TaxTMI 
TaxTMI 
TaxTMI 
2018 (2) TMI 435
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....ce to such notice, reassessment order u/s 143(3) r.w.s 147 was passed vide order dated 1.11.2012, assessing the income at same amount, i.e., 92,02,67,218/-, after detail scrutiny. Post the completion of such an reassessment, once again for the second time, assessee's case was reopened u/s 147, vide notice dated 29th March, 2014 u/s 148; and this time such a reopening was done on the basis of information received by the AO from DDIT (Investigation) Unit - III(1), New Delhi. The relevant 'reasons recorded' for reopening the assessment was as under:- "An information has been received from the Dy. Director of Income Tax (Inv.), New Delhi that a letter from CIT (A) Alwar was received on 18.08.2011 alongwith submission of Shri Satyendra Yadav. Shri Yadav is Prop. M/s. Shivam Exports had purchased tiles from M/s. Anant Raj Industries and M/s. Daga Ceramics Pvt. Ltd. As per which the whole amount for sale of tiles to M/s. Shivam Exports is said to have been received in cash from Shri Yadav by these parties at the year end. However, as per the submission of AR of M/s. Shivam Exports before the Ld. CIT(A) Alwar , M/s. Shivam Exports made payments of Rs. 10,09,024/- through various cheques ....
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....ade by M/s. Shivam Exports Rs.6,12, 787/-Through cheque As per books of Shivam Exports Rs.10,09,024/- through cheque as per submission filed by M/s. Shivam Exports before the Ld. CIT(A). In view of above facts, it is evident that M/s. Anant Raj Industries Ltd. has received cash payments to the tune of Rs. 41,72,465/- which might have its own unaccounted cash introduced in its books. M/s. Shivam Exports stated to be paid Rs. 6, 12,787/- through cheque whereas M/s. Anant Raj Industries is showing cheque receipt of Rs. 4,92,287/- i.e. there is difference in receipt amounting to Rs. 1,20,500/-. Thus an amount of Rs. 42,92,965/- is income escape assessment for the assessment year 2007-08. In view of above, I have reason to believe that an income to the extent of Rs. 42,92,465/- has escaped assessment for the assessment year 2007-08 and to assess the income mentioned above and to verify the genuineness / creditworthiness of the above investors, I propose to issue notice u/s 148 of the Income Tax Act, 1961 for the assessment year 2007-08." 3. During the course of such assessment proceedings, the assessee submitted that it has transacted with M/s. Shivam Exports and Shri Saty....
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....ontinued to exist in the books of the aforesaid parties." 4. Summary of sale and cash transaction with both the parties were given in the following manner:- S. No Name of Party Opening balance Sales Cash recd. Cheques recd./ transfer Closing balance 1. Shivam Exports (1,19,305) 27,02,939 20,15,500 5,11,159 56,975 2. Satendra Yadav - 28,73,783 21,56,965 - 7,16,818 TOTAL (1,19,305) 55,76,722 41,72,465 5,11,159 7,73,793 5. However, the Ld. AO after analysing the ledger account of M/s. Shivam Exports, noted that it has shown to have paid sum of Rs. 6,12,787/- through cheques to the assessee, whereas the assessee had shown cash sales from the said party. The relevant copy of account in the books of the assessee company and in the books of M/s. Shivam Exports were extracted by him as under:- "Payment received from M/s. Shivam Exports & Satendra Yadav Prop. M/s. Shivam Exports as per books of M/s. Anant Raj Industries pertains to A.Y. 2007-08: Particulars Amount received in cash Amount received through cheques Payment received from M/s Shivam Exports Rs.20,15,500/- Rs.4,92,287/- Payment received from Satendra ....
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....d March 31, 2007. (h) Provided the addresses of Mr. Satendra Yadav and Shivam Exports; (PAN of Mr. Satendra Yadav was in knowledge of the learned DCIT)." 7. Ld. CIT(A), deleted the said penalty after observing that assessee has shown sale to Shri Satendra Yadav and M/s. Shivam Exports of ceramic tiles for sum of Rs. 55,76,722/-; and against such sales, assessee has received payments of Rs. 41,72,465/- by way of cash and Rs. 5,11,159/- by way of cheque. Entire sale amount has been duly recorded in the books which has been subjected to audit and the sales is comprehensively proved by the various documents filed by the assessee before the AO. He further held that, no information has been brought on record by the AO to prove that a cash credited in the books of accounts of the assessee shown as sales actually belong to the assessee or assessee has routed its own money. Apart from that, AO has drawn adverse inference on the basis of statement of Shri Satendra Yadav, taken note by the Ld. CIT(A) Alwar in his own case, however there was no cross examination provided to the assessee of Shri Satendra Yadav. Thus, he held that there was nothing on record which can prove that assessee ha....
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....or show cause notice, then he cannot impose penalty for altogether different charge. In support he has relied upon the judgment of Karnataka High Court in the case of CIT vs. Manjunatha Cotton & Ginning Factor (2013) 359 ITR 565 ; CIT vs. SSA's Emerald Meadows (2016)73 taxmann.com 248(SC). 11. We have heard the rival submissions and also perused the relevant findings given in the impugned orders. Here in this case the addition has been made by the AO for sums aggregating to Rs. 41,72,465/- on account of sales made to the two parties in cash on the ground that same is unexplained cash credit under the deeming provisions of section 68. As discussed in the foregoing paragraphs, the assessee had shown following sales of ceramic tiles to two parties:- S.No I Name of Party Opening balance Sales Cash recd. Cheques recd./ transfer Closing balance 1. Shivam Exports (1,19,305) 27,02,939 20,15,500 5,11,159 56,975 2. Satendra Yadav - 28,73,783 21,56,965 - 7,16,818 TOTAL (1,19,305) 55,76,722 41,72,465 5,11,159 7,73,793 The AO has on the basis of payment shown by M/s. Shivam Exports to the assessee in its book....