Case Law Details
Rajshree Builder & Promoters Pvt. Ltd. Vs ITO (ITAT Delhi)
Conclusion: Addition by AO under section 41(1) as liability of ‘Trade Payables’ written off was not justified as the balance-sheets filed by assessee were neither signed by the Auditor nor by the Director and, therefore, the same were not reliable and assessee had failed to produce any confirmation to the effect that the assessee received payment from M/s. Omac as interest free unsecured loan.
Held: Assessee-company was engaged in the real estate business and for the year under consideration filed return of income on 30/03/20 12, declaring loss of ₹ 1,25,440/-. The case was selected for scrutiny assessment and notice under section 143(2) was issued and complied with. The scrutiny assessment was completed under section 143(3) after making addition of ₹ 2,02,27,914/- under section 41(1) as liability of ‘Trade Payables’ written off. On further appeal, CIT(A) rejected the contention of the assessee and confirmed the addition in dispute. It was held that various balance-sheets filed by assessee were neither signed by the Auditor nor by the Director and, therefore, the same were not reliable. Assessee had failed to produce any confirmation to the effect that the assessee received payment from M/s. O as interest free unsecured loan. Assessee had neither filed any agreement for obtaining unsecured loan from said party. In the facts and circumstances of the case and in the substantial interest of the justice, it was appropriate to restore this matter to the file of AO with the direction to the assessee to produce following documents and direction to AO to carry out enquiries deemed fit and then decide whether the remission of the liability in question was liable to be income under Section 41(1) of the Act in accordance with law.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the assessee is directed against order dated 07/11/2016 passed by the Learned CIT(Appeals)-7, New Delhi [in short ‘the Ld. CIT(A) ’] for assessment year 2011-12 raising following grounds:
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