In the case of ITA 343/DEL/2019, R.D. Finlease Pvt. Ltd., located in Noida, filed an appeal against the Deputy Commissioner of Income Tax (DCIT), Central Circle, Noida, for the assessment year 2012-13. The appeal was filed on January 17, 2019, challenging the addition of unexplained unsecured loans based on non-incriminating material. The final tribunal order was pronounced on June 16, 2023.
R.D. Finlease Pvt. Ltd., with its registered office at 20,21-22, Sector-16, Noida, Uttar Pradesh, filed its return of income for the assessment year 2012-13. The return was processed, and the assessment was completed. However, a search and seizure action under section 132 of the Income Tax Act was conducted on September 30, 2015, on the premises of the assessee, which is part of the Airwill Group of cases. Following the search, a notice under section 153A was issued to the assessee, leading to the addition of unexplained unsecured loans by the Assessing Officer (AO) based on his enquiry, despite no incriminating materials being found.
The appellant raised several grounds of appeal, primarily focusing on the procedural lapses by the CIT(A) in confirming the addition despite the absence of incriminating material. The appellant argued that the CIT(A) erred in law and on facts in upholding the addition made by the AO.
The ITAT, consisting of Accountant Member Shri Shamim Yahya and Judicial Member Shri Yogesh Kumar US, reviewed the case. The tribunal considered the arguments presented by the appellant, represented by Sh. Sandeep Jain, CA, and the respondent, represented by Sh. Binod Kumar, CIT-DR.
The tribunal found that the CIT(A) had failed to follow these principles and therefore set aside the addition made by the AO. The case was remanded back to the CIT(A) with directions to decide the appeal on merits after providing a reasonable opportunity of hearing to the appellant. The tribunal also directed the appellant to cooperate with the CIT(A) and participate in the appellate proceedings.
In conclusion, the ITAT ruled in favor of R.D. Finlease Pvt. Ltd., setting aside the addition of unexplained unsecured loans made by the AO. The tribunal directed the CIT(A) to decide the appeal on merits and provide a reasoned order after hearing both parties. The appeal was allowed, emphasizing the importance of adhering to principles of natural justice and procedural fairness in tax assessments.
Order pronounced in the open court on 16th June 2023.
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(YOGESH KUMAR US)
JUDICIAL MEMBER
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(SHAMIM YAHYA)
ACCOUNTANT MEMBER
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