TMI Blog2023 (9) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... short term borrowings was merely due to reclassification of part of loan from long term liability to short term liability. The findings of ld. CIT(A) requires no interference. Unexplained current liability - CIT(A) deleted the addition - HELD THAT:- As observed that before Ld. CIT(A) it was duly explained by the assessee as to what were the heads under which other current liability had increased. The increased were due to VAT payable, TDS payable, advance from individual and bank overdraft. As with regard to 1st three there can be no dispute and only with regard to advances from individual 1,20,00,000/- there could have been suspicion which has been taken care of by the assessee by putting explanation by furnishing of sale deeds of property sold to Jasmine Sapra and Sanjeev - In fact in the remand report genuineness of this advances has been accepted, thus, the findings of Ld. CIT(A) require no interference. Enhancement of income by CIT(A) u/s 251(1) - addition u/s 40 (a)(ia) for non-deposit of TDS within the prescribed period - HELD THAT:- As decided in Toffee Agricultural Farms Pvt. Ltd. [ 2022 (4) TMI 869 - ITAT DELHI] and Hari Mohan Sharma [ 2019 (2) TMI 113 - I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Repayment of loan during the year 1,71,48,915.00 8,29,91,388.89 10,01,40,303.89 Nil In substantiation of the same the appellant enclosed a copy of audited financials through which it can be observed that there was net decrease in total borrowings from Rs. 10,01,40,303.89 to Rs. 8,29,91,388.89. However, the increment shown on in the short-term borrowings from previous year to current year was on account of re classification of Long term borrowing into short term borrowings. Further it can be seen that the liabilities were reduced and not increased on account of payments made by the assesses company in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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) Perusal of list of guarantors reveals that companies which have taken loans for their own are made guarantors and conversely. With regard to the above observations in the remand report the appellant vide its rejoinder dated 27.01.2020 has explained the names of the pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 substan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... genuine and hence cannot be taxed u/s 68 of the Act. Same would be the position with regard to the TDS payable liability and the Bank overdraft 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 ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported the findings of Ld. AO and submitted that Ld. CIT(A) has relied the additional evidences and submissions without calling remand report. Ld. AR however supported the findings of Ld. CIT(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 tain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for admission of additional evidence. In the said application it has been submitted that out of the total increase and other liabilities one amount refers to the increase in TDS payable as on 31.03.2016 vis-a-vis the position as on 31.03.2015. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellate Assistant Commissioner, now Commissioner (Appeals). Section 251(1)(a) of the Act empowers the Appellate Assistant Commissioner in disposing of an appeal by the assessee against an order of assessment to confirm, reduce, enhance or annul the assessment or to set aside and refer the case back to the Income Tax Officer for making fresh assessment in accordance with the directions given by the Appellate Assistant Commissioner. Explanation to Section 251 provides that the Appellate Commissioner may hear and decide any matter arising out of the proceedings in which the order appealed against was passed notwithstanding that such a matter was not raised before the Appellate Commissioner by the appellant. 9. The issue with regard to the scope of powers of the first Appellate Authority in disposing of an appeal has come up before the Courts umpteen times but we do not propose to burden the judgment by making reference to all the decisions on the point. We will notice a few decisions which we consider are relevant to answer the question referred. In CIT, Bombay Vs. Shapoor ji Pallonji Mistry (1962) 44 ITR 891, while construing the corresponding provisions of the Indian Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment, but did comment on the issue whether these wide powers also include the power to discover a new source of income. Therefore, the principle of law laid down in Shapoorji and Chamaria's cases (supra) still holds the field. 12. Thus, the principle emerging from the aforenoted pronouncements of the Supreme Court is, that the first Appellate Authority is invested with very wide powers under Section 251(1)(a) of the Act and once an assessment order is brought before the authority, his competence is not restricted to examining only those aspects of the assessment about which the assessee makes grievance and ranges over the whole assessment to correct the Assessing Officer not only with regard to a matter raised by the assessee in appeal but also with regard to any other matter which has been considered by the Assessing Officer and determined in the course of assessment. However, there is a solitary but significant limitation to the power of revision, viz. that it is not open to the Appellate Commissioner to introduce in the Assessment a new source of income and the assessment has to be confined to those items of income which where the subject-matter of original assessm ..... 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