TaxTMI 
TaxTMI 
2023 (9) TMI 1172
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....g loss of Rs. 5,15,45,351/-. Ld. AO observed that during the year assessee company has shown loan against property from other parties under the head 'short term borrowings' amounting to Rs. 3,76,33,541 which was Rs. 1,89,54,980/- during the previous financial year. The assessee was asked by notice u/s 142(1) to justify the same however, failing to provide evidence addition of Rs. 1,86,78,560/- was made by Ld. AO which has been deleted by the ld. CIT(A) with following relevant findings ; "7.3 Vide letter dated 12.02.2020, the appellant further submitted that in respect of increase in the short-term borrowings from Rs. 1,89,54,980.48 to Rs. 3,76,33,541.18., that there was no increase in the liability on account of loan, against property, however the increase shown in the liability was on account of change in classification of long-term borrowings into short term borrowings. A comparative chart showing the same in comparison, to previous year is as under: Note of Balance Sheet Particulars 31.03.2016 31.05.2015 Difference Note 4 Short Term Borrowings 3,76,33,541.18 1,89,54,980.48 1,86,78,560.70 Note 3 Long Term Borrowings 4,53,57,847.71 8,11,85,323.41 -3,58,27,475.70 ....
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....7.71 8,11,85,323.41 -3,58,27,475.70 Repayment of loan during the year 1,71,48,915.00 8,29,91,388.89 10,01,40,303.89 Nil Since no fresh loan has been taken during the year under appeal the question of making any addition by treating it as unexplained would not arise. It is also noted that no show case notice was issued on this issue during the course of assessment, proceedings. Looking to the facts and circumstances of the case and in the interest of justice the application for admission of additional evidence was allowed and the assessing officer was provided an opportunity to furnish the remand report. In the remand report dated 01.02.2019, the A.O has not been able to controvert, the above material. Certain observations made in the remand report on this Ground of appeal are not relevant. The same are as under :- (i) Short term borrowings under the head current liabilities Loan from Reliance Capital was taken against property plot No-5, Block-12 Karol Bagh, New Delhi which ownership is not known. No supporting documents of the property as well as the loan security paper duly signed and verified have been furnished. (ii) Perusa....
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....ase in ''Other Current Liabilities" is also reflected in the audited Balance Sheet as on 31.03.2016, Details of increase in "Other Current Liabilities" is tabulated below :- S. No. As at March 31, 2016 (Amount in Rs. ) As at March 31, 2015 (Amount in Rs. ) 1. TDS Payable 13,90,427.00 19,59,248.00 2. D-VAT Payable 28,79,937.00 17,57.971.00 3. Bank Overdraft Balance 31,08,809.50 4. Advance from individual 1,20,00,000.00 Total 1,93,79,173.50 37,17,219.00 From the above it can be seen that there is an increase in statutory liabilities such as VAT payable and TDS payable and also increase in Bank overdraft and Advance has been received from an Individual against sale of immovable property. In support of the increase in "Other Current Liabilities", the appellant has brought on record substantiating documents in the form of (i) Ledger account of VAT payable 2014-15 along with the copies of payment challans substantiating the payment of liability and VAT payable 2015-16 along with quarter wise sales summaries substantiating and cross verifying the VAT liability for the year ; (ii) Copy of TDS summary showing TDS liability for the ye....
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....for which substantiating documents have been furnished. As regards the Advance of Rs. 1,20,00,000/- received from individuals it has been conceded in the remand report that the genuineness of the- advance stands established. In view of the above taking into account totality of facts and circumstances of the case, the addition of Rs. 1,56,61,954/- is hereby deleted. The appellant gets relief on this ground. 4. Revenue is in appeal raising following grounds ; "1. That on the facts and in the circumstances of the case, the Ld. CIT (A) has erred and on facts in deleting the addition of Rs. 1,86,78,560 /- made on account of unexplained liability as loan taken from Reliance Capital Ltd. ignoring the fact that assessee has failed to produce any concrete and also additional evidences in support of its contention. 2. That on the facts and in the circumstances of the case, the Ld. CIT (A) has erred and on facts in deleting the entire addition of Rs. 1,56,61,954/- made on account of unexplained current liability ignoring the fact that assessee has failed to produce any concrete and additional evidences in support of its contention to the extent Rs. 1,34,03,983/-. 3. That the order of t....
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....(A) in regard to grounds raised by the Revenue however, in regard to ground no.2 in the appeal of assessee it was submitted that the Ld. CIT(A) has made addition from a completely new source of income which is not permissible u/s 250 r.w.s. 251 of the Act. 8. Now giving thoughtful consideration to the matter on record and submissions the ground wise findings are as follows :- Revenue's appeal ITA No. 1592/Del/2021 Ground no. 1 9. It can be observed that before Ld. CIT(A) additional evidences were filed on behalf of assessee in the form of repayment schedules of Reliance Capital Ltd. and the accounts statement. In para 4.3 Ld. CIT(A) mentions the after considering the remand report that if the source of loan being established, the question of disputing identity and creditworthiness of the same can obviously not be raised. The loan from Reliance Capital was taken against property belonging to the party other than the assessee company but that does not make the transaction tainted. Ld. CIT(A) has duly taken into consideration the explanation of the assessee that the alleged addition that the increase in outstanding balance of short term borrowings was merely due to reclassificatio....
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..... The table submitted by the appellant in this regard is reproduced below: S. No. As at March 31, 2016 (Amount in Rs. ) As at March 31, 2015 (Amount in Rs. ) 1. TDS Payable 13,90,427.00 19,59,248.00 2. D-VAT Payable 28,79,937.00 17,57,971.00 3. Bank Overdraft Balance 31,08,809.50 -- 4. Advance from individual 1,20,00,000.00 -- Total 1,93,79,173.50 37,17,219.00 4. It has been submitted in the Written Submissions as well as application for additional evidence that no addition is required on this issue since the increase in other liabilities is on account of the increase in statutory liabilities. From the details submitted it is noted that the outstanding amount of TDS payable as on 31.03.2015 has been paid during F.Y. 2015-16. However, the TDS payable pertaining to F.Y. 2015-16 aggregating Rs. 13,90,427/- has not been deposited till the close of the financial year. The details of the same are as under:- S. No. (1) T.D.S. (2) Amount (3) Amount of Expenses corresponding to Column 3 (4) 1. Contractor 14,293/- 14,29,300/- 2. Interest 13,58,134/- 1,35,81,340/- 3. Professional 18,000/- 1,80,000/- T....
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....stion referred. In CIT, Bombay Vs. Shapoor ji Pallonji Mistry (1962) 44 ITR 891, while construing the corresponding provisions of the Indian Income-Tax Act, 1922, relating to the jurisdiction of the Appellate Commissioner in such an appeal, the Supreme Court held that, in an appeal filed by the assessee, the Appellate Assistant Commissioner has no power to enhance the assessment by discovering a new source of income, not considered by the Income-tax Officer in the order appealed against. Similar views were expressed by the Apex Court in CIT (Central) Calcutta Vs. Rai Bahadur Hardutory Motilal Chamaria (1967) 66 ITR443. It was held that the power of enhancement under Section 31(3) of the 1922 Act was restricted to the Subject-matter of the assessment or the source of income which had been considered expressly or by clear implication by the ITO form the point of view of taxability and that the Appellate Commissioner had no power to assess a source of income which had been processed by the Assessing Officer. 10. In Jute Corporation of India Ltd. Vs. CIT & Anr. (1991) 187 ITR 688, heavily relied upon by learned counsel for the Revenue, the Supreme Court, while considering the questio....