Case Number: ITA 1188/DEL/2019
Appellant: Naman Alloys Pvt Ltd, New Delhi
Respondent: ACIT Circle-17(2), New Delhi
Assessment Year: 2015-16
Case Filed On: 2019-02-14
Order Type: Final Tribunal Order
Date of Order: 2022-06-15
Date of Pronouncement: 2022-06-15
The case of Naman Alloys Pvt Ltd vs. ACIT Circle-17(2) pertains to the assessment year 2015-16. The appellant, Naman Alloys Pvt Ltd, filed an appeal against the appellate order dated 21.01.2019, passed by CIT(A)-6, Delhi, in appeal no. 6/10281/2017-18. The original assessment order was dated 22.12.2017 and was passed under Section 143(3) of the Income Tax Act, 1961, by the Assistant Commissioner of Income Tax, Circle-17(2), New Delhi.
Naman Alloys Pvt Ltd had declared a loss of Rs. 49,47,177 in its return of income. During the scrutiny of the case, the Assessing Officer (AO) found that the company had shown an unsecured loan of Rs. 10,00,000 in the relevant year. The source of this loan was questioned as it was claimed to be from the company’s Director, Shri Shivcharan Lal Gupta, who allegedly provided the loan from his personal sources to meet certain expenses of the company, which was running in losses.
The CIT(A) sustained the addition of Rs. 10 lakhs under Section 68 of the Income Tax Act. Aggrieved by this decision, Naman Alloys Pvt Ltd filed an appeal, raising the following ground:
“That on facts and in the circumstances of the case and in law the Learned CIT(Appeals) erred in confirming additions made by the AO in a sum of Rs. 10,00,000 being the amount of expenditure incurred on behalf of assessee company by the Director invoking section 68 of the Income Tax Act, 1961. The action being most arbitrary, erroneous and unlawful, it is prayed that the same must be quashed.”
The case was called for hearing on 25.05.2022. Shri Shivcharan Lal Gupta, Director of Naman Alloys Pvt Ltd, appeared in person and submitted a clarification. He presented bank statements and a cash book statement showing that the Rs. 10 lakhs deposited in the company’s account were withdrawn from his wife’s Axis Bank account.
The Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘E’, presided over by Hon’ble President Shri G.S. Pannu and Judicial Member Shri Anubhav Sharma, found that the tax authorities had primarily questioned the source of the source of the creditor. In the interest of justice, the bench decided to set aside the impugned assessment order and directed the AO to examine the explanation provided by the appellant.
The tribunal emphasized the necessity of giving the appellant a reasonable opportunity of hearing to explain the source of the source of the unsecured loan.
In conclusion, the appeal of Naman Alloys Pvt Ltd was allowed, and the issue was remanded to the files of the AO for a fresh assessment. This decision was pronounced on 15.06.2022.
Order:
Order pronounced in the open court on 15th June, 2022.
Signed:
(G.S. PANNU) PRESIDENT
(ANUBHAV SHARMA) JUDICIAL MEMBER
Date:- 15.06.2022
*Binita, SR.P.S*
Copy forwarded to:
By Order
Assistant Registrar, ITAT, New Delhi
Naman Alloys Pvt Ltd vs. ACIT Circle-17(2): Tax Appeal on Unsecured Loan under Section 68
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