TaxTMI 
TaxTMI 
2025 (1) TMI 1707
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....e contents of the same are reproduced here in below 1. During the course of assessment proceedings, the Ld. AO asked the appellant to submit details of trade payables. Further, the Ld. AO also issued notice u/s 133(6) to the creditors calling for the relevant details. 2. The Ld. AO observed that while all parties submitted the relevant details, no response was received from M/s. Arham International ('Arham') having outstanding balance of Rs. 46,65,485/- as on 31st March, 2016. Accordingly, the Ld. AO proceeded to add the said amount to the total income of the appellant. 3. Closing balance of Arham as on 31st March, 2016 in the books of the appellant stands duly reconciled with the corresponding closing balance of the appellant in the books of Arham in subsequent year. 4. During the course of assessment proceedings, Arham as well as the appellant could not submit the relevant details asked for by the Ld. AO. However, it is pertinent to note that subsequently, Arham submitted the balance confirmation to the Ld. AO on 24th December, 2018 vide their letter dated 20/12/2018. Enclosed Copy of Arham International submissions vide letter....
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....9,33,863/-. The said difference was on account of adjustment of the outstanding balance of Rs. 29,33,863/- pertaining to its associate concern viz. Shamrock Pharmachemi Pvt. Ltd. Arham adjusted the said outstanding balance of Shamrock Pharmachemi Pvt. Ltd. in the subsequent year FY 2016- 2017. Enclosed Copy of Arham International Ledger Account in the books of the appellant as well as Shamrock International Ledger account in the books of Arham International of F.Y. 2016-17 as "Exhibit - K". C. Grounds of Appeal: 1. The Id. CIT(A) has erred on facts and in law in invoking provisions of section 69 of the Act to the difference of Rs. 29,33,863/- between the closing balance in the books of the appellant's creditor viz. M/s Arham International and corresponding closing balance of M/s Arham International in the books of the appellant as on 31st March, 2016. The Ld. CIT(A) ought to have appreciated that the said difference was duly reconciled and section 69 has no application to the facts of the case. 2. The appellant craves leave to add and / or to amend and / or to delete the foregoing ground of appeal, at any time before the hearing or during the....
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....mediately preceding the assessment year. ii. Also, such investments are not recorded in the books of accounts, if any, maintained by him for any source of income. iii. Either the assessee unable to furnish explanation about the nature and source of the investments or the A.O. is in opinion that the explanation offered by him is not satisfactory. If all the above conditions are satisfied, then the value of such investments "MAY" be deemed to be the income of the assessee of the financial year in which he has made the investments. iv. Thus, it is clear from the above discussion that the provisions of Section 69 contained that before the amount of the undisclosed investment is included in the total income of an assessee, he is entitled to get an opportunity to explain the same before the assessing officer proceeds for additions. v. The appellant submits that no opportunity was provided to the appellant by the Ld. CIT(A) before passing the Order u/s. 250 of the Act, dated 22/07/2024, invoking Section 69 of the Act making additions of Rs. 29,33,863/- being differences in ledger balances without appreciating the appellant submissions that the ....
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....d submissions, the appellant humbly prays Your Honor that additions of Rs. 29,33,863/- made u/s. 69 of the Act being differences amongst the parties as on 31st March, 2016 may please be deleted and Order passed by the Ld. CIT(A)'s Order Dated 22/07/2024 may please be set aside. 4. On the other hand, Ld. DR relied upon the orders passed by the revenue authorities. 5. I have heard the counsel for both the parties and have also perused the material placed on record, judgements, cited before me and the orders passed by the revenue authorities. From the records, I noticed that the order of assessment was passed thereby making additions under section 69 of the Act on account of the fact that sundry creditors in case of Arham International Ltd, has not responded to any of the notices by the Ld.AO, and no documents were filed. However, during the course of appellate proceedings, the additional evidences were filed with regard to balance confirmation of the said party and consequently remand report was also sought and both the parties submitted their respective documents, and thus based on the ledger confirmation submitted by Arham International Ltd, the closing balance as per boo....
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....he above discussion that the provisions of section 69 of the Act is attracted only if the assessee gets an opportunity to explain the same before AO proceeds for making addition under section 69, which in this case has not been done. For this legal proposition, I rely upon the decision of Hon'ble High Court of Kerala in the case of TCN Menon Vs ITO, [1974] 96 ITR 148, wherein it was held as under: What section 144 requires the ITO to do in the case of defaulting assessee is to make an assessment of his total income to the best of judgment, after taking into account all relevant materials which the ITO has gathered. An assessment to the best of judgment is a quasi-judicial process, and it has to be based on the materials gathered. Any quasi-judicial process requires an opportunity for being heard before decision. The decision can be arrived at best, or as correctly as possible, only if the assessee is given an opportunity to say why on the materials gathered by the ITO, the income should not be assessed in the manner proposed to be done by him. There is no express denial of this well- established common law right in section 142(3). Sub-section (3) of section 142 de....