ACIT Vs Muffazal Lakdawala (ITAT Mumbai)
CIT(A)’s Co-terminus Powers Prevail: ITAT Mumbai Upholds Deletion of ₹3.25 Cr Addition u/s 68
Mumbai ITAT dismissed the Revenue’s appeal and upheld the deletion of ₹3.25 crore added u/s 68 in the case of Muffazal Lakdawala for AY 2020-21
The AO had treated unsecured loans of ₹1.50 crore from Anjuman E-Mohammadi Trust and ₹1.75 crore from Reshma Jairam Shetty as unexplained cash credits solely on the ground that the lenders did not respond to notices u/s 133(6). However, before the CIT(A), the Assessee furnished ITRs of the lenders, confirmations, bank statements evidencing cheque payments, and corresponding credits in the Assessee’s bank accounts, thereby establishing identity, creditworthiness and genuineness.
The Revenue contended that the CIT(A) violated Rule 46A by admitting additional evidence without remanding the matter. Rejecting this contention, the Tribunal held that the CIT(A) had himself called for the documents by issuing notice u/s 250, thereby invoking Rule 46A(4), which permits the appellate authority to require production of documents necessary for proper adjudication. The Tribunal reiterated that the powers of the CIT(A) are co-terminus with those of the AO, and reliance on additional evidence so called for does not amount to a Rule 46A violation.
Relying on the jurisdictional Bombay High Court decision in CIT v. Suretech Hospital & Research Centre Ltd., the ITAT held that documents essential for disposal of the appeal can validly be admitted and examined by the appellate authority. On facts, the Tribunal found that the CIT(A)’s conclusion was based on relevant material duly examined, and no infirmity was shown.
Accordingly, the Revenue’s appeal was dismissed, and the deletion of ₹3.25 crore u/s 68 was confirmed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
