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TMI Blog2015 (4) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... sment for Assessment Year 2009-10 dt.26.12.2011, the assessee preferred an appeal before the CIT (Appeals) - I, Bangalore. The learned CIT (Appeals) dismissed the assessee's appeal vide the impugned order dt.12.8.2013. 3.1 Aggrieved by the order of the CIT (Appeals) - I, Bangalore for Assessment Year 2009-10 dt.12.8.2013, the assessee has preferred this appeal before the Tribunal raising the following grounds :- " 1. DISCOVERY OF NEW SOURCE OF INCOME BY CIT (APPEALS) Learned CIT (Appeals) ought to have noted that invoking section 68, after deleting the addition under Section 2(22)(e) with respect to the same time, amounted to discovery of new source not permissible under Section 251(1)(a) read with several Supreme Court and High Court judgments including that of the Hon'ble Karnataka High Court. 2. SECTION 68 Learned CIT (Appeals) erred in invoking section 68 with respect to the credit of Rs. 1.25 Crores shown in the balance sheet of the appellant firm as - 2.1 None of the requirements of section 68 are met in this case. 2.2 The party's name (Deccan Alloys Private Limited) PAN and address and the cheque particulars were furnished by the appellant and the nature and sou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 68 of the Act with respect to the credit of Rs. 1.25 Crores shown in the balance sheet of the assessee after deleting the addition made by the Assessing Officer of the same amount under Section 2(22)(e) of the Act. It is contended that this amounted to the discovery of a new source of income by the learned CIT (Appeals) which is not permissible under Section 251(1)(a) read with several judicial decisions. The learned Authorised Representative was heard in support of the grounds raised. 3.2.2 The learned Authorised Representative further submitted that the learned CIT (Appeals) was wrong in invoking section 68 of the Act with respect to the credit of Rs. 1.25 Crores appearing in the assessee's balance sheet as on 31.7.2009. The learned Authorised Representative contends that the identity and existence of the creditor i.e. M/s. Deccan Alloys Pvt. Ltd. is established by furnishing of name, address, PAN details, the details of cheques, books of account, etc which establish the nature and source of credit of the concerned sum of Rs. 1.25 Crores. It was submitted that the cheque dt.27.3.2008 issued by Deccan Alloys P. Ltd., advancing this amount to the assessee was not en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s considered by the Assessing Officer in the order of assessment it cannot be considered as a new source of income and the learned CIT(A) has therefore correctly invoked his power of enhancement under Section 251(1) of the Act. It was submitted by the learned Departmental Representative that at the appellate stage, additional evidence may be taken and further enquiry can be made by the learned CIT(A). In view of the above, it is submitted that the impugned order of the learned CIT(A) in invoking the provisions of section 68 of the Act to bring to tax the unexplained credit of Rs. 1.25 Crores in the assessee's books of accounts is in order and ought to be upheld. 3.4.1 We have heard both parties and perused and carefully considered the material on record. The facts of the matter as emanate from the record are that in the course of assessment proceedings, the Assessing Officer on examination of the financial statements balance sheet as on 31.3.2009 filed along with the return of income, observed that the assessee has shown unsecured loans of Rs. 2,50,00,000. On examination of the details called for in this regard, it was noticed that the assessee is said to have received a sum o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HEET AS AT 31ST MARCH, 2009. (AMOUNT IN INDIAN RUPEES) Particulars Sch. No. As at 31.3.09 As at 31.3.08 I.Source of funds 1. Share Holder Funds 200,00.00 200,000.00 a. Capital Account b. Current Account 01 5,864,844.72 2498,015.07 2. Loan Funds : 02 58,213,410.42 62,965,037.22 3. Unsecured Loan 03 25,00,000.00 II. Application of funds 1.Fixed Asset: Gross Block Depreciation 5A 66,439.00 66,070.00 9,969.00 3,694.00 NET BLOCK 56,470.00 57,376.00 2. Investments 04 10,000.00 10,000.00 3. Current Assets, loans and advances a. Sundry Debtors 05 161,466,386.00 97,910,966.00 b.Cash & Bank Balances. 06 262,459.14 45,208,083.29 c.Loans & Advances 07 4,037,631.00 653,526.00 166,036,476.14 143,772,575.29 Less : Current liabilities & Provisions. 08 76,824,691.00 78,176,899.00 Net Current Assets 89,211,785.14 65,595,676.29 Total : 89,278,255.14 65,663,052.29 Schedules 1 to 14 forms an integral part of this accounts. ii) As seen that unsecured loan appears for Rs. 2,50,00,000 and same claimed to have been borrow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion has been offered, merely stating that they reconciled the bank balance. It is clearly established that the appellant failed to prove loan credit in the books of account and therefore it is to be considered as deemed income under Section 68 of the Act. The Assessing Officer is accordingly directed to make an addition of Rs. 1,25,00,000 under Section 68 of the Act instead of section 2(22)(e) of the Act." 3.4.4 On a careful and considered perusal of the findings of the learned CIT(A) extracted above (supra)and specifically sub-paras (iii), (iv) and (v) thereof, we find that these issues have never been before the Assessing Officer either in the course of assessment proceedings or were raised or considered or addressed by him in remand proceedings. We also find that not all the issues raised by the assessee in the grounds raised in this appeal (supra) appear to have been raised before the learned CIT(A) or considered or addressed by the learned CIT(A) in the impugned order. In this factual and legal matrix of the matter, we are of the view that in the interest of equity and justice, the issue of the unsecured loan of Rs. 1.25 Crores taken by the assessee from M/s. Deccan Alloys P ..... X X X X Extracts X X X X X X X X Extracts X X X X
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