2019 (1) TMI 204 - AT - Income Tax

Tribunal rejects Revenue's appeals on unsupported additions by Assessing Officer, upholds CIT(A)'s decisions.

The Tribunal dismissed all three appeals of the Revenue concerning the deletion of additions made by the Assessing Officer. The Tribunal found that the ... Unexplained income u/s 69A - Held that:- We agree with the contention of the ld. AR that the foundation itself is weak and the addition should not survive. AO made the addition on the strength of the statement of Shri Rohtash wherein he has admitted that ₹ 1 crore has been received. Exhibit 85 of the paper books reveals that on the date of receipt of the impugned amount, the same was returned back to Amrapali Group by M/s Bihariji group. The entries of ₹ 50 lakhs each on 11.12.2012 and 01.02.2013 can be seen from the said Exhibit 85 of the paper book. This means that the date on which the alleged ₹ 1 crore was received, on the very same day the same was returned back. There is no mention of the assessee’s name in the impugned document. AO has simply assumed that the reference to the impugned amount is in relation to the assessee. No addition can be made on the basis of presumptions and surmises. Assuming, yet not accepting that the amounts were received by the assessee, the same were returned back on the very same date as per Exhibit 85 of the paper book. Even on this count, addition is uncalled for. - Decided against revenue. Unexplained share application money - Held that:- There is no dispute that the purchase of shares of the aforesaid companies has been accepted by the Assessing Officer. Assuming, yet not accepting that the sale consideration is bogus, then the question which has to be answered by the Assessing Officer is that where did the purchase money go since he has accepted the purchase of shares of two companies? Considering the facts of the case in hand in totality, we do not find any error in the findings of the CIT(A). This ground is also dismissed. Rent payment expenditure - Held that:- DR also could not demonstrate that the assessee has actually made any payment to M/s Trinity Shipping and Allied Services Pvt Ltd. That being the fact of the matter, no interference is called for. This ground is dismissed. Issues Involved:1. Deletion of addition of Rs. 1 crore on account of unexplained income under Section 69A of the Income-tax Act, 1961.2. Deletion of addition of Rs. 3.28 crores on account of cash transaction with Amrapali Group.3. Deletion of addition of Rs. 6 crores on account of unexplained share application money.4. Deletion of addition of Rs. 5 lakhs on account of rent payment expenditure.Issue 1: Deletion of addition of Rs. 1 crore on account of unexplained income under Section 69A of the Income-tax Act, 1961.The Revenue's grievance was that the CIT(A) erred in deleting the addition of Rs. 1 crore made by the Assessing Officer (AO) on account of unexplained income under Section 69A of the Income-tax Act, 1961. The AO based his addition on the statement of Shri Rohtash Kumar and an .xls file seized during search operations, which indicated cash transactions between Mauria Group and Amrapali Group. However, the CIT(A) deleted the addition, drawing support from a previous decision in a similar case. The Tribunal noted that Section 69A applies when the assessee is found to be the owner of any money, bullion, jewelry, or other valuable article not recorded in the books of account. In this case, the assessee was never found in possession of any real money; the addition was based solely on notings from a file. The Tribunal also observed that the impugned amount was returned to the Amrapali Group on the same day it was received, as evidenced by Exhibit 85. Furthermore, there was no mention of the assessee's name in the document, and the AO's assumption was based on presumptions and surmises. Consequently, the Tribunal dismissed the Revenue's appeal.Issue 2: Deletion of addition of Rs. 3.28 crores on account of cash transaction with Amrapali Group.The facts of this addition were identical to those considered in the first issue. The Tribunal, applying the same detailed discussion and reasoning, dismissed the Revenue's appeal on this ground as well.Issue 3: Deletion of addition of Rs. 6 crores on account of unexplained share application money.The AO noticed that the assessee invested share application money in two companies, M/s Nexus Commosales Pvt Ltd and M/s Linkwise Marketing Pvt Ltd, and concluded that the amount introduced as the sale of shares was the assessee's own unaccounted money. The CIT(A) observed that the transactions were through banking channels, and the sale proceeds were credited in the P&L account. The AO did not provide any material evidence to prove that the source of money was unaccounted. The CIT(A) also noted that the initial purchase of shares was accepted by the AO, and even if the sale was considered bogus, only the difference between the sale proceeds and the initial investment could be unexplained. The Tribunal found no factual error in the CIT(A)'s findings and dismissed the Revenue's appeal.Issue 4: Deletion of addition of Rs. 5 lakhs on account of rent payment expenditure.The AO made an addition on the premise that the assessee claimed rent payment expenditure to M/s Trinity Shipping and Allied Services Pvt Ltd, which was not properly explained. The CIT(A) deleted the addition, finding no payment was made to the said company. The Tribunal noted that the Revenue could not demonstrate any actual payment to M/s Trinity Shipping and Allied Services Pvt Ltd and upheld the CIT(A)'s decision, dismissing the Revenue's appeal.Conclusion:All three appeals of the Revenue were dismissed by the Tribunal, with the order pronounced in the open court on 29.11.2018.