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2015 (5) TMI 676

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....Sec. 153A of the Act. The Ld. Counsel for the assessee stated that he is not pressing these grounds. Ground No. 1 to 5 are accordingly dismissed. The Ld. Counsel for the assessee stated that he is also not pressing ground No. 6, the same is also dismissed as not pressed. 3. Ground No. 7 relates to the addition of Rs. 2,70,88,882/- made u/s. 68 of the Act. 3.1. While scrutinizing the return of income, the AO noticed that the assessee has received unsecured credit from various parties. The details of which reads as under: S. No. Creditor Addition during A.Y. 2006-07 Addition during A.Y. 2007-08 1. Laffan Software (P) ltd. 9,67,240/- 1,00,00,000/- 2. Logic Infotech Pvt. Ltd. 1,02,80,040/- 50,00,000/- 3. N.E. Electronics Ltd. 1,08,41,300/- 0 4. Bhaskar Fund 28,57,782/- 0 5. Pansoft Technologies 21,42,520/- 0 Total 2,70,88,882/- 1,50,00,000/-   3.2. The assessee was asked to explain the aforementioned credits. The assessee was specifically required to prove the identity of the creditors, genuineness of the transaction and credit worthiness of the creditors. The AO observed that the assessee has only submitted the Memorandum of Association and Articles of associati....

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....orm of paper book. 6. Per contra, the Ld. Departmental Representative strongly supported the orders of the Revenue authorities. 7. We have carefully perused the orders of the authorities below and the relevant documentary evidences brought on record. We have also gone through various judicial decisions placed before us. There is no dispute that the assessee has submitted following documents: 1) Memorandum/Articles of Association of Companies 2) Board Resolution of the companies 3) Loan confirmations 4) Balance sheet 5) PAN details 6) Copies of I.T. returns. 8. A perusal of these documents go to establish that the assessee has prima facie discharged the onus cast upon him by virtue of provisions of Sec. 68 of the Act. The onus has now shifted on to the AO. Let us see how the AO has discharged the onus. A perusal of the assessment order shows that the AO has discussed at length the transactions in various group companies by the lenders of the case in hand. The AO drew support from the observations made in other group cases but that cannot be the sole basis for making the additions in the case in hand. We find that the transactions have been made by cheque. There is no direct....

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....No. 8 relates to the levy of interest u/s. 234A. 234B and 234C of the Act. Levy of interest is mandatory though consequential, the AO is directed to charge interest as per provisions of law. 10. In the result, the appeal filed by the assessee is partly allowed. ITA No. 4171/M/13- Assessee's appeal - A.Y, 2007-08 11. Ground No. 1 to 5 relate to the jurisdiction of the AO for making assessment u/s. 143(3) r.w. Sec. 153A of the Act. 12. At the very outset, the Ld. Counsel for the assessee stated that he is not pressing ground No. 1 to 5. Ground No. 1 to 5 are accordingly dismissed. 13. Ground No. 6 relates to the addition of Rs. 1.50 crores made by the AO u/s. 68 of the Act. 14. The assessee has borrowed money from two parties from whom the monies were borrowed in A.Y. 2006-07 also. We have deleted the addition made in A.Y. 2006-07 in ITA No. 3890/M/13 qua ground No. 7 of that appeal. Following our own finding /detailed discussions therein, we direct the AO to delete the addition of Rs. 1.50 croes. Ground No. 6 is accordingly allowed. 15. Ground No. 7 relates to the addition of Rs. 25 lakhs made by the AO u/s. 69 of the Act. 16. This issue has been considered by the AO at para....

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....dditions cannot be sustained. We set aside the findings of the Ld. CIT(A) and direct the AO to delete the addition of Rs. 25 lakhs. Ground No. 7 is accordingly allowed. 21. Ground No. 8 relates to the levy of interest u/s. 234A. 234B and 234C of the Act. Levy of interest is mandatory though it is consequential, the AO is directed to charge interest as per provisions of law. 22. In the result, the appeal filed by the assessee is partly allowed. ITA No. 4708/M/13 - A.Y. 2007-08 - Revenue's appeal along with ITA No. 4322/M/13 assessee's appeal for A.Y. 2008-09 23. The sole grievance of the Revenue is that the Ld. CIT(A) erred in deleting the addition of Rs. 5.90 crores holding that the transactions pertain to A.Y. 2007-08. Consequent to such finding of the Ld. CIT(A) the additions have been confirmed in A.Y. 2008-09 for which the assessee is in appeal. Therefore, our decision to this ground of appeal of the Revenue would also cover the grievance of the assessee for A.Y. 2008-09. 24. This issue has been discussed by the AO at para-10 of his order wherein he has made reference to certain incriminating papers found and seized at the time of search. Scanned copies of the impugned do....

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....6 50.00   08/07 50.00   23/09 200.00   4/12 180.00   22/2 50.00   25/02 25.00   07/03 100.00 Total    575.00     30. There is another entry of Rs. 15 lakhs. Document exhibited at page-16 of the assessment order again refers to Shri Vikramji Chennai with profit margin 70% and 30% to the assessee. We failed to persuade ourselves to give any logical conclusion/finding in respect of these documents on the basis of which the AO has made the addition. There is not even an iota of evidence to show that the AO has made an enquiry from the said Shri Vikramjee Agarwal. Merely because some figures were found to be written in some document, The AO cannot extrapolate 50 and interpret 50 as 50,00,000, 575 as 575 lakhs without any corroborative/demonstrative evidence. Without there being any corroborative evidence additions made merely on the basis of some illogical and irrelevant entry/jotting on a piece of paper cannot justify the actions of the AO and of the Ld. CIT(A). We, therefore, do not find any merit in the additions made by the AO on the basis of these documents. We direct the AO to delete the entire additions ma....