The Hyderabed Bench of Income Tax Appellate Tribunal (ITAT) has held that a meritorious case could not be thrown at threshold when proper documents are produced.
Assessee Narasimha Rao Venkata Lakshmi Nandury, is an individual, he has been a non-resident, deriving remuneration from LES Energy Services Limited, Nigeria . Since he was a non-resident he had been deriving income in respect of the services rendered outside India, in terms of section 5 of the Income Tax Act, which was not taxable in India, assessee did not file the return of income for the assessment year 2015-16.
The assessing Officer noted that the assessee purchased immoveable property and also investment in Fixed Deposit. Assessing Officer recorded that the assessee did not submit any relevant verifiable sources for the investment made towards the acquisition of property. However, reached a conclusion that the salle consideration as unexplained
Abhiroop Bhargav, on behalf of the assessee submitted that the DHFL which advanced funds to the assessee had undergone insolvency proceedings and the said company was taken over by the Piramal Group, which was subsequently named as Piramal Capital & Housing Finance Limited (PHFL) and this particular loan of the assessee was taken over by Bank of Baroda as DHFL declared insolvency.
He further submitted that the relevant documents could not be secured by the assessee In view of the insolvency proceedings against the financier and as he was a non-resident in India.
Jeevan Lal Lavidiya,appeared on behalf of the revenue.
The two member Bench of Ramakanta Panda (Accountant Member) and K. Narasimha Chary (Judicial Member) observed that there was no material to contradict the fact that there were insolvency proceedings against DHFL and ultimately PHFL took over the DHFL company and also that Bank of Baroda entered the shoes of DHFL in respect of this particular loan.
The Bench held that, if the assessee’s documents were considered in the , the assessee would have got a fair chance of winning the matter. The Bench allowed the appeal holding that “A meritorious case cannot be thrown out at the threshold, without giving an opportunity to the assessee that too when the assessee produced the documents from proper custody.”
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