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1Rs. (-) 4,94,001 made u/s 69C relating to negative balance of Reserve & Surplus as per the Audited Balance Sheet Since the afore-said negative balance of reserve and surplus, representing loss for the year, stood fully accounted for in the books of account ,source thereof is fully verifiedtherefore the same is liable to be deleted. 2.Rs. 12,75,00,000 made u/s 68 relating to 'Short term Borrowings' as appearing in the Audited Balance Sheet: Assessee has furnished on records bona-fide, legitimate and verifiable explanation about the nature and source of the said borrowings duly supported with cogent documentary evidences and therefore it is wrong to suggest at the part of ld. CIT(A) that the explanation of the assessee is allegedly not satisfactory and the said purported premise of Ld. CIT(A) is contrary to the documentary evidences on records, which proves that the assessee has been successfully able to discharge its onus as per law and has shifted the onus to revenue to prove contrary if any. The ld. CIT(A) did not have any findings to the contrary and thus the facts and circumstances of the case do not warrant to invoke the provisions of section 68 of the Income Tax Act, 1961 and thus the impugned enhancement made by ld CIT(A) is arbitrary and baseless and deserve to be deleted. 3Rs. 20.49,08,002/- u/s. 69 of the Act relating to work in progress as appearing under current assets in the audited balance sheet :- section 69 clearly stipulates that the provisions thereof are applicable only in case of investments which are not recorded in books of account being the transactions outside the books of account. As also admitted by the ld. CIT(A), who himself picked this figure from the Balance Sheet itself and therefore by no stretch of imagination, the said balance of work-in-progress' can be made any basis of any addition/enhancement u/s 69.

Shanti Prime Publication Pvt. Ltd.

Sec. 251 of Income Tax Act, 1961— Assessment — The Assessee company was a Private Limited Company engaged in the business of real estate development. During the course of assessment proceedings, assessee could not produce the confirmation of balances from 4 creditors in the balance sheet as on 31.3.2012 and the assessee filed its return income for the assessment year 2012-13 declaring income at Rs. NIL on 31.3.2014. Later on, the case of the assessee was selected for scrutiny and accordingly, notice u/s. 143(2) of the Income Tax Act, 1961 dated 03.09.2014 was issued and served upon the assessee. Thereafter queries, notices u/s. 142(1) of the Act were issued and served. In response to the same, the assessee appeared and produced the books of accounts, balance sheet & its schedule, P&L account, other details and explanation and the same was test checked. The AO finally computed the total income of the assessee and disallowed the sundry creditors and completed the assessment u/s. 143(3) of the Act vide order dated 27.03.2015. Against the assessment order, the assessee filed the appeal before the CIT(A), who vide his earlier order dated 27.9.2016 enhanced the income of the assessee. The assessee appealed before the Tribunal.
In view of tribunal the CIT(A) should have issued a fresh notice u/s. 251(2) to the assessee for substantiating its claim in order to prove the documentary evidences and to answer the query raised by the CIT(A) for the enhancement notice, but the same has not been done by the CIT(A), which is contrary to law and facts on the file and hence, the impugned order was not sustainable in the eyes of law. Therefore, the enhancement notice is not sustainable in the eyes of law and resultantly the enhancement made by the CIT(A) was not tenable, therefore, tribunal cancel the impugned order dated 29.10.2018 by accepting the appeal filed by the assessee. The Appeal filed by assessee stands allowed. --- GREEN VALLEY INFRACITY PVT. LTD. vs. ITO. [2020] 23 ITCD Online 76 (DEL)