AI Drafter 
TaxTMI 
TaxTMI 
2019 (7) TMI 1485
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....s of the case in deleting the addition of Rs. 1,63,41,365/- on account of unexplained expenditure u/s. 69C. 3. That the CIT(A) erred in law and on facts of the case in deleting the addition of Rs. 2,04,01,195/- made by AO u/s. 2(22)(e) of the Income Tax Act, 1961. 4(a) The order of the CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of the hearing of the appeal. 3. The following grounds have been raised in ITA No. 2600/Del/2014 (AY 2007-08) in the case of DCIT vs. Saamag Infrastructure Ltd.:- "1. That the CIT(A) erred in admitting additional evidence under Rule 46A. 2. That the CIT(A) erred in law and on facts of the case in deleting the addition of Rs. 2,80,31,778/- on account of unexplained expenditure u/s. 69C. 4(a) The order of the CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of the hearing of the appeal. 4. The following grounds have been raised in ITA No. 26....
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....d 142(1) were again issued on 20.10.2010 and fixed for hearing on 29.10.2010. In response to various statutory notices, the AR of the Assessee attended the proceedings alongwith representative of the Assessee Company and furnished necessary details, information and documents called form time to time. During the assessment proceedings, AO observed that there was complexity in accounts of the assessee, therefore, after obtaining prior approval of the Commissioner of Income Tax, Central II, New Delhi, directions for special audit u/s. 142(2A) of the Act were issued to eh assessee to get his accounts audited from M/s TR Chadha & Co., B-30, Connaught Place, New Delhi. The assessee was asked to furnish such Audit report u/s. 142(2A) within a period of 60 days from the date of receipt of these directions. The assessee has furnished Special Audit Report u/s. 142(1) on 06.6.2011. After perusal of Special Audit Report filed by the assessee, fresh questionnaire alongwith notice u/s. 142(1) were issued to the assessee on 10.6.2011 and case was fixed for 17.6.2011. In response to notices issued, assessee's counsel has attended the assessment proceedings from time to time alongwith 02 employees ....
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....ion 292C was introduced by the Finance Act, 2007 with retrospective effect from 1.10.1975; ++ the phrase "in any proceeding under this Act" in sub-section (1) to section 292C are important. They permit the AO to invoke the presumption that the seized documents belonged to the person searched, that the contents of the seized documents/books of accounts are true and that the signature of every other part of the books of accounts or documents which purports to be in the handwriting of any particular person are in that person's handwriting etc., even in the assessment proceedings. After the insertion of the section, the judgment of the Supreme Court cited above can no longer be called in aid to hold that the presumption is not available to the AO in making the assessment; ++ the Tribunal has reasoned that the seized papers are loose papers and not books of accounts. We are unable to appreciate the significance or sequitur of the statement made by the Tribunal. It is not necessary that the seized documents should be in the form of proper books of accounts so that they can be relied upon for the purpose of making additions. They could be in any form, including loose....
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....58B(b). There is presumption raised under section 132(4A) regarding documents seized and in light of such presumption, assessee ought to have produced other documents to disprove entries made in loose sheets. 4. Bhagheeratha Engineering Ltd Vs ACIT T20171 79 taxmann.com 325 (Kerala)/f20151 379 ITR 244 (Kerala)/r20161 282 CTR 209 (Kerala) (Copy Enclosed) where Hon'ble Kerala High Court held that in view of introduction of section 158BH presumption under section 132(4A) regarding ownership of seized assets was not limited to proceedings for search and seizure under section 132, and was also available for framing regular assessment. 5 Ashok Kumar Vs CAT T20161 69 taxmann.com 129 (Patna) /[2016] 239 Taxman At (Patna[2016] 386 ITR 342 (Patna)/r20161 290 CTR 450 (Patna) (Copy Enclosed) where Hon'ble Patna High Court held that where Assessing Officer passed income escaping assessment on basis of a loose sheet found in premises of father of assessee, action of Assessing Officer was justified being based on relevant material and, merely, because he used wrong presumption in assessment order it would not change nature of order. 6 Baldev Raj Vs CIT r201....
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....withdrawals were allowed to be made and subsequent adjustment of account made on very last day of accounting year would not alter position that assessee received notional dividends on various dates. CIT Vs Miss P. Sarada T21 Taxman 941 (Copy Enclosed) where Hon'ble Madras High Court held that Amount of impugned excess withdrawals, even though adjusted against credit balance before close of year, was assessable as deemed dividend in assessee's hands in terms of section 2(22)(e) 2- Puneet Bhagat v. ITO [157 ITD 353) Where Hon'ble ITAT Delhi held that deemed dividend- Loans and advances to share holders- Loans received by the company would be treated as deemed dividend in hands of P and S in proportion to their shareholdings. 3. Sunil Kapoor Vs CIT T20151 63 taxmann.com 97 (Madras)/r20151 235 Taxman 279 (Madras) where Hon'ble Madras High Court held that where assessee, holding 60 per cent shares of a company, took personal loan from accumulated surplus of said company, said amount would be treated as deemed dividend under section 2(22)(e), after reducing therefrom amount repaid by assessee during year 4. Shashi Pal Aaarwal Vs CIT T20151 54 taxma....
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....ld that, evidence which is crucial in disposing the case can be admitted. Since the documents filed by the assessee as additional evidences are of the nature that may advance the interest of justice and vital to decide the issue under consideration, the same need to be admitted and considered on merits. Hence, the documents filed as additional evidence in the course of appeal proceedings were rightly admitted for consideration and adjudication of the issues under consideration by the Ld. CIT(A), which does not need any interference on our part, therefore, we uphold the action of the Ld. CIT(A) on the issue in dispute and reject the ground no. 1 in Appeal No. 2599/DEL/14, 2600/DEL/14 & 2603/DEL/14. The case laws cited by the Ld. CIT(DR) are distinguished on facts. 10.2 As regards ground no. 2 involved in Appeal No. 2599/DEL/14, 2600/DEL/14 & 2603/DEL/14 is concerned, we note that the AO has merely relied on the observation of the Special Audit Report and made the addition in dispute. We find that the Special Audit Report simply based on the observations regarding the applicability of section 69C on the seized material without verifying the actual contents thereof and in turn the ....
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....IT(A) had deleted the addition of Rs. 44,74,198/- made by the AO u/s. 2(22)(e) of the Act by holding as under:- "5.13 I have considered the findings recorded by the Ld. AO as per the assessment order, the submissions made by the Id. AR and the facts of the case on record. The Assessing Officer has made additions in the hands of the lending companies on the basis that the monies have been given as loans to the Group Companies in which there are common shareholders. While calculating the accumulated profits, the Assessing Officer has added the amount of addition made in the Assessment Order to the figure of the profit available as per the books of account. The Id. AR argued that the appellant is a lender and not the borrower, therefore t e addition u/s 2(22)(e) made on protective basis is not called for in this case. The appellant further contended that the judgment of Hon'ble Supreme Court in the case of P.K. Bad am vs. CIT (supra) has been applied entirely erroneously and even as per the said judgment itself, the accumulated profit does not mean assessable or taxable profit liable to be taxed as income and will not include any addition effected by the Assessin....
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....struction Ltd., a company of Saamag Group, Ld. CIT(A) has rightly deleted the addition of Rs. 2,04,01,195/- made by the AO u/s. 2(22)(e) of the I.T. Act, 1961 in the case of the assessee, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) on the issues in dispute and reject the ground raised by the Revenue. The case laws cited by the Ld. CIT(A) in his findings, as aforesaid, are directly applicable in the case of the assessee. However, the case laws cited by the Ld. CIT(DR) are distinguished on facts. 10.4 As regards ground no. 3 involved in Appeal No. 2603/Del/14 relating to deletion of addition of Rs. 40,23,220/- on account of cash payment for purchase of land is concerned, we note that the addition in dispute was made on the basis of the observations of the Auditor made in his Report u/s. 142(2A), which were based on the document seized during the course of search proceedings. We further note that the AO observed that the reply of the assessee has been considered, which, for the same reasons as given for making the addition of Rs. 26,40,000/- u/s. 69C, was not found to be acceptable and, therefore, the impugned addition of Rs. 40,2....
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....and stated that Ld. CIT(A) has erred in law as well as on facts in holding that the notice u/s. 142(1) of the Act was not served upon the assessee within the prescribed time limit. He submitted that the assessee vide letter dated 30.7.2013 and 11.11.2013 submitted that the notice u/s. 143(2) of the Act was not received by the company within the time specified in the Income Tax Act for service of notice. In this regard, it was informed to the assessee that the notice u/s. 143(2) of the Act in this case for the assessment year 2011-12 was issued on 25.9.2012 i.e. within six months from the end of financial year in which return was furnished and duly dispatched and served upon the assessee through speed post. 14. On the other hand, Ld. Counsel for the assessee relied upon the order of the ld. CIT(A) and stated that he has passed a well reasoned order, which does not need any interference on our part. 15. We have heard both the parties and perused the records especially the orders of the revenue authorities. We find that as pr the provisions of section 143(2) of the Act, statutory notice u/s. 143(2) of the Act is required to be served on the assessee within 6 months from the end ....