TaxTMI 
TaxTMI 
2020 (12) TMI 50
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....the very outset, the two appeals of the revenue, namely, ITA No 6085/DEL/2019 for AY 2013-14 and 4880/DEL/2019 for A.Y 2015-16 deserve to be dismissed, as both the appeals are hit by the CBDT Circular No. 17/2019 dated 08.08.2019. 4. A perusal of the grievance of the revenue shows that the tax effect would be less than Rs. 50 lakhs, therefore, these appealsare not maintainable and dismissed in light of the CBDT Circular [supra]. 5. In the result, both the appeals of the Revenue in ITA No. 6085/DEL/2019 for AY 2013-14 and 4880/DEL/2019 stand dismissed. 6. The common grievance in all the appeals filed by the revenue relates to the admission of additional evidences. 7. Before us, the ld. DR vehemently stated that the ld. CIT(A) has admitted the additional evidences without following Rule 46A of the Income tax Rules 1962, and therefore, the order of the CIT(A) deserves to be quashed, since it is in violation of principles of natural justice. 8. On the other hand, the ld. counsel for the assessee stated that the proceedings u/s 153A of the Act started on 16.09.2016 and the first questionnaire dated 27.10.2016 and assessment orders have ....
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....er who was of the opinion that the assessee has failed to furnish the details. The Assessing Officer further observed that the assessee has only furnished details of advances received through RTGS/cheque payments but no explanation was given in so far as cash receipts found in the loose sheets and proceeded to make addition of Rs. 43,39,80,220/-. 16. As mentioned elsewhere, the assessee filed some new evidences before the ld. CIT(A). The fresh evidences were transmitted to the Assessing Officer and the Assessing Officer submitted his enquiry report vide letter dated 09.01.2019. The enquiry report reads as under: "Addition on account of cash received - During the course of assessment proceedings it was noticed from the incriminating documents seized from the premise of assessee that a details oj cash receipts were given on page no. 15 of Annexure LP-J. The some was scanned in the assessment order passed on 30/]2/20!6. During the course oj assessment proceedings the, assessee was required to explain the total cash receipt of Rs. 43,39,30,220/- mentions.: in the said paper along 'with supporting documents and to reconcile the same regular books of account and has....
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....that on one side the assessee is stating that the said paper has been added in the seized documents and no one has own up the pap. r and on the other hand the company has tallied the amount mentioned in the paper to the Ins: penny. Therefore, it is obvious that the company has prepared the documents according to the amount mentioned in the said paper and got tallied to the last penny otherwise the payments received in different period and different mode may not tally with a paper whose authenticity was also challenged by the assessee company. Therefore, in view of the above discussion and submission filed Iv the assessee the consent ion of the assessee is not acceptable as the paper which was found from she premises of the assessee pertains to assessee and details of cash received as and money mentioned on if paper which the then A.0. has rightly disallowed and added to the income of - assessee. 17. After considering the detailed submissions made by the assessee and the enquiry report submitted by the Assessing Officer, the ld CIT(A) observed that the Assessing Officer has simply treated the figures mentioned in the alleged seized documents as cash received by the....
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...., incriminating documents were found and seized and one of such documents was page No. 40 of Annexure LP 10 which is as under: 25. On perusal of the aforementioned seized documents, the Assessing Officer formed a belief that the assessee has made payments amounting to Rs. 7,08,23,250/- for the purchase of land. The assessee was asked to explain the transactions along with supporting documents. 26. In its reply, the assessee stated that the impugned document is a handwritten page having some calculations under the heading Krishna developers and promoters andsome other calculation related to New net worth of KPD Infrastructure Pvt. Ltd where the amount of Rs. 7,08,23,250/- is related to Khasara Nos. 915, 945 and 946, being some properties purchase at Haridwar. 27. The reply of the assessee did not find any favour with the Assessing Officer who was of the opinion that the assessee has not furnished any supporting evidences and proceeded to make addition of Rs. 7,08,23,250/- as unexplained investment. 28. Before the ld. CIT(A), the assessee furnished some evidences which were sent to the Assessing Officer and Assessing Officer has submitted ....
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....ments was page 49 of Annexure LP 12 which reads as under: 37. On perusal of the aforesaid document, the Assessing Officer found that the assessee has made total investment of Rs. 8.36 crores, out of which Rs. 7.02 crores was made in cash. The assessee was asked to explain the investment made in cash with supporting documents and reconcile the same in the regular books of account. 38. On receiving no plausible reply, the Assessing Officer made addition of Rs. 7,02,38,672/- u/s 69 of the Act. 39. Before the ld. CIT(A), the assessee filed detailed reply along with evidences which were sent to the Assessing Officer and the Assessing Officer submitted enquiry report vide letter dated 09.01.2019 which is as under: 40. After considering the detailed submissions made by the assessee and enquiry report submitted by the Assessing Officer, the ld. CIT(A) found that the bone of contention is the payment of Rs. 7,02,38,672/- in cash for Haridwar account. The ld. CIT(A) further found that the appellant has contended that the transaction in the seized documents related to F.Y 2005-06, which is beyond the block period under consideration. 41....
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....f Rs. 1,54,09,440/-. 50. During the search proceedings, certain incriminating documents were found and seized and one of such documents was Page No. 51 of Annexure LP 05 which is as under: 51. On perusal of the above document, the Assessing Officer found that the assessee has made expenditure totalling Rs. 3,28,27,680/- out of which Rs. 1,54,09,440/- pertains to the year under consideration. Accordingly, the assessee was asked to explain the transaction and reconcile the same with its books of account. 52. In its reply, the assessee explained that the seized documents referred to contain figures of comparison for expenditure made on maintenance charges, in the month of June 2012, 2013 and 2014 in respect of KDP Project. It was explained that Greenwell Mark Buildwell Pvt Ltd takes maintenance charges from residents but in actual, the appellant provides maintenance charges and, therefore, the amount is transferred from Greenwell Mark Buildwell Pvt Ltd for which the appellant raises bill. 53. Reply of the assessee was rubbished by the Assessing Officer. According to the Assessing Officer, the assessee has made the expenditure outside the books....
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....lected in the books of accounts of the appellant company as well as Greenwell Mark Buildwell Pvt Ltd. While deleting the impugned addition, the ld. CIT(A) concluded by holding that the Assessing Officer has merely on the basis of suspicions raised from the entries in the document seized in the search action has made addition. 60. Before us, the ld .DR strongly supported the findings of the Assessing Officer and the ld. counsel for the assessee reiterated what has been stated before the lower authorities. 61. We have carefully perused the factual findings given by the first appellate authority and no factual error has been pointed out before us by the ld.DR in the findings of the ld. CIT(A). Whereas the findings of the ld. CIT(A) clearly show that he has examined all the entries in the books of account of the appellant as well as Greenwell Mark Buildwell Pvt Ltd. Since the entries are duly recorded in the regular books of account, we do not find any reason to interfere with the findings of the ld. CIT(A). Ground No. 1 is dismissed. GROUND NO. 2 62. Ground No. 2 relates to the deletion of addition of Rs. 89 lakhs. 63. During search proceed....
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.... and, accordingly, made an addition of Rs. 27,97,84,156/-. 75. Before the CIT(A), it was strongly contended that the entire addition has been made only on account of difference in two separate trial balances. Both the trial balances were examined by the ld. CIT(A) and he found that one of the trial balances is incomplete and further found that in one of the trial balances, last six pages were missing. The CIT(A) further rubbished the contention of the Assessing Officer that the assessee is maintaining two parallel sets of books of account. Convinced with the reply of the assessee, the ld.CIT(A) deleted the impugned addition. 76. Before us, the ld. DR strongly supported the Assessing Officer and the ld. counsel for the assessee reiterated what has been stated before the ld. CIT(A). 77. We have carefully perused the orders of the authorities below qua the issue. It is true that the only basis for making addition was the difference in figures in two trial balances found at the time of search proceedings. The Assessing Officer has alleged that the assessee is maintaining two parallel set of books of accounts. But the entire assessment order is silent about an....
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....ctions and reconcile the same with its regular books of accounts. 84. In its reply the assessee submitted that payments have been made by cheque and cash to the aforementioned five parties which are duly recorded in the regular books of accounts. The assessee also filed ledger account and registry of land. 85. The Assessing Officer dismissed the submissions of the assessee stating that the assessee has not explained the source of the above payments and has not filed any satisfactory reply regarding these payments and accordingly, made an addition of Rs. 1.75 crores which was paid in cash. 86. Before the ld. CIT(A), the assessee vehemently stated that the seized documents were copy of ledger accounts of five parties. It was strongly contended that all the transactions were duly recorded in the regular books of accounts which were also placed before the AO. 87. After considering the submissions made by the assessee and the remand report of the Assessing Officer, the CIT(A) observed that the seized documents related to transactions of purchase of land at Noor Nagar, District Ghaziabad from the aforementioned parties to whom the con....
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....ined bv CIT(A) 1 Unexplained share capital u/s 68 21135000 0 1346000 00 5490000 351445490 2 Addition on the basis of mere statement u/s 132(4) 100000000 100000000 3 Enhancement made by the CIT(A) on the basis of statement u/s 132(4) 150000000 150000000 Total 21135000 1346000 5490000 250000000 601440000 93. At the very outset, the ld. counsel for the assessee stated that he is not pressing the legal grounds challenging the validity of assessment framed u/s 153A of the Act. On such concession, all the legal grounds raised by the asses....
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.... appellant company. The ld. counsel further stated that the assessment of Optimum Iron Works Pvt Ltd was framed in the very same circle where the appellant has been assessed. Therefore, the Assessing Officer could have very easily verified whatever he wanted to verify. 100. The ld. counsel drew our attention to the relevant documentary evidences brought on record in the form of paper book. Relying upon various judicial decisions ld. counsel stated that the appellant has successfully discharged the initial burden cast upon itu/s 68 of the Act and the additions deserve to be deleted. 101. Per contra, the ld. DR strongly supported the findings of the CIT(A)/Assessing Officer and drew our attention to the judicial decisions relied upon in his written submissions. 102. We have given thoughtful consideration to the orders of the authorities below. We have also considered the relevant documentary evidences brought to our notice. There is no quarrel that the directors of the investorcompanies are related to the directors of the appellant and in fact, in the case of Nivedan Agencies, the directors are the same. 103. In so far as Optimum ....
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....00/-. 108. In the result appeal filed by the assessee in ITA No. 4687/DEL/2019 is allowed. ITA No. 4688/DEL/2019 A Y 2013-14 109. The additions made u/s 68 of the Act in this year relates to share application money with share premium from the following three parties: (i) Nivedan Agencies - Rs. 3.5 crores (ii) Sutanuti Marketing Pvt Ltd - Rs. 5.96 crores (iii) Shanthi Gopal Vanijya Pvt. Ltd - Rs. 3.96 crores 110. The edifice of the additions made u/s 68 is that the assessee failed to discharge the burden cast upon it by provisions of Section 68 of the Act and the ld. CIT(A) concurred with findings of the Assessing Officer. 111. Before us, the ld. counsel for the assessee, at the very outset, stated that the share application money received from the three companies were earlier in the books of account of the assessee as loans from these companies and the loans have been repaid during the year and the same amount has been ploughed back in the form of share application and share premium, therefore....
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....ijya as per details at Annexure3-C page 14. Since no adverse inference has been drawn in so far as these credits are concerned in FY 2011-12, these credits are self-explanatory and explain the source of investment. Considering this fact, we are of the considered view that the appellant has successfully discharged the onus cast upon itu/s 68 of the Act and do not find any merit in the impugned addition. We accordingly direct the Assessing Officer to delete the addition of Rs. 13.46 crores. 118. In the result the appeal of the assessee in ITA No. 4688/DEL/2019 is allowed. ITA No. 4311/DEL/2019 [A.Y 2014-15]. 119. Additions have been made u/s 68 of the Act in the case of share application money received along with share premium from Shanti Gopal Vanijya Pvt Ltd amounting to Rs. 54.90 lakhs. The sole basis of making the addition is that the assessee has grossly failed to comply with the provisions of section 68 of the Act. The CIT(A) confirmed the findings of the assessee holding the same in appeal for A.Y 2013-14 [supra]. 120. We have explained the source of money invested by Shanti Gopal Vanijya Pvt Ltd. We have also mentioned that the direct....
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....curate particulars of income, therefore, penalty proceedings u/s 271AAB are also considered separately." 124. From the above the observations of the Assessing Officer it can be seen that the Assessing Officer has made the addition only because in his statement recorded u/s 132(4) of the Act, the director has surrendered Rs. 10 crores. 125. When the matter was agitated before the CIT(A), the CIT(A)was of the opinionthat it was not Rs. 10 crores but Rs. 15 crores and therefore, enhanced the addition to Rs. 15 crores. 126. However, we find that the language of the CIT(A) is not clear as to whether Rs. 10 crores has been enhanced to Rs. 15 crores or Rs. 15 crores has been added over and above Rs. 10 crores. This can be understood from the following finding of the ld. CIT(A): "In view of the above detail discussions of factual matrix of the case end judicial pronouncements cited here-in- above addition made by the AO amounting to Rs. 10,00,00,000/- has not only confirmed but also enhanced by Rs. 15,00,00,000/- on the basis on seized documents LP-3 and LP-12 respectively and considering the confess made by the director of appellant company ....
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....t always mindful of it and sometime can get out of its binding purview. If the person can explain exclusive with supportive evidence/material or otherwise that the admission by him earlier is not correct or contain a wrong statement or that a true state of affairs is different from that represented therein and so the same should not be accepted upon forecasting tax liability which should rather be fixed on the basis of correct and true affairs as ascertained from the material on record." 133. In the light of the aforesaid decision all the additions made in the earlier A.Ys [supra] have been deleted by us on facts of each A.Y.This itself proves that there was nothing to surrender and surrender was without any application of mind and the facts and circumstances clearly show that that was no undisclosed income which needed to be surrendered. Considering the facts of the case in totality in the light of the factsas discussed in the appeals of the A.Ys [supra] we do not find any merit in both the additions. We, accordingly, delete the addition of Rs. 10 crores and Rs. 15 crores and allow the appeal of the assessee. 134. Before parting, the judicial decisions reli....
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.... assessment proceedings. And the the AO has passed the assessment order dier day considering the fits and papers submated betare hon unit as mentioned or the assessment order that the timinde are Bol morond it, he his foxmy possibility that the papers may have heaters of the assessee is not uncopate as the kasmett Las the tention pred d assessee to produce the papers beter te Document 4 PMT Made By KDP Haridwar A/C By Cash 70238672 00 By Cheque 13450000 00 Total(A) 83688672.00 Exp Pmt made 79697989.00 Land Exp. 3497851 00 Agriculture Exp 3255353.00 Balance amt for Registry 1792000 00 Total(8) 88243193.00 Short Payment(A-B) -4554521.00 Document 5 Addition or account of investment made in and the name of Rs. 79258072- This addition was meale on the hans of pege to 19 of Annexure-LP? seized from the premises D-247-29 Ground Floor Sector-63. Noua of the assessee during the course of search proceedings During the course of assessment proceedings a was at that the assessee heel minde total vestment of Rs 3.36.88-72 cut of witch 707.31672 made in cash. The assess was reared to explet ....
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.... 3 K.D.P. Infrastructure Pvt Ltd. 2011-12 (Final) D24 29 Sec 03 Noida Maharaj Singh Tyagi Lecter Account 1-Apr 2011 16 31 Mar 2017 Dale Particulars Ven Tyse Vi No 49-2011 Cr Cash Payment 28-2011 C Cash Payment 936 1232 Debit 2:0000000 8.00 000 00 162011 Cr HDFC Bank Ltd CA 09768630000172 133434 20 00 000 00 2011 C Cash 2.11.2011 Cash 120 C Cast $336 10.00 000 00 Payment 1364 500 000 00 1011 303 000 00 3-12-2011 Gr Cash Payment 1812 292-2012 C State Bank of India CA-63028244845 1232012 Or Yes Bank Ltd. CA-412783900000159 903827 3.00 000 00 15.00.00000 10.00 000 00 Closing Balance A4 L-14 Page 25 K.D.P. Infrastructure Pvt. Ltd. 2011-12 (Final) C-24/29 Sec 63 Noida Satya Kumar Tyagi Ledger Accoun 1 Apr 2011 to 21 Mar-2012 Cred 80.00 000 00 80 00.000.00 2500,000 on Debil 1233 1330 2.00 000 00 800.000.00 20.00 000 00 10 00 00 00 5.00 000 00 500 000 00 Cate Fanulars уÑÑ‚ уре 40-2011 Cr Cash Payment 136 269-2011 Cr Cash Payment 810-2011 Cr HDFC Bank Ltd CA-0975....