TaxTMI 
TaxTMI 
2019 (5) TMI 338
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....d.CIT(A)'], Indore detailed as under; Name of assessee Assessment Year Date of CIT order Date of A.O order Order passed u/s Shri Sumati Kumar Kasliwal 2012-13 2013-14 29.03.2017 28.03.2017 29.01.2016 29.01.2016 153A r.w.s. 143(3) 143(3) M/s Pumarth Infrastructure Pvt. Ltd 2012-13 2013-14 31.03.2017 31.03.2017 29.01.2016 29.01.2016 153A r.w.s. 143(3) 143(3) Shri Parth Kasliwal 2012-13 2013-14 28.03.2017 28.03.2017 29.01.2016 29.01.2016 153A r.w.s. 143(3) 143(3) Smt. Sharda Kasliwal 2012-13 2013-14 28.03.2017 28.03.2017 29.01.2016 29.01.2016 153A r.w.s. 143(3) 143(3) M/s. Nishant Finance Pvt. Ltd 2012-13 2013-14 28.03.2017 28.03.2017 29.01.2016 29.01.2016 153A r.w.s. 143(3) 143(3) Shri Manoj Kasliwal 2013-14 28.03.2017 29.01.2016 143(3) 2. As the issues raised in these appeals are common, therefore these were heard together and are being disposed off by this common order for sake of convenience and brevity. 3. Brief facts of the case as culled out from the records are that the Search and Seizure operations u/s 132 were carried out on 21.9.2012 at the business as well as resi....
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....ndered Sumati Kumar Kasliwal and Pumarth Infrastructure 2012-13 & 2013-14 (n/a) consequential issue Ground No.11 Sumati Kumar Kasliwal and Ground No.8 in Pumarth Infrastructure On various issues challenged by the assessee(s) and revenue in these bunch of appeals and cross objection, Ld. Senior Counsel for the assessee along with various judgments mentioned in the written submissions before us, has also relied on following judgments; (i) Hon'ble M.P. High Court in ITA No.219/18 order dated 20.02.2018 in the case of PCIT Vs Shri Kiran Mittal. (ii) Hon'ble M.P. High Court in ITA No.65/2010 order dated 25.10.2010 in the case of CIT Vs STL Extrusion (P) Ltd (2011) 11 taxmann.com 125 (MP). (iii)Hon'ble Delhi High Court in the case of CIT Vs Kamdhenu Steel & Alloys Ltd (2012) 19 taxmann.com 26 (Delhi). (iv) Hon'ble Punjab & Haryana High Court in ITA No.251/2008 order dated 15.7.2008 in the case of CIT Vs Laul Transport Corporation. (v) Hon'ble Supreme Court in the case of CIT Vs Orissa Corpn (P) Ltd (1986) 25 Taxmann 80F (S.C) (1986). (vi) Hon'ble M.P. High Court in MAIT No.27/20....
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.... in the case of ITO vs Anand Builders SLP (C ) No.14166 of 2003 order dated 1.8.2003 (viii) Hon'ble High Court of Delhi in the case of CIT vs. Nipum Builders & Developers (P) Ltd ITANo.120 of 2012 dated 7.1.2013. (2013 30 taxmann.com 292 (Delhi) (ix) Hon'ble High Court of Delhi in the case of CIT vs Ultra Modern Exports (P) Ltd ITANo.262 of 2012 order dated 11.12.2012 (2013) 40 taxmann.com 458 (Delhi) 4. We shall proceed to first consider the appeals of Sumati Kumar Kasliwal as the said case contains facts which are mostly common in respect of all other connected cases and the findings arrived at in the case of Sumati Kumar Kasliwal would then govern the other connected cases. The Ld. Counsel for the assessee and the Ld. DR agreed to this fact and therefore mostly addressed the facts as contained in the case of Sumati Kumar Kasliwal. IT(SS)A No.181/IND/2017,Assessment Year 2012-13 SUMATI KUMAR KASLIWAL 5. The grounds of appeal raised in this appeal for AY 2012-13 of Sumati Kumar Kasliwal are as under: 1. That the entire assessment order is illegal, void and without jurisdiction as the same has been passed beyond the period ....
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....d repaid by the present assessee and the AO has treated the facts of another case of Pumarth Infrastructure as applicable to the present assessee which is grossly perverse and shows complete non-application of mind of the AO to the facts of the assessee's case and shows that the addition has been made in haste without considering the submissions and documents filed by the assessee. 8. That the Ld. CIT(A) failed to appreciate that the Settlement Commission has recorded a categorical finding in its order dated 24.11.2015 that the statements of five persons recorded during search have neither been given to the applicants nor opportunity of cross examination has been given and that it would not be fair and proper to place reliance on such statements. 9. That the Learned CIT(A) has erred in relying upon the finding of Income Tax Settlement Commission (ITSC) without appreciating the fact that the issue of unsecured loan has not been dealt with by the ITSC in its order. 10. That without prejudice to the aforesaid grounds of appeal, if the addition of Rs. 1,80,00,000 is sustained then firstly benefit of income offered for tax before the settlement Commission shou....
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.... Assessing Officer for making an order of assessment or reassessment, as the case may be, is less than sixty days such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly. 6.2 The counsel for the appellant further submitted that admittedly the assessment involved in this matter is under section 153A of the Act and the provision governing the period of limitation would be section 153B and a plain reading of the said section would clearly demonstrate that the assessment order is barred by limitation. 6.3 Rebutting the aforesaid submission of the appellant the Learned DR submitted that the provision governing the period of limitation in this case would be section 153 and not section 153B. It was submitted by the Learned DR that the proviso to section 153 provides that in case of abatement of proceedings of Settlement Commission the period of limitation would be 1 year and not 60 days as contained in the proviso to section 153. It was further submitted by the Learned DR that this issue of limitation has not been raised at any point of time before the Assessing Officer or the Ld. CIT(A) and has been rai....
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....ata S. Guram [(1986) 4 SCC 447] 6.6 Continuing his rejoinder regarding the issue of affidavit filed before the Assessing Officer and not raising this ground before the CIT(A) it was submitted by the learned counsel for the appellant that there is no estoppel against raising the issue of limitation for the first time in appellate proceedings. For this proposition the learned counsel for the appellant placed reliance on the case of Dilip S. Dahanukar v. Assisstant Commissioner Income Tax [2004] 90 ITD 525 (Mumbai). It was further submitted by the learned counsel for the appellant that when the affidavit was filed before the Assessing Officer in June 2015 the period of limitation was very much available till 31st July 2015 and the Learned AO could not consciously choose to let the period of limitation expire even when he had more than a month left till 31st July 2015 to pass the assessment order. According to the learned Counsel for the appellant the period of limitation provided under the Act is sacrosanct and cannot be extended by consent of the parties more-so that when the consent was given the limitation was yet to expire and it was not as if the consent was given after the li....
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.... the date on which an application is made before the Settlement Commission under section 245C and ending with the date on which the order under sub-section (1) of section 245D is received by the Principal Commissioner or Commissioner under sub-section (2) of that section; or shall be excluded. Provided that where immediately after the exclusion of the aforesaid period, the period of limitation referred to in clause (a) or clause (b) of this sub-section available to the Assessing Officer for making an order of assessment or reassessment, as the case may be, is less than sixty days such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly. 6.9 The counsel for the appellant has placed strong reliance on the decision of co-ordinate Delhi Bench of this Tribunal in the case of M/s NKG Infrastructure ltd v. Principal CIT [ITA No. 3825 to 3827 /Del/ 2018]. Before proceeding to examine the said decision it would be appropriate to extract the relevant paras of the said decision hereunder : 11. A reading of section 153 makes it clear that, no order of assessment shall be made under section 143 o....
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....f the Act was passed on 09/04/2015. It is, therefore, clear that under the provisions of section 153-B of the Act, learned Assessing Officer had to pass the order of assessment within two years, after excluding the period spent before the Income Tax Settlement Commission It means the limitation period for conclusion of the impugned assessment proceedings expires by 31/03/2015. Even if we allow the period of 60 days from the date of the order of the learned settlement commission on 09/04/2015, the order should have been passed by 07/06/2015. It is, therefore, clear that the orders passed on 31/03/2006 is not clearly within the period of limitation prescribed under section 153-B of the Act." 6.10 From a perusal of the facts of the aforesaid decision it transpires that the issue in question before the co-ordinate bench was the legality or otherwise of the order passed under section 263 and while examining that issue an additional issue that arose for consideration of the Delhi Tribunal was that of the validity of the assessment order. The issue was not in respect of direct challenge to assessment order. In the present case the appellant had given an affidavit before the Assessing O....
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....order has been passed on 29/01/2016 which is beyond the period of limitation. 2. In the last hearing held on 07/03/2019 it was argued that the provisions of section 153B are applicable in this case and the same prevail over the general provision of section 153. 3. Section 153 is in respect of time limit for completion of assessments and reassessments. The second proviso to sub section 4 of Section 153 as amended by the Finance Act, 2008 w.e.f. 01106/2007 is as under.- Provided further that where a proceeding before the Settlement Commission abates under section 245HA, the period of limitation available under this section to the. Assessing Officer for making an order of assessment, reassessment or re-computation, as the case may be, shall, after the exclusion of the period under subsection (4) of section 245HA, be not less than one year; and where such period of limitation is less than one year, it shall be deemed to have been extended ,to one year; and for the purposes of determining the period of limitation under sections 149, 153B, 154, 155, 158BE and 231 and for the purposes of payment of interest under section 243 or section 244 or, as the ca....
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....efore all courts, tribunals and other authorities, whereas Industrial Disputes Act was concerned with the representation by legal practitioners. This maxim was applied when the questions relating to assessments of a firm and its partners arose under the Income-tax Act, 1961 where the dissolution of the firm and its succession are held to be governed by the Special Act viz., the Income-tax Act and not the Partnership Act. The technical view of the nature of a partnership cannot be taken in applying the law of income-tax. Where a special provision is made in derogation of the provisions of the Indian Partnership Act, the effect is given to it. Where the provisions of the Indian Income-tax Act are clear, resort cannot be had to the provisions of another statute. (Dharam Pal Sat Dev v. CIT [1974] 97 ITR 302 (P&H) and Nandlal Sohanlal v. CIT [1977] 110 ITR 170 (P&H) (FB).) When the Legislature has deliberately made a specific provision to cover a particular situation, for the purpose of making an assessment of a firm under the Incometax Act, there is no scope for importing the concept and the provisions of the Partnership Act. (CIT v. Shambulal Nathalal & Co.[ 1984] 145 ITR 329 (Kar.). ....
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....ed, this being a consequence of the indulgence granted by the Tribunal to the assessee in permitting them to raise four additional grounds to urge the same has to be given effect to. As a consequence, the Commissioner of Income-tax (Appeals) is now directed to decide the appeal filed by the respondent (assessee) afresh on the merits including on the four additional grounds raised by the assessee. We, however, make it very clear that the Commissioner of Income- tax (Appeals) wouild not take into consideration any of the findings and the observations made by the Tribunal on any of the issues raised by the assessee, nor the Commissioner of Income-tax (Appeals) will be influenced by any of them. In other words, the Commissioner of Income-tax (Appeals) will decide the appeal strictly in accordance with law on the merits as if there is no finding on any of the issues ever recorded by the Tribunal because once we set aside the order of the Tribunal, then such order is regarded as being not in existence and cannot be looked into for any purpose, nor can be relied on or referred to by any authority much less an authority subordinate to the Tribunal. Needless to observe, the four additional ....
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....irmation letters, copies of PAN Cards, bank statements, Balance Sheet, P&L Accounts. ITR are sufficient enough to prove identity, creditworthiness and genuineness of the loan transaction carried out these parties. According to the Assessing Officer an enquiry of these companies was made by the Investigation Wing wherein it has been found that the addresses of the directors of such briefcase companies are lying in slum area of Indore while, the registered office of the company has been mentioned in Registrar of Companies at Mumbai. According to the Assessing Officer it was noticed from return of income of such companies that it had no business activities, but it has provide so called huge amounts in the shape of accommodation entries of 'Pumarth Group of Companies' on very large scale. As stated in the Assessment order during the course of post search enquiries, it has been found that Pumarth Group of Companies has accepted huge amounts of "Unsecured loans" & "Share Premium" by way of accommodation entries from the companies in which Shri Ashish GendalalVerma is a director. The name of those companies in which Shri Ashish GendalalVerma is/was a director, has been enquired fr....
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.... admitted that he provided accommodation entries to various entities after depositing cash in different bank accounts with various banks. He also furnished an Affidavit in this regard . It has been stated in the assessment order that that when the same affidavit filed by Shri Jaiprakash Jakhetia has been confronted before the assessee, he did not wish to clarify and substantiate his claim. Therefore according to the assessing officer it was clear that the assessee has failed to counter the very finding of post search enquiry in this regard. 7.5 It has been further stated in the assessment order that on perusal of the earlier enquiries of the Investigation Wing, the other companies have also been noticed which have provided accommodation entries to 'Pumarth Group of Companies in the shape of "Unsecured Loans" and "Share Premium" by colorable device and its directors address on R.O.C. database are at the Indore. 7.6 According to the assessing officer it was noticed from the ROC details of 'M/s Idani Trading Pvt. Ltd.' that Shri Ashish GendalalVerma and Shri Manoj Chaturvedi was the initial directors of the company. After cessation of Shri Ashish GendalalVerma, Shri ....
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....erification of the identity or ascertaining active nature of business activity and PAN is a number which is allotted and helps the Revenue to keep track of the transactions and thus PAN number is relevant but cannot be blindly and without considering surrounding circumstances be treated as sufficient to discharge the onus, even when payment is through bank account. As per the AO there is no actual business activity undertaken by these creditors and it is also not established as to why these companies have provided loans to the applicant. The AO mentioned that mere filing of confirmation of the creditors is not sufficient until and unless the creditors are produced for cross examination and verification on the basis of supporting evidence on record. As per the assessment order the assessee has been asked to produce the director of ASBN MultitradePvt. Ltd, Gambhari Trading Pvt. Ltd, Color union International Pvt. Ltd., Magma Dealers Pvt. Ltd., MartinmasVyapak Trading Pvt. Ltd., Mohin Infrastructure Pvt. Ltd., Venkateshwara Bunglows Pvt. Ltd. for Statement u/s 131 from whom the assessee has taken Unsecured Loan and sold shares. But till the date of passing the order the assessee faile....
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....g shows that the following companies had provided accommodation entries to Pumarth Group of Companies in the form of unsecured loans and share premium and the addresses of the Directors of these companies is at Indore. The CIT(A) noticed that during the course of post search proceedings by the Investigation wing summons u/s 131 were issued to the Directors of the companies who are residing at Indore but during the course of field inquiry none of the Directors could be found in place at the addresses mentioned in the ROC database. Further', during the search loose papers, bank statements, Memorandum of Association and Article of Association, certificate of incorporation of Company, copy of return of income, blank share transfer form were found in respect of M/s Kothistar Developer Pvt. Ltd., M/s. Printage Offset Pvt. Ltd., M/s Evershine Building Pvt. Ltd. and M/s. Color union International Pvt. Ltd, the 4 investor companies in Pumarth Infrastructure Pvt. Ltd. (PIPL) which have not been found genuine by the Hon'ble Settlement Commission. The CIT(A) noticed that there is inter connection between the Directors of the Companies mentioned in the above table and the aforementioned....
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....ged statement is of Feb 2012 i.e. even prior to taking of the loan. According to the Ld. Counsel for the appellant this very fact shows the complete eye wash attempted by the Ld. AO without actually making any enquiry. According to the Ld. Counsel for the appellant the dates tell the correct facts. Search in the assesses premises was on 21/09/2012 while Statement of Ashish Verma recorded on 07/02/2012 i.e. prior to search. This statement cannot be termed as post search proceedings. Also on 07/02/2012 no transaction was made by any company with the assessee. The assessee received unsecured loan in March 2012 while the alleged statement was recorded in Feb 2012.The statement of Jai Prakash Jagetia is also dated 13/2/2012. The assessee received loan in March 2012. How can such a statement be relied upon. Moreover even in this statement no mention of assessee's company has been made. Affidavit of Jai Prakash Jagatia is also on 15/02/2012. On 15/02/2012 no transaction was made by any company as loan with the assessee. The assessee received unsecured loan on 26/03/2012.No statement of Dayaram Mansore on record. No copy was ever provided in spite of repeated request by the Appellant. Even....
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....treated the loan as alleged unexplained cash credit u/s.68 of the Income Tax Act, 1961 but this finding is not based on any inquiry or investigation as is evident from the dates on record. The counsel for the appellant submits that the Ld. AO failed to appreciate the fact that the assessee company filed the affidavit of the directors of the company wherein they confirmed for the lending the unsecured loan and also the source of source. The ld. Counsel submitted that the factum of Repayment of Loan in short period and that too much before search has also to be considered. It was submitted that the credentials and genuineness gets established by the fact that the unsecured loans were returned within two months of time. Loan was taken on 26th March 2012 and returned on 23rd May 2012. Even Interest at the rate of 12% has been paid to the above companies against the borrowings. Tax at source has also been deducted on interest payment to the above companies. As per the section 68 when the assessee has not offered any explanation regarding the nature and source of credit found in the books, then only addition can be made under section 68. But if the assessee provides satisfactory explanat....
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....nths with interest. This was a case of genuine business loans. The Ld. Counsel for appellant thus submitted that the ratio of the Hon'ble Supreme Court's decision in PCIT v. NRA Iron and Steel Pvt. Ltd. is not applicable to the facts of the present case. The Ld. Counsel for the appellant submitted that since the lender companies are existing companies and duly assessed to income tax, no addition can be made in the hands of appellant company for the loans received from these companies during the year. 7.13 On the other hand, the Learned CIT DR has supported the addition made by the assessing officer and has also drawn support from the observations and findings of CIT(A) by placing following written submissions:- 7.14 We have heard rival contentions and perused the records placed before us and gone through the judgements carefully. Before proceeding further it would be appropriate to discuss the judgements cited by the Ld. Senior Counsel for the appellant during the course of arguments. These judgements are extracted hereunder : In the Case of Principal Commissioner of Income Tax-II Indore Vs Karan Mittal Hon'ble High Court of Madhya Pradesh has held that: Par....
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....e learned Appellate Tribunal, they are the findings of fact based on proper appreciation of documents on record. No substantial question of law is arising in this appeal. Para 8 On due consideration of the arguments of the learned 9 counsel for the parties, so also the reasoning assigned by the learned Appellate Tribunal, we are of the view that the income tax appeal filed by the department has no merit nor any substantial question of law is arising in the matter. In the case of Commissioner of Income Tax-II, Indore V STL Extrusion P Ltd [(2011) 11 Taxman 125 ] Hon'ble High Court Madhya Pradesh has held that Para 5. Shri R.L. Jain, learned Senior counsel for the appellant argued that the Tribunal has committed error in not considering the law laid down by this Court in the case of CIT v. RathiFinlease Ltd. [IT Appeal No. 63 of 2004, dated 11-10- 2007] in which it has been laid down that onus is on the assessee to establish the genuineness of the credits. He also argued that no opportunity was available to the appellant to controvert the affidavits. Para 6. Having considered the contention of the appellant we find that the Tribunal has taken note ....
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....ightrope of Sections 68 and 69 of the Income Tax Act. The burden of proof can seldom be discharged to the hilt by the assessee; if the Assessing Officer harbours doubts of the legitimacy of any subscription he is empowered, nay duty bound. But if the Assessing Officer fails to unearth any wrong or illegal dealings, he cannot obdurately adhere to his suspicions and treat the subscribed capital as the undisclosed income of the company." (Emphasis supplied) Para 19. In conclusion, we are of the opinion that once adequate evidence/material is given, as stated by us above, which would prima facie discharge the burden of the assessee in proving the identity of shareholders, genuineness of the transaction and creditworthiness of the shareholders, thereafter in case such evidence is to be discarded or it is proved that it has "created" evidence, the Revenue is supposed to make thorough probe of the nature indicated above before it could nail the assessee and fasten the assessee with such a liability under Section 68 and 69 of the Act. Para 21. However, in the facts and circumstances of these cases, it would be difficult to give such an opportunity to the Revenue. There are number ....
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....nd there is adequate material to support the same if not the addition has to be deleted. At that stage, the tribunal would not order further inquiry. It is to be kept in mind that the AO is prosecutor as well as adjudicator and it is for the AO to collect sufficient material to make addition. There may be exceptional circumstances in which such an inquiry can be ordered, but normally this course is not resorted to In the case of Commissioner of Income Tax- Faridabad v Laul Transport Corporation [(2009) 180 Taxman 185 (Punjab and Haryana) Hon'ble High Court of Punjab and Haryana held that Para 6. In the present case, a perusal of the impugned order passed by the Tribunal reveals that in the instant case the assessee has discharged its onus to prove the genuineness of the cash credit by placing on record before the Assessing Officer sufficient material/evidence. Not only the identity of the creditor has been established by producing the record of the assessee in which those transactions have been duly accounted for, but the assessee has also discharged its onus in explaining the nature of source and the cash credit. It is also well settled that the assessee can be m....
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....nce pro and con had been considered in reaching the final conclusion ; and whether the conclusion reached by the Tribunal had been coloured by irrelevant considerations or matters of prejudice. It was further reiterated that the previous decisions of this Court did not require that the order of the Tribunal must be examined sentence by sentence through a microscope as it were, so as to discover a minor lapse here or an incautious opinion there to be used as a peg on which to hang an issue of law. In considering probabilities properly arising from the facts alleged or proved, the Tribunal did not indulge in conjectures, surmises or suspicions Para 13. In this case the assessee had given the names and addresses of the alleged creditors. It was in the knowledge of the revenue that the said creditors were the income-tax assessees. Their index number was in the file of the revenue. The revenue, apart from issuing notices under section 131 at the instance of the assessee, did not pursue the matter further. The revenue did not examine the source of income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the alleged loans. Th....
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.... record. Further no incriminating material was found during the course of search which could clearly prove that the alleged transaction of receiving loan was an accommodation entry. The assessee's case further finds support the fact that the alleged loans were taken for a period of two months and have been repaid back with interest. Tax has also been deducted at source on the interest paid. The alleged transaction of receiving loan and being repaid back has been duly acknowledged by the cash creditors in the affidavit. These transaction of receiving loan cannot be equated to a capital formation exercise. Alleged transaction purely looks to be a normal business transaction in which short term loan has been taken for business purposes and have been repaid back after having sufficient funds. The documents filed in support of identity, creditworthiness and genuineness i.e. Profit & loss accounts, income tax returns, audit reports, affidavit of the cash creditors and identity proof have not been disputed by the revenue authorities at any stage. Ld. A.O seems to have made the addition without making any investigation after the loan was taken. The finding given in the impugned assessment ....
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.... has erred in law and on facts in sustaining the addition of Rs. 3,61,22,825/- made by the Ld. AO u/s 68 by treating entire share trading receipt as unexplained cash credit since the assessee had given full details of the sale transaction and by no stretch of imagination the entire trading receipt could be treated as unexplained cash credit since at most only the profit thereof could be taxed which was already offered in the return as share trading profit. 7. That the Ld. CIT(A) has erred in law and on facts in sustaining the addition of Rs. 3,61,22,825 as unexplained cash credit without appreciating that the same was on account of sale of sales and since the purchase of these shares was not doubted by the AO therefore addition of the entire sale amount is arbitrary and illegal and contrary to the decision of the jurisdictional High Court in (2003) 263 ITR 610 (MP) CIT v. Balchand Ajit Kumar . 8. That while sustaining the addition of Rs. 3,61,22,825 the CIT(A) failed to appreciate that the addition of sale amount without disturbing the purchase amount is not justified either in law or on facts since if the sale is held to be bogus then the purchase should also be ....
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.... of such assessment u/s 143(3) of the Act is governed by the provisions of section 153(1) of the Act which before being amended by the Finance Act, 2016 provides that no order of assessment shall be made u/s 143 or 144 at any time after expiry of (a) two years from the end of the assessment year in which the income was first assessable or (b) one year from the end of the financial year in which return or the revised return relating to the assessment year commencing the first day of April, 1988 or in earlier assessment year, is filed under Section 4 or Sub Section 5 or Section 139 whichever is later. Now section 153(1)(a) of the Act contemplates that the Ld.A.O had to complete the assessments u/s 143(3) of the Act in the instant case within two years from the end of the assessment year i.e. 2013-14. The last date to frame the assessment in this case is 31.03.2016 which is two years from the end of the Assessment Year 2013-14. The impugned assessment order for Assessment Year 2013-14 was passed on 29.01.2016. The contention of the assessee is that the he moved an application before the Income Tax Settlement Commission and the same was rejected which needs to be considered while apply....
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....astructure Pvt. Ltd wherein the Assessing Officer has made an addition of Rs. 13,60,00,000 in respect of unexplained share capital. The Ld. counsel for the appellant prays that the source of the said amount of share capital can be attributable to the income offered and taxed in the hands of Sumati Kumar Kasliwal and therefore no further addition in respect of the said amount of Rs. 13,60,00,000 is required to be made in Pumarth Infrastructure Pvt. Ltd. It is submitted that the appellant Sumati Kumar Kasliwal has already offered the said amounts in his settlement application as his income. Although he has claimed expenditure on the said amounts and has offered the balance Rs. 30 lacs as income but the PCIT in his report under Rule 9 has categorically held that the entire amount belongs to Sumati Kumar Kasliwal. It is submitted that the Ld. AO has added this amount in entirety in the hands of Sumati Kumar Kasliwal. The Ld. counsel for the appellant submitted thatan identical addition of the same amount (Rs. 13,60,00000) has been made in the hands of PIPL wherein this amount was received as share capital. The source of the said share capital is this income received by Sumati Kumar Kas....
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....1,94,600/-, Rs. 68,40,000/- and Rs. 26,77,469/- made by the Ld. A.O on the basis of seized loose paper No.62 of LPS-B-1/5 for the unexplained cash received by the assessee. Ld. Senior Counsel for the assessee while submitting that these Ground No. 3,4 & 5 are not pressed because Shri Sumit Kumar Kasliwal has himself offered this amount before Income Tax Settlement Commission although after claiming expenditure there from if any along with by making an alternate submission that the nexus of the amount mentioned in Ground No. 3,4 & 5 is with the addition for unexplained share capital in the case of M/s. Pumarth Infrastructure Pvt. Ltd made by the revenue authorities in the Assessment Year 2012-13. Ld. Senior Counsel for the assessee pleaded that the alleged share capital of Rs. 13.60 crores was introduced in the books of M/s. Pumarth Infrastructure Pvt. Ltd at the instance of Shri Sumati Kumar Kasliwal who is the Director in this company and is the founder of Pumarth Group of Companies and also head of Kasliwal family. Entire funds are managed by him and the entire money or money worth remains in his control. Referring to the disclosures made by the assessee Shri Sumati Kumar Kasliwa....
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....while deciding the issue of unexplained share capital in the case of M/s. Pumarth Infrastructure Pvt. Ltd for Assessment Year 2012-13 in the subsequent adjudication of the remaining issues. Accordingly Ground No. 3, 4 & 5 of the assessee's appeal for Assessment Year 2013-14 are dismissed as not pressed subject to are findings mentioned herein above of providing telescoping benefit of the addition not pressed to Rs. 14,57,12,069/- as against the addition for unexplained cash credit of Rs. 13.60 crores made in the hands of group concern Pumarth Infrastructure Pvt.Ltd. 13. Ground no. 6 to 10 in AY 2013-14 in ITA No.472/IND/2017 relates to the sale of shares of Rs. 3,61,22,825 assessed as income u/s 68. According to the Assessing Officer, during the course of post search operation, several documents seized at the premises located at the address of the assessee at 5/5, Navratan Bagh, Indore on 16/11/2012 and among these B-1/5/page-62 is a chart showing the amount along with the name of the directors and the companies for the period from 16/05/2012 to 03/07/2012. According to the assessing Officer i seized document 'B-1/5/Page-62', details of amounts in the name of 'Pumarth Gr....
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....mount of Rs. 3,61,22,825/- is appearing in column of "SSK" on page 62 of LPS under discussion which is shown as "Current Total "as Rs. 3,61.22.825/- in tally data of Shri Sumati Kasliwal. The AO was of the opinion that in the order passed by Hon'ble Income Tax Commission u/s 245D(2C) dated 24/11/2015, the Hon'ble Settlement Commission has given categorically finding about the non-genuineness of the companies through which the Pumarth group of Companies has received share application money. The AO stated in his order that the assessee has been asked to produce the director of ASBN MultitradePvt. Ltd, Ganbhari Trading Pvt. Ltd, Colorunion International Pvt. Ltd., Magma Dealers Pvt. ltd., Martinmas Vyapak Trading Pvt. Lid. Mohin Infrastructure Pvt. Ltd., Venkateshwara Bunglows Pvt. Ltd. for Statement u's 131 from whom the assessee has taken Unsecured Loan and sold shares but till the date of passing the order the assessee failed to produce all the directors for giving statement on oath to substantiate identity, creditworthiness and genuineness of the transaction accordingly, the AO was of the opinion that the identity, creditworthiness and genuineness of the transaction do....
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....1/2012 various documents were found and seized. Page no. 62 of B- 1/5 was a chart showing the fund flow statement. It was submitted that the Assessing Officer has himself admitted that the Tally Account of le appellant was examined and it shows receipt of similar amount in the books of accounts as shown in the seized page no. 62 of LPS-BI/5. The appellant has submitted all along before the AO and during the appeal proceedings that chic seized document B-1/5 page 62 is nothing but jotting of recorded transactions prepared by the employees to work out the available cash position with the group. The amount of Rs. 3,06,32,825/- outof Rs. 3.51.22.825,-as written under SSK is on account of the sale of share of two group companies. The difference of Rs. 54,90,000/- (3,61,22,825 - 3,06,32,825) was also received from Venkateshwara Bunglow's Pvt. Ltd. against sale of share but the same was returned back as the transaction could not be finalized. It is argued by the Ld. Counsel for the appellant that the sale consideration of shares is duly supported with valuation of the equity shares of these companies and the source of the purchase of the shares and the value of shares has not been dou....
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....ares were sold in AY 2013-14 and gain was duly offered for tax. Since purchase has not been doubted hence sale cannot be treated as unexplained. In any event purchase by Cheque would be the source of sale and no addition in any case is warranted. Also when the purchase and profit on sale of such shares is accepted only sale cannot be disregarded and hence addition is uncalled for. It was argued that these shares are of two group companies of the appellant and the shares were sold by the appellant and the sale consideration of the shares is duly shown in the returns. The source of these purchases and the value of shares have not been doubted by the AO. Further, even the capital gains offered by the assessee to tax have been duly accepted by the AO. Thus, when the original purchases and capital gains have not been doubted by the AO and the shares have been sold at around the same rates, the question of doubting the genuineness of the sale transaction does not arise. The shares were purchased by the assessee out of either it's own funds or borrowed funds and these shares have been sold by it to third parties at similar valuations. It is a well decided judicial principle that when purc....
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....Pumarth Commodities Pvt. Ltd. on the basis of page 62, wherein the amount mentioned against its name represents maturity proceeds of FDR, which is duly reflected in the books of the company, however Ld AO made addition of the said amount based on page 62 as seized during search. However on appeal Ld CIT(A) has deleted the said addition and on further appeal by the Revenue, Hon'ble ITAT vide order ITA No. 455/Ind/2017 dated 11/01/2019 the Hon'ble ITAT has dismissed the said appeal of revenue. It was submitted that the facts of the case are identical to the above matter with only difference that the in the case of Pumarth Commodities Pvt Ltd the amount mentioned on page 62 represents maturity proceeds of FDR, whereas in the case of appellant the amount represents cheques received on sale of shares. In both the cases the amount is duly recorded in the books of the assessee. Thus, there is no element of undisclosed income in the hands of assessee company in the noting of page 62 in the hands of company. Reliance was placed by the Ld. Counsel for the appellant on the case of Twobro Investment & Finance Ltd., vs Department Of Income Tax DELHI ITAT (ITA No.4486 /DEL/ 2011). The counsel fo....
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....e of shares of Rs. 3,06,32,825/- we find that Rs. 1,03,00,000/- was received from sale of 1,00,000 shares of Pumarth Meadows Pvt. Ltd and remaining amount of Rs. 2,03,32,825/- is from sale of 66,665 equity shares of Pumarth Holdings Pvt. Ltd. Ld. A.O has treated this sum of Rs. 3,06,32,825/- i.e. the sale consideration from sale of shares as unexplained cash credit u/s 68 of the Act on the basis that the amount received from the companies who purchased the shares from the assessee are not explained. However Ld. A.O has not doubted the genuineness of the purchase of the equity shares made by the assessee in the preceding financial year. It is established principle of law that if the purchases are genuine then only the difference between the sale and purchase amount can be subjected to tax. In the instant case the assessee has offered Short Term Capital Gain of Rs. 6,33,325/- for tax being the difference between the sale consideration of Rs. 3,06,32,825/- and the purchase/cost price of the equity shares sale of Rs. 2,99,99,500/-. Further all the necessary details about the identity and genuineness of the concern purchasing the shares from the assessee have been placed on record. Mere....
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....ishant Finance Pvt Ltd Rs. 38,50,000 (page 173 of paper book of SS Kasliwal ) ,Sumati Kasliwal Rs. 30,00,000 ( pg. 175 ) Parth Kasliwal Rs. 30,00,000 (pg. 176) 14.4 It is prayed that the Ld. AO may be directed to verify whether credit of the aforesaid surrender and income offered before settlement commission has been taken by the respective assessees' or not. In case no credit has been taken by the respective assessee and there is no addition to relate to the amount surrendered then the Ld. AO may kindly be directed to give credit of the said amount in the hands of Sumati Kumar Kasliwal. 14.5 We have considered the aforesaid ground and we find that there is no discussion either by the AO or the CIT appeal regarding the income surrendered by the various assesses of the Apollo and taxation thereof and the consequential credit available. We find that this alternative claim is made on the basis of the decision of the Allahabad high court 42 taxmann.com 476 (Allahabad)/[2014] Commissioner of Income-tax (Central), Kanpur v. Fertilizer Traders wherein it has been held as under : "14. Regarding the peak theory, it may be mentioned that the peak theory was defined in the Samp....
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.... partly allowed for statistical purposes. ITA SS 179/IND/2017 Assessment Year 2012-13 PARTH KASLIWAL 16. The grounds of appeal raised in this appeal read as under: 1. That the Ld. CIT(A) has erred in law and on facts in not appreciating that the entire assessment is illegal, void and without jurisdiction and further in not considering that the same is in complete breach of principles of natural justice . 2. That the Ld. CIT(A) failed to appreciate that the entire factual narration made by the Ld. AO in the body of assessment is not found in the notice/questionnaire issued prior to assessment nor was the assessee at any point confronted with any such evidence as discussed in the assessment order. It appears that the Ld. AO has cut-paste the contents of the assessment done in case of Pumarth Infrastructure Pvt. Ltd without any relation of such evidence with the assessee's facts. The entire assessment is perverse and devoid of merit and deserves to be quashed. 3. That there in no justification either in law or on facts for the addition of Rs. 90,00,000 by treating the same as unexplained cash credits u/s 68 which received by the assessee as tempo....
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....ed loan should be allowed. 10. That without prejudice to the aforesaid grounds, cumulative effect of Income offered in the return of income filed U/s 153A of the Act by the group plus the income offered for tax before the settlement commission by the group plus the income added in the hands of group entities and finally sustained should have been considered to arrive at a holistic picture of undisclosed income and if this is done then there would remain no amount which can be added. 17. The facts arising from the order of Assessing Officer and the CIT(A) in respect of addition of Rs. 90,00,000 towards loans treated as unexplained are identical to those contained in the order of Sumati Kumar Kasliwal for AY 2012-13. Both the Ld. Counsel for the appellant and the Ld. DR agreed at the time of arguments that arguments made in the case of Sumati Kumar Kasliwal are adopted for other cases also. 18. The issue of loan received and paid back within 2 months alongwith interest has already been adjudicated in the case of Sumati Kumar Kasliwal in ITASS 181/IND/2017 for AY 2012-13. The finding arrived at in the case of Sumati Kumar Kasliwal is as under : 7.16 In the ligh....
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....ch does not survive since the other grounds are already allowed. This ground No. 10 has thus become infructuous. 20. Consequently the appeal of Parth Kasliwal for AY 2012-13 is allowed. ITA NO.465/IND/2017 (Assessment Year 2013-14) PARTH KASLIWAL 21. The grounds of appeal raised in the memo of appeal for AY 2013-14 read as under : 1.That the Ld. CIT(A) has erred in law and on facts in not appreciating that the entire assessment is illegal, void and without jurisdiction and further in not considering that the same is in complete breach of principles of natural justice. 2. That the Ld. CIT(A) has erred in law and on facts in sustaining the addition of Rs. 3,06,32,825 made by the Ld. AO u/s 68 by treating entire share trading receipt as unexplained cash credit since the assessee had given full details of the sale transaction and by no stretch of imagination the entire trading receipt could be treated as unexplained cash credit since at most only the profit thereof could be taxed which was already offered in the return as share trading profit. Trading receipt of shares is a business income and cannot be treated as cash credit u/s 68. 3....
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....l in ITA No.472/IND/2017 for AY 2013-14. The finding arrived at in the case of Sumati Kumar Kasliwal is as under : Sumati Kumar Kasliwal & others ITANo.181,472/Ind/2017,ITA(SS)No.178,ITANo.468/Ind/2017&C.O.No.31/Ind/2018 and others "13.9 We have heard rival contentions and perused the records placed before us and gone through the judgments referred to and relied by the Ld. Counsel for the assessee. Grievance raised by the assessee in Ground No. 6 to 10 revolves round the addition of Rs. 3,61,22,825/- being unexplained cash credit treated by the Ld. A.O u/s 68 of the Act on the basis of details available in the seized loose paper No.62 of LPS/B-115. On perusal of the orders of both the lower authorities and submissions made by the Ld. Counsel for the assessee and the paper book submitted before us there remains no dispute to the fact that the alleged amount of Rs. 3,61,22,825/- is appearing in the regular books of accounts of the assessee. This amount comprises of two parts firstly Rs. 3,06,32,825/- is for the sale consideration of sale of shares held by the assessee since preceding financial year and some of the remaining amount of Rs. 54,09,000/- which was also received a....
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....1 Following the aforesaid finding arrived at on identical facts in the case of Sumati Kumar Kasliwal the addition of Rs. 3,06,32,825 in respect of shares sold but treated as unexplained is deleted. The grounds of appeal no.1 to 6 in the case of Parth Kasliwal are allowed. 24. Ground no. 7 in Parth Kasliwal's case is an alternative ground which does not survive since the other grounds are already allowed. This ground no.7 has thus become infructuous. 25. Consequently the appeal of Parth Kasliwal for AY 2013-14 is allowed. ITA(SS) 174/IND/2017 Assessment Year 2012-13 SHARDA KASLIWAL 26. The grounds of appeal raised in this appeal read as under : 1. That the Ld. CIT(A) has erred in law and on facts in not appreciating that the entire assessment is illegal, void and without jurisdiction and further in not considering that the same is in complete breach of principles of natural justice . 2. That the Ld. CIT(A) failed to appreciate that the entire factual narration made by the Ld. AO in the body of assessment is not found in the notice/questionnaire issued prior to assessment nor was the assessee at any point confronted with any such evidence as discus....
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.... statements. 8. That the Learned CIT(A) has erred in relying upon the finding of Income Tax Settlement Commission (ITSC) without appreciating the fact that the issue of unsecured loan has not been dealt with by the ITSC in its order. 9. That without prejudice to the aforesaid grounds of appeal, if the addition of Rs. 40,00,000 is sustained then firstly benefit of income offered for tax before the settlement Commission should be given and secondly credit for repayment of the unsecured loan should be allowed. 10. That without prejudice to the aforesaid grounds, cumulative effect of Income offered in the return of income filed U/s 153A of the Act by the group plus the income offered for tax before the settlement commission by the group plus the income added in the hands of group entities and finally sustained should have been considered to arrive at a holistic picture of undisclosed income and if this is done then there would remain no amount which can be added. 27. The facts arising from the order of Assessing Officer and the CIT(A) in respect of addition of Rs. 40,00,000 towards loans treated as unexplained are identical to those contained in the order ....
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....e therefore set aside the finding of both the lower authorities and allow this issue of unexplained cash credit raised by the assessee in Ground No. 3 to 9. 28.1 Following the aforesaid finding arrived at on identical facts in the case of Sumati Kumar Kasliwal the addition of Rs. 40,00,000 in respect of loans treated as unexplained is deleted. The grounds of appeal no.1 to 9 in the case of Sharda Kasliwal are allowed. 29. Ground No.10 in Sharda Kasliwal's case is an alternative ground which does not survive since the other grounds are already allowed. This ground No.10 has thus become infructuous. 30. Consequently the appeal of Sharda Kasliwal for AY 2012-13 is allowed. ITA NO.469/IND/2017 Assessment Year 2013-14 SHARDA KASLIWAL 31. The grounds of appeal raised in the memo of appeal for AY 2013-14 read as under : 1.That the Ld. CIT(A) has erred in law and on facts in not appreciating that the entire assessment is illegal, void and without jurisdiction and further in not considering that the same is in complete breach of principles of natural justice. 2. That the Ld. CIT(A) has erred in law and on facts in sustaining the addit....
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....ising from the order of Assessing Officer and the CIT(A) in respect of addition of Rs. 3,56,60,000towards shares sold but treated as unexplained are identical to those contained in the order of Sumati Kumar Kasliwal for AY 2013-14. Both the Ld. Counsel for the appellant and the Ld. DR agreed at the time of arguments that arguments made in the case of Sumati Kumar Kasliwal are adopted for other cases also. 33. The issue of shares sold has already been adjudicated in the case of Sumati Kumar Kasliwal in ITA No.472/IND/2017 for AY 2013-14. The finding arrived at in the case of Sumati Kumar Kasliwal is as under : 13.9 We have heard rival contentions and perused the records placed before us and gone through the judgments referred to and relied by the Ld. Counsel for the assessee. Grievance raised by the assessee in Ground No. 6 to 10 revolves round the addition of Rs. 3,61,22,825/- being unexplained cash credit treated by the Ld. A.O u/s 68 of the Act on the basis of details available in the seized loose paper No.62 of LPS/B-115. On perusal of the orders of both the lower authorities and submissions made by the Ld. Counsel for the assessee and the paper book submitted before....
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....aining amount of Rs. 3,06,32,825/- represents the sale consideration of sale of equity shares held by the assessee since last financial year and the amount from sale thereof is duly offered to tax. We accordingly set aside the findings of lower authorities and delete the addition of Rs. 3,61,22,825/- and allow the assessee's Ground No. 6,7,8,8 & 10 for Assessment Year 2013-14. 33.1 Following the aforesaid finding arrived at on identical facts in the case of Sumati Kumar Kasliwal the addition of Rs. 3,56,60,000 in respect of shares sold but treated as unexplained is deleted. The grounds of appeal no.1 to 6 in the case of Sharda Kasliwal are allowed. 34. Ground no. 7 in Sharda Kasliwal's case is an alternative ground which does not survive since the other grounds are already allowed. This ground no.7 has thus become infructuous. 35. Consequently the appeal of Sharda Kasliwal for AY 2013-14 is allowed. ITA(SS) 180/IND/2017 Assessment Year 2012-13 NISHANT FINANCE PVT. LTD. 36. The grounds of appeal raised in this appeal read as under : 1. That the Ld. CIT(A) has erred in law and on facts in not appreciating that the entire assessment is i....
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....submissions and documents filed by the assessee. 7. That the Ld. CIT(A) failed to appreciate that the Settlement Commission has recorded a categorical finding in its order dated 24.11.2015 that the statements of five persons recorded during search have neither been given to the applicants nor opportunity of cross examination has been given and that it would not be fair and proper to place reliance on such statements. 8. That the Learned CIT(A) has erred in relying upon the finding of Income Tax Settlement Commission (ITSC) without appreciating the fact that the issue of unsecured loan has not been dealt with by the ITSC in its order. 9. That without prejudice to the aforesaid grounds of appeal, if the addition of Rs. 1,50,00,000is sustained then firstly benefit of income offered for tax before the settlement Commission should be given and secondly credit for repayment of the unsecured loan should be allowed. 10. That without prejudice to the aforesaid grounds, cumulative effect of Income offered in the return of income filed U/s 153A of the Act by the group plus the income offered for tax before the settlement commission by the group plus the inc....
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....thout making any investigation after the loan was taken. The finding given in the impugned assessment order about the investment is during the period prior to taking the loan. We therefore in the given facts and circumstances of the case and respectfully following the judgments in the preceding paragraphs are of the considered view that the addition for unexplained cash credit of Rs. 1,80,00,000/- needs to be deleted. We therefore set aside the finding of both the lower authorities and allow this issue of unexplained cash credit raised by the assessee in Ground No. 3 to 9. 38.1 Following the aforesaid finding arrived at on identical facts in the case of Sumati Kumar Kasliwal the addition of Rs. 1,50,00,000 in respect of loans treated as unexplained is deleted. The grounds of appeal No.1 to 9 in the case of Nishant Finance Pvt. Ltd. are allowed. 39. Ground No. 10 in Nishant Finance Pvt. Ltd. is an alternative ground which does not survive since the other grounds are already allowed. This ground No.10 has thus become infructuous. 40. Consequently the appeal of Nishant Finance Pvt. Ltd. for AY 2012-13 is allowed. ITA NO.470/IND/2017 Assessment Year 2013-14 ....
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.... prejudice to the aforesaid grounds, cumulative effect of Income offered in the return of income filed U/s 153A of the Act by the group plus the income offered for tax before the settlement commission by the group plus the income added in the hands of group entities and finally sustained should have been considered to arrive at a holistic picture of undisclosed income and if this is done then there would remain no amount which can be added. 42. The facts arising from the order of Assessing Officer and the CIT(A) in respect of addition of Rs. 3,08,32,825 towards shares sold but treated as unexplained are identical to those contained in the order of Sumati Kumar Kasliwal for AY 2013-14. Both the Ld. Counsel for the appellant and the Ld. DR agreed at the time of arguments that arguments made in the case of Sumati Kumar Kasliwal are adopted for other cases also. 43. The issue of shares sold has already been adjudicated in the case of Sumati Kumar Kasliwal in ITA No.472/IND/2017 for AY 2013-14. The finding arrived at in the case of Sumati Kumar Kasliwal is as under : 13.9 We have heard rival contentions and perused the records placed before us and gone through the judgmen....
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....ly for not producing the directors of the alleged companies buying the equity shares cannot make the transaction in genuine. We therefore in the given facts and circumstances of the case are of the considered opinion that the assessee has successfully explained the amount of Rs. 3,61,22,825/- which includes Rs. 54,90,000/- being he amount received against sale of equity shares but returned back to the purchaser as the transaction could not be finalized and remaining amount of Rs. 3,06,32,825/- represents the sale consideration of sale of equity shares held by the assessee since last financial year and the amount from sale thereof is duly offered to tax. We accordingly set aside the findings of lower authorities and delete the addition of Rs. 3,61,22,825/- and allow the assessee's Ground No. 6,7,8,8 & 10 for Assessment Year 2013-14. 43.1 Following the aforesaid finding arrived at on identical facts in the case of Sumati Kumar Kasliwal the addition of Rs. 3,08,32,825 in respect of shares sold but treated as unexplained is deleted. The grounds of appeal no.1 to 6 in the case of Nishant finance Pvt. Ltd. are allowed. 44. Ground No. 7 in Nishant Finance Pvt. Ltd. is an alternative....
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....ommission (ITSC) order without appreciating the fact that the issue of sale of shares has not been dealt with by the ITSC in its order. 7. That without prejudice to the aforesaid grounds, cumulative effect of Income offered in the return of income filed U/s 153A of the Act by the group plus the income offered for tax before the settlement commission by the group plus the income added in the hands of group entities and finally sustained should have been considered to arrive at a holistic picture of undisclosed income and if this is done then there would remain no amount which can be added. 47. The facts arising from the order of Assessing Officer and the CIT(A) in respect of addition of Rs. 3,56,50,000 towards shares sold but treated as unexplained are identical to those contained in the order of Sumati Kumar Kasliwal for AY 2013-14. Both the Ld. Counsel for the appellant and the Ld. DR agreed at the time of arguments that arguments made in the case of Sumati Kumar Kasliwal are adopted for other cases also. 48. The issue of shares sold has already been adjudicated in the case of Sumati Kumar Kasliwal in ITA No.472/IND/2017 for AY 2013-14. The finding arrived at in the....
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..../-. Further all the necessary details about the identity and genuineness of the concern purchasing the shares from the assessee have been placed on record. Merely for not producing the directors of the alleged companies buying the equity shares cannot make the transaction in genuine. We therefore in the given facts and circumstances of the case are of the considered opinion that the assessee has successfully explained the amount of Rs. 3,61,22,825/- which includes Rs. 54,90,000/- being he amount received against sale of equity shares but returned back to the purchaser as the transaction could not be finalized and remaining amount of Rs. 3,06,32,825/- represents the sale consideration of sale of equity shares held by the assessee since last financial year and the amount from sale thereof is duly offered to tax. We accordingly set aside the findings of lower authorities and delete the addition of Rs. 3,61,22,825/- and allow the assessee's Ground No. 6,7,8,8 & 10 for Assessment Year 2013-14. 48.1 Following the aforesaid finding arrived at on identical facts in the case of Sumati Kumar Kasliwal the addition of Rs. 3,56,50,000 in respect of shares sold but treated as unexplained is d....
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....(A) was not justified either in lae or on facts in sustaining the addition of Rs. 7,50,000 made by the AO u/s 40A(3). 8. That without prejudice to the aforesaid grounds, cumulative effect of Income offered in the return of income filed U/s 153A of the Act by the group plus the income offered for tax before the settlement commission by the group plus the income added in the hands of group entities and finally sustained should have been considered to arrive at a holistic picture of undisclosed income and if this is done then there would remain no amount which can be added. 52. The grounds of appeal raised by the appellant for AY 2013-14 read as under: 1. That the Ld. CIT(A) has erred in law and on facts in not appreciating that the entire assessment is illegal, void and without jurisdiction and further in not considering that the same is in complete breach of principles of natural justice 2. That there is no justification either in law or on facts for the Ld. CIT(A) in sustaining the entire addition of Rs. 1,31,36,750/- as alleged on money received by the assessee. The determination of the said amount of Rs. 1,31,36,750/- is arbitrary and presumptuous. ....
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.... effect of Income offered in the return of income filed U/s 153A of the Act by the group plus the income offered for tax before the settlement commission by the group plus the income added in the hands of group entities and finally sustained should have been considered to arrive at a holistic picture of undisclosed income and if this is done then there would remain no amount which can be added. 53. Ground No. 1 to 4 in AY 2012-13 are in respect of Share Capital of Rs. 13,60,00,000 in AY 2012-13 which has been treated as unexplained by the Assessing Officer and appeal against the said addition has been confirmed by the CIT(A). 54 Brief facts relating to the above stated Ground No.1 to 4 for Assessment Year 2012-13 in respect of Pumarth Infrastructure Pvt. Ltd are that during the course of assessment proceedings subsequent to search while examining the books of accounts and financial statements, Ld. A.O observed that the assessee company has received share capital of Rs. 27,20,000 with equity shares having face value of Rs. 1,000 and the share premium of Rs. 13,32,80,000/- of premium of Rs. 49,000/- per share thereby totaling to Rs. 13,60,00,000/- from following 5 companies; ....
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....anking channel, shares allotted to the investors were repurchased back by other buyers on the issued/higher price and on cancellation of the deal Shri Sumati Kumar Kasliwal received cash in June and July, 2012 of Rs. 13,61,91,600/- and the same stands added by the Ld. A.O to the returned income of Shri Sumati Kumar Kasliwal while concluding the assessment for Assessment Year 2013-14. Thus as per the Sr. Counsel for the assessee the source of share capital of Rs. 13.60 crores in the books of M/s. Pumarth Infrastructure Pvt. Ltd stands explained and as the addition has already been made in the hands of Shri Sumati Kumar Kasliwal maintaining the addition in Pumarth Infrastructure Pvt. Ltd will amount to double addition and therefore prayed for deleting the same. 54.1. While arguing these grounds it has been submitted by the learned counsel for the appellant that since identical addition arising out of the same loose paper has already been made in the hands of the appellants' director Sumati Kumar Kasliwal and in the submission filed before this Hon'ble Tribunal the said addition has already been accepted and the ground raised have been not pressed in the case of Sumati Kumar Kasliw....
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....ed share capital in March 2012, April 2012 and June 2012. How can such a statement be relied upon. Moreover even in this statement no mention of assessee's company has been made. Affidavit of Jai Prakash jagatia is also on 15/02/2012 . On 15/02/2012 no investments were made by any company as share capital with the assessee. The assessee received share capital application money on 23/02/2012,27/03/2012, 03/04/2012,05/04/2012, 25/05/2012 & 28/05/2012.No statement of Dayaram Mansoreis on record. No copy was ever provided in spite of repeated request by the Appellant. Settlement Commission in its order dated 24/11/2015 has categorically observed that such statements cannot be used against the assessee since no copies thereof have been ever provided to the assessee. Inspectors report is dated 29/12/2012 wherein, Inspectors states that he has been directed to issue summons. The AO assumed jurisdiction over the assessee on 23/12/2013 by virtue of order u/s 127. How the Inspector got director to serve summon u/s 131 on 29/12/2012 when AO himself got jurisdiction after one year on 23/12/2013. Thus the very foundation of Inspectors Report is without jurisdiction and is clearly a made up one.....
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....settlement order or in assessment order it was proved that the funds received in the investor companies belongs to the assessee company or that the assessee company was related to that company whose funds are received in the investor company. The assessee has proved the source of investment, under the act there is no need to prove the source of source. 54.4 It was further argued that one of the group Company M/s Premier Capital Services Pvt. Ltd. has repurchased these shares from the above parties on 17/09/2012, before the date of search, at total consideration of Rs. 13,87,20,000/- as against shares allotted to them at Rs. 13,60,00,000/- as mutually agreed terms. The appellant once again reiterates the fact that all the investor companies are duly incorporated under the companies act with certificate of incorporation, have PAN number and are assessed to tax. The parties have invested the funds in share capital of assessee company through proper banking channels and the same has been authorized by the resolution of Board of Directors of respective companies. The amount of investment is also reflected in the Balance Sheet of the respective companies and all the companies have suf....
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....soore, but the same has not been provided to the appellant. As regard the allegation of the Assessing Officer that the directors was not found at the address mentioned in the ROC side or the assessee has not produced the director before the assessing Officer, the appellant submits that the Ld. AO failed to appreciate the fact that the assessee company filed the affidavit of the director of the company wherein they confirmed for the share allotment. Even assessee has asked to cross examine the parties, on whose statement he has relied upon. However AO has not considered the same. 54.5 As regards the allegation of the department that the blank share transfer form & board resolution was found on the computer of the assessee the appellant submits that these shares were allotted on private placement basis. Hence assessee company has to provide application form and draft Board resolutions to these companies. Some of these subscriber mailed these documents to the assessee company for approval which got stored in the computer system. Further transfer deed was taken from party on repurchase of share capital. But these transfer deed ware dated 18/06/2012 whereas the shares were repurchase....
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....es are duly incorporated under the companies act with certificate of incorporation, have PAN number and are assessed to tax. The parties have invested the funds in share capital of assessee company through proper banking channels and the same has been authorized by the resolution of Board of Directors of respective companies. The amount of investment is also reflected in the Balance Sheet of the respective companies and all the companies have sufficient net-worth so as to justify the share capital contributed by them. Thus the assessee has proved the identity, genuineness and creditworthiness of transaction with documents before the Ld AO. Further the share premium was also justified by the assessee by filing the valuation report. 54.9 It was argued that the Learned Assessing Officer has not considered the same and made the addition without any basis and logic. All the documents filed before the Learned Assessing Officer proved the identity, genuineness and creditworthiness of transaction, but the Learned Assessing Officer ignored the same and without giving any cogent evidence made the addition u/s.68 of the Act. 54.10 It was argued that as per the section 68 when the assess....
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....t of the share capital since the source thereof in any event can be traced to the income of Sumati Kumar Kasliwal. 55. The Ld. DR has opposed grounds raised by the appellant and has pointed out that the Settlement Commission has already decided the issue of share capital against the appellant and has categorically held that the share capital is unexplained. Thus the amount of share capital has been rightly added in the hands of the appellant. The Ld. CIT DR has also opposed the alternative plea raised by the counsel for the appellant. 56. We have heard rival contentions, perused the records available with us carefully gone through the findings of lower authorities and the written submissions placed before us along with judgments referred and relied by both the parties. Grievance raised by the assessee in Ground No. 1 to 4 for Assessment Year 2012-13 in the case of M/s. Pumarth Infrastructure Pvt. Ltd is in respect of treating share capital and share premium totaling to Rs. 13.60 crores as unexplained cash credit added by Ld. A.O u/s 68 of the Act and has been confirmed by Ld. CIT(A) also. Ld. A.O treated the following amount received from following companies towards share cap....
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....he amount was given back to the investors by way of purchasing the shares for the equal or higher price by other group concerns. These being adjustment entries the amount was received in cash by Shri Sumati Kumar Kasliwal in June/July, 2012 which is appearing in the seized document of loose paper No.62 of LPS B-1/5. The above series of transaction has been duly admitted by Shri Sumati Kumar Kasliwal and are supported to some extent by various documents observed by us while adjudicating various grounds through the concern namely share capital and share premium received by M/s. Pumarth Infrastructure Pvt.Ltd, shares sold to the investors of M/s. Pumarth Infrastructure Ltd having further sold to the group members which have been further sold on higher price and capital grain have been offered to tax. So admittedly some transactions are tallying with the story/submission given by Shri Sumati Kumar Kasliwal and coincidently the figures of Rs. 13,61,94,600/- found in the seized document during the course of search is also almost same as the figure of Rs. 13.60 crores of undisclosed income added in the case of M/s. Pumarth Infrastructure Pvt.Ltd. It is also an undisputed fact that no othe....
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....vt. Ltd was examined which shows that the receipt of similar amounts in its books of account was found in the seized page 62 of LPS-B1/5. It is also found that there are various other deposits in these bank accounts in the same period but when inter-group transfer are excluded and only amounts of these entry provider companies are added, the amount mentioned in the page 62 exactly matches. This clearly shows that this sheet was prepared to check the position of accommodation entry taken by the group. The document is authentic as the above discussed entries are exactly tallying." 56.2 The above observation of Ld. A.O supports our view that an unexplained income of Rs. 14,57,12,069/- inter alia including the amount of Rs. 13,61,94,600/- admitted as undisclosed income and offered to tax by Shri Sumati Kumar Kasliwal has its direct nexus with the addition of unexplained share capital of Rs. 13.60 crores in the case of M/s. Pumarth Infrastructure Pvt. Ltd. As we have already confirmed the addition in the hands of Shri Sumati Kumar Kasliwal it will not be justified to sustain the addition of Rs. 13.60 crores in the case of M/s. Pumarth Infrastructure Pvt. Ltd and the same deserves to ....
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....has been extracted: "We have heard rival contentions and perused the records placed before us. For all three assessment years i.e 2009-10 to 2011-12 common issue raised by the assessee, in Ground No. 2 & 3 is for the additions confirmed by Ld. CIT(A) of 'On-Money' of Rs. 96,76,800/-, Rs. 3,09,80,760/- & Rs. 50,96,575/- received from buyers for plots/row houses in the project undertaken by the assessee in the name of 'Pumarth Park' & 'Pumarth Meadows'. Both the lower authorities have confirmed addition for gross amount of 'On-Money' received from the projects run by the assessee. 2. Ld. counsel for the assessee has filed extract of the statement given before Income Tax Settlement Commission (in short ITSC) for the other group concerns as well as the submissions made for the assessee company which was later on rejected by the Income Tax Settlement Commission. In this submission, the assessee has disclosed gross receipts and has also claimed the expenses incurred on the project which were connected to administrative, as well as construction activities. In the statement filed before the ITSC 75% of the gross receipts are shown as expenses. It seems that both the lower....
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.... factors came forward in a spirit of settlement to offer the corresponding unaccounted portion of the receipts on its 540% share of sale to which it was entitled under the Agreement with Garha Group. The disclosure made by the applicant on account of unaccounted receipt from the Gold-Green project amounts to Rs. 25,00,000/- on which taxable income has been worked out after applying a net profit rate of 25% which amounts to Rs. 6,25,00,000/-. A letter dated 26.4.2016 to this effect filed by the applicant is placed on record. The year-wise working made by the applicant gives the details of additional income in the project Golf-Greens by estimating profit at the rate of 25% on estimated unaccounted (difference in deal rate of plots sold by Applicant and Garha Group )as under: A.Y. Area sold (Sq.feet Difference in sales rate (per sq feet Estimated unaccounted receipts (rounded off) Estimated net profit (1) (2) (3) (4)=2*3 (5)=25% 4 2009-10 133117 514 68500000 17125000 2010-11 181098 533 96600000 24150000 2011-12 38715 465 18000000 4500000 2012-13 64323 423 27200000 6800000 2013-14 62155 3....
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....counting. Therefore the profit, if any, would be subject to tax on completion of the project which takes place only for the A. Y. 2006-07(90%) and A. Y. 2007-08. The Assessing Officer by an order dated 30 th December, 2008 did not accept the respondent's contention of Project Completion Method and brought to tax, the entire amount received as 'on money' consideration i. e. 65% of total sales value (35% recorded plus 65% 'on money) of the 14 unit sold. (c) Being aggrieved, the respondent carried the issue in appeal to the Commissioner of Income Tax(A) (CIT(A)). In appeal, by an order dated 30th October, 2009 the CIT(A) modified the order of the Assessing Officer to the extent it held that the total consideration received in respect of sales of 14 unit during the subject assessment year would be taxed at 40% as net profit of the total consideration in place of 65% in respect of sales of 14 units. The CIT(A) did not accept the respondent-assessee's contention that only 8% should be taken as net profit of the unaccounted turnover. This was in view of the fact that annexure-L found during the course of the search indicated the net profit at 28.18%. ....
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.... of sales could not represent the income of the assessee who had not disclosed the sales. The sales only represented the price received by the seller of the goods; only the realisation of the excess over the cost incurred could form part of the profit included in the consideration for the sales. Since there was no finding to the effect that investment by way of incurring the cost in acquiring the goods which were sold had been made by the assessee and that the investment was also not disclosed, only the excess over the cost incurred could be treated as profit. Hon'ble'ble I.T.A.T., Ahmedabad Bench in ACIT vs. Shri Jigesh Vs Koralwala I(SS) A No.262,263 and 264/Ahd/2010 "Since Ld. CIT(A) has given relief to the assessee by following the Ahmedabad Tribunal decision in the case of Adinath construction decided vide order dated 20.10.2005 in Income-tax Act, 1961, No.1975 and 176/Ahd. 1999 wherein it was held that entire on- money did not represent the recipient's income but only to the extent of 15% thereof and the balance 65 % being expended on the project and no contrary decision was cited by the Revenue at the time of hearing, we find no reason to interfere in the fi....
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....leged that the assessee has incurred cash expenses over and above Rs. 20,000/- and therefore is liable for disallowance u/s 40A(3) of the Act. Looking to the request of Ld. counsel for the assessee for setting aside the issue which goes opposed by the revenue authorities. We direct the Ld. AO to examine this issue of disallowance u/s 40A(3) of the Act for various expenses incurred in cash afresh after providing necessary opportunity to the assessee for filing documents and evidence in support of its claim that no disallowance is called for. Accordingly this issue for disallowance u/s 40A(3) of the Act is allowed for statistical purposes. 65. Ground 5 for A.Ys. 2013-14 is an alternative ground and in view of the fact as we have already adjudicated the main grounds dealing with these alternative grounds would be merely academic in nature and thus we find no reason to adjudicate the same and therefore these are dismissed as academic in nature. 66. Ground no. 4 to 8 in AY 2013-14 is in respect of amount of Rs. 4,08,00,000 added on unexplained cash credit u/s 68. 67. The facts arising from the order of Assessing Officer and the CIT(A) in respect of addition of Rs. 4,08,00,000 t....
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....ase of the equity shares made by the assessee in the preceding financial year. It is established principle of law that if the purchases are genuine then only the difference between the sale and purchase amount can be subjected to tax. In the instant case the assessee has offered Short Term Capital Gain of Rs. 6,33,325/- for tax being the difference between the sale consideration of Rs. 3,06,32,825/- and the purchase/cost price of the equity shares sale of Rs. 2,99,99,500/-. Further all the necessary details about the identity and genuineness of the concern purchasing the shares from the assessee have been placed on record. Merely for not producing the directors of the alleged companies buying the equity shares cannot make the transaction in genuine. We therefore in the given facts and circumstances of the case are of the considered opinion that the assessee has successfully explained the amount of Rs. 3,61,22,825/- which includes Rs. 54,90,000/- being the amount received against sale of equity shares but returned back to the purchaser as the transaction could not be finalized and remaining amount of Rs. 3,06,32,825/- represents the sale consideration of sale of equity shares held b....