assessee took loan from two parties and assessee had furnished requisite material showing identity loan givers and that assessee was not beneficiary as loan was repaid in subsequent year, no addition under section 68 could be made on account of such loan”. The Ld. Counsel for the assessee also took us through the ledger account of Darshanbhai Dilipbhai Udani for the period of 01.04.2015 to 31.03.2016 which is placed at page-41 of the assessee’s paper book. The Ld. Counsel also submitted that transactions were through banking channel and the relevant bank statement is placed at page-46 of the paper book. Therefore, the Ld. Counsel contended that since the assessee filed additional evidence before Ld. CIT(A) the Bench may take appropriate view either to decide appeal or to remit the matter back to the file of Assessing Officer for examination of additional evidence and adjudicate the issue in accordance with law. 3. On the other hand, Ld. Senior DR for the Revenue submitted that since the assessee has filed additional evidences before Ld.CIT(A), therefore one Printed from counselvise.com ITA No.172/RJT/2024 (AY :17-18) Vinayakaanjney Impex Pvt. Ltd. 3 opportunity should be given to Assessing Officer for examination of documents furnished by assessee. The Ld. Sr-DR submitted that a lot of evidences were filed for the first time before Ld. CIT(A) which were not filed before Assessing Officer by the assessee. Therefore, this issue should be remitted back to the file of Assessing Officer for fresh adjudication. 4. We have carefully considered the facts of the case, the submission of the Learned Counsel for the assessee and ld.Senior DR for the Revenue and evidences on record. We have also deliberated the case law relied upon by Ld. Counsel for the assessee. We find that Ld.CIT(A) in his appellate order has stated that assessee has offered no explanation about the nature and source of the sum or the explanation offered by his is not satisfactory in the opinion of AO. Resultantly, he upheld the action of Assessing Officer. Further, we find that under sub-section (4) of Section 250 of the Act the Ld. CIT(A) is empowered to make further enquiry as he thinks fit or to direct AO to make further enquiry and report the result of such enquiry to him. If the appellate authorities fail to exercise his discretion judicially and arbitrarily refuses to make enquiry in a case where the facts and circumstances so demand, his action would be open to correction by higher authorities. In case of ITO vs. Bajoria Foundation 117 Taxman 126 (Cal) the Kolkata ITAT held that where assessment was done u/s 144 of the Act, the assessee obviously did not have opportunities to produce evidence before the AO. In such circumstance, if the assessee produced some evidence before the Ld.CIT(A), such additional evidence was clearly covered by clause-(c) of Rule-46A of the Income-tax Rules, 1962 and admission of same was within the powers vested in Ld. CIT(A) u/s 250(4) of the Act. In view of these facts and circumstances of the case and the decision cited (supra) we are of the considered opinion that the additional evidence produced before the Ld.CIT(A) should have been admitted. We also Printed from counselvise.com ITA No.172/RJT/2024 (AY :17-18) Vinayakaanjney Impex Pvt. Ltd. 4 find that the Ld. CIT(A) has not adhered to the principle of natural justice by not providing these additional evidences to AO for his comments. Accordingly, considering all the facts and in the interest of justice, we set aside the order of Ld. CIT(A) and remit the matter back to the file of AO with a direction to pass de novo assessment order in accordance with law after granting adequate opportunity of hearing to assessee. The assessee is directed to be more vigilant and to furnish all details and explanation as needed by AO by not seeking adjournment without valid reason. With this direction, the grounds of appeal raised by the assessee is treated as allowed for statistical purposes. 5. In the result, appeal filed by the assessee is treated as allowed for statistical purposes. Order is pronounced in the open court on 28/07/2025 Sd/- Sd/- (DINESH MOHAN SINHA) (DR.ARJUNLALSAINI) ÛयाǓयक सदèय/JUDICIAL MEMBER लेखा सदèय/ACCOUNTANT MEMBER राजकोट /Rajkot Ǒदनांक/ Date: 28/07/2025 DKP Outsourcing Sr.P.S आदेश कȧ ĤǓतͧलͪप अĒेͪषत/ Copy of the order forwarded to :  अपीलाथȸ/ The Assessee  Ĥ×यथȸ/ The Respondent  आयकर आयुÈत/ CIT  आयकर आयुÈत(अपील)/ The CIT(A)  ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, राजकोट/ DR, ITAT, RAJKOT  गाड[ फाईल/ Guard File // True Copy // By order/आदेश से , सहायक पंजीकार आयकर अपीलȣय अͬधकरण ,राजकोट Printed from counselvise.com "