Case Number: ITA 1592/DEL/2021
Appellant: DCIT, Central Circle-28, New Delhi
Respondent: Goel Exim India Pvt. Ltd., Delhi
Assessment Year: 2016-2017
Case Filed on: 2021-10-29
Order Type: Final Tribunal Order
Date of Order: 2023-09-22
Pronounced on: 2023-09-22
In the matter of DCIT, Central Circle-28, New Delhi versus Goel Exim India Pvt. Ltd., the appeal was filed by DCIT against the order of the CIT(A)-29, New Delhi, dated 19.08.2021, which was in favor of Goel Exim India Pvt. Ltd. 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 ‘C’ of the Income Tax Appellate Tribunal, consisting of Accountant Member Shri N.K. Billaiya and Judicial Member Shri Anubhav Sharma. The appeal was taken up for hearing on 19.07.2023 and the decision was pronounced on 22.09.2023.
The appellant, represented by Sh. Vivek Vardhan, Sr. DR, raised the following grounds of appeal:
The respondent, represented by Sh. Nirbhay Mehta, Adv., 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 reclassification of loans and genuine business transactions.
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 from Reliance Capital Ltd. 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 included statutory liabilities like VAT payable and TDS payable, bank overdrafts, and advances from individuals. 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 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, Goel Exim India Pvt. Ltd., granting relief on all grounds. The order was pronounced in the open court on September 22, 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 September 22, 2023.
—
(N.K. BILLAIYA)
ACCOUNTANT MEMBER
(ANUBHAV SHARMA)
JUDICIAL MEMBER
Date: September 22, 2023
DCIT Central Circle-28 New Delhi vs Goel Exim India Pvt. Ltd: Unexplained Liabilities for AY 2016-17
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