TaxTMI 
TaxTMI 
2021 (2) TMI 728
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....pliances from time to time. No objection qua the same, and only fairly so, was also raised by the ld. counsel for the assessee, Sh. Bardia. Under the circumstances the delay is condoned, being in fact statutorily provided. We also observe that the appeal is maintainable u/s. 268A; the tax-effect being Rs. 62.19 lacs inasmuch as the tax on the deletion being impugned is at a higher rate. 3.1 The brief facts of the case, in-so-far as are relevant for the purpose of this appeal, are as follows. The assessee, a partnership firm in the business of property development, filed its' return of income for the year on 02/11/2017 at Rs. 72,191, which was subject to the verification procedure under the Act by the Assessing Officer (AO) by the issue of notice u/s.143(2) on 28/9/2018. The AO, during the course of the assessment proceedings observed credits at Rs.. 80,50,000 from one, Smt. Sunita Khatri w/o Sh. S.K. Khatri, partner, accounted for by the assesse as under: * Unsecured loan: Rs.. 30.50 lakhs * Advance against Building: Rs.. 50 lakhs The said creditor, also assessed with him, had sold immovable property for Rs.. 73,62,918 during the relevant year, investi....
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....in Rs.) Date of payment to appellant firm Amount Date of receipt by Smt. Sunita Khatri Amount Source of receipt 05.07.2016 16.07.2016 30,00,000/- 50,000/- 05.02.2016 09.03.2016 22.03.2016 25,00,000/- 25,00,000/- 10,00,000/- Land advance from M/s. Balaji Infrastructure 27.06.2016 50,00,000/- 03.06.2016 27.06.2016 12,50,000/- 12,50,000/- Land advance from M/s. Balaji Infrastructure Total 8050000 85,00,000/- It is utmost important that the entire receipt and payment has been fully recorded in books of account of Smt. Sunita Khatri which were verified by the AO. Thus, the allegation of the AO that meager income has been shown in return of income by Smt. Sunita Khatri has no merit and is therefore, rejected. The AO ought to have considered the receipts of funds which are disclosed in books of account before making any allegation on Smt. Sunita Khatri. As the applicability of amended provisions of section 115BBE of the Act. It is held that the appellant has discharged its onus of proving creditworthiness of Smt. Sunita Khatri, no addition u/s 68 of the Act survived. Therefore, amended provisions o....
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....appellate proceedings as per provisions of Rule 46A of the Income Tax Rules, 1962. 4.1 Before us, both the parties relied on the order by the Revenue authority as favourable to it. The ld. DR, Sh. Khandel, would emphasize that it was incumbent on the ld. CIT(A) to have recorded reason/s for the admission of the documents furnished by the assessee before him for the first time, and which could only be on the satisfaction of the condition/s specified u/r. 46A of the Income Tax Rules, 1962, mandatory in character. In any case, he ought to have, before relying thereon, confronted the same to the AO, seeking his report/comments thereon. On an enquiry by the Bench as to the applicability of r. 46A(4), he would submit that the same is inapplicable in the facts of the case, as it is not a case where the first appellate authority had, in exercise of its' power thereunder, called for or directed the production of any material before him to enable him to dispose of an appeal or for any other substantial cause. The documents relied upon by him were furnished before him by the assessee in substantiation of its' case, and which it ought to have before the assessing authority, whose satisfacti....
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....ecedent, to be recorded by him in writing, is the first appellate authority empowered to admit additional evidence produced before him (r. 46A(1) & (2)). Two, the reliance thereon is to be further subject to the same being examined by the AO as well as he being allowed reasonable opportunity to produce evidence or witness in rebuttal of the evidence admitted (r. 46A (3)). The impugned order (IO) is silent on both these aspects, and on which alone it has been assailed before us by the Revenue. There is even no finding by him of the documents furnished before him (refer para 4.1.2 of the IO) as having been furnished before the AO. Rule 46A is mandatory in character. The law in the matter is trite, admitting of no two views. The same, quite clearly, is toward observing the principles of natural justice. This would be more so in a case as the present one as the satisfaction qua the genuineness of a credit, which the law mandates if it is not to be regarded as unexplained and deemed as income u/s. 68, is of the AO, and of no other authority. The purview of an appellate authority, on merits, therefore, is only as to if the AO was, in the given facts and circumstances, i.e., in view of th....
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....creditor from the assessee-firm, stands also furnished to the AO vide its' letter dated 25/12/2019. We shall advert to the relevance of this document later. All that we can say at this stage is that the same does not appear to be toward establishing either the capacity of the creditor or the genuineness of the impugned credits, nature whereof is stated as 'unsecured loan' or 'advance against building' (and not against 'booking' as stated in the IO). Continuing further, sure, some of the materials adduced before the ld. CIT(A) may be with the AO, i.e., in the file of the creditor (Sunita Khatri). That, however, is no reason for the assessee not to furnish the same before it's AO. Rather, to be fair to it, we do not find any reply by the assessee on record to that effect, i.e., stating of any document on the file of the creditor with the AO, to be therefore taken on record in the case of the assessee. To what purpose then, one may ask, the statement that the creditor is assessed with the same AO, who cannot possibly take on record the said documents, even if relevant, for the purpose of establishing the credit/s, nor could possibly be expected to cull out the relevant documents....
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....formation gathered by him in the creditor's case. Be that as it may, the doubt in its respect could therefore principally be with reference to the nature of the credit - which would in fact stand to be determined with reference to the underlying documents/arrangements, not before the AO, and not as to its source. That is, even if not substantiated, or fully explained, there is no suggestion of the impugned credits as being either unaccounted for or as not genuine, except of course where the genuineness of the agreements/understanding itself is in doubt, of which there is though no whisper. We exclude reference to the quantum here because, admittedly, a part of the sum given to the assessee (Rs..80.50 L) stands received by the creditor during an earlier year, so that the difference in its respect between the AO's statement, based on the creditor's return, and her bank statement, not before him, could be for that reason. The assessee surely ought to have been fair & forthright enough, and clarified these aspects during hearing; rather, before the first appellate authority itself, while even before us the thrust of the arguments by Sh. Bardia, who also represented before the Rev....
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....ials before the AO, come to the conclusion that some further were required, while the documents furnished before the ld. CIT(A) were at the very outset, i.e., the beginning of the proceedings before him, per the first letter addressed to him by the assessee-appellant (PB pgs. 23-25). That is, there was no occasion for him to have considered calling for any of the said documents. Also, as it appears, no inquiry stands made by him with the assessee as to which of those documents were in fact furnished by the assessee before the assessing authority. This, rather, gives rise to the question as to whether it is a case to which r. 46A(4), which is akin to rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963, would, strictly speaking, apply. The same refers to the power conferred under Order 41, Rule 27 of CPC, 1908, law on which is wellsettled, even with reference to the decisions under the Act. The said power, however, having not been invoked by the ld. CIT(A), we do not consider it necessary or proper to dwell thereon. Suffice to state that he ought to have, in the view of the clear mandate of s. 68, recording a clear finding in the matter, required the AO, before whom the burden....
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....n eligible asset, and being deposited in a designated bank account where not so utilized within a specified time, for being so utilized upon withdrawal from the said account, and within a defined time period. However, the validity or otherwise of the said exemption, we may clarify, cannot be of any consequence in the instant proceedings, unless of course the same impinges on the nature and source of the credits under reference. Even, therefore, assuming the condition of s. 54(2) as not satisfied for the reason that the sale proceeds of the property stand, as claimed, and as appears to be the case, 'loaned' or 'advanced' to the assessee-firm, it would rather prove the credit on the anvil of s. 68. Again, as it appears to us, it is the 'advance against building' in the assessee's books, which is being at the same time regarded as an investment in property qualifying for exemption u/s. 54, in the hands of the creditor, in whose books the entire amount given to the assessee, whether by way of loan or otherwise, is shown as receivable from to it (PB pg. 48). Which of the two descriptions, i.e., advance or investment, or perhaps both, is 'correct', would only be determined on a perusa....