TaxTMI 
TaxTMI 
2015 (8) TMI 1457
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....ilak Bazar, Khari Baoli, Delhi. The case was centralized to Central Circle-12, New Delhi by an order passed u/s 127 of the Income Tax Act, 1961 vide F.No.-CIT-V/Centralization/2011-12/1472 dated 14/10/2011 of the Commissioner of Income Tax-V, Delhi. In view thereof, Date of Hearing 27.05.2015 Date of Pronouncement 07.08.2015 notice u/s 153C of Income Tax Act, 1961 dated 14/10/2011 was issued requiring the assessee to file the return of income for the Assessment Year 2004-05. As a result thereof return was filed by the assessee on 18/11/2011 declaring total income of Rs. 33,24,420/-. 2.1. Notices u/s 143(2) & 142(1) along with a questionnaire etc. were issued to the assessee on 18.11.2011 and in response to the same, the assessee represented by his Authorized Representative was required to provide the details in regard to its income derived mainly from interest income. The AO considering the books of accounts produced on behalf of the assessee which as per record were examined on a test check basis required the assessee to furnish the information in regard to fresh unsecured loans in the following format:- S.No. Name And Address Opening Balance Addition during the yea....
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....losed income to the books of accounts. The assessee company has failed to furnish any information in respect unsecured loans to prove the genuineness of transaction, identity and creditworthiness of the entities/companies making investments. Thus onus casted upon the assessee company does not stand discharged. In view of the above discussion, I am satisfied that the amount of increase of Rs. 84,00,000/- is unaccounted income of the assessee company, therefore, the same is added to the income of the assessee company for the assessment year under consideration and income is computed accordingly. For the reasons discussed above, penalty proceedings for furnishing inaccurate particulars of income and concealing the particulars of income are initiated under section 271(1)(c) of the Act separately." (Addition made Rs. 84,00,000/-) 2.6. Apart from the above, the AO disallowed the assessee's claim of having paid interest expenditure of Rs. 12,500/- to Sh. Vinay Garg on the ground that the assessee could not establish the genuineness of the loan. 3. As a result of the above additions, the returned income of Rs. 33,24,420/- was assessed at an income of Rs. 1,17,36,920/-. ITA No.-468....
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....n seeking permission to file additional evidence under Rule 46A of the I.T. Rules 1962 dated 30.04.2012. 7.1. The CIT(A) on record is found to have forwarded the additional evidence to the AO for her comments. 7.2. The record shows as per page 10 of the impugned order the AO objected to the admission of additional evidence vide his letter dated 06.06.2012. The said fact was confronted to the assessee who filed a re-joinder dated 11.06.2012 to the Remand Report dated 06.06.2012 of the AO. 7.3. The contents of the re-joinder have been addressed by the CIT(A) in para 3.1.20. A perusal of the same shows that the assessee submitted that on none of the dates when the hearing took place the AO as per the order sheet required the assessee to submit the confirmations of unsecured loans. Further the admission of fresh evidences notwithstanding the objections of the AO on opportunity was also canvassed on the alternate ground that the additional evidence had got a "strong bearing in respect of the appellate proceedings as such may be admitted". In these circumstances it was requested that the AO may be directed to verify the claim of the assessee as "she repeatedly says that the matt....
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.... Report. These facts are found addressed in para 3.1.21 and 3.1.22 of the impugned order. Considering this Remand Report dated 22.06.2012 filed in pursuance to the directions given to re-consider the issue on merits, the CIT(A) granted relief. In the said factual background, the ld. CIT DR was unable to point out any infirmity either in procedure followed or on conclusion arrived at on these facts in the order. 12. On going through the remaining two appeals it was stated by him that herein also the evidences were verified by the AO in the second remand proceedings. However for the record, he stated it may be considered that he has relied upon the assessment orders in each of the appeals. The maintainability of the said position was questioned on facts as to how the AO having given up the issue in the remand proceedings can justify the filing of appeals raising the grounds on same facts without bringing any new fact or argument to show that the conclusion in the remand proceedings overlooked a relevant fact etc. In the absence of any such efforts to point out perversity in the order the Ld. CIT DR was required to address why costs should not be imposed upon the Assessing Officer ....
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....he grounds raised is curiously missing. This omission appears to be deliberated and leads us to conclude that the Revenue has consciously indulged in engaging in meritless litigation. Once the A.O. in the Remand Report dated 22.06.2012 had already communicated that the enquiries made after issuing notices u/s 133(6) to the parties/persons who had confirmed the assessee's version and the AO concluded that the loans taken stood verified. No further legitimate grievance can then be said to remain for examination by the AO. In the said factual position, it is not possible for the AO to still have a grievance as he himself reports that having examined he is satisfied by the claim put forth. This factual position is borne out from the following paras reproduced from the impugned order:- 3.1.21. "The date of first appearance of the Counsel and passing of order by the AO as mentioned above suggests that adequate and real opportunities was lacking during the assessment proceedings. I called for a report from the AO on the rejoinder submitted by the appellant Now, the A.O. has submitted another comments/ Remand Report dated 22.062012 stating as under :- (i) Vide letter dated 02.12.2011....
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....mportantly, the AO in her comment in the remand report dated 22.06.2012 stated that the verification of loans was carried out by her and they appeared verified. 3.1.23.In view of above findings, the addition of Rs. 84,00,000/- made by the Assessing Officer on account of unsecured loans u/s 68 is here by deleted. The appellant thus gets the relief of Rs. 84,00,000/-. (Emphasis provided) Ground no.-2 3.2.1. This is regarding disallowance of interest of Rs. 12,500/- paid to Sh.Vinay Garg, Since the unsecured loan of Rs. 25,00,000/- standing in the name of Sh.Vinay Garg is accepted thus, the interest paid to the creditors is liable to be allowed." 15.2. Accordingly in the context of the above peculiar facts and circumstances, we find that the appeals filed by the Revenue have been filed carelessly and frivolously and deserve to be rejected. As observed, we had required the Ld. CIT DR to address why costs should not be imposed upon the Revenue for having indulged in meritless litigation and wasting the time of all concerned. In the context of the same, we find that the Co-ordinate Bench in its order dated 29.10.2014 in ITA No.1454/Del/2012 in the DCIT, Circle-21(1), Ne....
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.... by such responsible persons which grievously damages the public faith and belief in the honest fair play of the tax administration. The conscious and selective reference to facts demonstrates that at the very stage of filing of the appeal its fate and conclusion was known for which specific purpose the facts were attempted to be obfuscated. The filing of present appeal with complete knowledge of its fate by the Revenue only reflects the mischievous adamancy to attempt to mislead the Tribunal and waste the time of the Court and the officers concerned. The present appeal as a part of a search cannot be a case of non-application of mind where the grounds presumably proposed by the AO have been approved carelessly. To our minds the present appeal is a prime example of meritless litigation for reasons best known to the few departmental officers having powers of directing authorization for filing appeals. This over confidence of the concerned Departmental officers in filing an appeal completely devoid of merit prima facie shows that these officers endowed with the onerous task of handling Department's actions in litigation matters have willfully and deliberately failed to exercise their....