Gujara Construction Pvt. Ltd. vs ITO, Ward 10(3)

PER MAHAVIR SINGH, VP :

This appeal of the assessee is arising out of the order of the Ld. National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income Tax (Appeals), New Delhi [hereinafter referred as CIT(A)], in Appeal No. NFAC/2012-13/10264786 dated 4.2.2026. Assessment was framed by the AO, NFAC, Delhi for the assessment year 2013-14 u/s. 147 r.w.s 144B of the Income Tax Act, 1961 (hereinafter referred as ‘Act’) vide his order dated 29.5.2023.

The first issue on merits is as regards to order of the Ld. CIT(A) confirming the addition of Rs. 2,45,50,000/- made by the AO on account of unexplained payment made for purchase of immovable property u/s. 69C of the Act.

Brief facts of the case are that AO noted in the assessment order that as per information available on record, the assessee during the year under consideration has purchased a immovable property valued at Rs. 2,80,64,000. According to AO assessee has not furnished the complete copy of purchase deed and documentary evidence with regard to source of investment in the immovable property. Hence, the AO issued show cause notice. The assessee explained before the AO that it has purchased a commercial land for a sum of Rs. 2,45,50,000/- during the financial year 2012-13 relevant to AY 2013-14 and not for consideration of amount of Rs. 2,80,64,000/- as noted by the AO in the show cause notice. The assessee before the AO submitted the necessary evidences and complete book of accounts wherein the assessee has booked this purchase of property as business expenses and it was further explained that only payment of Rs. 1,20,00,000/- was made for such transaction and remaining payment amounting to Rs. 1,25,00,000/- was not made because of the settlement. The assessee explained the source of expenditure for the purchase of property for business purposes and accordingly added the sum of Rs. 2,45,50,000/- u/s. 69C of the Act.

Aggrieved, assessee preferred appeal before the CIT(A). The CIT(A) confirmed the action of the AO. The CIT(A) also noted that the assessee has not satisfactorily explained the source and even before the CIT(A). The assessee could not submit any evidence and hence, he confirmed the action of the AO for making addition of Rs. 2,45,50,000/- as unexplained expenditure u/s. 69C of the Act.

Aggrieved, assessee is in appeal before the Tribunal.

Before us, now ld. Counsel for the assessee filed the copy of balance sheet as on 31.3.2013 wherein the current assets inventorized at Rs. 26,88,785/- in the note i.e. inventory of the balance sheet wherein ,the complete land purchased, material purchased, labour charges are depicted which are amounting to Rs. 2,45,50,000/- is clearly admitted by the assessee in its balance sheet that these expenses booked and the amounts are not in dispute. Ld. Counsel for the assessee before us, explained that once the assessee has booked these expenses in its books of accounts, there is no question adding the same u/s. 69C of the Act.

When these facts were confronted to the Ld. Sr. DR, he could not controvert the above fact situation that the entire amount is recorded in the balance sheet which is produced before us and for the first time in the balance sheet in current assets particularly Schedule II wherein the entire amount of Rs. 2,45,50,000/- is included as explained as the same is recorded in the books of accounts and in case this amount is added, this will tantamount to double addition, hence, we delete the addition and allow this ground of appeal filed by the assessee.

The next issue on merits is as regards the order of the CIT(A) confirming the action of the AO for making addition of Rs. 2,55,54,062/- on account of short term borrowings u/s. 68 of the Act.

We have heard both the parties and perused the records. Ld. Counsel for the assessee took us through the short term borrowing capital of Rs. 2,55,54,062/- and thereafter he took us through the assessment order wherein, the assessee has specifically asked for furnishing of complete details in regard to short term borrowings such as name, PAN, address, confirmation, copy of ledger account and copy of ITR of persons to whom these borrowings have been made alongwith mode of receipt of these borrowings. The assessee submitted list of unnamed loans and stated that these are farmers and not having PAN cards and in the absence of the same the AO added unexplained credit u/s. 68 of the Act amounting to Rs. 2,55,54,062/-.

Aggrieved, assessee appealed before the CIT(A).

Before the CIT(A) assessee furnished details alongwith the additional evidences which were now filed before us also i.e. confirmation from the creditors, bank statements etc. which were not admitted by the CIT(A) for the reasons that these were not produced before the AO even during the remand proceedings. The CIT(A) accordingly dismissed the ground of assessee.

Aggrieved, assessee is in appeal before the Tribunal.

We noted that the assessee has now filed these details before us for the first time i.e. to prove the genuineness of transaction, creditworthiness of the parties and source to explain these credits. When these facts were confronted to the Ld. Sr. DR he could not controvert the fact situation that these evidences are vital for deciding the issues, hence, we admit these evidences and restore the matter back to the file of the AO for fresh adjudication. AO will look into these evidences and then decide the issue afresh, after allowing reasonable opportunity of being heard to the assessee.

Coming to other grounds of jurisdiction, Ld. Counsel for the assessee stated that he is not interested for prosecuting the same, hence, the legal issue is dismissed as not pressed.

In the result, the appeal of the assessee is partly allowed for statistical purposes.