AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 692
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....so and had not recorded reasons for admission of additional evidence could be said to have vitiated his order entirely. 3. Whether in view of the decision of ITAT 'G' bench. Murnbai in the case of ITO, Wd-4(3), Thane vs Rajan Manhazi Aynoorkanot (2011) 15 taxman.corn 297 (Mum), CIT(A) was correct in not strictly following rule 46A when assessee neglected opportunity provided by AO during assessment proceedings. 4. On facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the addition under section 68 only related to three new depositors without appreciating the fact that in the remand report AO has not commented upon the other creditors. Thus, the addition in respect of other creditors should also have ought to be confirmed". Whereas in the assessee's appeal following grounds have been raised : "1. On the facts and in the circumstances of the case and in law, the CIT(A) was not justified in confirming the addition for the loans taken during course of business amounting to Rs. 2,50,000/- rejecting the claim of the appellant as genuine loans. a) loan from Mr. Mahadevlal Mahatto Rs.50,000/- b) loan from Mr. Prakash Butani Rs.50,....
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....sessee in the books of creditors. To prove the genuineness of the loan along with the confirmation letters, the assessee also furnished the details of purchase and sales and expenses which were incurred during the previous year relevant to the assessment year 2007-08. The ld.CIT(A) forwarded the entire additional evidences and information to the AO to submit his remand report not only on the admissibility of additional evidence but also to examine the details/additional evidence filed by the assessee, through his letter dated 14.7.2010. In response, the AO submitted his remand report dated 30.4.2012, the copy of which have been placed in the paper book at pages 83 to 87. The relevant contents of the remand report have also been incorporated by the ld. CIT(A) at pages 4 and 5 of the appellate order. In the remand proceedings, the AO examined the confirmation letters and the copy of accounts of all the 34 creditors and also books of account, bills and vouchers. The AO after examination of the evidences furnished, accepted the loan s in respects of 31 creditors and only in respect of 3 creditors he gave his adverse comments, which were in the following manner: "8. Loan Credits treate....
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....-, the loan account of three creditors have not been satisfactorily explained and accordingly he confirmed the loan credits aggregating of Rs. 3,50,000/- as received from three persons. Regarding interest also, after considering the remand report of the AO and the submissions of the assessee, he directed the AO to charge 8% of interest on the amount advanced and also on the amount of loan confirmed in respect of all the creditors. Regarding disallowance of loss, the ld. CIT(A) accepted the loss on the basis of remand report and also submissions made by the assessee. Against this, the department has not raised any ground. 4. Before us, the ld. DR submitted that, once the assessee was given ample opportunity by the AO, then the ld. CIT(A) should not have accepted the additional evidence without assigning any reason or admitting the additional evidence. Even, in the remand report, the AO has not given any specific finding for each and every creditor except in the case of three creditors for which he has given his adverse comments. The ld. CIT(A) was required to give proper findings with regard to each and every other creditors and should have come to his definite conclusion. He has r....
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....s in respect of three creditors only. This does not lead to any inference that the AO has not examined other creditors. Otherwise also, all the creditors have confirmed that they have paid the loan amount through account payee cheques drawn from their bank account and have also confirmed the copy of the ledger account. All these details are appearing from pages 1 to 68 of the paper book. Thus, mere fact that the AO in the remand report has not mentioned about all the creditors after detailed examination, it cannot lead to any adverse inference with regard to the creditors which has been accepted by him. The ld.CIT(A), on the basis of report and also on the examination of the record filed before him, has accepted the majority of creditors and in respect of only three creditors upheld the observation and finding of the AO given in the remand report. The ld. CIT(A) has strictly followed the provisions of Rule 46A, by not only forwarding the entire evidence to the AO to submit the remand report but also, required the AO to give his comments with regard to admissibility of such evidences. Once the AO has admitted the additional evidence and has not objected to then it cannot be held tha....
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....ing the shifting of office premises from Vadala to Ambarnath and also the employees of the assessee have left their job without any notice. Therefore, the assessee could not comply with the notices issued by the revenue and could not furnish details and evidences before the AO. The reasons stated by the assessee before the ld. CIT(A) was accepted by him and he sent all the additional evidences in the form of confirmation letters, confirmed copy of account and entire details of purchase and sales to the AO to give his comments, not only on the additional evidences and admissibility of additional evidences, but also to carry out the proper examination and inquiries of additional evidences. It appears that the AO took almost two years for submitting his remand report. From the perusal of the remand report, as appearing in the paper book, it is seen that the AO has noted the facts as to why the assessee could not furnish the confirmation and other details during the course of assessment proceedings. This, itself goes to show that he has no objection on the reasons stated by the assessee. In the remand proceedings the AO had called for entire details, explanation of the assessee and als....
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....e assessee. Even before us, no documentary evidence has been filed to rebut the findings of the ld. CIT(A), which are as under : "1. Shri Mahadevlal Mahatto - Rs. 50,000/- The A.O. mentioned that the assessee filed only confirmation letter. No other details furnished. Only reply the assessee submitted is that, the lender is an employee and he has paid by cheque. It is established law that merely because the payment is made by cheque does not satisfy all the conditions to be out of the purview of the provisions of section 68 of the I.T.Act. As the assessee failed to prove the creditworthiness of the lender, the credit can not be accepted as genuine. Thus, the AO's action is justified in adding Rs. 50,000/- u/s.68 accordingly the addition is upheld. 2. Shri Babulal L Shah - Rs. 1,50,000 In this case, the AO reported that that no information was furnished except copy of the death certificate of the lender who expired in April 2007. In this case also as no evidence has been produced by the assessee, the same cannot be treated as genuine loan. Further, the assessee could not establish the creditworthiness of the lender and genuineness of the transaction. The amount of Rs. 50,000....