TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 1098
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.... of even date 31.03.2015 / 30.03.2015 and for the same assessment orders, penalty under dispute was levied u/s.271A / 271B of the Act vide orders of even date 31.08.2015 / 10.09.2015 / 30.09.2015. 2. At the outset, it is noticed that all the appeals of assessees Shri Shanthilal D Jain and Smt. Sharmila S Jain are delayed by 7 days to 138 days. The assessees have filed condonation petitions supported by affidavits for condoning the delay and admitting the appeals. The ld.counsel for the assessee drew our attention to the affidavit filed in one of the appeal in ITA No.429/CHNY/2020 for assessment year 2008-09, wherein one of the assessee Smt. Sharmila S Jain filed affidavit and delay was to the extent of 138 days. In the affidavit, the facts stated is that the order of CIT(A) - 18, Chennai dated 30.07.2009 was received on 06.08.2019. The ld.counsel stated that the appeal should have been filed before the Tribunal within 60 days i.e., on or before 05.10.2019, but appeal was filed only on 20.02.2020 with a delay of 138 days. These are admitted facts and there is no dispute. The ld.counsel for the assessee stated the reasons submitted in para 3 & 4 of the affidavit. It was stated that ....
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....h and there is no proceedings pending and the assessments are unabated and there is no incriminating material found during the course of search conducted by the Department on 22.05.2012 on the residential and business premises of the assessees group of cases. This common issue is raised by assessees in all these 8 appeals and stated that the assessments are unabated and as on the date of search no action or assessment proceedings or any other proceedings were pending before the Income Tax Authorities. 3.2 The ld.counsel for the assessees for this taken up one of the case in ITA No.2357/CHNY/2019 for the assessment year 2007-08 in the case of Shri Shanthilal D Jain and stated that facts are identical in all these 8 appeals of the group. The ld.counsel for the assessees as well as ld. CIT-DR agreed that facts and circumstances are identical in all these 8 appeals and hence, will take up this appeal in the case of Shri Shanthilal D Jain. 3.3 The ld.counsel for the assessee first of all drew our attention to Ground Nos.6 & 7 which reads as under:- 6. For that without prejudice to the above, Commissioner of Income Tax (Appeals) failed to appreciate that additions made under section ....
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....iled a chart giving the status of the assessment framed u/s.153A / 153C r.w.s 143(3) of the Act, in regard to unabated assessments which is as under:- S.NO NAME OF ASSESSEE SECTION ITA .NO ASST YEAR STATUS 1. SHANTHILAL D JAIN 153A 2357/2019 2007-08 ROI filed on 19.08.2008-No proceedings pending as on date of search. Hence Unabated 2. SHANTHILAL D JAIN 153A 2358/2019 2008-09 ROI U/s.139(1) filed on 19.08.2008- No proceedings pending as on date of search. Hence Unabated 3. SHANTHILAL D JAIN 153A 2359/2019 2009-10 ROI U/s.139(1) filed on 02.09.2009-No proceedings pending as on date of search. Hence Unabated 4. SHANTHILAL D JAIN 153A 2360/2019 2010-11 ROI U/s.139(1) filed on 08.10.2010-No proceedings pending as on date of search. Hence Unabated 5. SHARMILA S JAIN 153C 431/2020 2010-11 ROI U/s.139(1) filed on 04.10.2010-No proceedings pending as on date of search. Hence Unabated 6. SHARMILA S JAIN 153C 429/2020 2008-09 ROI U/s.139(1) filed on 09.09.2008-No proceedings pending as on date of search. Hence Unabated 7. SHARMILA S JAIN 153C 430/2020 2009-10 ROI U/s.139(1) filed on 29.09.2009-No proceedin....
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....e dismissed." Aggrieved assessee came in appeal before the Tribunal. 3.7 Before us, the ld.counsel for the assessee stated that as per details given in chart, returns of income were filed for the respective assessment years on due dates and search was conducted on the residential and business premises of the assessee on 22.05.2012. The ld.counsel stated that there is no incriminating material found during the course of search relating to these assessment years, where assessment is unabated, means no action is pending against a valid return of income filed u/s.139(1) of the Act. The ld.counsel stated that once there is no incriminating material, there is no scope for the AO to assume jurisdiction u/s.153A / 153C of the Act and reopen the assessment in view of the decision of Hon'ble Bombay High Court in the case of CIT vs. Continental Warehousing Corporation (Nhavasheva) Ltd., (2015) 374 ITR 645. The ld.counsel for the assessee also relied on the decision of Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla, (2015) 380 ITR 573. Apart from this, ld.counsel for the assessee has not argued anything else. 3.8 On the other hand, ld.CIT-DR relied on the order of CIT(A) and s....
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....ted that this is uncontroverted claim that the hard disk contains incriminating material having bearing on the determination of income on account of unaccounted indirect expenditure, peak cash credits, sundry loan creditors added u/s.68 of the Act, bogus purchases and unexplained investment in property. We find that this is a common feature in all the assessees cases and once this is the fact, we noted that the AO has rightly assumed jurisdiction u/s.153A or 153C of the Act in the above mentioned cases for the above 8 appeals. Hence, this common issue in all these appeals of assessee is dismissed. 4. Now, let us take the following 17 appeals :- Sl. No. ITA Nos. Assessment Years Assessee 1 2357/CHNY/2019 2007-08 Shri Shanthilal D. Jain 2 2358/CHNY/2019 2008-09 3 2359/CHNY/2019 2009-10 4 2360/CHNY/2019 2010-11 5 2361/CHNY/2019 2011-12 6 2362/CHNY/2019 2012-13 7 2363/CHNY/2019 2013-14 8 2587/CHNY/2019 2010-11 M/s. Shree Battery House 9 2588/CHNY/2019 2011-12 10 2589/CHNY/2019 2012-13 11 2590/CHNY/2019 2013-14 12 429/CHNY/2020 2008-09 Smt. Sharmila S Jain 13 430/CHNY/2020 2009-10 14 431/CHNY/2020 2010-11 ....
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....harma Battery and Shree Battery House and also partner in the partnership firm M/s. Shree and M/s. Shreyans Power with the proprietorship of Smt. Sharmila, assessee's wife and Smt. Prema Devi, assessee's mother. The assessee admitted in the statements recorded and noticed from the entire affairs of the entities controlled and managed by the assessee, it seems that these concerns did not maintain any separate books of account for each entity but only maintains sales and purchase registers in tally. The AO during the course of assessment proceedings required the assessee to produce books of account but assessee was able to produce only incomplete books of account and that also there was inconsistency in the pattern of expenditure claimed and the expenditure is not supported with any bills or vouchers. Accordingly, the AO estimated the expenditure and disallowed 25% of the expenditure in these assessment years as under:- A.Y. 2007-08 Rs.2,12,053/- A.Y. 2008-09 Rs.4,33,951/- A.Y. 2009-10 Rs.34,57,003/- A.Y. 2010-11 Rs.38,819/- A.Y. 2011-12 Rs.2,18,658/- A.Y. 2012-13 Rs.2,38,902/- A.Y. 2013-14 Rs.4,84,180/- Aggrieved assessee preferred appeal before CIT(A). 5.2 Th....
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....xpenditure in order to determine the true and correct income of the appellant. The only caveat is that, it is not open to the AO to make unreasonable and excessive disallowance without basis on material and without having nexus to trade practices. 10.3.3 Viewed from the provisions of law, defence advanced by the appellant, the prevalent trade practice and the nature of trade, the disallowance of 25% of expenditure claimed cannot be considered as reasonable and is not found to be justified, especially when no concrete adverse material to justify disallowance of this magnitude has been brought on record by the AO. 10.4 On appraisal of the facts of the case, materials on record and the basis of the observations made supra on the impugned addition, I am of the view that the restriction of disallowance to 10% towards indirect expenses debited/claimed for the respective AYs under consideration would meet the ends of justice. Thus, the AO is directed to restrict the disallowance accordingly. Therefore, the appellant gets partial relief and the appellant's grounds on this issue are partly allowed. Aggrieved, assessee came in appeal before the Tribunal. 5.3 Before us, the ld.counsel f....
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....centives received by the appellant ought not to have been added by the Assessing Officer. Incentives received were always duly accounted by the appellant in his books of accounts. 6.1 The AO noted that the assessee is the proprietor of M/s. Shree Battery House engaged in the trade of batteries and inverters. The assessee was purchasing batteries from M/s. Exide Industries but assessee was not maintaining any books of accounts. Accordingly, the AO called for the ledger account of the assessee in the books of M/s. Exide Industries. After verification of ledger account of the assessee in the books of M/s. Exide Industries, the AO noted that the assessee has received incentives apart from cash discounts on purchases made from M/s. Exide Industries. According to AO, the assessee has not accounted for the same in his books of accounts and hence, the AO disallowed the following incentives and made addition:- A.Y. 2007-08 Rs.28,545/- A.Y. 2008-09 Rs.1,25,397/- A.Y. 2009-10 Rs.13,98,093/- A.Y. 2010-11 Rs.53,886/- Aggrieved assessee preferred appeal before CIT(A). The CIT(A) confirmed the addition by observing in para 11.3 as under:- 11.3 I have given careful consid....
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....sed. 7. The next common issue in these appeals of assessee is as regards to addition made by the AO and confirmed by CIT(A) to peak cash credit of bank statement as unexplained cash credits for assessment years 2007-08 to 2012-13 in ITA Nos.2357 to 2362/Chny/2019. The facts and circumstances in all these appeals are exactly identical and the grounds raised are identical and hence, we will adjudicate this issue in ITA No.2357/Chny/2019 for the assessment year 2007-08 in the case of Shri Shanthilal D. Jain. For this assessee has raised following Ground Nos.13 & 14:- 13. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the Assessing Officer ought not to have added Rs.19,76,020/- being peak cash credit of bank statement as unexplained cash credit. 14. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the deposits made in the bank account represent the amounts received in the course of appellant's business and there was no unaccounted deposit in the bank account. 7.1 Brief facts are that the AO on perusal of bank statements noted that the assessee made cash deposit in South Indian Bank during financial years 2006-07 to 2011-12 r....
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....- regardless of cash and cheque transactions. The onus is on the appellant and is more stringent when the impugned credits are by way of cash. 12.3.1. The appellant's shelter that bank statement cannot be treated as books of accounts does not absolve him of the responsibility to discharge his onus as he has stated to have maintained purchase and sales accounts; and if the appellant's argument that the impugned deposits are part of turnover were to be true, it is all the more incumbent on him to explain the entries to the satisfaction of the AO. The appellant has failed to do so even during the course of appeal proceedings. 12.3.2. The issue is to be decided is whether the addition under Section 68 had rightly been made or not. As per section 68, when a cash credit entry appears in the appellant's accounts, the appellant is under legal obligation to explain the same that too to the satisfaction of the A.O. In case the appellant did not offer any explanation or fails to tender evidence or burkes an enquiry then the A.O. can hold that income as income from undisclosed sources. It is thus, imperative for the appellant to prove prima facie the transactions, which resulte....
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....d in M/s. Shree Battery House for assessment year 2007-08 in ITA Nos. 2357/Chny/2019 and the relevant ground raised reads as under:- 11. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the source of investment in M/s. Shree Battery House to the extent of Rs.1,50,000/- is the borrowing made by the appellant from M/s. Shantilal D Jain HUF. The Commissioner of Income Tax (Appeals) erred in confirming the order of the Assessing Officer in treating the said sum as unaccounted income. 8.1 Brief facts are that the assessee has transferred a sum of Rs.7.50 lakhs and invested in M/s. Shree Battery House, a firm of the assessee and explained the source that Rs.1,50,000/- is loan from M/s.Shanthilal D Jain HUF and Rs.6,00,000/- from his late father Shri Dharmichand Jain. As the assessee could not explain before AO, he made addition. Aggrieved, assessee preferred appeal before CIT(A). The CIT(A) confirmed the addition of Rs.6,00,000/- received from Late Shri Dharmichan Jain but deleted the addition of Rs.1,50,000/- as unaccounted income by observing in para 15.3 as under:- 15.3. I have held that the loan said to have been received from Sh.Dharmichand is not a g....
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.... I have perused the materials and noticed that the appellant has not discharged his onus as to the cumulative satisfaction of identity, creditworthiness and genuineness of the impugned credit. Even in the records of Dharmichand, details as to the identity of the debtors are not available. In view of the appellant's failure to discharge initial burden of proof, the AO's action is upheld. The appellant's ground is dismissed." 9.2 We noted that this amount of Rs.6 lakhs from Shri Dharmichand Jain claimed by assessee but no details were filed to prove the identity, creditworthiness and genuineness of transaction. Even now before us the assessee could not discharge his onus to prove the transaction and therefore, we uphold the order of CIT(A) confirming the addition of Rs.6 lakhs. It is to be noted that this Rs.6 lakhs is doubly added by AO and we have already considered this issue in para 8 where this addition was deleted by CIT(A) and this deletion was confirmed but we sustain this addition here only. Hence, this is a single addition and not double addition. 10. The next issue in these 7 appeals of assessee in ITA Nos. 2357 to 2363/Chny/2019 is as regards to disallowance of claim of....
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....dingly, the AO worked out the profit margin @ 30% in assessment year 2008-09, 37% in assessment year 2009-10 and 27 % in assessment year 2010-11 and made addition of trading in scrap as under:- A.Y. 2008-09 Rs.1.59,923/- A.Y. 2009-10 Rs.3,95,885/- A.Y. 2010-11 Rs.18,47,211/- The assessee before AO contended that the profit margin on sale of old batteries is in the range of 0.5% to 1% and accordingly the estimate should have been made. Apart from this, the assessee has not produced any evidence or has not contested the addition. The CIT(A) reduced the estimation of profit and estimated the profit rate for all the years at 10% by observing in para 14.3 as under:- 14.3. I have perused the findings of the AO and the submissions made before me by the appellant. The appellant has not discharged his onus of demonstrating that he had earned certain profits from sale of scrap by maintaining proper, regular and complete books of account and he further needs to substantiate such claims/ results by advancing necessary primary documents. In this case the appellant has clearly failed to substantiate the outcome of scrap sales and as to the quantum of profit/loss. In the circumstances....
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....n the sources of persons who gifted the amount and also evidences to prove the creditworthiness of the donor, genuineness of transaction and the identity of the donors. The assessee failed to explain and hence, the AO treated the entire unexplained investment or gift received from relatives as unexplained credit and added to the returned income of the assessee. Aggrieved, assessee preferred appeal before CIT(A). The CIT(A) confirmed the addition by observing in para 17.3 as under:- "17.3 I have perused the assessment order and written submissions submitted by the AR. The gist of the submissions of the assessee is that, the investment in property was out of cash gifts received from his relatives. The donors are close relatives of the assessee and the gifts have been fully supported with documents such as gift deeds. Hence under such circumstances, it cannot be treated as unexplained investment. 17.3.1 The appellant has just relied on the deed. It is noticed that the gifts have been received in cash. The appellant has not discharged his onus of proving the identity, creditworthiness and genuineness of the impugned transaction. At the most, the appellant has attempted to identify ....
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....nd balance Rs.15,50 lakhs was added in the absence of any evidence in regard to identity of the party, creditworthiness and genuineness of transaction in term of section 68 of the Act. Aggrieved, assessee preferred appeal before CIT(A). The CIT(A) restricted the addition at Rs.13 lakhs by observing in para 16.6 as under:- 16.6. I have gone through the facts of the case. It is settled position of law that the onus is on the person who makes claim. In the instant case, the appellant has shown to have owed Rs.13,00,000 as sundry credits from "Other parties". The identity, creditworthiness and genuineness of the transactions with those unidentified "Other parties" have not been established by the appellant. He did not produce an iota of evidence on this score. The issue is to be decided is whether the addition under Section 68 had rightly been made or not. As per section 68, when a cash credit entry appears in the appellant's accounts, the appellant is under legal obligation to explain the same that too to the satisfaction of the A.O. In case the appellant did not offer any explanation or fails to tender evidence or burkes an enquiry then the A.O. can hold that income as income from ....
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....appellant's ground is dismissed. Aggrieved in all the three years, assessee came in appeal before the Tribunal. 13.3 We have heard rival contentions and gone through facts and circumstances of the case. Before us, ld.counsel for the assessee has not argued anything on merits. We noted that the ld.CIT(A) has very reasonably allowed set off of the carry forward addition of 2011-12 to 2012-13 and retained addition in 2011-12 at Rs.13.50 lakhs but deleted addition in AY 2012-13 and the CIT(A) has rightly allowed set off of Rs.13 lakhs in AY 2013-14 and balance addition of Rs.37 lakhs was sustained. As the assessee could not produce any evidence or could not prove the sources of credit, in the absence of the same, we also confirm the action of CIT(A). This issue of assessee's appeals for assessment years 2011-12 to 2013-14 is dismissed. 14. In above para No.4, in all there are 17 appeals, and now, we will take up 4 appeals of M/s. Shree Battery House in ITA Nos.2587 to 2590/Chny/2019 (Sl.Nos. 8 to 11), the assessee has raised various issues on merits in regard to additions made as given in the following chart:- A.Y. Indirect expenditure Incentives Peak cash credit Tradin....
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....e are partly allowed. We noted that we have already dealt with this issue in para 5.4 of this order and taking a consistent view, we confirm the order of CIT(A) restricting the disallowance to 50% of the amount disallowed by the AO in the respective assessment years. This issue of assessee's appeals is dismissed. 16. The next common issue in these 3 appeals of assessee in ITA Nos.2587 to 2589/CHNY/2019 for assessment years 2010-11 to 2012-13 is as regards to the order of CIT(A) confirming the action of AO in disallowing incentives and adding the same to returned income of the assessee. For this, assessee has raised following Ground No.9:- 9. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the incentives received by the appellant ought not to have been added by the Assessing Officer. Incentives received were always duly accounted by the appellant in his books of accounts. 16.1 The ld.counsel for the assessee as well as ld.CIT-DR agreed that the facts and circumstances in the case of present assessee i.e., Shree Battery House is exactly identical to the facts of Shri Shanthilal D Jain, wherein the Tribunal has already heard the matter. We noted that t....
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.... not produced any evidences for deletion of addition of incentives received by assessee. We noted that this very issue, we have adjudicated vide para 6.2 above and taking a consistent view, we dismiss this issue in assessee's appeals also for all these 3 assessment years i.e., 2010-11, 2011-12 & 2012-13. This common issue of assessee's appeals is dismissed. 17. The next common issue in these 4 appeals of assessee in ITA Nos.2587 to 2590/CHNY/2019 for assessment years 2010-11 to 2013-14 is as regards to profit margin on sale of old batteries, i.e., trading in scrap and for this, assessee has raised following Ground Nos.10 & 11:- 10. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the profit margin on sale of old batteries were always in the range of 0.5% to 1%. 11. For that the Commissioner of Income Tax (Appeals) erred in holding that the appellant earned 15% profit on sale of old batteries, that too on an arbitrary basis. 17.1 At the outset, the ld.counsel for the assessee as well as ld. CIT-DR agreed that this issue of trading in scrap i.e., profit margin on sale of old batteries is a recurring issue in all 3 assessees cases and the issue has bee....
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.... is against the order of CIT(A) confirming the action of AO in making addition of peak credit balance for all these years. For this, assessee has raised the following Ground Nos.12 & 13:- 13. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the Assessing Officer ought not to have added Rs.7,34,400/- being peak cash credit of bank statement as unexplained cash credit. 14. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the deposits made in the bank account represent the amounts received in the course of appellant's business and there was no unaccounted deposit in the bank account. 18.1 The facts and circumstances in all the 4 years are exactly identical and the assessee claimed that the cash deposit made in South Indian Bank during financial year 2009-10 to 2012-13 relevant to assessment years 2010-11 to 2013-14 is out of sale proceeds accounted for, but the assessee neither before AO nor before CIT(A) has not filed any evidence or produced the books of account. In the absence of books of account, the AO made addition and CIT(A) confirmed the addition vide para 12.3.2 to 12.4 as under:- 12.3.2. The issue is to be decided ....
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.....4, in all there are 17 appeals, and now, we will take up 6 appeals of Smt. Sharmila S. Jain in ITA Nos.429 to 434/Chny/2020 (Sl.Nos. 12-17), the assessee has raised various issues on merits in regard to additions made as given in the following chart:- A.Y. Indirect expenditure Incentives Peak cash credit Trading in Scrap Sources for investment in M/s. Shree Sundry loan credits and interest Extra debit to purchase Bad debts 2008-09 9,70,809 - 43,66,700 - 10,00,000 45,52,182 2009-10 8,72,256 1,68,422 8,50,321 54,02,472 49,40,850 2010-11 5,59,483 22,861 69,022 - - - 27,72,435 2011-12 19,99,941 4,94,861 12,02,130 25,68,661 2012-13 23,00,476 2,45,549 34,66,684 2013-14 11,15,102 5,25,961 54,86,640 50,49,505 - - - 26,09,836 The ld.counsel for the assessee as well as the ld.CIT-DR agreed that facts and circumstances in all the cases are exactly identical and addition is based on only one seized document i.e., one hard disk containing tally details of indirect expenditure, incentives, pe....
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....turned income of the assessee. The facts and circumstances in all these appeals are exactly identical and the grounds raised are identical and hence, we will adjudicate this issue in ITA No. 430/Chny/2020 for the assessment year 2009-10. For this, assessee has raised following Ground No.9:- 9. The Learned Assessing Officer and the Learned CIT erred in adding a sum Rs.1,68,422/- as incentives without the right consideration of facts. 21.1 The ld.counsel for the assessee as well as ld.CIT-DR agreed that the facts and circumstances in the case of present assessee i.e., Smt. Sharmila S. Jain is exactly identical to the facts of Shri Shanthilal D Jain, wherein the Tribunal has already heard the matter. We noted that the assessee Smt. Sharmila S. Jain is engaged in trade of batteries and inverters. The AO during scrutiny assessment called for ledger account of the assessee in the books of Exide Industries and noted that the assessee has received incentives apart from cash discounts while purchasing the batteries from M/s. Exide Industries. But these incentives were not accounted for in its books of account. Further, it was noted that M/s. Exide Industries adjusted these incentives aga....
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....09, 2009-10, 2011-12 & 2013-14 is against the order of CIT(A) confirming the action of AO in making addition of peak credit balance for all these 4 years. For this, assessee has raised the following Ground Nos.5 & 6:- 5. The Learned Assessing Officer and Learned CIT failed to realize the fact that the Appellant had both cash and cheque deposits into her bank account and hence erred in treating the peak credit of the Appellant as unexplained cash credit. 6. Without prejudice to the above the Learned Assessing Officer and Learned CIT erred in treating the peak credit as unexplained cash credits while having already treated the sum of Rs.45,52,182/- of the loan and interest as unexplained credit which would have been part of the peak credit and hence tantamounting to double addition of the sum of money. 22.1 The facts and circumstances in all the 4 years are exactly identical and the assessee claim that the cash deposit made in South Indian Bank during financial years 2007-08, 2008-09, 2010- 11 & 2012-13 relevant to assessment years 2008-09, 2009-10, 2011-12 & 2013-14 is out of sale proceeds accounted for, but the assessee neither before AO nor before CIT(A) has not filed any evi....
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....sue assessee's appeals in ITA Nos. 429, 430, 432 & 434/Chny/2020 is dismissed. 23. The next common issue in these 4 appeals of assessee in ITA Nos.431 to 434/CHNY/2020 for assessment years 2010-11 to 2013- 14 is as regards to profit margin on sale of old batteries, i.e., trading in scrap. The facts and circumstances in all these appeals are exactly identical and the grounds raised are identical and hence, we will adjudicate this issue in ITA No. 431/Chny/2020 for the assessment year 2010-11. The assessee has raised the following Ground No.6:- 6. The Learned CIT erred in treating the profits from the scrap business at an enormous 15% only on an estimate basis and without the right consideration for a conclusive finding on the product, its modes of purchase and sale or its market. 23.1 At the outset, the ld.counsel for the assessee as well as ld. CIT-DR agreed that this issue of trading in scrap i.e., profit margin on sale of old batteries is a recurring issue in all 3 assessees cases and the issue has been dealt with in the case of Shri Shanthilal D Jain at para 10.1 & 10.2, wherein the order of CIT(A) estimating profit rate at the 10% is confirmed. In the present case, the AO h....
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....,472/- respectively. The relevant ground raised in assessment year 2009-09 reads as under:- 7. The Learned Assessing Officer and the Learned CIT failed to realize that the Appellant had sufficient balance to transfer the said sum of Rs.10,00,000/- to her proprietorship and hence erred in treating the sum as unexplained credit. 8. Without prejudice to the above, the Learned Assessing Officer and the Learned CIT erred in treating the transfer of the sum of Rs.10,00,000/- to her proprietorship as unexplained credit while already having added the sum of loan and peak credit also as unexplained credit tantamounting to double addition of the same sum of money. 24.1 Brief facts are that the AO during the course of assessment proceedings found from the seized material that the assessee has transferred Rs.10 lakhs to M/s. Shree Batteries, the assessee asked the assessee to explain the sources. Since, the assessee did not produce any explanation or evidence for the source of this amount of Rs.10 lakhs, he treated the same as unexplained cash credit u/s.68 of the Act. Aggrieved assessee preferred appeal before CIT(A). The CIT(A) also confirmed the action of AO vide para 19.3 as under:- ....
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....sed supra. In effect, the source amounting to Rs.10 lakhs and Rs.48 lakhs has already been brought to tax and has been confirmed as such by the undersigned both for AY 2008-09 and 2009-10. That being the case, the transfer of Rs.54,02,472/- stands explained by the source that has been brought to tax. In view thereof, the AO's action in again bringing the application part i.e. the transfer of funds is not justifiable. Hence, the appellant succeeds on this issue. The appellant's ground is allowed. Since, the CIT(A) allowed this ground in assessment year 2009-10, the assessee should not have been aggrieved by the order of CIT(A) and Revenue has not challenged this ground. Hence, the ground raised by the assessee i.e., Ground Nos. 7 & 8 in assessment year 2009-10 in ITA No.430/Chny/2020 is treated as infructuous. 25. The next common issue in these two appeals of assessee in ITA Nos. 429 & 430/Chny/2019 for assessment years 2008-09 & 2009- 10 is as regards to the order of CIT(A) confirming the action of AO in making addition of sundry loan creditors of Rs.45,52,182/- in assessment year 2008-09 and Rs.49,40,850/- in assessment year 2009-10. For this, assessee has raised following Groun....
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.... AY 2008-09] was held as unproved by the undersigned and the addition of Rs.48 lakhs was confirmed by the undersigned in the appeal for the A.Y. 2008-09. Thus the infusion during the current year is only Rs.8 lakh, for which there is a failure on the part of the appellant to substantiate the impugned loan credit. Hence, the AO is directed to add Rs.8 lakh [representing unproved sundry loan credit] to the total income of the appellant for the AY 2009-10. The entire interest of Rs.1,40,850/- is to be disallowed for the credits are held as bogus. The appellant's grounds are partly allowed." 25.3 We have heard rival contentions and gone through the facts and circumstances of the case. Before us, the ld.counsel for the assessee could not argue anything and did not produce any evidence either in regard to sundry creditor loan of Rs.40 lakhs in assessment year 2008-09 or fresh credit of Rs.8 lakhs in assessment year 2009-10, the interest of Rs.5,52,182/- for assessment year 2008-09 and Rs.1,40,850/- in assessment year 2009-10 which is consequential. In the absence of any details, we have no alternative except to confirm the order of CIT(A). This common issue of assessee's appeals in both....
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....ILA S JAIN 9. 436/CHNY/2020 2009-10 10. 437/CHNY/2020 2010-11 11. 438/CHNY/2020 2011-12 12. 439/CHNY/2020 2012-13 13. 440/CHNY/2020 2013-14 14. 2591/CHNY/2019 2010-11 SHREE BATTERY HOUSE 15. 2592/CHNY/2019 2011-12 16. 2593/CHNY/2019 2012-13 17. 2594/CHNY/2019 2013-14 27.1 The only issue in the above mentioned 17 appeals is as regards to the order of CIT(A) confirming the action of AO in levying penalty u/s.271A of the Act for non-maintenance of books of account. The facts and circumstances are identical in all the appeals and the AO in all the appeals for all assessment years in appeals levied penalty u/s.271A of the Act of Rs.25,000/- in each of the years. The AO levied penalty despite the fact that the assessees contended that the assessees have maintained books of accounts and got them audited u/s.44AB of the Act. The AO did not accept the contention as the assessees in sworn statement during the course of search admitted that the assessees did not maintain books of account in all the years and all the assessees made identical statement and one of the statement in the case of Shri Shanthilal D. Jain for assessment year 2007-08 in I....
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....dings. It becomes an admitted case that books of account were not maintained and even in present proceedings where the issue was with respect to maintaining of the books of account by the assessee. 7.3. The appellant's contention that the AO had not properly appreciated the averments given by the appellant is misconceived as it has been categorically deposed that no books of account were maintained except purchase and sales ledgers. No accounts to substantiate the indirect expenditure have been maintained. The AO could not keep track of the correctness of the expenditures said to have been incurred by the appellant as the accounts were incorrect and incomplete as recorded by the AO in the assessment order as well as in the penalty order. The appellant's defence that he did not personally maintain the books and that they were given to the auditor for maintainence does not absolve the appellant's liability in conforming to the statutory requirements of the Act. The appellant's submission that the accounts were audited and audit reports were filed alongwith the return of income is not acceptable as the appellant has clearly failed to furnish proof that the audit repo....
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....f account and hence, he agreed that penalty levied u/s.271A of the Act by the AO can be confirmed. The ld.Senior DR relied on the order of AO and that of the CIT(A). 27.3 After hearing rival contentions and going through the case records, we noted that only seized material found during the course of search is a hard disk i.e., document in the form of incomplete tally package inventories as ANN/SR/RJ/hard disc/S dated 22.5.2012 having bearing on the determination of the total income were recovered. This is incomplete tally package of documents i.e., sales, purchase but no books of account are maintained. Even now before us, the ld.counsel admitted that there is no books of account and assessee could not produce any books of account before us despite specific opportunity given. Hence, we are of the view that the lower authorities have rightly levied penalty for non-maintenance of books of account u/s.271A of the Act. Similar are the facts in other 16 appeals, taking a consistent view we dismiss all these 17 appeals of the assessees. 28. Now, we will deal with the following 17 appeals:- S.NO ITA Nos. ASST YEAR NAME OF ASSESSEE 1. 2396/CHNY/2019 2007-08 SHANTHILAL D JAI....
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.... the matter. Of course, it is apparent from the records that the assessee failed to maintain the books of account as required under s. 44AA and for that penalty is prescribed under s. 271A. It is for the Tribunal to take action in accordance with law. Similarly, the Hon'ble Allahabad High Court in the case of S.K. Gupta & Co, supra, held as under:- "The submission of Sri Mahajan is misconceived for the reason that the requirement of getting the books of account audited could arise only where the books of accounts are maintained. If for some reason the assessee has not maintained the books of account the appropriate provision under which penalty proceedings can be initiated is under section 271A of the Act which recourse has also been taken by the assessee as would appear from the order of the Tribunal. The Tribunal was, therefore, justified in upholding the order of the Commissioner of Income-tax (Appeals) cancelling the penalty imposed under section 271B of the Act." 28.3 As the issue is squarely covered in favour of assessee and no contrary decision pointed out by Revenue, respectfully following the decision of these High Courts, we delete the penalty and reverse the orders....