2016 (4) TMI 1375

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....ITA No. 4289/M/2014 - Assessee's appeal 2. The assessee in its appeal raised following grounds: The appellant company is aggrieved by the order passed by Id. CIT(A) - 36, Mumbai and is in appeal: 1. BECAUSE, Id. CIT(A) has erred in law and on facts in upholding the validity of the impugned assessment order even though the same is illegal, invalid and wholly without jurisdiction. 2. BECAUSE, Id. CIT(A) has erred in law and on facts in upholding the disallowance of interest expense claimed under the head Income from House Property to the tune of Rs. 4,10,218/- paid on borrowed funds. 3. BECAUSE, Id. CIT(A) has erred in law and on facts in upholding the disallowance of interest expense claimed under the head Incom....

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....to decide afresh in the interest of justice. 5. The Ld. Departmental Representative submits that the finding of the Ld. CIT(A) is that the assessee has not filed a petition under Rule 46A and sought permission of the Ld. CIT(A) to file the additional evidences. Thus the additional evidences were rejected by the Ld. CIT(A). 6. On hearing both the parties, we are of the view that the Ld. CIT(A) should be admitted the additional evidences filed by the assessee. The additional evidences were rejected observing that they were not filed before the Assessing Officer and no petition under Rule 46A was filed. In our view since the powers of the CIT(A) are coITA terminus of the Assessing Officer, it is not just and proper to reject the addition....

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.... the course of assessment proceedings, assessee provided certain details in respect of unsecured loans viz., copy of return, PAN card, copy of bank statement etc. The Assessing Officer examined all these details and observed that all these parties from whom the assessee had taken unsecured loans was small and meager parties with low incomes and several parties have written losses. Their bank statement show that they do not have any regular source of income. Huge funds are credited to bank accounts by way of clearing of cash deposits and these funds are subsequently advanced as loans to several parties including assessee. He also observed that funds remained in the bank accounts for a very short period of a day or two. The Assessing Officer ....

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....of the Ld. CIT(A) submits that there are 12 parties in all and amount involved is Rs. 2,66,05,000/- The Ld. Counsel submits that parties at S. No. 10 & 11 are sister concerns of the assessee company and they were assessed in the same circle and Assessing Officer with whom the assessee company is also assessed and had frequent transactions. The Ld. Counsel referring to page 7 of the Ld. CIT(A)'s order submits that Sl. Nos. 1 to 9 are infact not the lenders. They are all corporate who have deposited share application money against which shares have been allotted on 1.4.2010. It is submitted that Sl. No. 12 is also a lendor which is a corporate body and in this case assessee has partly repaid. The Ld. Counsel submits that the non appearance of....

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....regarded or considered as undisclosed income of the assessee u/s. 68 of the Act. 13. We have heard the rival contentions, perused the materials on record and the case laws relied on by the assessee. The Assessing Officer made addition u/s. 68 of the Act in respect of 12 parties holding that the creditors have not appeared in response to the summons issued u/s. 131 of the Act and he also held that the genuineness of the transaction and credit worthiness of the creditors is not established for the reason that according to the Assessing Officer the parties who gave the loans are deposited their amounts in the bank accounts just before issue of loans to the creditors and they have not appeared before him. The Ld. CIT(A) after considering the....