TaxTMI 
TaxTMI 
2020 (12) TMI 664
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....No. 266/Ahd/18 A/w. CO No. 46/ Ahd/20 -Do- 2012-13 -Do- -Do- -Do- 2. The Revenue has filed Miscellaneous Petition No. 76/Ahd/2020 arising in ITA No.2376/Ahd/2018 dated 14.08.2019 concerning AY 2012-13 in case of the captioned assessee. As per the Miscellaneous Petition, it was submitted on behalf of the Revenue that assessment order under s.143(3) r.w.s. 153A of the Act was passed on 29.12.2016 in case of assessee for AY 2012-13 by making following additions: * unexplained cash credit u/s. 68 Rs. 2,60,00,000/- * unexplained money (on protective basis) Rs. 36,36,760/- 3. Thereafter, first appellate order dated 17.07.2018 was received by the AO wherein additions of Rs. 2,60,00,000/- stood deleted. However, another addition of Rs. 36,36,760/- remained to be disposed off in the said appellate order of the CIT(A). The tax effect on deletion of additions of Rs. 2,60,00,000/- was Rs. 80,34,000/-. Therefore, the department filed second appeal before the Tribunal on 01.10.2018 vide IT(SS)A No. 266/Ahd/2018 against the aforesaid order of the CIT(A). Thereafter, a rectification order under s.154 of the Act dated 11.09.2018 came to be passed by the CIT(A) in the case of assessee for....
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....hearing today. 7. In the result, M.A. of the Revenue is allowed. 8. We shall now dispose of both the captioned appeals arising from the same assessment order herewith. IT(SS)A No. 266/Ahd/2018-A.Y. 2012-13 9. As per the ground of appeal, the Revenue has assailed the action of the CIT(A) in deleting the additions of Rs. 2,60,00,000/- on account of unexplained credit under s.68 of the Act. 10. Briefly stated, the assessee filed return of income under s.139 of the Act on 08.07.2012 declaring total income at Rs. 7,13,357/-. After filing of return, a search and seizure action was conducted in the case of the assessee under s.132 of the Act on 04.12.2014. A notice under s.153A o the Act was issued and the assessee filed return of income declaring his income at Rs. 6,09,660/- in compliance of the aforesaid notice. The AO completed the assessment under s.153A of the Act assessing total income at Rs. 3,38,83,177/-. The additions made towards unexplained cash credit by invoking provisions of Section 68 of the Act amounting to Rs. 2,60,00,000/- is in challenge in the captioned appeal. 11. In the course of the assessment proceedings, the AO noted that the assessee has received unsecured....
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....ll defeat other relevant provisions of the Act and also the rights of the assessee accrued by virtue of a completed assessment. The decision of the Hon'ble Gujarat High Court in the case of Pr.CIT vs. Saumya Construction Pvt. Ltd. 387 ITR 529 (Guj.) was relied upon. After taking cognizance of the various submissions made by the assessee, the CIT(A) found a conceivable case in the justification led by the assessee and deleted the additions made on merits. 14. It will be pertinent to reproduce relevant operative para of the decision making process of the CIT(A) for easy reference: "7. Submission of the appellant assessment order, report of the AO and rejoinder d by the appellant have been carefully considered. The First ground of appeal is general in nature, hence, does not require adjudication. Therefore, it is dismissed. Facts of the case in brief are that the appellant filed return of income for AY 2012-13 on 08.07.2012 showing total income of Rs. 7,13,357/. A search u/s. 132 of the Act was conducted upon the appellant alongwith other group persons/concerns on 4.12.2014. Notice dated 22.7.2015 was issued on 22.7.2015 u/s. 153A of the Act and served upon the appellant. The appel....
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....ppeal is against the additions of Rs. 2,60,00,000/- made by the AO u/s 68 of the Act considering the credits as Unexplained. The AO stated that during the year, the appellant obtained loan of Rs. 2,60,00,000/- from Anushthan Buildcon Pvt. Ltd. To substantiate the genuineness of these credits, the appellant submitted confirmations from creditors, copy of acknowledgement of ITR and bank account by highlighting the transactions. The appellant further stated that the creditors are assessed with the AO himself and these are also covered under search action with the appellant. So all the details of the creditors are available with the AO. The AO stated in the assessment order &reiterated in remand report that the persons/concerns of this group have been found indulged in trading in share market, manipulation of share prices, giving & taking accommodation entries and investing unaccounted income in real estate & other business activities. Therefore, the AO considered that the loan obtained by the appellant remained unexplained. The appellant contended that to prove the genuineness of credit in the books of accounts, the following three things are to be proved :- i) identity of the credito....
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....eposit in the bank account of the creditor immediate before giving loan to the appellant, prove creditworthiness of the creditor. This fact shows that all the ingredients to prove the genuineness of credits have been complied with. Keeping in view the discussion above, the additions of Rs. 2,60,00,000/- made by the AO u/s. 68 of the Act is not found justified. Moreover, the case of the appellant has been found covered by the following binding judgments of Hon'ble High Court of Gujarat, Ahmedabad. DCIT v/s Rohini Builders - 256 ITR 360 (Guj) CIT v/s, Ranchhod Jivabhai Nakhava - 208 Taxman 35 (Guj) CIT v/s. Apex Therm Packaging P Ltd - 42 Taxman.com 473 (Guj) CIT v/s. Dharmdev Finance - (2014) 43 Taxman.com 395 (Guj) CIT v/s. Shailesh Kumar Rasiklal Mehta (2014) 41 Taxman.com 550/224 (Guj) Looking to the facts of the case, as narrated above and binding judgments, the additions made by the AO u/s. 68 amounting to Rs. 2,60,00,000/- are not found justified, hence, deleted. This ground of appeal is allowed." 15. Aggrieved by the reversal of additions under s.68 of the Act by first appellate authority, the Revenue has filed an appeal before the Tribunal to assail t....
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....e seized papers relied upon by the AO are dumb documents which do not make any affirmative revelation nor has been signed by the assessee. It was further pointed out that there is no link between JBL from whom the money was sourced by lender and assessee. It was contended that the act of Revenue to cast doubt on genuineness of loan is based on conjectures and surmises. The learned AR thus submitted that CIT(A) has rightly decided the issue in the light of the binding decisions of the jurisdictional High Court listed in the first appellate order and no interference therefore with the order of the CIT(A) is called for. 16. We have carefully considered the rival submissions. The additions under s.68 of the Act amounting to Rs. 2,60,00,000/- on loan received by assessee from a group company ABPL is in controversy. The identity and capacity of the lender has not been challenged on behalf of the Revenue. The genuineness of transaction however has been challenged. The AO proceeded on the footing that the documentary evidences towards confirmation, bank statement of the lender is not available and the seized documents reveal that ABPL has received money from JBL which has been transferred....
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.... well as the lender of the lender are both limited company and are tax assessee in the record of department. In absence of any evidence against the assessee qua the lender of the lender, the onus on the assessee to establish genuineness and creditworthiness of lender, in our view, stands discharged. We see no error in the process of reasoning adopted by the CIT(A) while concluding the issue in favour of the assessee. We thus decline to interfere. 17. In the result, appeal of the Revenue is dismissed. Cross Objection No. 46/Ahd/2020 18. The grounds of appeal raised by assessee in CO read hereunder: "1. The C.I.T.(Appeals) erred in not appreciating the facts that, there is no application of mind by joint CIT while giving approval u/s 153d vide no.17/2013 dated 29-12-2016 as mentioned by Assessing Officer in his order dated 29-12-2016 para 7 and therefore, the whole proceedings under sec. 153A(1)(b) is itself bad in law and void and liable to be quashed. 2. That, it is respectfully prayed that, this cross objection is going to the root of the matter regarding jurisdiction of the authority of sec.153D and it is came to our knowledge only when our new counsel has guided us rece....
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.... purchasing the land and incurred expenditure which remains unexplained as stated by the AO. The payment for purchase of land in cash was made from the booking amount received on booking of units of the projects and same is evident from 'the seized material. These seized documents were relied upon by the AO to make additions in the hands of Hiralal Buildcon LLP on substantive basis. 4. The facts of the case have been considered carefully. The AO made additions on substantive basis in the hands of Hiralal Buildcon LLP for unexplained investment made in purchase of land but the same has been deleted by my order dated 13.08.2018 while deciding the appeal of Hiraial Buildcon LLP for A.Y. 2012-13. in the said appeal order, the seized material has been analysed in detail and it has been adjudicated that the cash payment for purchase of land was paid out of amount received against booking of units in the projects. Therefore, additions of Rs. 3288000/- made by the AO considering the unexplained investment by the AO is not found justified and hence, deleted. Regarding the additions of Rs. 2487607-considering as unexplained expenditure, it has been considered in the appellate order pa....