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TMI Blog2024 (5) TMI 1207X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that the persons who advanced loans aggregating to Rs. 1,93,50,000/- to the assessee had creditworthiness to do so and the assessee had duly explained these loan transactions in accordance with the provisions of Section 68 of the Income Tax Act, 1961 [In short, the 'Act'] during the appellate proceedings. 2. We are tasked to decide here the solitary issue that whether the unsecured loans aggregating to Rs. 1,93,50,000/- taken from three persons [Directors of the assessee and Group Company] were explained, as held by the CIT(A), in accordance with the provisions of section 68 of the Act. 3. The relevant facts, in brief, are that the assessee, a company, engaged in the spinning, weaving and finishing of textiles, filed its Income Tax Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) sent additional evidence to the AO, on 09.08.2019, for examining the same and submitting a report thereon. In response, the AO submitted the remand report stating his inability to conduct any inquiry on the reasoning (The said remand report is extracted in para 6 of the appellate order) extracted below:- "It is further requested that the proceedings are now faceless and DIN number is mandatory on each correspondence and there is no module on ITBA/ITD for this function. This office has no jurisdiction to conduct enquiry without order under Rule 46A passed by your honor's office." 5.1 The CIT(A), without appreciating the technical difficulties being faced out by the AO in conducting the requisite and desired investigations for submittin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness of lenders and the genuineness of the loan transactions. The Ld. Sr. DR; highlighting and emphasizing on the technical problems faced by the AO in carrying out the routine work in new Faceless Environment, contended that the appeal should have not been decided in haste particularly when the respondent/assessee adopted tactical noncompliance, before the AO, to avoid investigations. In such facts and circumstances, the role of the CIT(A) became more crucial and the CIT(A) was duty bound to get the issue properly examined/investigated before concluding the appellate proceedings. However, the CIT(A) failed to do so and the AO was not able to do the needful. Accordingly, he prayed for remitting the matter back to the AO for ascertaining th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xiii. N.R.Portfolio Pvt. Ltd. in ITA No. 134/2012 dated 21.12.2012 and xiv. Precision Finance (P.) Ltd. 208 ITR 465 (Cal). 8. Heard the Ld. Sr. DR at length and perused the case record and the above case laws. The sole issue for our consideration here is the taxability of the cash credit. We find force in the argument of the Ld. Sr. DR that the issue under dispute here not properly examined/investigated due to tactical non-compliance of the respondent/assessee before the AO and partial compliance before the CIT(A) vis-à-vis teething problem faced by the AO during the remand proceedings in Faceless System. 9. According to the Section 68 of the Act, where any sum is found credited in the books of assessee, the assessee offers no e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellate proceedings. The Hon'ble Delhi High Court, in similar facts and circumstances, in the case of Siddharth Export 112 taxmann.com 193 has held that where assessee received unsecured loan from a person outside India but failed to produce relevant documents to prove identity and creditworthiness of creditor and genuineness of transaction either before AO or before the CIT(A), certain documents produced by the assessee during instant appeal before High Court under section 260A could not be accepted and, therefore, impugned addition made under section 68 in respect of said loan was justified. The Hon'ble Supreme Court in the case of N. R. Iron and Steel Pvt. Ltd. SlP No. 29855 of 2018, referring the decision of Hon'ble Delhi High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils/documents filed by the respondent/ assessee to discharge its primary onus of explaining the loans of Rs. 1,93,50,000/- before the CIT(A) have not subjected to the requisite enquiry/examination/investigation. Thus, the respondent/assessee deserves reasonable opportunity of being heard to make shortcomings or non-compliances. In view thereof, without offering any comment on merit of the case, we deem it fit to set aside the impugned order and remit the matter back to the file of the AO for de-novo consideration. The respondent/assessee should ensure compliances during the set-aside proceeding before the AO. The AO is also required to provide reasonable opportunities of being heard before deciding the case on merit. 13. In the result, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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