TaxTMI 
TaxTMI 
2016 (11) TMI 387
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....and in the circumstances of the case, the Ld. CIT(A) erred in confirming addition of Rs. 3,19,35,000/- made u/s 68 of the Income Tax Act, 1961 without appreciating the fact that no amount whatsoever has been received by the assessee. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) failed to appreciate that S.68 of the Income-tax Act, 1961 is not applicable to facts of the present case as the provision presupposes actual receipt of amount/sum. 3. The appellant prays that addition made of Rs. 3,19,35,000/- may be deleted." 3. The brief facts of the case are that assessee is in the business of engineering, erection and commissioning and consultancy in Oil and Gas industry. The assessee was asked to produce the books of accounts by the AO during the course of assessment proceedings u/s 143(3) read with Section 143(2) of the Act which was produced by the assessee along with the bills before the AO. The A.O. during the course of assessment proceedings u/s 143(3) read with Section 143(2) of the Act observed that there was an increase in issued share capital of Rs. 70 lacs which was subscribed by Shri Krishnanand Trivedi (Rs. 42 lacs) and Shri Alok....
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....ces Pvt. Ltd. Rs. 75,00,000.00 Loan to Alvi Tech Services Pvt. Ltd. Alok Rs. 50,00,000.00 Loan to Alvi Tech Services Pvt. Ltd. Rs. 51,78,000.00 Alvi Tech Services Pvt. Ltd. Share Application Money Rs. 31,500,000.00 ICICI Bank Rs. 7,049.69 TDS Rs. 301,506.00 TDS 2008-09 Rs. 56,135.00 Cash Balance Rs. 143,742,15 Rs. 54,716,502.84 It was observed by the A.O. on verification that the assessee has not shown the figures mentioned in the capital balance and balance sheet in the return of income filed for the respective years. On verification of the return of income filed by Shri Krishnananad Trivedi, Proprietor of Alvi Tech Services, the following incomes were shown during period assessment year 2001-02 to assessment year 2011-12:- A.Y. Returned Income in Rs. 2001-02 50,000/- 2002-03 85,580/- 2003-04 1,47,524/- 2004-05 1,77,340/- 2005-06 4,02,090/- 2006-07 6,95,840/- 2007-08 2,00,000/- 2008-09 2,00,000/- 2009-10 4,97,500/- 2010-11 4,97,500/- 2011-12 4,97,500/- Further from the r....
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.... with Alvi Tech Services Pvt. Ltd. He further stated that documentary proof of transactions of M/s Alvi Tech Services was destroyed by the act of God in year 2005. Statement of Shri Krishnanad Trivedi was recorded on 26th November, 2012 by the AO whereby he stated that at the time of retirement from Indian Navy in the year 1994, he had got nearly Rs. 15 lakhs and he was earning monthly salary of Rs. 30,000/- per month from companies during 1995 to 2000. It was stated by him that no documentary evidence to prove the financial assistance received from the family members is available. Thus, the A.O. held that Shri Krishnanand Trivedi was not having enough salary to substantiate such a capital balance and the income disclosed in the return of income by Shri Krishnanand Trivedi is very less as compared to the capital balance. The assessee was asked to explain as to how such a huge capital has been built up and also asked to explain the source of the said capital. The assessee, in reply has filed capital account for the period 1990 to 2005 claiming to be personal capital account of Shri Krishnanand Trivedi whereby he has received Rs. 75 lakhs as share from family settlement in the financ....
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....ds of the assessee company and the same was brought to tax by the A.O. in the hands of the assessee company as unexplained cash credit u/s. 68 of the Act vide assessment order dated 14.02.2013 passed by the AO u/s 143(3) of the Act. 4. Aggrieved by the assessment order dated 14.02.2013 passed by the A.O. u/s. 143(3) of the Act , the assessee filed first appeal before the ld. CIT(A). 5. The assessee during proceedings before learned CIT(A) submitted that while going through the old records, Mr. Krishnanand Trivedi found details of some old agricultural land which he had inherited from his father which is around 10 hectare and value of land is Rs. 10 crores for which the assessee filed land records before the learned CIT(A). Thus, the assessee contended before the learned CIT(A) that the addition to capital account of Mr Krishnanand Trivedi found stood explained. The ld. CIT(A), however, rejected the claim of the assessee on the ground that the assessee was not able to substantiate the claim of introduction of share capital/share application money to the tune of Rs. 3,19,35,000/- during the previous year relevant to the assessment year whereby the built up capital in the cap....
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....t , which are now duly audited by the auditors of the company being qualified chartered accountants who have issued audit report dated 20-07-2015 along with re-casted audited financial statements which is part of additional evidences filed for the first time before the Tribunal. The ld. Counsel submitted an affidavit of Shri K.N. Trivedi dated 21st November, 2015 which is placed on record as additional evidences vide paper book page No. 43 to 46 and further prayed that the said additional evidence should be admitted and adjudicated on merits. There are additional evidences filed for the first time before the Tribunal which are part of the paper book-II/pages 43-148. The ld. Counsel further requested that the matter may be remanded back to the CIT(A) for verification of all these additional evidences and claim of the assessee may be adjudicated on merits. He submitted that the addition u/s 68 of the Act is not sustainable as there are in-fact no cash credits to the tune of Rs. 3.15 crores which is supported by affidavit filed as additional evidence of Mr K.N.Trivedi along with re-casted audited financial statements. The revised audited accounts are also duly filed with the governmen....
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....nal evidences filed with the Tribunal are placed at page no 43-148/paper book-II and it is prayed that the said additional evidences be admitted and adjudicated on merits. The said additional evidences consists of Affidavit of Shri K.N. Trivedi dated 21st November, 2015 which is placed on record as additional evidence before the Tribunal vide paper book page No. 43 to 46 wherein he admitted of manipulating the accounts and introducing of fictitious entries in books of accounts of the assessee company. The copies of revised and re-casted audited accounts for the financial year 2009-10 are placed as additional evidences page 47-64/paper book-II. Copies of Resolutions along with forms filed with Ministry of Corporate affairs for filing revised and re-casted audited accounts for financial year 2009-10 along with paid challans are enclosed in paper book-II/page 65-68. The copy of notice of Extra-ordinary General Meeting(EGM) , Board Resolutions and Resolutions passed at EGM are also filed as additional evidences before the Tribunal. Sanction letters from Bank of Baroda is also filed as additional evidences to substantiate that the loans/limits were enhanced by the bank in favour of the ....