TaxTMI 
TaxTMI 
2022 (2) TMI 591
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....-12 [Assessee] : 2. Facts of the case, in brief are that the assessee is an individual and derived income from salary, house property, income from business and income from other sources. He filed his return of income on 15.09.2011 declaring total income of Rs. 61,93,010/-. A search under section 132 of the I.T. Act was conducted on 28.02.2017 at the residential premises of the assessee at House No. 128, Sector-16, Faridabad, Haryana from where certain papers/documents belonging to the assessee were found and seized. The jurisdiction of the assessee was transferred from Pr.ClT-5, Delhi to PCIT, Central Circle-4, Delhi vide order under section 127(1) dated 30.11.2017. In response to notice under section 153A of the I.T. Act, the assessee filed return of income declaring total income of Rs. 61,93,010/-. The A.O. issued notice under section 143(2) and subsequently notice under section 142(1) along with questionnaire. In response to the same, the assessee appeared before the A.O. and filed the requisite details from time to time. The A.O. thereafter completed the assessment under section 153A of the I.T. Act determining the total income of the assessee at Rs. 1,64,54,330/-. 3. In ....
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....f Rs. 40,00,000/- as unexplained money while treating the witness (assessee) u/s. 118 of Indian Evidence Act, 1872, as the assessee involved in the transaction resultingly an unreasonable finding without even calling and summoning the person involved namely RA Financial Services and Om Shanti Educational Society. 9. Because the action is being challenged on facts and law for making an addition of Rs. 3,207/- by invoking the provisions u/s 69C by making presumption on presumption while law is settled that the presumption is supplied by Statute namely Income Tax Act, 1961, Schedule VII List 1 Entry 82 it is presumption of income and not presumption on presumption. 10. Alternatively and without prejudice to above, the action for not allowing telescoping of addition on account of u/s. 69A, u/s. 69C & commission expenses against addition on account of bogus purchases of group concerns is challenged on facts and law as both additions cannot be made simultaneously. 11. For any consequential relief and/or legal claim arising out of this appeal and for any addition, deletion, amendment and modification in the grounds of appeal before the disposal of the same in th....
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....ly an amount of Rs. 1,00,000/- (i.e., 2 entries of Rs. 50,000/- each were kept with Mamaji and Mataji) and the other entry relate to an amount of Rs. 1,00,000/- received back by the assessee from Mataji. Therefore, the amount of Rs. 1,00,000/- which assessee has given to them was received back. Alternatively, it was argued that if any addition on this account is to be made then assessee is entitled to telescoping against addition made on account of Bogus purchases which is treated as undisclosed income of assessee. It was further submitted that if telescoping of income is not allowed, it will amount to double addition. 8.2. However, the A.O. was not satisfied with the arguments advanced by the assessee and made addition of Rs. 12 lakhs to the total income of the assessee. 8.3. In appeal, the Ld. CIT(A) deleted the addition of Rs. 2 lakhs and sustained the addition of Rs. 10 lakhs by observing as under : "4.6. As far as amount of Rs. 2,00,000/- given to 'Mamaji' on 07.08.2010 is concerned, it is clearly mentioned in the seized paper itself that it was given for purchasing gold jewellery. The AO has certainly not disputed cash in hand of Shri Vishnu Kumar Garg (Rs. 1,7....
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....guments as made before the AO and Ld. CIT(A). He submitted that Mamaji and Mataji were living with the assessee and assessee used to handover business cash to them for safe custody, whenever he used to go out of station for either business purpose or some personal purpose. Referring to Page-267 of the PB, Learned Counsel for the Assessee drew the attention of the Bench to the details of cash in hand as on 07.07.2010 in various proprietorship firms and companies which are as under : Sr. No. Particulars Amount PB Pg 1. Blossom Landeal Pvt. Ltd., 8,001.00 268 2. LV Rustore Applications Pvt. Ltd., FBD 4,51,455.07 269 3. LV Rustore Applications Pvt. Ltd., - DL 17,392.25 270 4. Vishnu Kumar Garg - Proprietorship Firm 86,520.00 271 5. Lata Garg - Proprietorship Firm 3,77,827.00 272 6. Vishnu Kumar Garg 1,75,446.59 273 7. Lata Garg 1,63,557.00 274 Total Cash Balance as on 07 Jul 2010 12,80,198.91 8.6. He accordingly submitted that since the amount of cash available as on 07.07.2010 is Rs. 12,80,198/- which is more than the amount of Rs. 10 lakhs kept with Mamaji and ....
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....nts of the assessee. We find the assessee before the AO had categorically stated that Mamaji & Mataji were staying with the assessee and he used to handover business cash to them for safe custody whenever he used to go out of station for either business purposes or personal work. The assessee has also given the availability of cash on 07.07.2010 (the date of entry in the seized document) in the books of accounts of various proprietorship concerns and companies in which the assessee is a director at Rs. 12,80,198.91/- which is more than the amount of Rs. 10.00 lakhs. Therefore, merely stating that the explanation is not acceptable is not justified. Since, the availabilities of cash of Rs. 12.80 lakhs on 07.07.2010 in the books of accounts of various concerns of the assessee is not doubted, therefore, we are of the considered opinion that the Ld. CIT(A) is not justified in sustaining the addition of Rs. 10,00,000/-. The order of the Ld. CIT(A) on this issue is, therefore, set-aside and the AO is directed to delete the addition. The ground raised by the assessee is accordingly allowed. 11. Ground of appeal number.4 relates to the order of the Ld. CIT(A) in confirming the addition o....
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.... entries on page no.14 of Annexure-A1 seized from premise no.128, Sec. 16, Faridabad :- - 16,30,000 cash - 75,000 Registree - 6,05,000 bhaiyaa ne -11,00,000/- Vishnu 4.8 Before the AO, the appellant stated that the entries are rough workings s pertained to property relating Shri Mukut Bhaiya, elder brother of the appellant. The / did not accept this reply. The AO noted that Rs. 11,00,000/- were paid by the appella {Shri Vishnu Kumar Garg} and therefore, added this amount. This addition was dispute vide ground No. 3. 4.9 ' During the appellate proceedings, the appellant re-iterated the same stand as was taken before the AO. The appellant also raised alternative contention that the cash was available out of bogus purchases in the hands of Shri Vishnu Kumar Garg, Smt. Lata Garg, M/s. RR Carwell Pvt. Ltd. and M/s. L. V. Rustore Applications Pvt. Ltd. and this addition should be telescoped against the same. 4.10 In my considered opinion, there is a clear entry in the seized material to the effect that Shri Vishnu Kumar Garg paid Rs. 11,00,000/-. Therefore, there is no infirmity in the action of the AO in terms of making ....
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....refore, the same should be upheld. 14. We have considered the rival arguments made by both the sides, perused the orders of the A.O. and the Ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both the sides. We find the A.O. on the basis of seized document Page-14 of Annexure-A1 made addition of Rs. 11 lakhs since the amount of Rs. 11 lakhs was appearing against the name of the assessee. We find the Ld. CIT(A) sustained the addition on the ground that there is a clear entry in the seized material to the effect that Shri Vishnu Kumar Garg paid Rs. 11 lakhs. It is the submission of the Learned Counsel for the Assessee that the entries found in documents seized are rough calculations for purchase of same property which did not materialize and no such property was found to have been purchased by the assessee and, therefore, these are dumb documents and, therefore, in the absence of any corroborative evidence no addition should be made. It is the alternate contention of the assessee that benefit of telescoping should be given on account of additions made for bogus purchases etc. 14.1. We find the assessee....
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....tigation and correlation with other material found either during the course of the search or on investigation. Unless the document is clear and unambiguous, it is only a dumb document and no charge can be levied on the basis of a dumb document. We find the Tribunal at para 11 of the order has observed as under:- "11. For the sake of argument if we accept the submission of the Ld. D.R. that the Ld. CIT (A) erred in accepting fresh evidence then what is left after ignoring those affidavits is the bare document No. 7 with the bare details as referred to above. The moot question now arises is whether any addition can be made on the basis of that document. We have already pointed out above that this document is bereft of necessary details about year of transaction, ownership of transaction, nature of transaction, necessary code for deciphering the figures. It may be possible that a document may not be complete in all respects as the businessman or tax evaders may chose to record minimum details on a document and keep the rest in their memory. It is the duty of the AO to carry out necessary investigations by correlating the impugned document with other documents seized, with reg....
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....kut bhaiya (lan) - 3,45,000 balance. 15.2. The assessee explained that the entry relating to dated 26.04.2010 pertains to property relating to Mukut Bhaiya who is the elder brother of the assessee. However, the A.O. was not satisfied with the arguments of the assessee and held that the assessee could not explain the source of Rs. 14 lakhs. In absence of any satisfactory explanation given by the assessee, the A.O. made addition of the same to the total income of the assessee. 15.3. In appeal, the Ld. CIT(A) sustained the addition made by the A.O. He, however, accepted the alternate plea of the assessee for telescoping subject to his observation at para-4.6 of the order reproduced at para 8.3 of his order. The relevant observations of the Ld. CIT(A) at para 4.15 of his order reads as under : "4.15. In my considered opinion, there is a clear entry in the seized material to the effect that on 14.09.2010, Rs. 5,00,000/- cash was received. Also, the entry "650000" shows either an amount of Rs. 6,50,000/- were received or adjusted so that balance became Rs. 8,45,000/- (instead of earlier balance of Rs. 14,00,000/-). Therefore, there is no infirmity in the action of....
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.... been purchased and the entries are mere calculations and estimations. A perusal of the entries in the seized document, which has been reproduced at Para 15.1 of this order clearly mentions Rs. 5,00,000/- cash received 14.09.2010. This, in our opinion, cannot be termed as rough calculation or estimation. However, a perusal of all the entries shows that out of Rs. 14,00,000/- there is still a balance of Rs. 3,45,000/- left. Therefore, addition, if any, has to be restricted to Rs. 10,55,000/- only (i.e., Rs. 14,00,000 - Rs. 3,45,000). We, therefore, modify the order of the Ld. CIT(A) and direct the A.O. to restrict the addition to Rs. 10,55,000/-. 18.2. So far as argument of Learned Counsel for the Assessee that telescoping benefit should be given is concerned, the same is acceptable in view of the decision of the Hon'ble Delhi High Court in the case of CIT vs. Sonal Construction reported in [2013] 359 ITR 532 (Del.) where the Hon'ble High court has accepted the theory of benefit of telescoping. We, therefore, direct the A.O. to allow the benefit of telescoping and deduct the addition of Rs. 10,55,000/- from profits from bogus purchases etc. added in the hands of the assessee and ....
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....ar under consideration. The Assessee failed to prove that it had not received any interest during the year on the loan given in January 2009 of Rs. 50 lakhs and June 2009 of Rs. 25 lakhs @ 1.5% per month. The A.O, therefore, calculated the interest on Rs. 75 lakhs at Rs. 11,25,000/- and added the same to the total income of the assessee treating the same as income from other sources. 20.3. In appeal, the Ld. CIT(A) upheld the action of the A.O. on the ground that the plea of the assessee that interest was not received cannot be accepted in the absence of any supporting evidence. 20.4. Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal. 21. Learned Counsel for the Assessee referring to Pages 95 and 96 of the paper book submitted that the seized documents Pages 125 & 126 of Annexure A-5 contain details of Loan. He submitted that the A.O. presumed that the said documents contain details of loan amounting Rs. 75 Lakh given to Shri Rattan Prakash Mishra in the year 2009 instead of Shri Abhay Salwan merely on the basis that the said document contains signature of Shri Rattan Prakash Mishra. He submitted that the A.O. overlooked that the se....
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....supra). However, the interest for the above said period and balance Rs. 50 Lakh (Principal) was still recoverable from Abhay Salwan and the same is mentioned on Page-125 of the seized Annexure A-5. Similarly, Interest amounting Rs. 6 Lakh on principal loan Rs. 25 Lakh was still recoverable as mentioned on Page-125 of the seized Annexure A-5. Thus, it is a proven fact that assessee has not received any interest on loan from Abhay Salwan during that year. AO overlooked the documents Pages 125 & 126 (supra) and submissions of assessee and merely on presumption added interest amount Rs. 11,25,000/- during the year. 21.2. Learned Counsel for the Assessee submitted that Shri Rattan Prakash Mishra, in his proceedings under section 153C has denied to have any transaction with the assessee. He referred to the copy of assessment orders passed under section 153A/153C for the A.Ys. 2011-12 and 2012-13, copies of which, are placed at Pages 16-24 of second synopsis dated 03.08.2021 and drew the attention of the Bench to the submission before the A.O. He submitted that when both assessee and Shri Rattan Prakash Mishra are denying of any transaction and there is no other corroborative evidence ....
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.... ambit of re-convertibility of statutory levies are like a general lien of the state on all the belongings (moveable and immoveable assets) of the litigant whereby the assessee Vishnu Garg is an unsecured creditor. However an unsecured creditor with a unilaterally signed document bereft of bilateral and consensus-ad-idem is not an enforceable document in Law perse. Simultaneously and collaterally the state (statutory bodies for statutory levy) don't have any document of whatsoever kind to recover the amounts from said Shri Abhay Salwan and in spite of that they are a secure creditor in accordance with the principle of law laid down in the case of Vijay Bank vs., CIT (2010) 323 ITR 166 (SC). 21.7. He further submitted that in the Court of Saurab Gusain, Civil Judge (Sr. Div), Faridabad in the case of Vijay Sachdeva (Plaintiff) vs., Abhay Salwan (Defendant), vide order dt. 22.09.2015 (PB Pages 112-197) in suit for specific performance of contract where the issue is that the defendant Abhay Salwan agreed to sell the property to the plaintiff for a total sale consideration of Rs. 50 Lakhs vide sale agreement dt.31.12.2012. On same day defendant received a sum of Rs. 45 Lakh as p....
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.... huge interest amount from Shri Abhay Salwan even though no document was found during search relating to recovery of interest and even overlooking the order of Hon'ble Allahabad High Court, Civil Court and Judicial Magistrate wherein Shri Abhay Salwan has been declared as a proclaimed person. 21.10. Alternatively and without prejudice to above, the Learned Counsel for the Assessee submitted that if any addition on this account is made, then, the assessee should be entitled to telescoping against addition made of Bogus purchases in the hand of assessee and two companies namely LV Rustore Applications Pvt. Ltd. and R R Carwell Pvt. Ltd. where he is the director and the controlling person as undisclosed income of assessee. He submitted that if telescoping of income is not given than there will be double addition in as much as both the undisclosed income and the investment made out of such income are both brought to tax which was contrary to the basic principles of assessment. Therefore, undisclosed income and the undisclosed investment are to be set off against each other, thus giving benefit of telescoping to the assessee. For the above proposition, the Learned Counsel for the....
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....hay Salwan during the year, no addition on account of such interest should be made. 23.1. We find some force in the above arguments of the Learned Counsel for the Assessee. A perusal of the seized document at Page Number-125 of Annexure-A5 clearly mentions the following : "Principal Amount Rs. 75,00,000 Paid Balance up to 11.10.2010 Rs. 25,00,000/- 31.12.2010 Rs. 50,00,000/- [Interest @ 1.5% p.m.]" 23.2. From the above it cannot be deciphered that assessee has received any interest on the amount of Rs. 75 lakhs given to Shri Abhay Salwan. We find merit in the arguments of the Learned Counsel for the Assessee that the lower authorities have overlooked the submissions and added the interest merely on the basis of presumption and surmises. We find the Learned Counsel for the Assessee through various documents/Court order has established that Shri Abhay Salwan is absconding, is a proclaimed person and is a defaulter. Therefore, in absence of any evidence available with the Revenue, it cannot be said that the assessee has received the interest of Rs. 11.25 lakhs from Shri Abhay Salwan during the year especially when the seized document does no....
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.... in the present case, in fact, had not received any interest and hence, interest in question remained only notional interest. 23.8. In view of the above discussion, we set aside the order of the Ld. CIT(A) on this issue and direct the AO to delete the addition. The grounds raised by the assessee are allowed. 24. In ground of appeal number.8, the assessee has challenged the order of the Ld. CIT(A) in confirming the addition of Rs. 40 lakhs made by the A.O. as unexplained money. 25. Facts of the case, in brief, are that during the course of search proceedings at premises 17/6, Hanspal Industrial Complex, Mathura Road, Faridabad, Page Nos.67 to 71 of Annexure-A5 Hanspal Industrial Complex were seized. These pages are letters issued by R.A. Financial Services to Mr. Rattan Prakash Mishra, President Om Shanti Educational Society. As per this letter, Sh. Vishnu Garg has received Rs. 40,00,000/- (Rs. 18,00,000/- received on 19.10.2010 and Rs. 22,00,000/- received on 30.10.2010) from R. A. Educational Trust. The A.O, therefore, asked the assessee to explain the said amount and his interest in Omshanti Educational Society and the reasons as to why the said amount was paid to assess....
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....Assessee strongly challenged the order of the Ld. CIT(A) in confirming the addition of Rs. 40 lakhs made by the A.O. He submitted that the documents Page Nos. 67 to 71 of Annexure 5 (PB-1 Pages 79-83) seized from 17/6, Hanspal Industrial Complex, Mathura Road, Faridabad, are letters issued by RA Financial Services to Rattan Prakash Mishra, President Om Shanti Educational Society. As per these letters assessee received cash of Rs. 40,00,000/- (40 Lakh) on behalf of Om Shanti Educational Society from R.A. Financial Services as Authorized Person which is specifically mentioned in Letter at PB Pages 81-82. Moreover, the impugned agreement mentioned in this letter was between RA financial services and Om Shanti Educational Society and assessee was not related to either with Om Shanti Educational Society or R. A. Financial Services. He submitted that assessee's role was only that of a witness to the transactions and he had not received any amount from any of the involved parties. During assessment proceedings under section 153A, statement of Sh. Rattan Prakash Mishra was recorded on dt. 16.11.2018 (PB Pg. 275-276) wherein specific question (Q-13) was asked relating to above said l....
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....the money to the assessee to handover the same to Omshanti Educational Society. She accordingly submitted that the order of the Ld. CIT(A) should be upheld and the ground raised by the assessee on this issue should be dismissed. 28. We have considered the rival arguments made by both the sides, perused the orders of the A.O. and the Ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the A.O. in the instant case made addition of Rs. 40 lakhs on the basis of the seized documents Page Nos.67 to 71 of Annexure-A5 on the ground that as per the letter issued by R.A. Financial Services to Mr. Rattan Prakash Mishra, President Omshanti Educational Society, Mr. Vishnu Garg has received Rs. 40 lakhs from R.A. Educational Trust on various dates i.e., Rs. 18 lakhs on 19.10.2010 and Rs. 22 lakhs on 30.10.2010. The submission of the assessee that he has received the cash of Rs. 40 lakhs on behalf of Omshanti Educational Society from R.A. Financial Services and were subsequently passed-on to Omshanti Educational Society was rejected by the A.O. on the ground that the assessee failed to furnish any evidence that t....
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.... first and second part which stands already paid, The details of which are as under : "A sum of Rs. 1,35,00,000 (Rs.One Crore Thirty Five Lacs only) has been paid till 16.10.2010 as admitted by you in your letter under reply. The balance amount of Rs. 40,00,000 (Rs.Fourty Lacs only) has been paid by R.A. Financial Services through its authorized signatory Mr. Abhay Salwan to Mr. Vishnu Garg, s/o. Sh. B.D. Garg, member Omshanti Educational Society as per your instructions and to your knowledge because you have to pay the aforesaid amount to Mr. Vishnu Garg. The details of payment are given below : 19.10.2010 - A sum of Rs. 18,00,000 (Rs.Eighteen Lacs only) was paid. 30.10.2010 - A sum of Rs. 22,00,000 (Rs.Twenty Two Lacs only) was paid. 3. That as per the clause 9 of MOU and the payment terms of the said agreement, the balance payment having already been paid to you on 30.10.2010 by R.A. Financial Services the land of RPS Education. Foundation has been transferred to Omshanti Educational Society vide Sale Deed No.149 dated 06.04.2011. It is further stated that after having received the amount of Rs. 1,35,00,000 (Rs. One Crore Thirty. Five lacs onl....
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....cial Services vide letter dated 29.08.2011 addressed to Shri Rattan Prakash Mishra, President Omshanti Educational Society has written as under [PB Pages 170-171 and PDF Pages 79-80] : "R.A. FINANCIAL SERVICES SOLUTION TO FINANCIAL MATTERS F-13, 2nd Floor, Sector-10, Faridabad Ph.9971797798 Email : [email protected] 29th August, 2011 To Mr. Rattan Prakash Mishra, President, Om Shanti Educational Society, H.No.1365, Sector-17, Faridabad. Dear Mr. Mishra, Please refer to your communication dated 23,08.2011. After going through the contents and without adverting to para-wise and point-wise reply, I wish to Inform you as under : At the outset, it is highly surprising and painful to say that despite having received- the entire amount in terms of the MOU dated 06.09.2010, you still have the audacity to deny the receipt of payment, although it is in your active and full knowledge. To steer clear the misgivings, it is once again brought to-your notice in order to straighten the records that admittedly a sum of Rs. 1,35,00,000 has been received by you. The remaining amount of Rs. 40,00,000 st....
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....er of the Ld. CIT(A) on this issue is set aside and the ground of appeal number 8 raised by the assessee is allowed. 29. Grounds of appeal number.10 relates to telescoping which has already been adjudicated while deciding the ground No.5 at para 18.2 of this order and, therefore, no separate adjudication is required. 30. In the result, ITA.No.9147/Del./2019 of the Assessee is partly allowed. ITA.No.9148/Del./2019 - A.Y. 2012-13 : 31. The grounds raised by the Assessee are as under: 1. "Because the action for initiation, continuation and conclusion of assessment proceedings u/s 153A at an amount of Rs. 79,47,790/- is being challenged on facts and law. 2. Because the action is being challenged on facts and law for making additions in assessment proceedings u/s 153A when there is no incriminating material/ document found during the course of search u/ s 132 of the Act for the impugned year. 3. Because the action is being challenged on facts and law for making an addition of Rs. 4,50,000/- (@ 1.5% of Rs. 50,00,000/- given to Mishra ji) which is unwarranted action by assuming the interest accrued of 1.5% which is a hypothetical income and against t....
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.... pressed. 34. Grounds of appeal numbers. 3 to 5 relate to interest of Rs. 9,00,000/- [Rs. 4,50,000/- + Rs. 4,50,000/-] from Shri Abhay Salwan and Shri Rattan Prakash Mishra. 35. After hearing both the sides, we find the above grounds are identical to the grounds of appeal numbers. 6 and 7 in ITA.No.9147/Del./2019. We have already decided the issue and the grounds raised by the assessee have been allowed wherein the addition of interest made by the AO and upheld by the Ld. CIT(A) has been deleted. Following similar reasoning the above grounds by the assessee are allowed. ITA No.9149/Del./2019(Assessee's appeal) A.Y. 2013-14 36. The grounds raised by the assessee are as under : 1. Because the action for initiation, continuation and conclusion of assessment proceedings u/s 153A at an amount of Rs. 3,70,94,992/- is being challenged on facts and law. 2. Because the action is being challenged on facts and law for making additions in assessment proceedings u/s 153A when there is no incriminating material/document found during the course of search u/ s 132 of the Act for the impugned year. 3. Because the action is being challenged on facts and law for....
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....ies i.e., LV Rustore Applications Pvt. Ltd., RR Carwell Pvt. Ltd., Blossom Landeal Pvt Ltd., & Elvi Bardahl India Pvt. Ltd., 17/6, Hanspal Industrial Complex, Mathura Road, Faridabad, therefore the additions on the basis of the said documents can only be made u/s 153C of the Act & not u/s 153A of the Act." 38. Learned Counsel for the Assessee did not press the additional ground, for which, the Ld. D.R. has no objection. Accordingly, the additional ground by the assessee is dismissed. 39. Grounds of appeal numbers. 1 and 8 being general in nature, are dismissed. 40. Learned Counsel for the Assessee did not press ground of appeal number.2, for which, the Ld. D.R. has no objection. Accordingly, the same is dismissed as not pressed. 41. In ground of appeal number.3 the assessee has challenged the addition of Rs. 2,39,25,000/- made by the A.O. and sustained by the Ld. CIT(A). 42. Facts of the case, in brief, are that during the search operation at premises 17/6, Hanspal Industrial Complex, Mathura Road, Faridabad, Page numbers. 35 and 36 of Annexure A-10 was seized. It is an MOU entered into by the Assessee and Gyaneshwar Education Trust on 12.11.2012. According to this M....
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....ved a cash loan of Rs. 3.5 Cr which carried interest @ 2.6% per month for one year (i.e. till 11.11.2013). The AO calculated available cash balance as per the table mentioned in para 5.8 of the assessment order to the tune of Rs. 1,10,75,000/- as on 12.11.2012. Since, the MOU acknowledged receipt of cash loan of Rs. 3.5 Cr, therefore, the AO treated Rs. 2,39,25,000/- being the difference between Rs. 3.5 Cr and Rs. 1,10,75,000/-, as unexplained and made addition of equivalent amount u/s 69A. 45. In appeal, the Ld. CIT(A) upheld the action of the A.O. by observing as under : 22.6. During the present appellate proceedings, that AR repeated the stand taken before the AO. Additionally, the AR argued that calculation of availability of cash as on 12.11.2012 was not correct because benefit of Rs. 1,00,00,000/- which was extended by way of four receipts of Rs. 25,00,000/- each {first evidencing payment of cash loan Rs. 25,00,000/- by Shri Vishnu Kumar Garg to Shri Abhay Salwan, second evidencing payment of cash loan of Rs. 25,00,000/- by M/s. L.V. Rustore Applications Pvt. Ltd. to Shri Abhay Salwan, third evidencing payment of cash loan of Rs. 25.00,000/- by Shri Vishnu Kumar G....
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....fore, it is difficult to accept this plea. As far as the other plea (telescoping against the generation of cash out of bogus purchases) is concerned, it has been dealt with in para 4.6 (supra). The observations/remarks made therein are applicable to this addition, mutus mutandi. 22.9. In view of the above discussion, this ground (No. 3) of appeal is dismissed, subject to the above mentioned remarks/observations." 46. Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal. 47. The ld. Counsel for the assessee strongly challenged the order of the Ld. CIT(A) in sustaining the addition of Rs. 2,39,25,000/- made by the AO on the basis of seized documents at page no.36 & 37 of the Annexure A-10. He submitted that the First MOU dated 12.11.2012 has only the signature of Abhay Salwan, which was neither stamped nor notarized. Therefore, it has no evidentiary value. Further Shri Abhay Salwan is a fraud has already been brought on record by producing court orders while arguing for AY 2011-12. There is no corroborative evidence that the amount of Rs. 3.5 crores is given by the assessee to Abhay Salwan. He submitted that a perusal of the MOU an....
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....ed the witnesses to such MOUs and the notary who are available to find out the truth. 47.4. Ld. Counsel for the assessee referring to various court orders submitted that Mr. Abhay Salwan, his wife Ashima Salwan, his partner Brij Bhusan Tyagi, Mr. Himanshu Tyagi and Suman Tyagi wife of Mr. Brij Bhushan Tyagi, who are parties to the second MOUs are declared as proclaimed offenders. However, the AO has not examined Mr. Sanjay Gupta, one of the witness of the MOU or the notary in whose register, such documents/MOUs were entered to find out the truth. 47.5. Ld. counsel for the assessee submitted that during the course of search, receipts in the name of O.P. Gulati and his wife Renu Gulati were also found, which is related to these MOUs. Although the AO has summoned O.P. Gulati and recorded his statement, however, no question was asked to him on these MOUs which shows that no proper examination was done by the AO. He submitted that since the AO has failed in his duty, the addition made by him and sustained by the Ld. CIT(A) should be deleted. 47.6. The ld. counsel for the assessee further submitted that addition has been made by the AO under section 69A of the I.T. Act. Referrin....
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....s made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the AO in the instant case made addition of Rs. 2,39,25,000/-on the basis of documents at page 36 and 37 of the Annexure A-10 seized from the premise at 17/6, Hanspal Industrial Complex, Mathura Road, Faridabad. According to the AO, the seized document is an MOU entered into between the assessee and Gyaneshwar Education Trust on 12.11.2012, according to which the assessee had given cash loan of Rs. 3.50 Crores to Gyaneshwar Educational Trust @ 2.6% interest per month for one year till 11.11.2013. This MOU is duly signed by Shri Abhay Salwan on behalf of the Trust and was found in the custody of the assessee. We find the reply of the assessee that Mr. Abhay Salwan has not signed at First Party place but made initial only as proposal of MOU was rejected by the AO and for which the AO has given his reasoning at pra 5.4 to 5.10 onwards in his order. However, the AO while making the addition of Rs. 2,39,25,000/-, has given benefit of peak credit of Rs. 1,10,75,000/- and made the....
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.... the Assessee had paid Rs. 25 lakhs each to Ravi Talwar and Madhu Talwar towards part consideration for the purchase of agricultural land valued at Rs. 123.30 lakhs. The balance amount was to be paid on or before 30th April, 1999, failing which the amount of Rs. 25 lakhs each would be forfeited. 3. On the basis of the MOUs, the Assessing Officer issued a questionnaire to Ravi Talwar and Madhu Talwar regarding receipt of the amount of Rs. 25 lakhs each but while they both admitted having signed the MOUs, they denied having received any amount. The Assessing Officer concluded that the denials by the Assessee of having made payments and of Ravi Talwar and Madhu Talwar of having received the amounts was only to escape payment of tax liabilities. Accordingly, an amount of Rs. 50 lakhs was added in the hands of the Assessee under Section 69 of the Income Tax Act, 1961 (for short the Act) as unexplained expenditure. 4. The view taken by the Assessing Officer was not accepted by the Commissioner of Income Tax (Appeals) and also by the Tribunal. Both concurrently were of the view that there was not enough evidence to add the amount in the hands of the Assessee. 5.....
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....ommissioner of Income Tax v. S.M.S. Investment Corporation P. Ltd., [1994] 207 ITR 364, the presumption is a rebuttable one and relates to a question of fact. While coming to this conclusion, the Rajasthan High Court relied upon an earlier decision rendered by it in Commissioner of Income Tax v. S.M.S. Investment Corporation, [1988] 173 ITR 393. 11. Even in Income Tax Officer, B-Ward, Ernakulam v. T. Abdul Majeed, [1988] 169 ITR 440, it has been held as follows: - "It is true that section 132(4A) of the Act enables the court to presume the truth of the contents of such books. However, it is a presumption which can be rebutted. Moreover, the presumption envisaged therein is only a factual presumption. It is in the discretion of the court, depending upon other factors, to decide whether the presumption must be drawn. The expression used in the sub-section is "may be presumed" as is used in section 114 of the Evidence Act, 1872. It is not a mandate that whenever the books of account are seized, the court shall necessarily draw the presumption, irrespective of any other factors which may dissuade the court from doing so." 12. In so far as the present case is ....
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.... assessee to produce them before the AO. If the assessee fails to produce them and they do not respond to the summons then the AO may take adverse view. 50.2 The AO shall decide the issue in the light of our above observation and in accordance with law after giving due opportunity of being heard to the assessee. He shall also keep in mind the decision of the Hon'ble Delhi High Court (cited supra), while deciding the issue. We hold and direct accordingly. The ground of appeal no.3 by the assessee is accordingly allowed for statistical purposes. 51. Ground of appeal no.4 relates to the non-granting of credit of Rs. 50 lakhs received from Mr. Abhay Salwan and R.A. Financial Services while computing the peak cash balance. 51.1. After hearing both the sides, we find it is the contention of the ld. Counsel for the assessee that benefit of Rs. 50 lakhs as per receipt dated 01.01.2012 seized during the search and received back from Mr. Abhay Salwan and R.A. Financial Services should be given for computing the peak cash balance, Similarly, it is also his submission that the Assessing Officer has not given the benefit of Rs. 50 lakhs as per seized documents dated 15.12.2011 seized d....
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....therefore, this ground is also restored to the file of the for fresh adjudication by the AO. Needless to say, the AO shall give due opportunity of being heard to the assessee and decide the issue as per fact and law. We hold and direct accordingly. This ground of the assessee is accordingly allowed for statistical purposes. 54. Ground no.6 relates to the addition of Rs. 13,50,000/- made by the AO and sustained by the Ld. CIT(A) again on account of interest received from Mr. Abhay Salwan on the loan granted of Rs. 25 lakhs and Rs. 25 lakhs each. 55. After hearing both the sides, we find the above ground is identical to the ground of appeal no.6 and 7 in ITA No.9147/Del/2019 for AY 2011-12. We have already decided the issue and ground raised by the assessee has been allowed. Following similar reasonings, this ground raised by the assessee is allowed. 56. Ground No.7 by the assessee relates to the order of the Ld. CIT(A) in confirming the addition of Rs. 3,04,832/- made by the AO being interest paid on housing loan. 57. After hearing the both the sides, we find the AO on the perusal of the computation of income found that the assessee has shown interest payment on housing ....
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....fter hearing both the side, we do not find any infirmity in the order of the Ld. CIT(A) on this issue. So far as the benefit of telescoping is concerned, we have already allowed the benefit of telescoping by relying on the decision of the Hon'ble Delhi High Court in the case of CIT vs., Sonal Construction [2013] 359 ITR 532 (Del.). Therefore, the grounds raised by the Revenue on this issue are dismissed. 62. So far as the order of the ld. CIT(A) in granting telescoping benefit from additions made in various other companies are concerned, the same in our opinion is justified. Admittedly, the assessee Mr. Vishnu Kumar Garg is the director and controlling person of the two other companies namely R.R.Carwell (P) Ltd. and L.V. Rustore Applications Pvt. Ltd. . Therefore, there is no infirmity in the order of the Ld. CIT(A) on this issue since the profit was generated on account of bogus purchases, etc in the hands of the two companies are appropriated by Mr. Vishnu Kumar Garg only. Therefore, the grounds raised by the Revenue on this issue being devoid of any merit are dismissed. ITA No.9150/Del/2019 (Assessee's Appeal) for AY 2014-15. 63. The grounds raised by the assessee are ....
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..... The assessee has also raised the following additional ground : (i) Because the action is being challenged on facts & law for making additions in assessment proceedings u/s 153A wherein the seized documents Pg. 36-37 of Annexure A-10 & Pg.13- 14 of Annexure A-10 relating to assessee were found from the premises of third parties i.e., LV Rustore Applications Pvt. Ltd., RR Carwell Pvt. Ltd., Blossom Landeal Pvt Ltd., & Elvi Bardahl India Pvt. Ltd., 17/6, Hanspal Industrial Complex, Mathura Road, Faridabad, therefore the additions on the basis of the said documents can only be made u/s 153C of the Act & not u/s 153A of the Act. 65. However, the ld. Counsel for the assessee did not press the additional ground of appeal for which the Ld. DR has no objection. Accordingly, the additional ground filed by the assessee is dismissed as not pressed. 66. Ground No.1 and 2 were not pressed by the ld. counsel for the assessee for which the Ld. DR has no objection. Accordingly, the grounds of appeal no. 1 and 2 are dismissed as not pressed. 67 Grounds of appeal no.3 and 4 relate to the order of the Ld. CIT(A) in confirming the addition of Rs. 3,59,64,000/-. 68. Facts of the c....
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....Sep 2011) and interest thereon , entered into the MOU with Abhay Salwan for Rs. 5Cr. on 28.09.2013 defies human wisdom on several accounts. According to the AO, even if it is considered that Rs. 50.00,000/- and interest @1.5% per month thereon is pending to be received from Sep 2010, the said amount would not be more than Rs. 85,45,697/- in September 2013. Then why a person i.e. Abhay Salwan on behalf of Gyaneshwar educational trust would sign on an agreement which clearly mentioned that Gyaneshwar educational trust is receiving Rs. 5 Cr in cash on 28.09.2013@ 3% interest for three year till 28.09.2016. 71. The AO further observed that MOU of Rs. 5 Cr was entered into by the assessee and Gyaneshawar Educational Trust on 28.09.2013 whereas MOU of Rs. 3.5 Cr was entered into by the assessee and Gyaneshawar Educational Trust on 12.11.2012 for one year. Therefore, the MOU of Rs. 5 Cr was entered before completion of the MOU of Rs. 3.5 Cr. Therefore, Both MOUs are independent and not related to each other. The AO therefore concluded that the assessee had given a cash loan of Rs. 5 Cr to Gyaneshwar Educational trust @ 3% interest per month on 28.09.2013 for three year till 28.09.2016.....
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....00/- given to RA Financial Services for period from 01.04.2010 to 31.10.2012 1,10,75,000 Total cash in hand on 12.11.2012 12.11.2012 3,50,00,000 Cash loan given to Gyaneshwar Trust 31.12.2012 3,00,000 Interest income from cash loan of Rs. 25,00,000/- given to Abhay Salwan & cash loan of Rs. 25,00,000/- given to RA Financial Services for period from 1.1 1.2012 to 31.12.2012 01.01.2013 50,00,000 Received back principle amount of Rs. 25,00,000/- given to Abhay Salwan and Rs. 25,00,000/- given to RA Financial Services 31.3.2013 41,86,000 Interest income from cash loan of 3.5 Cr given to Gyaneshwar Trust on 12.11.2012 for period from 12.11.2012 to 31.03.2013 94,86,000 Cash in hand as on 31.03.2014 AY 2014-15 31.8.2013 45,50,000 Interest income from cash loan of 3.5 Cr given to Gyaneshwar Trust on 12.11.2012 for period from 01.04.2013 to 31.08.2013 1,40,36,000 Total cash in hand as on 28.09.2013 73. He observed that on 28.09.2013, the assessee had a peak cash balance of Rs. 1,40,36,....
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....Rs. 3.5 Cr became the amount of Rs. 5 Cr by including the due interest (because the interest was never paid). However, the appellant used rate of interest @ 3% per month and used compounding every month. However, the rate of interest as per seized MOU dated 12.11.20121 was only 2.6 % per month and the agreement was supposed to be in force upto 11.11.2013. The appellant produced no material evidence in support of this claim that the (earlier) MOU dated 12.11.2012 was rescinded. Therefore, in absence of any evidence showing contrary, it will be presumed that the loan of Rs. 3.5 Cr would be returned' on 11.11.2013. Therefore, it is difficult to accept this plea. As far as the other plea (generation of cash out of bogus purchases) is concerned, it has been dealt with in para 4.6(supra). The observations/remarks made therein are applicable to this addition, mutus mutandi." 75. Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal. 76. After hearing both sides, we find this ground is identical to ground of appeal no.3 in ITA No.9149/Del/2019 for AY 2013-14. We have already decided the issue and restored the issue to the file of the AO for fr....
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.... on interest income. 83. After hearing both the sides, we find the AO on the basis of MOU entered into by the assessee with M/s Gyaneshwar Educational Trust on 12.11.2012, according to which the assessee had given a sum of Rs. 3.5 Crores to Gyaneshwar Education Trust on 12.11.2012 as loan on interest @ 2.6% per month for one year made addition of Rs. 6,70,3666/- on account of interest received, which has been upheld by the Ld. CIT(A). 84. We find the above issue is identical to the ground of appeal No.5 decided in the preceding paragraph. Following the similar reasoning, we restore this issue to the file of the AO for fresh adjudication in the light of our directions given therein. The ground raised by the assessee is accordingly allowed for statistical purposes. 85. In grounds of appeal no.7, the assessee has challenged the order of the Ld. CIT(A) in sustaining the addition of Rs. 5,47,261/- on account of disallowance of housing loan interest. 86. After hearing both the sides, we find this ground is identical to ground of appeal no.7 in ITA No.9149/Del/2019 for AY 2013-14. We have already decided this issue and dismissed the ground. Following the similar reasoning, the....
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....llenged on facts law for charging interest of Rs. 90,00,000/- (Period 01.04.2014 to 30.09.2014) as income from other sources which is disputed since hypothetical income cannot be put to charge and against the principle of law (Godhara Electricity Co. Ltd v CIT (1997) 225 ITR 746(SC)). 4. Because the action is being challenged on facts and law for making an addition of Rs. 90,00,000/-, wherein the evidence and the fact is that the payee Abhay Salwan being a proclaimed offender and absconding is matter of Judicial Review before the Hon'ble Allahabad High Court, yet wrongly invoking the jurisdiction of presumption u/s 132(4A) and alternatively without prejudice, the prayer is to allow the claim/relief in accordance with the provision of section 58(2) r.w.s. 70, 71 of Income Tax Act 1961. 5. Because the action is being challenged on facts and law for making disallowance of interest for Rs. 5,06,563/- which is a deduction allowable while computing chargeable income u/s 22 to 24. 6. Because the action for addition amounting Rs. 30,00,000/- is being challenged on facts and law as assessee failed to prove identity, genuineness and credit worthiness of unsecur....
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....soning, this ground by the assessee is dismissed. 97. In ground no.6, the assessee has challenged the order of Ld. CIT(A) in confirming the addition of Rs. 30,00,00/- made by the AO being unsecured loan from M/s Giantmaker Developers Pvt. Ltd. and M/s NBS Engineers India Pvt. Ltd. 98. The facts of the case, in brief, are that the AO during the course of assessment proceedings observed from the details of unsecured loan that the assessee has shown unsecured loan of Rs. 10,00,000/- received on 09.04.2014 and Rs.l5,00,000/- on 11.04.2014 from M/s Giantmaker Developers P Ltd and Rs. 5,00,000/- received on 05.05.2014 from NBS Engineers India P Ltd during the year under consideration. The assessee was asked to provide ITR, Bank statement of the party and Confirmation of the party who provided unsecured loan during the year in order to prove identity, credit worthiness and genuineness of the transaction. But the assessee failed to provide any of the above mentioned documents. Further, page no 46 of Annexure A-10 seized from the premise of the asessee contains above mentioned loan amount from Giant maker developers P Ltd and NBS Engineers P Ltd. Vide questionnaire dated 15.10.2018, t....
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....er words, It was claim of the appellant that the cash of Rs. 50,00,000/- { Rs. 25,00,000/- each paid to Shri Abhay Salwan/ M/s. R A Financial } has already been taxed(added) and the same money has come back. The AO did not accept this plea and added the amount. 39.4. Before undersigned, the AR argued that the fact of this money being received from Shri Abhay Salwan was evident from the entries reflecting re-payments under consideration which are written in juxtaposition of an entry reflecting receipt of Rs. 10 Lakhs on 07.05.2014 from Shri Abhay Salwan. The AR informed that this re-payment of Rs. TO Lakhs received from Shri Abhay Salwan was received in group company M/s. Blossom Landeal Pvt. Ltd. and has been taxed in AY 2015-16. 39.5 It is noted that these additions have been made u/s 68. It is not the case of appellant that he was able to discharge initial onus of proving identity and creditworthiness of the lender and genuineness of the transaction. It is also noted that the amount of Rs. 50 Lakhs was not added in the AY 2012-13 (because due to telescoping, the source of two cash loans of Rs. 25 each were extended on 01 January, 2012 to Shri Abhay Salwan and M/....
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....t, then assessee decided not to file any FIR against Abhay Salwan to buy peace of mind. Most importantly, if assessee had given such huge amount of Rs. 8.5 Cr. as loan to Abhay Salwan, then assessee must have filed the FIR as filed by other persons and (or) initiated court proceedings under the Specific Relief Act,1963. However, till date no such proceeding has been initiated, thus, the onus to explain & put the details of transaction to the knowledge of the deptt. stands discharged by the assessee & even further to state that rule of presumption is that once there is a doubtful fact then that may be inferred from certain other proved facts. While inferring the existence of a fact from another set of proved facts , the Court exercises the process of reasoning and reaches to a logical conclusion so as to the most probable position pursuant to Section 114 of the Indian Evidence Act, 1872. He submitted that in the present case the Deptt. is settling the whole case on presumption which is not correct. He accordingly submitted that the order of the Ld. CIT(A) be set-aside and the ground raised by the assessee be allowed. 103. The Ld. DR, on the other hand, heavily relied on the order....
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....on is being challenged on facts and law for making addition of Rs. 10,000 based on seized paper whereas per assessee the said entry is rough noting given to driver for business purposes. 3. For any consequential relief and/or legal claim arising out of this appeal and for any addition, deletion, amendment and modification in the grounds of appeal before the disposal of the same in the interest of substantial justice to the assessee. 108. The additional grounds raised by the assessee are as under:- i) Because the action is being challenged on facts & law for making additions in assessment proceedings u/s 153A wherein the seized documents Pg. 13-14 of Annexure A-10 & Pg.46 of Annexure A-10 relating to assessee were found from the premises of third parties i.e., LV Rustore Appliations Pvt. Ltd., RR Carwell Pvt. Ltd., Blossom Landeal Pvt Ltd., & Elvi Bardahl India Pvt. Ltd., 17/6, Hanspal Industrial Complex, Mathura Road, Faridabad, therefore the additions on the basis of the said documents can only be made u/s 153C of the Act & not u/s 153A of the Act. 109. However, the ld. Counsel for the assessee did not press the additional ground for which the ld. DR has no....