TaxTMI 
TaxTMI 
2016 (4) TMI 36
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....he grounds of appeal before or during the appellate proceedings. 2. The brief facts of the case are that the search and seizure action u/s. 132 of the I.T. Act, 1961 was carried out in Suresh Nanda Group of cases on 28.2.2007. The case was centralized by CIT, Kolkata vide order u/s. 127(2) of the I.T. Act. The assessee has filed return of income declaring an income of Rs. 95,88,893/- on 2.6.2009. Notice u/s. 143(2) was issued on 15.9.2009. Notice u/s. 142(1) alongwith questionnaire was issued on 17.9.2009. In response to the same, Assessee's Authorised Representative attended the proceedings and filed the necessary details/ clarifications. The assessee had declared income from business and profession, income from house property and income from other sources being interest from bank etc.. Thereafter, the Assessing Officer, completed the assessment u/s. 143(3) of the Act at an income of Rs. 13,98,94,893/- passed vide order dated 29.12.2009 and made various additions. 3. Aggrieved with the Assessment order dated 29.12.2009, Assessee filed appeal before the Ld. CIT(A) who vide impugned order dated 06.4.2011 has partly allowed the appeal of the Assessee. 4. Aggrieved with the o....
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....Puri, Ms. Hanisha Puri and Ms. Priyanka Puri. But the observation of the AO is without any application of mind because during this year, no credit was received from any of these persons. We note that it is a settled law that if prima facie information is necessary to examine the claim of the assessee, the Ld.CIT(A), should consider the necessary evidence in exercise of his powers u/s. 250(4) and it is also a settled law that when a statutory authority has the power to do something, then it has a corresponding duty to exercise such powers whenever circumstances warranting exercise of such powers exist. This view is supported by the ITAT, Calcutta Bench decision in the case of ITO vs. Bajoria Foundation (254 ITR (AT) 65). 6.3 In the background of the aforesaid discussions and precedent relied upon in the CIT(A)'s order, we are of the view that Ld. CIT(A) has rightly admitted the additional evidences, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) on this ground and dismiss the ground no. 2 raised by the Revenue. 7. Apropos Ground No. 3 relating to deletion of addition of Rs. 13,05,06,000/- of unsecured loans is concerned, we find....
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....n various dates. Subsequently, Rs. 5,40,00,000/- were received from the company on various dates which means a loan of Rs. 69,82,273/- only after adjusting the advance of Rs. 4,70,17,727/-. The loan of Rs. 69,82,273/- was also repaid on 31/3/2007 by way of transfer entry. Therefore, total credit received was only Rs. 1,20,82, 273/- (51,00,000 + 69,82,273)- which was also squared up leaving NIL balance at the end of the year. Therefore, there is an arithmetical mistake in as much as the figure of Rs. 6,07,00,000/- should have been 1,20,82,273/-. Relevant extract from his submissions dated 21/3/2011 are as under: - "ii) During the course of assessment, following documents were filed before the Ld. AO:- a) Confirmation b) Copy of bank accounts c) Income Tax return d) Audit report alongwith balance sheet as well as P/L Alc These documents clearly provided the following information: - a) Name of the creditor b) Address of the creditor c) PAN of the creditor d) Admittance on the part of creditor e) Jurisdiction of assessing authority over the creditor as ITO, Ward 2(1). f) Credit was received vide alc payee cheques on various dates indicating cheque no....
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.... denial by the Yadavs, was, as per bank records, found to be opened and operated by Sh. O.P. Yadav/Mohinder Singh Yadav. The initial burden thus discharged, it was for the Revenue to establish that the transaction in question was bogus. " c) Hon'ble ITAT Mumbai in its latest judgment dated 7/1/2011 in the case of Guruprerna Enterprises vs. ACIT, ITA No. 255, 256 & 257/Mum/2010 has held on page 25, para 35 as under: - "When a lender gives money by way of crossed cheques, reflects the same in his balance sheet and filed the balance sheets alongwith the return of income with the Income Tax Department, the conclusion that the assessee is not able to explain the source of funds of the lender properly, is not correct. " v) Therefore, identity, genuineness and creditworthiness of the creditor is fully established. The initial burden on the assessee thus discharged, it was for the revenue to establish that the transaction was bogus. But the Ld. Aa has not pointed out to any material to establish that the transaction is bogus. Hence, credit of Rs. 1,20,82,273/-. (wrongly mentioned as Rs. 6,07,00,000/- by the Ld. AO) from M/s Arlington Impex Pvt. Ltd. stands duly explained. ....
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....08) 307 ITR 334 (Del) "Income-Cash credit-Share application money-CIT(A) accepted the existence of the applicants-It is very difficult for the assessee to show the creditworthiness of strangers-Revenue has not shown that the applicants did not have the means to make the investment and that such investment actually emanated from the coffers of the assessee company-Addition rightly deleted by the Tribunal-No substantial question of law arises." 15. I have considered the AO's order, the AR's submissions, the remand report and the rejoinder by the AR as well as the position of law and the facts of case. The appellant has filed confirmation, PAN, IT return, bank statement and audited accounts including balance sheet. These documents clearly provide name, address, PAN etc of the creditor. Details of jurisdiction of assessing officer over the creditor was also provided. I have also seen the bank statements of the creditor which clearly indicate that the appellant had given Rs. 35,00,000/- to the company on 31/5/2006 vide cheque no. 031643 which is duly credited in the bank account of the creditor with HSBC Bank bearing no. 094-135217-001 thereby returning the old loan of Rs.....
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....initial burden thus discharged, it was for the Revenue to establish that the transaction in question was bogus. Similarly, Hon'ble ITAT Mumbai in its latest judgment dated 7/1/2011 in the case of Guruprerna Enterprises vs. ACIT, ITA No.255,256 & 257/Mum/2010 has held that when a lender gives money by way of crossed cheques, reflects the same in his balance sheet and filed the balance sheets alongwith the return of income with the Income Tax Department, the conclusion that the assessee is not able to explain the source of funds of the lender properly, is not correct. Genuineness of the transaction is fully established by the fact that the transaction is duly confirmed by the creditor and the fact that the amount is received by Alc Payee cheques indicating cheque nos, date, amount, bank account no. as well as name and address of the bank. Creditworthiness of the creditor is also fully established by the fact that the amount is received by Alc Payee cheques indicating cheque nos, date, amount, bank account no. as well as name and address of the bank and in view of the fact that the bank account of the creditor clearly shows the debit and credit pertaining to loan and its repayment....
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....h to prove the identity of a person as held by Hon'ble Delhi High Court in the case of CIT vs. Dwarkadhish Investment Pvt. Ltd., (2010) 45 DTR (Del) 281. iii) Genuineness of the transactions is also fully established by the fact that the transaction is duly confirmed by the creditor and the amount is received by Alc Payee cheques which are duly debited in the bank account of the creditor which has confirmed the same. iv) Creditworthiness of the creditor is also fully established by the fact that the amount is duly debited in the bank account of the creditor company. This view is fully supported by the judgment of Hon'ble Delhi High Court in the case of CIT vs. Kishori Lal construction Ltd., [2010] 5 Taxmann.com 60 (Delhi), Hon'ble ITAT Mumbai in the case of Guruprerna Enterprises vs. ACIT, ITA No. 255,256 & 257/Mum/2010 and other case laws as discussed above. v) Therefore, identity, genuineness and creditworthiness of the creditor is fully established. The initial burden on the assessee thus discharged, it was for the revenue to establish that the transaction was bogus. But the Ld. AO has not pointed out to any material to establish that the transactions are bo....
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....tor. The copy of bank account with CITI bank was not filed on the ground that the same is under restraint uls 132(3). The appellant could not obtain the copy from the bank because of section 132(3). Therefore, the Ld AR requested that the AO may obtain the copy of bank statement directly from the bank, if so required. The relevant extract from his arguments is as under: - "ii) The Ld AO has further observed that no proof of donor's income in Dubai has been brought on record. It was explained to the Ld. AO that Shri Mohit Puri left India on 9/4/2006 for employment with M/s Friend's General Trading FZCO, Dubai. In this regard your kind attention is invited to the letter dated 1010212011 vide which further documents were filed ulr 46A as under: - - Copy of Employment Agreement with M/s Friend's General Trading FZCO, Dubai indicating salary of 40,000 OH per month (Rs. 4,96,4001- approx. @ 1DH = Rs. 12.41 in April, 2006) + commission @ 12.5% besides reimbursement of expenses in respect of boarding, lodging, transport, communication, meals, etc. - Confirmation from Employer regarding reimbursement of various personal expenses. - Confirmation from Employer regardin....
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....ted. It has already been made very clear in the application made u/r 46A that bank statement could not be filed as the bank account with CITI Bank, G. K.. New Delhi is under restraint order uls 132(3). A copy of the restraint order uls 132(3) is placed in the paper book. Under the circumstances only Revenue Authorities can obtain the copy from the bank. If the Ld. AO had any doubt he could have verified the confirmation w.r.t. bank account by obtaining a copy from the bank itself In fact, confirmation clearly indicates that aments were received as under:- Date Cheue No. Bank Amount 27/07/2006 599082 Citi Bank 65,00,000 29/7/2006 599083 Citi Bank 10,00,000 02/08/2006 599089 Citi Bank 35,00,000 TOTAL Rs. 1, 10,00,000 viii) The Ld. AO has mentioned on page 13 (para 7.1) of the assessment order that the genuineness of transaction is also in doubt. The additions cannot be based on doubts and have to be based on findings relying on evidences to that effect. This view is further confirmed by the Hon'ble ITAT Mumbai's latest judgment dated 7/1/2011 in the case of Guruprerna Enterprises vs. ACIT, ITA No.....
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....the responsibility of the assessee-firm is over. The assessee-firm cannot ask that person who makes investment whether the money invested is properly taxed or not. The assessee is only to explain that this investment has been made by the particular individual and it is responsibility of that individual to account for the investment made by him. If t at person owns that entry, then, the burden of the assessee firm is discharged. It is open for the AO to undertake further investigation with regard to that individual who has deposited this amount. " e) CIT vs. Value Capital Services (P) Ltd., (2008) 307 ITR 334 (Del) "Income-Cash credit-Share application money-CIT(A) accepted the existence of the applicants. It is very difficult for the assessee to show the creditworthiness of strangers-Revenue has not shown that the applicants did not have the means to make the investment and that such investment actually emanated from the coffers of the assessee company-Addition rightly deleted by the Tribunal-No substantial question of law arises." 20. The AR has also argued that the appellant cannot be asked to explain the source of source. It is also judicially settled that if the revenu....
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....s, the remand report and the rejoinder by the AR as well as the position of law and the facts of case. I have also considered the bank account of the creditor. I have also gone through the case laws relied upon by the AR. The additions cannot be based on doubts and have to be based on definite findings relying on evidences to that effect. I agree with the AR that addition cannot be made on the basis of doubts, suspicions, surmises and conjectures. Hon'ble ITAT Mumbai has clearly upheld this ratio in the case of Guruprerna Enterprises. Moreover, genuineness of the transactions is fully established by the fact that the transaction is duly confirmed by the creditor and the amount is received by a/c Payee cheques and he has confirmed the same. Therefore, it is held that genuineness of transaction is fully established. 22. As regards creditworthiness, the appellant has filed the following documents to explain the source of funds in the hands of the creditor: - - Copy of Employment Agreement with M/s Friend's General Trading - FZCO, Dubai indicating salary of 40,000 OH per month (Rs. 4,96,400/- approx. @ 1DH = Rs. 12.41 in April, 2006) + commission @ 12.5% besides rei....
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....t. Ltd. for a consideration of Rs. 2,50,00,000 - and for ground floor and basement, Rs. 2,00,00,000/- were received from Mls Ocenic Homes Pvt. Ltd. Therefore, total consideration received was Rs. 6,50,00,000/-. The Coownership of the appellant and Ms. Neelam Mohan was in the ratio of 60 : 40. Therefore, out of gain of Rs. 15,00,000- (6,50,00,000 - 6,35,00,000), share of appellant was only Rs. 9,00,000/- The share of the appellant in the sale consideration was only 3,90,00,000/- being 60% of Rs. 6,50,00,000/-. Since, the appellant received Rs. 4,70,00,000/--, Rs. 80,00,000/-- were to be handed over to Ms. Neelam Mohan. Therefore, there was no unsecured loan from Ms. Neelam Mohan. As regards the objection of the Ld. AO regarding non filing of bank account of Ms. Neelam Mohan is concerned, it is irrelevant because no loan was received from her. As regards receipt of sale considerations, they were all received through a/c payee cheques, details of which like cheque nos., date, name of bank etc are available in the sale deeds themselves. In fact, registered sale deed itself is conclusive proof of the transaction. Moreover, this amount of Rs. 80,00,000/- was paid to her on 15/1/2011 vide....
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....operate. During appellate proceedings, he was persuaded and he cooperated by providing certain documents which were filed u/: 46A as under:- a) Confirmation from the creditors which gives the following particulars: - i) Name of the creditor ii) PAN of the creditor iii) Date of Transaction iv) Amount of Transaction v) Account Payee Cheque nos. vi) Name of the Bank on which cheques were drawn. b) Bank account with Centurian Bank of Punjab, Connaught Place, New Delhi which indicates debit of Rs. 50,00,000/- vide cheque no. 429301 in favour of Shri Vikrant Puri on 04/05/2006 in Alc no. 0011-408624-001. Similarly there are debit entries of Rs. 70,00,000/- vide cheque no. 429307 on 22/06/2006, Rs. 1,00,00,000/- vide cheque no. 429314 on 5/12/2006 and Rs. 1,00,00,000/- vide cheque no. 429315 on 1211212006 in the same account. c) Copy of Passport with residence visa of UAE indicating that he was a resident of UAE. d) Copy of PAN Card of the creditor e) Affidavit of Shri Pankaj Kapoor confirming that he is a NRI since 2002 and his source of income is from proprietorship business in Dubai with P. O. Box No. 64834. He has further deposed that he has given a lo....
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....ubmitted that para 3 of the affidavit clearly says that Shri Pankaj Kapoor is deriving income from proprietorship business under the name and style Mls Oracle General Trading having its business address as - P. O. Box - 64834, Dubai, UAE. 29. I have considered the AO's order, the AR's submissions, the remand report and the rejoinder by the AR as well as the position of law and the facts of case. The appellant has filed confirmation, copy of PAN card, copy of bank statement, cheque nos., copy of passport with residence for UAE and affidavit explaining source of income and details of transactions. Identity of Shri Pankaj Kapoor is established by the name, address, PAN and confirmation. PAN is enough to prove the identity of a person. Genuineness of the transactions is also fully established by the fact that the transaction is duly confirmed by the creditor and the amount is received by Alc Payee cheques which are duly debited in the bank account of the creditor which has confirmed the same. As regards creditworthiness, it is very clear from the affidavit itself that Shri Pankaj Kapoor is deriving income from proprietorship business under the name and style Mls Oracle Gener....