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2022 (10) TMI 593 - AT - Income TaxUnexplained cash credit u/s.68 - Creditworthiness of creditors and genuineness of the transactions were not established - CIT-A deleted the addition - HELD THAT:- No mention of statement recorded under section 131 of the Act. Further, from the submission dated 06/08/2019 filed by the AO, through office of learned DR, we find that the AO accepted the fact that pursuant to summons issued under section 131 statement of Director of Shreeji Aluminium Pvt Ltd. We find that even in the latest submission dated 12/07/2022, filed by the learned DR, statement recorded u/s 131 is stated to be self-serving in nature, which is not corroborated with balance sheet and profit and loss account. From the perusal of financials of Shreeji Aluminium Pvt Ltd. we find that the company has Revenue from operations - Further, it has long-term borrowing from Karnataka bank Ltd. The company has fixed assets - We further find that the company has trade payables of Rs. 1,83,68,844 in comparison to trade receivables of Rs. 5,79,22,610. Therefore, in view of the aforesaid financial position of Shreeji Aluminium Pvt Ltd., we do not agree with the submissions of the Revenue. As a result, we find no infirmity in the aforesaid findings of the learned CIT(A). In respect of all the other entities, the AO in its remand report gave similar reply that unsecured loan lender have advanced the fund on the same day or within 10 to 12 days on which they have received the same. In its latest submission dated 12/07/2022, the Revenue has made submission only regarding loan from Parul Mittal, and submitted that the response under section 133(6) is self-serving and is not corroborated with balance sheet and profit and loss account. In respect of addition on account of Sheelaben Thummar, Kirti Thummar HUF and Krushy Metal, we find from the details available in the paper book that these are appearing as loans / deposits by the assessee’s proprietary concern viz. Krushy trading company. Thus, we find no infirmity in the findings of the learned CIT(A) that same cannot be added under section 68 of the Act. Loan from Ram Avtar Paper Ltd., we find from audited financial at page 191 and 192 of the paper book that the company has capital and reserves of Rs. 68,17,941 and short term borrowings from bank of Rs. 26,91,870. Further, this entity has inventory of Rs. 30,54,584. Thus, we are of the considered view that learned CIT(A) has correctly deleted the addition in respect of this entity. As regards payment from Suyash Mittal family, it is the claim of the assessee that this is in respect of repayment of earlier loan. No material contrary to assessee’s claim has been brought on record. Thus, we are of the considered view that learned CIT(A) has correctly deleted the addition in respect of this entity. We find that the details of capital account of few loan lenders were not examined by the learned CIT(A) and these details are also not placed in the paper book. Further, other aspects of the financial statement of the loan lenders have also not been examined by the learned CIT(A). Therefore, we deem it appropriate to remand the addition pertaining to loan transactions of the assessee with Parul Mittal, Sanjay Mittal & Sons, Shivakumar & Sons HUF, Vikas Mittal & Sons, and Ram Mittal HUF to the file of learned CIT(A) for de novo adjudication. The assessee is also directed to file all the details of the loan lenders in support of its claim for necessary examination by the learned CIT(A). The learned CIT(A) shall be at liberty to seek any other information / document for complete adjudication of this issue. Appeal by the Revenue is partly allowed for statistical purpose in view of our aforesaid findings. Issuance of notice under section 143(2) of the Act on the ground that the same is without jurisdiction - From the perusal of record we find that this issue was not raised by the assessee in its appeal before the learned CIT(A) and has been raised for the first time in the present cross objection against the Revenue’s appeal. Though, this fresh issue should have been raised by way of an application seeking admission of additional ground, however, the assessee has raised the same in the present cross objection. It is settled that being a legal issue, same can be raised at any stage of proceedings. However, since, this legal issue was not raised and therefore was not considered by the CIT(A), thus, we deem it appropriate to remand the issue arising in grounds no.2 and 3, raised in assessee’s cross objection, to the learned CIT(A) for necessary adjudication. Needless to mention that no order shall be passed without affording opportunity of being heard to both the parties. Grounds raised in assessee’s cross objection are allowed for statistical purpose.
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