TaxTMI 
TaxTMI 
2018 (2) TMI 861
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....der section 69. 4. While the Assessing Officer brought to tax the amount of Rs. 18,00,100/- as unexplained investment under section 69, the CIT(A) erroneously confirmed the same as 'unexplained cash credit' considering it as an addition under section 68; and without appreciating the fact that the assessee discharged the onus cast under section 68. 5. Crave Leave to urge/raise any ground that might be necessary at the time hearing". 3. Briefly stated facts are that assessee had filed her return of income on 21-10-1999 declaring a total income of Rs. 91,990/-. This return was processed u/s 143(1). However, a notice u/s. 148 of the Income Tax Act [Act] has been issued dt. 11-03- 2005 on the reason that the income has escaped assessment. The Assessing Officer (AO) has completed the assessment u/s. 143(3) r.w.s. 147 vide order dt. 24-03-2006 by making the addition of unexplained investment of Rs. 18,00,100/-. AO noted that assessee has invested an amount of Rs. 21,50,100/- in M/s. Sankhya Infotech Ltd., and the source of investment was Rs. 3,50,000/- out of savings and Rs. 18,00,000/- from the loans raised. AO also acknowledges that assessee while fining the return ....
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....d. 6. Ld. Counsel explained that assessee along with other family members (whose appeals are separately dealt with) has invested in a company (M/s Sankhya Infotech Ltd, Bhubaneswar) promoted by them and the investment by assessee was to the tune of Rs. 21,50,100/-. The sources of the amounts were disclosed in the original return filed and the same were as under: "Note: During the year I have invested in Sankhya Infotech Limited Some are Out of Savings 3,50,000 Loans raised 18,00,100 21,50,100 6.1. It was submitted that assessee has borrowed from the following persons: Sl.No. Name of the Creditor Amount (Rs) 1 Bala Raju 82,000 2 Bapuji 90,000 3 Bhoji 50,000 4 Chandraiah 82,000 5 Chinnappa 50,000 6 Chittemma 92,000 7 Eeswara Rao 50,000 8 50,000 9 Jaya Raju 90,000 10 Jayamma 95,000 11 Jaya Raju 90,000 12 Kanakayya 50,000 13 Koteswara Rao 50,000 14 Krishna Murthy 40,000 15 Mahalakshmi 50,000 16 Mangamma 42,000 17 Mangatayaru 83,000 18 Munindrarao 95,000 19 ....
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....rishna, Parvathavardini, Indira Ramani, N. Sridhar and N. Gayatri. Except these notes, evidences and the letter received from Addln. CIT, Bhuvaneshwar, to take action u/s. 147 there is no tangible material that income has escaped assessment. Relied on judgment of Delhi High Court in the case of CIT Vs. Atul Kumar Swami where reference to notes filed along with original return of income are made. The entire reasons recorded for reopening of assessment is "BORROWED SATISFACTION" and not that of the Assessing Officer. Reasons for re-opening not communicated in any of the cases - Fatal to re-assessment - Not furnishing of reasons or its non-communication is fatal to reassessment proceedings. Pls. see case law relied upon as under - Sr. No. Case Law ITR Page Court i. CIT Vs. Tecumseh Product 361 429 AP & Telangana ii. CIT Vs. Trend Electronics 379 456 Mumbai iii. CIT Vs. Vijaya Talkies & Distributors 398 13 Delhi iv. CIT Vs. Kothari Mills 377 581 Karnataka 7. Ld.DR, however, defended the order of the AO/CIT(A) vehemently. Regarding the satisfaction, Ld.DR informe....
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....t prone area for the last five to six years and sufficient income was not generated. The appellant-company has quoted from the same report to assert that from 1986 to 1996, prawn was being cultivated in the land where the yield per acre was Rs. 1 lakh per annum. The AO has drawn attention to the discrepancies between the plot/survey numbers and the extent of land area given by the cultivators and as appearing in the land records. This discrepancy has been attempted to be explained by the appellant-company by attributing the same to non-mutation of land and typographical and unintentional error etc., although the veracity of the allegation has been admitted in few cases. The difference regarding the extant of land area was attributed to causes like sale/gift or sharing of land subsequently. But, be that as it may, the enquiry report does not indicate that the sources of source, i.e., the loans advanced by the farmers to the Directors/shareholders; were totally bogus or that they completely lack creditworthiness. But, there appears to be some substance in the assertion of the AO/Jt.CIT that certain elements like the genuineness of the transactions and complete creditworthiness of the....
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.... by the DCIT, Circle-I, Bhuvaneshwar. During the course of pendency of the assessment proceedings in the case of Sankhya Infotech Ltd., for the Asst. Year 1998-99 the Assessing Officer noticed that cash credits found in the books of the company on account of introduction of share application money by the promotors do not have adequate means to introduce such money and also the alleged transactions of unsecured loans obtained by the promotors from various farmers of Krishna District of Andhra Pradesh were not found to be genuine. The Assessing Officer requested the DDIT (Inv.,) Vijayawada to conduct enquiries about the genuineness of the loans raised and report. The DDIT (Inv.,) Vijayawada conducted the enquiries which reveals that the transactions of loans from farmers are not genuine and they are only paper transactions. In view of the above, the claim of the assessee that she has raised loans from the farmers is not genuine. The investment made by the assessee represents her income. I have reason to believe that income chargeable to tax for the Asst. Year 1998-99 has escaped assessment within the meaning of Section 147 of the I.T. Act, 1961. I request t....
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....ni 16 Y. Eswar Rao, Pedapatnam N. Gayatri 17 Y. Eswar Rao, Pedapatnam N. Parvathavardhini 18 Lella Joji, Padapatnam N. Indira Ramani 19 Lella Joji, Padapatnam N. Gayatri 20 Lella Joji, Padapatnam N. Parvathavardhini 21 G. Yesupadam, Pedapatnam N. Indira Ramani 22 G. Yesupadam, Pedapatnam N. Parvathavardhini 23 G. Chinnappa, Pedapatnam N. Parvathavardhini 24 G. Chinnappa, Pedapatnam N. Gayatri 25 G. Chinnappa, Pedapatnam N. Indira Ramani 26 K. Bapuji, Kaanuru N. Indira Ramani 27 K. Bapuji, Kaanuru 28 J. Mahalakshmi, Kaanuru N. Indira Ramani 29 J. Mahalakshmi, Kaanuru N. Parvathavardhini 30 J. Mahalakshmi, Kaanuru N. Gayatri 31 Puppala Rambabu, Kaanuru N. Gayatri 32 Puppala Rambabu, Kaanuru N. Parvathavardhini 33 G. Vemlata Ramadevi, Vundrapudi N. Indira Ramani 34 G. Vemlata Ramadev....
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.... Vura Chinnappa Pedapatnam 16 D. Sambasiva Rao Pedapatnam 17 V. Paidaiah Tallapalem 18 V. Vakalaiah Tallapalem 19 P. Gopi Tallapalem 20 V. Subba Rao Tallapalem 4. On enquiry it was learnt that the following persons have expired. In this regard I have obtained certificate from VRO. Sl.No. Name of the persons S/Sri/Smt. 1 Jayapal, Pedapatnam 2 Jayaraju, Pedapatnam 3 Mariyanna, Pedapatnam 4 Bunga Raju, Pedapatnam 5 Ramappa, Pedapatnam 6 Krishna Murthy, Kaanuru 7 Venkata Narasimha Rao, Kaanuru 5. It was also came to know that some of the persons have migrated to some other places on their personal grounds. Submitted for information, please. Encl: As above Sd/- (MD. SAYED BAJI) ITI :: RANGE-11 H) Ld. CIT(A) relied on the enquiry reports of year 2001 in the company's case, even though the enquiries were conducted through the ITI. 9. Now, coming to the merits of the addition, the findings of AO and CIT(A) are not based on facts. The reliance on CIT(A), Bhubaneswar order by the present CIT(A), Hyderabad is also misplaced. In fac....