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| The Tax Publishers2020 TaxPub(DT) 0154 (Del-Trib) INCOME TAX ACT, 1961
Section 68
Where despite summons issued, the lender did not appear and assessee submitted that given an opportunity, assessee was in a position to produce the said party along with necessary documents to substantiate their credit worthiness, therefore, matter was remanded back to AO with a direction to give one final opportunity to assessee to substantiate its claim
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Income from undisclosed source - Addition under section 68 - Unexplained cash credits - Assessee pleaded opportunity to produce lender
Assessee was engaged in the business of manufacturing of craft paper. AO noted that assessee had received a loan from M/s R. From the details so furnished by assessee, AO noticed that creditworthiness of the lender was not satisfactory and transaction was doubtful as income returned by the lender was Rs. nil. Subsequently, summons were issued to lender for compliance and assessee was also directed to remain present on the date of hearing for filing cross objection during the statement. AO, therefore, asked assessee to substantiate the creditworthiness of M/s R, as the details submitted by assessee and confirmation received from the party prove that the company did not have sufficient funds to advance to assessee. Rejecting the various explanations given by assessee and invoking the provisions of section 68, AO made addition to the income of assessee. Held: It was allegation of AO that despite summons issued, the said party did not appear and the reply given by the said party in response to notice under section 133(6) raises certain doubts. CIT(A) upheld the action of AO. Assessee submitted that given an opportunity, assessee was in a position to produce the said party along with necessary documents to substantiate their credit worthiness. Considering the totality of the facts of the case, matter was remanded back to AO with a direction to give one final opportunity to the assessee to substantiate its case by producing the said party before him.
REFERRED : PCIT (Central) v. NRA Iron & Steel Pvt. Ltd. (2019) 412 ITR 161 (SC) : 2019 TaxPub(DT) 1628 (SC) M/s Anis Ahmad & Sons v. CIT (Appeals) & Anr. (2008) 297 ITR 441 (SC) : 2008 TaxPub(DT) 1503 (SC) CIT v. Daulat Ram Rawatmall (1973) 87 ITR 0349 (SC) : 1973 TaxPub(DT) 0323 (SC) CIT v. Mark Hospitals (P) Ltd. (2015) 373 ITR 115 (MAD.) : 2015 TaxPub(DT) 2072 (Mad-HC) CIT & Anr. v. Anurag Agarwal, Kanpur (2014) 229 TAXMAN 532 (ALL.) CIT v. Avant Grade Carpets Ltd. (2015) 230 TAXMANN165 (ALL.) : 2015 TaxPub(DT) 2904 (All-HC) CIT v. Pancham Dass Jain (2006) 156 Taxman 507 (ALL.) : 2006 TaxPub(DT) 1807 (All-HC) Exoimp Resources (India) Ltd. v. CIT (2005) 276 ITR 87 (KOL.) : 2005 TaxPub(DT) 1013 (Cal-HC)
FAVOUR : In assessee's favour (by way of remand)
A.Y. :
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