Harina Developers Pvt. Ltd. Vs ITO (ITAT Bangalore)
The issue under consideration is that whether the loan received from two directors can be considered as unexplained cash credit u/s 68 of the Act?
In the given case, the assessee has received amount from two of its directors. The assessee could file only ledger account extract of above creditors. Since the assessee did not file any confirmation letter from them, the assessing officer assessed it as unexplained cash credit u/s 68 of the Act.
Further, before Ld CIT(A), the assessee furnished additional evidences and hence the first appellate authority also called for a remand report from the assessing officer. However, the ld CIT(A) choose not to admit additional evidences and accordingly confirmed the additions.
There is no dispute that the impugned amounts have been received from the directors, who are actually managing the affairs of the assessee company. Before Ld CIT(A), the assessee has submitted bank statements of directors and also ledger account copies. Before the AO, the assessee has submitted copies of their income tax returns. During the course of hearing before us, the Ld A.R also submitted that the assessee could not furnish all these details, since there was change of counsel appearing before the AO. Under these set of facts, in the interest of natural justice, ITAT are of the view that the additional evidences should be admitted and the assessee should be given opportunity to substantiate the loan taken from directors. Accordingly, ITAT admit the additional evidences. Since these evidences require examination at the end of the assessing officer, ITAT set aside the order passed by Ld CIT(A) on this issue and restore this issue also to the file of the assessing officer for examining it afresh.
FULL TEXT OF THE ITAT JUDGEMENT
The assessee has filed this appeal challenging the order dated 09.08.2019 passed by Ld CIT(A)-3, Bengaluru and it relates to the assessment year 2012-13. The Ld A.R did not press ground no.2, wherein a legal issue has been urged. Remaining grounds urged by the assessee relate to the following issues:-
(a) Addition of outstanding liabilities u/s 68 of the Act
(b) Addition of loans taken from directors u/s 68 of the Act.
(c) Addition of Advances received on sale of sites u/s 68 of the Act.
(d) Charging of interest u/s 234B of the Act.
2. The assessee is engaged in the business of plotting and selling of housing sites.
3. The first issue relates to the addition of outstanding liabilities made u/s 68 of the Act. The AO noticed that the assessee has purchased lands from certain persons, but was showing a sum of Rs.2,99,20,000/- as still payable to the sellers of land as on 31.3.2012. The break-up details of outstanding amount was given by AO as under:-
