Tribunal Adjusts Appeal: Section 68 Addition Deleted for Some, Confirmed for Mr. Arvind; Late Section 43CA Appeal Dismissed.

The Tribunal partially allowed the appeal, deleting the addition under Section 68 for Mr. Solanki and M/s Mewad Infrastructure (P) Ltd., as the necessary documentation was provided and no adverse findings were reported. However, the addition for Mr. Arvind was confirmed due to a lack of supporting documentation. The additional ground of appeal regarding Section 43CA was not admitted due to delayed filing without sufficient justification.

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Issues Involved:

1. Addition under Section 68 for unexplained cash credit.
2. Admission of additional ground of appeal regarding addition under Section 43CA.

Detailed Analysis:

1. Addition under Section 68 for unexplained cash credit:

The primary issue is the addition of Rs. 22,50,000 under Section 68 for unexplained cash credit. The assessee filed a return of income declaring Rs. 8,59,010, but the assessment was completed at Rs. 32,78,890, including the disputed addition. The assessee provided documentation, including the name, PAN, address, confirmations, ITR, financial statements, and bank statements for loans from Mr. S.L. Solanki and M/s Mewad Infrastructure (P) Ltd. The loans were taken through banking channels, and M/s Mewad Infrastructure (P) Ltd.'s loan was repaid in FY 2018-19. Notices under Sections 133(6) and 131 were issued but were not served on M/s Mewad Infrastructure (P) Ltd. due to an incorrect address. The AO did not record statements as the parties arrived late, and Mr. Solanki could not appear due to health issues but sent relevant documents. The CIT(A) sustained the addition as the assessee could not produce Mr. Solanki and the books of M/s Mewad Infrastructure (P) Ltd.

Upon review, the Tribunal found that the assessee had provided necessary information, and Mr. Solanki's non-appearance was due to a valid reason. The AO had no adverse findings on the submitted documents. For M/s Mewad Infrastructure (P) Ltd., the assessee, as a director, appeared before the AO and submitted confirmations, bank statements, and financial statements. The AO's claim that it was a paper company was not supported by records showing substantial operations. Thus, the addition for Mr. Solanki and M/s Mewad Infrastructure (P) Ltd. was deleted.

Regarding Mr. Arvind, the assessee mistakenly categorized the transaction as an unsecured loan instead of an advance from customers. However, there was no supporting documentation to prove it was a business advance. Therefore, the addition for Mr. Arvind was confirmed.

2. Admission of additional ground of appeal regarding addition under Section 43CA:

The assessee sought to raise an additional ground of appeal for an addition of Rs. 1,69,878 under Section 43CA, which was not pressed before the CIT(A). The Tribunal examined whether the additional ground could be admitted. The assessee relied on the case of Vijay Kumar Jain vs. CIT, where it was held that grounds not pressed before the CIT(A) could be urged before the Tribunal. The Tribunal noted that the additional ground was legal and related to the retrospective applicability of a tolerance band of 5% introduced by the Finance Act, 2018. However, the Tribunal found no justification for the delay in raising the additional ground, as the amendment and relevant judicial decisions were already in the public domain at the time of filing the appeal. Consequently, the additional ground was not admitted.

Conclusion:

The appeal was partly allowed, with the addition under Section 68 for Mr. Solanki and M/s Mewad Infrastructure (P) Ltd. deleted, but the addition for Mr. Arvind confirmed. The additional ground of appeal regarding Section 43CA was not admitted due to delayed filing without sufficient justification. The order was pronounced in the open Court on 23/12/2019.

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