Case Number: ITA 1593/DEL/2021
Appellant: DCIT, Central Circle-28, New Delhi
Respondent: Ginni Gold Private Limited, New Delhi
Assessment Year: 2016-2017
Case Filed on: 2021-10-29
Order Type: Final Tribunal Order
Date of Order: 2023-07-27
Pronounced on: 2023-07-27
In the matter of DCIT, Central Circle-28, New Delhi versus Ginni Gold Private Limited, the appeal was filed by DCIT against the order of the CIT(A)-29, New Delhi, dated 19.08.2019, which was in favor of Ginni Gold Private Limited. The case revolves around the disallowance of unexplained liabilities and borrowings for the assessment year 2016-17.
The case was heard before the Delhi Bench ‘H’ of the Income Tax Appellate Tribunal, consisting of Judicial Member Shri Kul Bharat and Accountant Member Shri M. Balaganesh. The appeal was taken up for hearing on 23.06.2023 and the decision was pronounced on 27.07.2023.
The appellant, represented by Ms. Swati Joshi, CIT-DR, raised the following grounds of appeal:
The respondent, represented by Mr. Nirbhay Mehta, Advocate, supported the findings of the CIT(A) and argued that the additions made by the Assessing Officer (AO) were unjustified. The respondent contended that the increases in liabilities were due to genuine business transactions and reclassification of loans.
After considering the submissions and reviewing the material on record, the tribunal made the following observations:
The tribunal noted that the CIT(A) had accepted the additional evidence provided by the respondent, which included repayment schedules and account statements. The reclassification of long-term borrowings into short-term borrowings was also explained and substantiated with the audited balance sheet. The tribunal upheld the CIT(A)’s decision, stating that the addition by the AO was not justified as no fresh loan was taken during the year under appeal.
The tribunal observed that the CIT(A) had correctly identified the nature of the liabilities, which were secured loans from banks and non-banking finance companies. The respondent had provided detailed explanations and supporting documents, which the AO failed to counter effectively. Thus, the tribunal upheld the deletion of this addition as well.
The tribunal found that the CIT(A) had correctly identified the nature of the other current liabilities, which included statutory liabilities like VAT payable and TDS payable, and bank overdrafts. The respondent had provided detailed explanations and supporting documents, which the AO failed to counter effectively. The tribunal upheld the deletion of this addition as well.
The tribunal found that the CIT(A) had made an enhancement based on a new source of income, which was not considered by the AO in the original assessment order. This action was deemed impermissible as per the settled legal principle that the CIT(A) cannot introduce a new source of income during the appellate proceedings.
The tribunal dismissed the appeal filed by the Revenue and allowed the appeal filed by the respondent, Ginni Gold Private Limited, granting relief on all grounds. The order was pronounced in the open court on July 27, 2023.
Order:
In the result, the appeal of the Revenue is dismissed and that of the respondent is allowed.
Order pronounced in the open Court on July 27, 2023.
—
(KUL BHARAT)
JUDICIAL MEMBER
(M. BALAGANESH)
ACCOUNTANT MEMBER
Date: July 27, 2023
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform