TaxTMI 
TaxTMI 
2021 (12) TMI 137
X X X X Extracts X X X X
X X X X Extracts X X X X
....in the Appeal Memo before him. 2a). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO in issuing notice under s.148 of the Income-Tax Act, 1961 and framing the reassessment in the case of the appellant company without considering the material fact that the issuance of the notice under s.148 of the Act by the AO, itself, was bad-in-law and void ab initio. 2b). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO in issuing notice under s.148 of the Income-Tax Act, 1961 and framing the reassessment in the case of the appellant company without considering the material fact that having withdrawn the notice issued earlier under s.153C of the Act to the appellant, for the same assessment year, there was absolutely no justification for the AO to restart the assessment proceedings, earlier dropped, under the garb of the provisions of s.147 of the Act. 2c). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO in issuing notic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t at all and further, the AO also failed to give any finding that the alleged investment was made by the appellant company during the year under consideration. 4c). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs. 10,63,37,500/- made by the AO in the appellant's income, without considering and appreciating the material fact that during the previous year under consideration, the appellant had neither made/ incurred any unexplained investment/ expenditure nor it had made any unaccounted receipts chargeable to tax. 5a). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs. 1,50,00,000/- made by the AO in the appellant's income, on account of alleged unexplained cash credit under s.68 of the Act in respect of certain unsecured loans appearing in the audited balance sheet of the appellant company for the relevant previous year, without considering and appreciating the material fact that such issue was not the subject matter of notice under s.148 of the Act and further, during the course of the assessment procee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s.148 of the Income-Tax Act, 1961 and framing the reassessment in the case of the appellant company without considering the material fact that in the instant case, the Assessing Officer by himself had not formed any belief as regard to escapement of any income chargeable to tax in the hands of the appellant and instead, merely on the finding of some other Assessing Officer in some other case, had assumed the jurisdiction for issuance of notice under s.148 of the Act. 2d). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in not considering the material fact that in the case of some other assessee namely Shri Mohanlal Chugh, which has been made the very basis for issuance of notice under s.148 of the Act to the appellant, the findings were not to the effect of payment or any unexplained investment by the appellant but, on the contrary, the findings were relating to the alleged receipt of money by the above named Shri Mohanlal Chugh on behalf of the appellant company thereby making the very foundation of belief, and, consequently, the notice issued under s.148, as bad-in-law and void ab initio. 3a). That, without preju....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on 19.11.2019 and during the course of search in premises of M/s. Phoenix Devcons Pvt. Ltd. (in short 'PDPL'), one of the group companies of the Satellite Group, some loose papers, inventorized as Annexure A/3, containing the payment details, aggregating to a sum of Rs. 18,42,50,000/- made to Shri Mohanlal Chugh, one of the then directors of the appellant company, were found mentioned which were correlated with notings in one Diary inventoized as BS-8, which was also seized from the premises of the PDPL. Thereafter, the then Ld. Assistant Commissioner of Income-Tax - 3(1), Indore issued notices u/s. 153C of the Act for A.Y. 2008-09 and A.Y. 2009-10, both dated 14.11.2011. In response to notices issued u/s. 153C, the appellant company, vide its two letters both dated 19.12.2011 intimated the AO that it had already furnished its returns of income u/s. 139 of the Act and further, made a request that the returns so furnished u/s. 139 be treated as the returns furnished in compliance to notices u/s. 153C. Thereafter, by way of two separate letters, both dated 19.12.2011, the Ld. ACIT-3(1) withdrew the earlier notices issued u/s. 153C of the Act for both the A.Y. 2008-09 & A.Y. 2009-10.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....appeal before this Tribunal. 8. The appellant company has filed two separate paper books for A.Y. 2008-09 and A.Y. 2009-10, respectively containing 103 pages and 61 pages on 23.07.2019. Subsequently, vide its letter dated 17.01.2020, the appellant filed certain additional evidences in form of a separate paper book running from page nos. 104 to 428 with a prayer of admission of such additional evidences under Rule 29 and Rule 18(4) of the Income-Tax (Appellate Tribunal) Rules, 1963. A copy of the paper book containing the additional evidences was also provided by the appellant to the Revenue. The bench had asked the CIT(DR) to furnish his comments/objections, if any, upon the admissibility of the additional evidences. In response, the office of the CIT(DR) filed a copy of the comments of the concerning assessing officer i.e. ITO- 5(1), Indore dated 10.02.2021 along with its covering letter dated 23.02.2021 which are perused and placed on record. 9. Upon going through the comments of the concerning ITO, we find that the Revenue has conceded that the additional evidences so furnished by the appellant are already available on the record and many of these additional evidences were....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uest for supply of the reasons recorded before issuance of the notices. The reasons so recorded were provided to the appellant on 04-12-2015 for both the assessment years. Afterwards, through its letters dated 14.12.2015, the appellant raised its objections which were overruled by the AO by passing two separate orders i.e. on 23-12-2015 for A.Y. 2008-09 & on 29.12.2015 for A.Y. 2009-10. 13 Before the ld. CIT(A) also, the appellant company challenged the reopening of assessment u/s.148 by the AO, but the CIT(A) did not find any merit in the contention of the appellant. The Ld. CIT(A) has given a finding that the AO had categorically established that in the appellant's case, after recording the reasons and after taking due approval from his Range Head, the notices u/s. 148 were issued. The reasons were recorded to the effect that the income of the appellant had got escaped assessment in the form of receipt made by one of its directors, of a sum of Rs. 10,63,37,500/-, on behalf of the appellant company, which were not so recorded in the books of account of the appellant. The CIT(A) also found from the assessment records that the copies of the reasons so recorded were also provided ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nted, illegal and bad-in-law. For such proposition, reliance is placed on the following judicial pronouncements: i) CIT v. Kamdhenu Steel & Alloys Ltd. (2012) 248 CTR 33 (Del.HC) ii) CIT v. Multiplex Trading & Industrial Co Ltd (2015) 128 DTR 217 (Delhi)(HC) iii) Pr. CIT v G. Pharma India Ltd.[2017] 384 ITR 147 (Delhi) (HC) iv) CIT vs. Insecticides (India) Ltd. (2013) 357 ITR 300 (Del.)(HC) v) CIT v/s Meenakshi Oversea's Pvt Ltd (2017) 395 ITR 677(Del) (HC) vi) CIT vs. Fair Invest Ltd. (2013) 357 ITR 146 (Del.)(HC) vii) Sarthak Securities Co. (P.) Ltd. vs. ITO (2010) 329 ITR 110 viii) PCIT v. Manzil Dineshkumar Shah[2018] 95 Taxmann.com 46 (Guj) HC) ix) Amar Jewellers Ltd. v. Dy. CIT (2018) 254 Taxman 384 (Guj. )(HC) x) Deepraj Hospital (P) Ltd. v. ITO, 41/AGRA/2017, AY: 2010-11 Dtd:01/06/2018 (Agra)(Trib) xi) ITO v. Reliance Corporation (2017) 55 ITR 69 (SN) (Mum.) (Trib.) 3.00 ENTIRE REASONS FOR RE-OPENING ARE BASED ON ADDITIONS MADE BY SOME OTHER AO IN SOME OTHER ASSESSEE That, from the statement of reasons recorded by the learned AO [kindly refer PB Page No. 18 &....
X X X X Extracts X X X X
X X X X Extracts X X X X
....NE DIRECTLY WAS NOT PERMISSIBLE TO BE DONE OBLIQUELY It is submitted that the assessment in the case of the assessee for the relevant assessment years stood completed under section 143(1) of the Act and the time limit for issuing notice under section 143(2) of the Act stood expired as on the date of reopening of the assessment and that even if scrutiny assessment under section 143(3) of the Act was to be made, the same would not fulfill criteria laid down under section 142(2) of the Act since the AO had not conducted any such independent enquiry of his own but had merely relied on borrowed satisfaction. Therefore when none of the said material was independently examined by the AO so as to put such material to the assessee under section 142(3) or for that to even to sustain the addition under section 143(3) of the Act then how the same could have been utilized for reopening the assessment under section 148 of the Act in the assessee's case. It is submitted that what could not have been done directly was not permissible to be done obliquely, meaning thereby, whatever is prohibited by law to be done could not have been legally effected by an indirect and circuitous contrivanc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stainable and deserves to be quashed. In such circumstances, in view of the pronouncement of the various judicial authorities, the very initiation of notice under s. 148 deserves to be held as invalid and consequently, the impugned assessment order so passed also deserves to be strucked down." "SUBMISSION [for Ground No. 2(b)] 1.00 REASON FOR RE-OPENING IS FINDING OF LOOSE PAPERS DURING A SEARCH U/s. 132 IN THE PREMISES OF A THIRD PERSON In the instant case, according to the statement of reasons recorded by the learned AO before issuance of the Notices under s.148, the very reason for reopening the case of the appellant company for the relevant assessment years is that a search and seizure operation under s.132 of the Act was carried out on a group of assessees namely 'Satellite Group' on 19-11-2009 and during the course of search in premises of M/s. Phoenix Devcons Pvt. Ltd., some loose papers inventorized as LPS A/3 were seized. On a perusal of the page No. 25, 20 & 21 of LPS A/3, the payment details made to Shri Mohanlal Chugh, one of the then directors of the appellant company, were found mentioned which were correlated with notings in the Di....
X X X X Extracts X X X X
X X X X Extracts X X X X
....application of the provisions of s.147/148 of the Act. It would be appreciated by Your Honours that if the proceedings are initiated under s.153C of the Act and subsequently dropped, thereafter, on the similar grounds, the provisions of s.147/148 are not liable to be invoked. 3.01 On the similar issue, the Hon'ble Delhi High Court in the case of CIT Vs. Kalvinator of India Ltd. (2002) 256 ITR 1 (Del) observed at page no. 15 that "it is well settled principle of law that what cannot be done directly cannot be done indirectly". 3.02 On the similar issue, the Hon'ble ITAT Mumbai in the case of Shri Mohan Thakur vs. ACIT 2020 (1) TMI 558 (ITAT Mumbai) has held that the proceedings under s.153C have been initiated and subsequently dropped, then, the notice under s.148 so issued was unjustifiable and the assessment order is not liable to be sustainable in the eyes of law. A copy of the judgment is being enclosed herewith for kind perusal and record of Your Honour, as Exhibit P-1. 3.03 Hon'ble ITAT Delhi Bench "A" in the case of Shri Adarsh Aggarwal Delhi Vs. ITO, Ward-61, Delhi in ITA No. 777/Delhi/19 for the A.Y. 2010-11 vide order dt. 14/01/2020 by follow....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../148. Hence, notice issued under section 148 and proceedings under section 147 by the Assessing Officer were illegal and void ab initio. In view of the provisions of section 153C, section 147/148 stands ousted. In the instant case, the procedure laid down under section 153C has not been followed by the Assessing Officer and, therefore, assessment has become invalid. The Commissioner (Appeals) was justified in following the ratio laid down by the Supreme court in the case of Manish Maheshwari v. Asstt. CIT [2007] 289 ITR 341 / 159 Taxman 258 wherein it has been held that if the procedure laid down in section 158BD is not followed, block assessment proceedings would be illegal. The Commissioner (Appeals) has correctly observed that the provisions of section 153C are exactly similar to the provisions of section 158BD in block assessment proceedings. Thus, considering the entire facts and the circumstances of the case, the Commissioner (Appeals) was fully justified in quashing the reassessment order." 8.3. The other decisions relied upon by the Learned Counsel for the Assessee are on the same proposition. Considering the facts of the case in the light of above decisio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he correct course of action would have been to proceed against the assessee under s.153C of the Act and there was no justification for the AO to initiate proceedings under s.147 r.w.s. 148 of the Act. A copy of the judgment is being enclosed herewith for kind perusal and record as Exhibit P-5. 3.07 Hon'ble ITAT Delhi in the case of Saurashtra Color Tones P.Ltd.vs.ITO 2020(4)TMI289(ITAT Delhi)has also held the same view. Copy is being enclosed herewith for kind perusal and record as Exhibit P-6. In view of the above facts and circumstances of the case, it would be appreciated having withdrawn the notice issued earlier under s.153C of the Act to the appellant, for the same assessment years, there was absolutely no justification for the AO to restart the assessment proceedings, earlier dropped, under the garb of the provisions of s.147 of the Act and therefore, the assessment proceedings as well as the assessment order passed in pursuance thereof deserves to be knocked down on this legal count alone." 15. The gist of the appellant's submission for ground nos. 2(a) and 2(c) is that the appellant had furnished its original return of income for both the assessment ye....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ve heard rival contentions and perused the records placed before us and duly considered the AO's order, the CIT(A)'s order, paper books filed by the appellant, the counter comments on the additional evidences filed by the AO and the oral arguments advanced by both the parties before us. We have also gone through the copies of the statements of reasons recorded by the AO before issuance of the notices u/s. 148 to the appellant. We find that in this case, a search was initiated in one group named and titled as 'Satellite Group' and during the course of the search in such group, from the premises of one of its companies, namely, PDPL, certain seized documents were found and inventorized by the search party and from such seized material, it got emanated that Shri Mohanlal Chugh had received certain payments on behalf of the appellant company against the sale of land of 'Phoenix Green Project'. Based upon such seized documents, we find that the assessing officer i.e. ACIT-3(1), Indore framing the assessment u/s. 153A of the Act in the case of Shri Nilesh Ajmera, one of the group assesses of Satellite Group, on 30.12.2011, for A.Y. 2008-09, had reached to a conclusion that Shri Nilesh Aj....
X X X X Extracts X X X X
X X X X Extracts X X X X
....noted that the notices for both the assessment years have been issued within the time limit prescribed u/s. 149 of the Act. We also find that after issuing the notices, upon request of the appellant, the copies of the reasons recorded were provided to the appellant and the objections raised by the appellant subsequently against such reasons were also disposed off by the AO by passing speaking orders. Thus, in our considered view, the assessing officer has duly complied with all the conditions as enjoined in the law and has also complied with the ratio laid down by the Apex Court in the case of M/s. G.K.N. Driveshafts (India) Ltd. v/s. Income-Tax Offices and Ors., 259 ITR 19. Accordingly, we do not find any substance in the ground nos. 2(a) & 2(c) raised by the appellant for both the assessment years and the same are hereby Dismissed. 19. Now, coming to the ground no. 2(b) raised by the appellant. We find that undisputedly, during the course of the search u/s. 132 in the case of the Satellite Group, certain documents were seized but, there is no finding by any of the authorities that the documents so seized were not belonging to the person who were so searched or from whose posse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e found mentioned which were correlated with notings in the Diary BS-8 which was also seized from the premises of above named company. Further, on a perusal of the details mentioned on page nos. 182, 184 & 186 of LPS A/3, some payments were found to be made to Shri Mohanlal Chugh, Indore. The AO in the statement of reasons furnished to the appellant made a reference to the order passed u/s. 143(3) of the Act in the case of some other assessee namely Shri Mohanlal Chugh for A.Y. 2009-10 and reproduced the findings of the then AO passing the aforesaid order in the case of Shri Mohanlal Chugh for A.Y. 2009-10. As per the findings of the AO, passing the order in the case of Shri Mohanlal Chugh, M/s. Phoenix Leisure and Lifestyle Pvt. Ltd., a company promoted by Shri Nilesh Ajmera had got itself engaged in a project referred with different names such as 'Pheonix Green', 'Phenox Grande', 'Zenith Tower' etc. and from the various loose papers found during the search it was seen that Shri Nilesh Ajmera, during the financial year relevant to A.Y.2009-10, had paid an aggregate amount of Rs. 10,63,37,500/- to Shri Mohanlal Chugh for acquiring land at Pipliyakumar. Accordingly, as per the AO of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ext, it is submitted as under: 1.00 On a perusal of the statement of reasons as recorded by the learned AO before issuance of the Notice under s.148 [kindly refer PB Page No. 18 & 19 for A.Y. 2008-09], it would be observed that in the case of some other assessee namely Shri Mohanlal Chugh, which has been made the very basis for issuance of notice under s.148 of the Act to the appellant, the findings were not to the effect of payment or any unexplained investment by the appellant but, on the contrary, the findings were relating to the alleged receipt of money by the above named Shri Mohanlal Chugh on behalf of the appellant company. 2.00 Even in the statement of reasons supplied to the appellant company, for issuance of notice under s.148 [kindly refer PB Page No. 18 & 19 for A.Y. 2008-09], by reproducing the abstract of the Assessment Order passed in the case of Shri Mohanlal Chugh, one of the directors of the appellant company, it has been averted that Shri Mohanlal Chugh has received certain payments on behalf of the appellant company which was not so recorded in the books of account of the appellant company. 3.00 It is submitted that the subject incrim....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... no. 3 relates to the addition made under s.69 of the Act. 5.00 In view of the above submissions, it would be appreciated that the findings given by the ld. AO holding that the appellant company had made certain unaccounted payments are patently wrong and therefore, the ld. CIT(A) was not justified in upholding such a wrong findings given by the ld. AO." SUBMISSION[For Ground Nos. 4(a) to 4(c) for A.Y. 2008-09 & 3(a) to 3(c) for A.Y. 2009-10] In this regard, it is submitted as under: 1.00 CORRESPONDING ADDITIONS IN THE CASES OF SHRI NILESH AJMERA AND M/s. PHOENIX LEISURE & LIFESTYLE PVT. LTD. Your Honours, on the basis of the seized loose papers, the corresponding additions were also made by the concerning AO, under s.153A/153C of the Act, framing the Orders of Assessment in the cases of Shri Nilesh Ajmera and M/s. Phoenix Leisure & Lifestyle Pvt. Ltd.. Against such Assessment orders, both the above named assessees preferred appeals before the ld. CIT(A) and then, being unsuccessful, before this Hon'ble Bench of the Tribunal. 2.00 ORDER OF HON'BLE ITAT, INDORE BENCH IN THE CASE OF SHRI NILESH AJMERA AND FINDINGS OF THE HON'BLE B....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of some other assessees, without conducting any independent enquiry in the appellant's own case, no addition was warranted. 5.00 ALLEGED RECEIPT OF Rs. 5,50,00,000/- COULD BE REGARDED ONLY AS A LIABILITY IN THE HANDS OF THE APPELLANT COMPANY AND NOT AS AN INCOME Your Honours, without admitting that the appellant company had received any sum of Rs. 5,50,00,000/- in cash from Shri Nilesh Ajmera, as held by this Hon'ble Bench while adjudicating the appeals in the case of Shri Nilesh Ajmera, it is submitted that such an alleged receipt of Rs. 5,50,00,000/- could be regarded only as a liability in the hands of the appellant company and not as an income inasmuch such sum was received by Shri Nilesh Ajmera from the various customers as on-money for booking of the flats in a building proposed to be constructed, on ratio basis, on the land owned by the appellant company. It is submitted that once the ratio agreement with Shri Nilesh Ajmera through his company, with the appellant company, came to an end, Shri Nilesh Ajmera handed over the entire project on as-is-where-is basis and the appellant company was given the responsibility of repaying the on-money collected by Shr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... finding of making of payments by the appellant. According to the ld. AR of the appellant, in these cases either the notices u/s. 148 were issued without any application of mind and without having any nexus with the material on record with the belief formed or the assessment order, giving a finding contrary to the reasons set-out for issuance of the notice u/s. 148, is erroneous and in either of the cases, the entire assessment order deserves to be annulled. 26. On merits, the AR of the appellant contended that in the case of the payer of the impugned sum i.e. Shri Nilesh Ajmera, this Bench in its common Order, for A.Y. 2008-09 and A.Y. 2009- 10, in Appeal Nos. IT(SS)A Nos. 183 & 184/Ind/2013 dated 11.05.2016, has held that Shri Nilesh Ajmera had paid only a sum of Rs. 7,80,00,000/- to Shri Mohanlal Chugh on behalf of the appellant company and out of which, a sum of Rs. 2,30,00,000/- was paid through explained sources and only, a sum of Rs. 5,50,00,000/- was paid in cash. The appellant has also submitted that first of all, the findings given by this Bench in the case of Shri Nilesh Ajmera are not binding upon it but, even if for the sake of arguments, such findings are accepted ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....amount received by Shri Nilesh Ajmera from various customers and already handed over to the appellant company had to be refunded by the appellant company to various customers. In such circumstances, according to the appellant, nothing could come to the hands of the appellant company in the form of income. 27. Per Contra, the ld. CIT(DR) supported the orders passed by the authorities below. However, he could not specifically controvert the contention of the ld. AR of the appellant. He further argued that the mistake committed by the AO in respect of making the addition on account of unexplained expenditure instead of unaccounted income, was in the nature of a curable defect and immunity as conferred u/s. 292B can be said to be available to the Revenue in respect of the present assessment orders. Alternatively, the ld. CIT(DR) argued that if due to such errors, additions could not be sustained in the hands of the appellant then the same should be directed to be made in the hands of Shri Mohanlal Chugh who had received the payments from Shri Nilesh Ajmera. According to the ld. CIT(DR), the Income-Tax Appellate Tribunal has got wide powers u/s. 254 of the Act and it would be within ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lly objecting the proceedings and the addition proposed. The assessee has not furnished any evidence in support of its contentions. Due consideration have been given to the reasons recorded by the ACITs, documents referred in the reasons recorded u/s. 148(2), assessment order of Shri Mohanlal Chugh for the Assessment Year 2009-10 as well as the submissions made by the assessee in the shape of objection to notice u/s. 148 and submission against notice u/s. 142(1). It is seen that the assessee is trying to deny the transaction of cash payment against purchase/proposed purchase of land. The assessing officer of Shri Mohanlal Chugh has examined the issue at length in the assessment order u/s. 143 (3) for the A.Y. 2009- 10. His findings have been reproduced by the ACITs in the reasons recorded u/s. 148(2). As regards legality of the proceedings u/s. 148, the issue stands already addressed by me in the speaking order passed on 15.01.2014. On the question of merits, the assessee's objection is that its name does not figure in the documents referred to in the reasons recorded. This is an argument for the sake of argument only. The structure of the company during the period relevan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is that certain receipts made by the appellant against certain land had got escaped assessment whereas, eventually the assessments have been made on the basis that the appellant had made certain payments for purchase of certain lands which remained unaccounted for in the books of account of the appellant. In our considered view, the present is a situation where no addition has been made on the sole issue for which notices u/s. 148 were issued but, the additions have been made on some other grounds. In similar circumstances, the Hon'ble High Court of Punjab & Haryana in the case of Vipin Khanna vs. CIT (2002) 255 ITR 220 (P&H) was pleased to quash the entire additions made in an assessment framed in pursuance to a notice issued u/s. 148 of the Act. The similar views have been expressed by the Hon'ble High Court of Kerala in the case of Travancore Cements Ltd. vs. ACIT & Anr. (2008) 305 ITR 170 (Ker.), Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. vs. CIT (2011) 60 DTR 77 (Delhi), the Hon'ble High Court of Calcutta in the case of Hotel Regal International & Anr. Vs. ITO (2010) 320 ITR 573 (Cal.), the Hon'ble High Court of Patna in the case of Dy. CIT vs. Takshila ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....chased the land from Chughs and Ajmeras. However, it is a matter on record that Chughs family were the owners of the appellant company at the relevant time and the appellant company did not purchase any land from Chughs. On the contrary, we find that the case of the Revenue since the day one when search operations took in the case of the Satellite Group was that Shri Mohanlal Chugh on behalf of the appellant company sold the land of the appellant company and received the payment from Shri Nilesh Ajmera or his company. Thus, the findings given by the AO in his assessment orders are patently wrong which has culminated into an absolutely absurd and unwarranted addition in the hands of the appellant company. 32. We are of the view that for making any addition in the hands of any assessee on the allegation of unexplained investment, either u/s. 69 or 69B of the Act, the onus lies on the Revenue first to establish that the assessee had made any investment during the year under assessment and only after establishing such investment, based upon the explanation regarding the sources of such investments, any addition can be made. Thus, finding of some investments in the year of assessment....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mera) ground nos. 2(a) & 2(b) has given a clear finding that Shri Nilesh Ajmera had paid a sum of Rs. 7,80,00,000/- to the appellant through its director Shri Mohanlal Chugh in form of cash/cheque. The relevant findings of this Bench, as given in the case of Shri Nilesh Ajmera, at internal page no. 43 & 44 of its Order, is reproduced as under: " The assessee had paid only a sum of Rs. 7,80,00,000/- in form of cash/cheque, out of which a sum of Rs. 2,30,00,000/- was paid through explained sources i.e. through cheques of the companies and remaining Rs. 5,50,00,000/- was paid in form of cash. Again out of Rs. 5,50,00,000/- a sum of Rs. 4,87,58,350/- was made out of the on money received against booking of flats in the project Phoenix Green for which separate additions have already been made by the AO in the hands of M/s. Phoenix Leisure & Lifestyle Pvt. Ltd. For remaining Rs. 62,41,650/- paid to Shri Mohan Chugh, the assessee has no concrete evidence or explanation. Finally the assessee could be said to have made unexplained investment to the extent of Rs. 73,41,650/- only [i.e. Rs. 11,00,000/- + Rs. 62,41,650/-] equally in two assessment years and to this extent only, additi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lty and it cannot be said to be an ordinary mistake or defect or omission curable under s. 292B of the Act. In our view, the AO before making the addition on the allegation of making the unaccounted payment was duty bound to first bring on record the factum of investment by the appellant and if he was intended to make the addition on the basis of unaccounted receipts, then he ought to have given a clear finding to this effect in the assessment orders which in the present cases he utterly failed to do so. In our view, a judicial authority cannot altogether rewrite the assessment order passed by any revenue authority and it cannot base its decision on presumptions and assumptions but, would be required to restrict itself on the assessment orders, appellate orders of the authorities below and other records placed on record. We find that in this case, even the Ld.CIT(A) has not made any attempt to make the addition on the correct ground by exploring the possibilities of invoking the provisions of s. 251 of the Act. 36. We also do not find any merit in the contention of the ld. CIT(DR) that in the present case, if the addition could not be sustained in the hands of the appellant comp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....blish the genuineness of the unsecured loans aggregating to a sum of Rs. 1,50,00,000/- shown in its return of income. Consequently, the CIT(A) confirmed the addition against which the appellant is in Appeal before us. 42. Before us, the appellant company has made a written submission in the form of a Synopsis. The relevant portion of the appellant's reply is being reproduced as under: "SUBMISSION In this context, it is submitted as under: 1.00 ISSUE OF UNSECURED LOANS WAS NOT A SUBJECT MATTER AT THE TIME OF RE-OPENING THE CASE OF APPELLANT At the outset, it is submitted that the ld. AO has made an addition of Rs. 1,50,00,000/- on account of alleged unexplained unsecured loans which was not an issue before the learned AO at the time of reopening the case of the appellant. In other words, the AO has made an addition in the appellant's income on an issue which was not the subject matter of notice under s.148 of the Act and further, during the course of the assessment proceedings, there was no material before the AO from which he could have presumed that such cash credit represents the escaped income of the appellant. It shall be appreciated that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nfirmation in writing for grant of loan by them to the appellant company. 2.03 GENUINENESS OF LOAN TRANSACTIONS The genuineness of the loan transactions is also established from the very vital fact that the loans aggregating to a sum of Rs. 1,50,00,000/- have been by the loan creditors in pursuance of the ratio deal which was entered into by one of their group companies namely M/s. Phoenix Leisure & Lifestyle Pvt. Ltd. with the appellant company, as discussed in detail in the preceding paras. As has been stated in the preceding paras that this Hon'ble Bench, while passing the Order in the hands of the other party to the alleged transactions, i.e. in the case of Shri Nilesh Ajmera, held that Shri Nilesh Ajmera had paid only a sum of Rs. 7,80,00,000/- to Shri Mohanlal Chugh / the appellant company and out of which, a sum of Rs. 2,30,00,000/- was paid through explained sources [kindly refer Last few lines at the internal page no. 43 of the Order placed at page no. 408 of the Additional Paper Book]. It is submitted that out of the aforesaid sum of Rs. 2,30,00,000/-, an amount of Rs. 1,50,00,000/- has been given by Shri Nilesh Ajmera/ his company in the form of the sub....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mera had paid only a sum of Rs. 7,80,00,000/- to Shri Mohanlal Chugh / the appellant company and out of which, a sum of Rs. 2,30,00,000/- was paid through explained sources. It was submitted by the appellant that out of the aforesaid sum of Rs. 2,30,00,000/-, an amount of Rs. 1,50,00,000/- has been given by Shri Nilesh Ajmera/ his company in the form of the subject unsecured loans only. 43. Per Contra, the ld. CIT(DR) supported the orders passed by the authorities below. The CIT(DR) contended that nothing prevented the appellant from furnishing all the necessary documents relating to the acceptance of loan either before the AO or before the CIT(A). In such a situation, according to the CIT(DR), the action of the lower authorities were required to be confirmed. 44. We have heard rival contentions and perused the records placed before and carefully gone through the orders of both the lower authorities and paper book filed by the appellant. On perusal of the statement of the reasons recorded by the AO before issuance of notices u/s. 148 of the Act for the A.Y. 2008-09, it has been observed that the sole reason for reopening the case of the appellant was that Shri Mohanlal Chugh,....