TaxTMI 
TaxTMI 
2015 (9) TMI 1182
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....d the order of the Assessing Officer. 4. It is, therefore, prayed that the order of the ld. CIT(A)-XIV, Ahmedabad may be set aside and that of the Assessing Officer be restored. ITA No.993/Ahd/2011 for Asst. Year 2005-06 1. The ld. CIT(A)-XIV, Ahmedabad erred in law and on facts in deleting the disallowance of Rs. 58,61,657/- made by the Assessing Officer on account of unexplained cash credits u/s 68 of the Act. 2. On the facts and in the circumstances of the case the ld. CIT(A)-XIV, Ahmedabad ought to have upheld the order of the Assessing Officer. 3. It is, therefore, prayed that the order of the ld. CIT(A)-XIV, Ahmedabad may be set aside and that of the Assessing Officer be restored. 2. First we take up ITA No.953/Ahd/2011 for AY 2002-03 wherein the first ground relates to disallowance of Rs. 58,01,339/- made by the Assessing Officer on account of unexplained investment. 2.1 The facts of the case are that the assessee company is engaged in the business of manufacturing of yarn. The assessee filed its original return of income for Asst. Year 2002-03 on 31.10.2002 declaring total income of Rs. NIL. The assessee company filed its revised return of income on 27.....
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....d back to the hands to the company as unexplained investment/money of the assessee. The assessee vide letter dated 18-08-2010 furnished its reply. The assessee stated that the bank account was never operated by the assessee directly or indirectly. The assessee furnished a copy of the PAN card of Shri Rakesh I. Panchal HUF. The assessee also furnished the return of income of the HUF for Assessment Yean 2008-09 which shows gross total income of Rs, 108004/-. However, no return of income for the- Assessment Year 2002-03 has been filed. The assessee a/so could not produce the Karta of the HUF for cross examination. Under the circumstances it is very difficult to accept the view of the assessee that a HUF, having no taxable income would have such huge inflow and out flow of funds without any reasons. It is also beyond the doctrine of preponderance of probability that on his individual basis Shri Panchal would act as conduit of the assessee but would not act so through the HUF." After considering the detailed submission given by the assessee including Affidavit filed by the said person, the Assessing Officer by producing various decisions observed as under: "After going through the....
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....pertains to my HUF's only. They shown me the Notice u/s. 142(1) of the Income Tax Act, 1961 dated 25-09.2009 issued to Unipon (India) Limited for A.Y. 2002-03 and also reminder thereof dated 9.11.2009 wherein name of Rakesh I Panchal- HUF has been reflected. I therefore state and confirm that the above referred Bank A/c. No.000400 is purely pertains to my HUF and Unipon( India] Limited is no any way concern with the said Bank Account''. 5. Once the Affidavit is sq, clearly confirming that all the transactions belong to the H.U.F. of Rakesh Panchal and not to the appellant, the Assessing Officer had power to issue summons and examine the person if he had still any doubt. However, the Assessing Officer has not considered all these details filed by the appellant company including transactions in bank account, affidavit and other details which are not belonging to it. I agree with the appellant that once the Affidavit is filed, confirming that the transactions of Rakesh Panchal H.U.F. belonged to-him and not of the company, the burden is sniffed to the Assessing Officer to issue Summons and verify further details if he had any doubt. However, the Assessing Officer has made th....
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.... 58,01,339/- as unexplained investment. The addition made was therefore rightly deleted by CIT(A). There is no infirmity in CIT(A)'s order. Therefore, we uphold the same. 3. The second ground of the appeal is pertaining to deletion of disallowance of Rs. 1,28,670/- made by the Assesseeing Officer on account of unexplained expenditure. 3.1 The facts of the case are that the Assessing Officer has made the addition as per page 4 of his Order in para 5 by observing as under :- "During the year the assessee had received a sum of Rs. 2.57 crores from various sundry debtors which were discounted through a Shroff and deposited into the account of M/s Krishna Finance and M/s Shriji Trading & Investments. The assessee was asked to show cause as to why expenditure incurred on payment to Shroff on cheque discounting should not be treated as unexplained expenditure. The assessee vide letter dated 19.8.2010 stated that it did not deny discounting of cheque by the Shroff but submitted that it had not incurred any additional expenditure on such cheque discounting." The provisions of section 69C are merely clarificatory and embody a rule of evidence which is otherwise quite clear. This ....
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....g Officer has not found any evidence of assessee having incurred any expenditure for discounting of cheques, the addition made only on presumption and suspicion cannot be made u/s 69C. The addition of Rs. 1,28,670/- is accordingly deleted." The Revenue being aggrieved has come in appeal before us. 3.3 The ld. Departmental Representative relied on the Assessing Officer's order whereas the ld. authorized representative supported the CIT(A)'s order. 3.4 We have considered the rival submissions and carefully gone through the material on record. We find that CIT(A) has rightly deleted the impugned addition by observing that the law is very clear that when the Assessing Officer has not found any evidence of assessee having incurred any expenditure for discounting of cheques, the addition made only on presumption and suspicion cannot be made u/s 69C. The addition of Rs. 1,28,670/- is accordingly deleted. Nothing contrary has been brought to our knowledge by the Revenue. Therefore, we find no infirmity in CIT(A)'s order and we uphold the same. 4. In the result, the appeal of Revenue is dismissed. 5. Now we take up ITA No.993/Ahd/2011 for AY 2005-06 where the sole issue is in....
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....ained like cash book, bank book, journal register, general ledger, purchase register, sales register stock register etc. and all the bank accounts of the appellant company. From the voluminous audit report of more than 250 pages, I have seen that the Auditors have examined and reproduced every bank account and credit entries and have obtained appropriate audit evidences as well as other evidences to explain the source of the same. The Auditors have obtained all material and confirmations, which explains the genuineness, capacity and creditworthiness of all the creditors and credits appearing in bank account. After verifying and satisfying themselves, the Auditors have finally given their opinion on page 22 of the Report that income earned in the above 10 concerns/persons from mutual funds, share investment and other income, are of Rs. 68,55,384/-. Thus all other bank entries and credits therein stand clearly explained and cannot be considered as unexplained. In view of this, the addition made of Rs. 56,61,60,657/- deserves to be deleted.". 7. This is particularly so because the income of Rs. 68,55,384/- as suggested by Special Auditor also cannot be added and sustained inasmuch ....