Addition of loan Amount as Outstanding Balance without Proper Evidence and Documents: ITAT directs AO to Re-adjudicate [Read Order]

The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has directed the Assessing Officer to re-adjudicate the case regarding the addition of a loan amount as an outstanding balance.

The assessee TSP Engineers Pvt. Ltd was a company engaged in the business as a Contractor taking contracts of all types, e.g. Civil & Construction Contract, Electrical Contracts and Painting Contracts.

For Assessment Year 2014-15, the assessee had filed its return declaring income of Rs. 18,89,184/-. The case was processed under section 143(1) of the Income Tax Act, 1961. Subsequently, the case was selected for scrutiny under CASS. Statutory notices under Section 143(2) and 142(1) of the Income Tax Act were duly served upon the assessee. In response the assessee submitted requisite details and information which were placed on record.

The  Assessing Officer completed the assessment on total income of Rs. 1,28,64,600/- including therein the addition of Rs. 10,50,500/- under Section 68; addition of Rs. 5,00,000/- being loan received by the assessee from one of its Directors Shri Sumit Rastogi; addition of Rs. 26,500/- being amount received from Shri Rajesh and Shri Yogesh; disallowance of project expenses of Rs. 78,44,531/-; disallowance of Rs. 1,06,742/- under Section 40(a)(ia) and addition of Rs. 14,47,140/- being balance of M/s. Telecom Service Provider.

The assessee challenged the above additions/disallowances before the CIT(A) who confirmed the addition of Rs. 10,50,500/- made by the Assessing Officer under Section 68; deleted the addition of Rs. 5,00,000/- and Rs. 26,500/-; deleted the disallowance of project expenses of Rs. 78,44,531 subject to verification of TDS returns and confirmed the disallowance of Rs. 1,06,742/- made under Section 40(a)(ia) and addition of Rs. 14,47,140/-

The assessee filed an appeal before the Tribunal against confirmation by the CIT (A) of addition of Rs. 10,50,500/- under Section 68 and confirmation of addition of Rs. 14,47,140/- being balance of M/s. Telecom Service Provider and all the six grounds of appeal relate thereto.

The tribunal Bench of Judicial Member Astha Chandra and Accountant Member Anil Chadurvedi observed that before the CIT(A), the assessee did not submit any explanation and the stand taken by the Assessing Officer remained uncontroverted. In the absence of any supporting evidence and documents filed by the assessee in support of the impugned outstanding balance of Rs. 14,47,140/-, the CIT(A) confirmed the impugned addition.

The two-member Bench further added that the assessee must have an opportunity to present his case before the Assessing Officer. The explanation of the assessee could not come on record.

Additionally, it was noted that the assessee had filed certain fresh documents before the Tribunal which the CIT (A)/Assessing Officer had not perused. Therefore, deem it fit to remit this issue also to the file of the Assessing Officer to decide it afresh after allowing reasonable opportunity to the assessee to present his case on the point.

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

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates