TaxTMI 
TaxTMI 
2020 (1) TMI 620
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....ced. However, as per the agreement it was clearly mentioned that loan has been given. Both the parties have denied the transaction as the same was not accounted for in the books of account. The A.O. on that basis reopened the assessment in the case of the assessee and questionnaire was issued seeking explanation of assessee. Assessee was directed to file return of income under section 147/148 of the I.T. Act. The assessee submitted that earlier return filed originally may be treated as return having been filed in response to notice under section 148 of the I.T. Act. The assessee at the re-assessment stage denied to have given any cash loan to Shri Naresh Sabharwal. It was explained that assessee had agreed to arrange the loan for him through the Financer which was not materialised, therefore, original agreement was scrapped. It may be possible that photocopy have been retained by the said party. The A.O, however, did not accept the contention of assessee and made addition of Rs. 1 crore on account of cash loan given to Shri Naresh Sabharwal as well as made addition on account of interest of Rs. 6,96,774/-. 3. The assessee challenged the reopening of the assessment as well as add....
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....dshahr vs., ITO, Ward-3(1), Bulandshahr in ITA.No.987/Del./2018, Dated 30.11.2018. 05. Order of ITAT, Mumbai SMC-Bench, Mumbai in the case of M/s. Rayoman Carriers Pvt. Ltd., Mumbai vs., ACIT, Central Circle-12, Mumbai in ITA.Nos.3275 & 3276/Mum/2015, Dated 16.03.2018. 06. Order of ITAT, Visakhapatnam Bench, Visakhapatnam in the case of G. Koteswara Rao vs., DCIT, Central Circle-1, Visakhapatnam [2015] 64 taxmann.com 159. 6.1. The Learned Counsel for the Assessee also submitted that since both the parties denied to have entered into loan transactions and there is no other corroborative evidence on record, therefore, no addition could be made. In support of this submission, he has relied on the following decisions. 01. Commissioner of Income Tax (Central)-1, New Delhi vs., Ved Prakash Choudhary [2008] 169 Taxman 130 [Delhi] [HC] 02. Commissioner of Income Tax, Central-II, New Delhi vs., S.M. Aggarwal [2007] 293 ITR 43 [Del.] [HC]. 03. ACIT vs., Kences Foundation (P.) Ltd., [2007] 289 ITR 509 [Madras] [HC]. 04. Commissioner of Income Tax, Central-III vs., Suneet Verma [2007] 145 DLT 280 [DB] [Del.] [HC]. 05. Commissioner of Income Tax vs.,....
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....books of accounts. In view of the information as above the case Explanation 2(b) to section 147 is applicable in the case, which lays down, "where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income...... " In view of the above facts, I have the reason to believe that income to the tune of Rs. 1 crore chargeable to tax has escaped assessment. Therefore, notice u/s. 148 of the I.T. Act is herby issued. Sd/- P.K. Malik, Income Tax Officer, Ward-61(1), New Delhi". 8.1. In the reasons A.O. has mentioned that search was conducted in the case of Shri Naresh Aggarwal [wrongly mentioned the name] and that during the course of search it was found that assessee has given cash loan of Rs. 1 crores to Shri Naresh Sabharwal on 17.12.2009. Copy of the agreement is filed at page-25 of the PB. A.O. has also mentioned in the reasons that both the parties have denied to have given or taken any cash loan. Thus, Shri Naresh Sabharwal has never agreed that he has taken any cash loan from the assessee. Copy of the agreement is filed in the paper book whi....
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....h and is not corroborated by any evidence or material on record, therefore, such photo copy of the agreement cannot be relied upon by the A.O. for the purpose of initiating the re-assessment proceedings in the case of the assessee. It is an admitted fact that in the present case the agreement in question was found during the course of search in the case of Shri Naresh Sabharwal and proceedings under section 153A have been initiated against him. Therefore, the agreement in question have been transferred by A.O. of the person searched to the A.O. of the assessee for the purpose of taking remedial action in the matter. It is well settled Law that in the case of assessment made on assessee consequent to the search in another case, A.O. is bound to issue notice under section 153C and thereafter proceed to assess the income under section 153C and if A.O. had proceeded with re-assessment under section 147/148 of the I.T. Act and passed the Order under section 143(3)/148 of the I.T. Act, the same would be illegal and arbitrary and without jurisdiction. We rely upon the Order of ITAT, Visakhapatnam Bench in the case of G. Koteswara Rao (supra). In the case of ITO vs., Arun Kumar Kapoor [201....