Comet Granito Pvt. Ltd. Vs DCIT (ITAT Rajkot)
ITAT Rajkot remanded the matter as lower authority has not exercised their power to enquiry in section 131 and 133(6) of the Act to verify the genuineness of the transaction and creditworthiness of the party in case of addition towards unsecured loan u/s. 68.
Facts- The appellant is a closely held private limited company engaged in the business of ceramic vitrified tiles and parking tiles. During the year, the assessee has unsecured loan of Rs.1,82,10,891/- has been taken from ten parties. As per AO, the genuineness of the transaction creditworthiness and identity of the depositor cannot be held to be genuine. Therefore, the depositor of Rs. 1,82,10,891/- is treated as unexplained cash credit u/s. 68 of the I. T. Act. CIT(A) dismissed the appeal.
Conclusion- Held that ITO observed the credit worthiness of aforesaid depositor, shareholder is not proved. Deposit cannot be held to be genuine hence the receipt is treated assessable income. We further note the Ld. CIT(A) has observed in all cases, this genuineness of the transaction and credit worthiness of the party is not established. We note that lower authority has not exercised their power to enquiry wasted in section 131 and 133(6) of the Act to verify the genuineness of the transaction and creditworthiness of the party. Further of the view that the Revenue should be given one more opportunity to the prayer to his case before the Ld. AO. We note the matter back to the file of Ld. AO to take decisions after giving the assessee reasonable opportunity to be heard.
