TaxTMI 
TaxTMI 
2025 (4) TMI 2098
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....Sh. Sparsh Jasuja Rs. 7400/- 2. That the confirmation of addition in respect of above said parties in part is against the facts and circumstances of the case and without any basis. 3. That the Ld. CIT(A) has erred in confirming the addition of Rs. 7,43,234/on account of disallowance of interest u/s 36(1)((Hi). 4. That the confirmation of above addition is against the facts and circumstances of the case. 5. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 3. Brief facts of the case are that the assessee is engaged in the business of manufacturing of cloths and the returns have been filed on the basis of the audited Books of accounts. During the year under consideration, a survey was carried out by the Department at the business premises of the assessee, wherein, an amount of Rs. 1.15 crore was surrendered as business income and the detail of the amount surrendered is as under: PARTICULARS AMOUNT(Rs.) Stock in Trade 80,05,000/- Cash in Hand 5,10,000/- Building under construction 15,00,000/- TOTAL 1,00,15.000/- 4. The appeal of the assesse....
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....r book including the relevant documents and details was dully filed during course on appellate proceedings. 4. It is hereby submitted that during the course of appellate proceedings, the case of the assessee was referred for remand proceedings and during the course of remand proceedings, various replies were filed before the Ld. AO by the assessee. It is hereby pertinent to mention here that during the course of assessment proceedings as well as remand proceedings, the assessee has duly mentioned that there is a dispute between the family members. 5. However, the Worthy CIT-(A) without considering the detailed submission filed by the assessee and relying merely on the remand report of the Ld. AO, rejected the additional evidence filed by the assessee only on account that the said documents were filed by the assessee only after being pointed out by the Ld. AO and the said documents were filed during the remand proceedings. Hence Worthy CIT-(A) passed the appellate order in the case of the assessee on 25.09.2019 wherein, the additions made by the Ld. AO to the tune of Rs. 1,06,07,234/- were confirmed and no relief was given to the assessee. 6. Thereafter, a....
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....ok-II) 9. It is submitted that in fact, dispute has been there among the directors of the company since 2012 and even various FIR's were filed for the dispute (Copies of various FIR's filed is placed at page no. 3-18 of the paper book -II) and even the workers also filed police compliant for the violence (copy placed at page no. 19 of the paper book -II). Further, the directors had filed a civil suit against one another about the ownership of family business. Due to such serious dispute, they were not cooperating with each other but for some common matters relating to Income Tax, though, they were meeting such obligations upto the level of CTT(A) earlier but when the order of the CTT(A) was passed against the assessee, then situation worsened and none of the directors were on speaking terms even for the common matters and, as such, after the order of CTT(A) in the year 2019, none of the directors were co-operating with each other even with regard to the common matters and which is evident from the fact that civil suits and other issues of violence had arisen. 10. Then, there was a fire and heavy losses were there in the business premises of the erstwhile d....
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....own out at the very threshold and the cause of justice being defeated." 13. Further, reliance is also placed on the judgment of Hon'ble ITAT Surat Bench in the case of Chirag P. Thummar vs. Principal Commissioner of Income-tax reported in [2024] 159 taxmann.com 1628 (Surat-Trib.) wherein, it has been held as under: "Where assessee filed an appeal before Tribunal against order of Principal Commissioner passed under section 263 after a delay of 1740 days contending that there was a delay in filing appeal as income tax practitioner of assessee did not advise assessee to file appeal against order passed by Principal Commissioner under bona fide belief that order passed by Principal Commissioner was not appealable, mistake of lawyer or accountant was a good reason for condonation of delay, therefore, said delay of 1740 days was to be condoned" 14. Further, the assessee also relies on the judgment of various courts in which following the judgment of the Apex Court, it has been held that the delay should be condoned where the assessee has a reasonable cause and also that if there is a mistake of the counsel that is a good reason for condonation of delay. Rel....
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.... filing of appeal before the Hon'ble ITAT Bench with a delay of 997 days. 17.08.2022. 3. That the delay in filing the appeal has occurred because of serious dispute among the directors, for which, there was a civil suit and also fire has broken up in the factory building and even the brothers were not in good terms, which is evident from the Newspaper's report and also that one of the director, who was looking into the matter had gone into depression due to the above said reason of dispute and fire, for which, the evidences have been submitted in the paper book. 4. That though, the dispute has been running since long but due to intervention of certain elders and common friends, the matter regarding the Income tax were sort out for the time being and then due to worsened situation over a period of time after the receipt of the order of CTT (A) in September, 2019, none of the directors could involve in filing the appeal due to fear of repercussion against them. 5. Also, when after a very long time, the civil suit was decided by the Judicial Magistrate First Class on 13.07.2022 as per copy of the order being submitted and the matter had gone to th....
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.... per the facts reproduced above. The Ld. DR argued, before us that the assessee could have filed the appeal in time and stated that the delay should not be condoned. 6. We have gone through the application of the assessee for condonation of delay along with the documentary evidences, as filed before us, and also the affidavit, of one of the director and find that there has been a serious dispute among the brothers, who had been the directors in the company, leading to the registration to the FIR, Civil Suits and their bank accounts had become NPA and Unit had been taken over by the State Bank of India and the dispute was finally settled on 13.07.2022, as per the evidences filed before us and also that one of director, who was initially looking after the Income Tax Matters, the huge fire took place in his unit and due, to which, his entire business came to a halt and he went into depression as per the evidences filed before us. We have also taken note on the COVID-19 period, in between, and after considering the facts & circumstances as enumerated above, the delay in filing of appeal is condoned and the appeal is taken up for adjudication on merits. 7. Coming to the merits of ....
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....er amounts advanced by the family members and further pointed out that such evidences are borne out from the copies of the respective bank accounts of the lenders, it is clear that the amount has been cleared from their respective bank accounts as per submission, and the order of the Ld. CIT(A). It was further argued that each & every entry of the 'unsecured loan' is verifiable, for which, our attention was drawn from para 8 page 15 to 21 of the order of the Ld. CIT(A). 9. it was further argued before us that the Ld. CIT(A) has given the findings in his order and particularly from page 22 of the order, he has confirmed the part addition, despite the fact during the remand proceedings, sufficient and ample evidences with regard to the identity, genuineness and creditworthiness of the 'unsecured loan' had been given. All such persons are being assessed with the same Assessing Officer and their ITR copies, where even the interest received by creditor from the company had been disclosed in their respective returns, no omission have been pointed out, either by AO or by the Ld. CIT(A) to the documentary evidences furnished by the assessee before the AO and during reman....
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....pose of the business. It was not meant for the personal use and, as regard the machinery was concerned, it was stated that the advance for machinery was given for the purchase of the new machinery for business purposes. It was further argued before us, that the assessee had sufficient interest free funds in the year under consideration and also as on 31.03.2010, as per the following chart: Types of Funds As on 31.03.2010 (Rs. in Crores) As on 31.03.2009 (Rs. in Crores) Paid up share capital 5.06 5.06 Share Premium 1.71 1.71 Reserve and Surplus 0.78 0.78 TOTAL 7.55 7.55 The assessee relied upon the decision of the jurisdictional High Court in the case of 'Bright Enterprises Pvt. Ltd.' in ITA No. 224/2013 dated 15.10.2015, in which, the department appeal was dismissed by holding that the assessee's interest free funds were sufficient to cover, even interest free advances given to the sister concern. It was argued before us that in the present case, there was no such interest free advances, rather the amount have been utilized for the business purposes. Further it was submitted that the reliance has been placed by the Id. CIT....
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....with the company. Further, the Ld. AO has called the information under section 133(6) of the Income Tax Act, 1961 from State Bank of India, which has duly confirmed the transactions. Keeping in view the above, it is evident that the identity of the creditors, their creditworthiness and genuineness of the transactions has been duly established in the case and thus, the addition made of Rs. 9864000/- on this account is liable to deleted in toto. 14. Even in respect of three parties, certain further evidences were furnished in respect of the family members viz a viz their ITRs, copies of bank account, from where, the relevant cheques had been cleared and the Ld. CIT(A) has not been able to pinpoint any omission/error in respect of such documentary evidences. Even a detailed chart has been submitted before the AO during the remand proceedings as reproduced in the order of the Ld. CIT(A) and no discrepancy have been pointed out by the Ld. CIT(A). Regarding part addition it is to be seen that further when during the remand proceedings, the creditors have appeared before the Ld. AO and confirmed having advanced the loan and submitted the documentary evidences. Later on also and all cre....