2023 (4) TMI 536

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....ing out of assessment order dated 30.03.2016 u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred as the "Act"), passed by the Assistant Commissioner of Income Tax, Circle-2, Meerut (hereinafter referred in short as "Ld. AO"). 2. The facts in brief are, the assessee is engaged in manufacturing and supplying of Kraft paper, Gray Board and Paper Board. Return of income was filed at an income of Rs. 29,22,250/-. The learned AO noticed that there was huge increase in loan/advances from related parties and raised a query from the assessee to furnish source and proof of old jewellery sold by the depositors, relatives or share-holders. Inquiry was also made to provide wealth-tax returns of these parties. Based on the submissions, the le....

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....wellery in the statement of affair for A.Y. 2012-13, cannot be coincident which prove that assessee introduced its own fund in the garb of unsecured loan from closely related parties." 3. Thus, the learned AO concluded that assessee had introduced his unaccounted money in the garb of loan from share holders and relatives of share holders and from whom the assessee can get confirmation or any other documents as per his convenience. Learned AO observed that all the depositors are closely connected with the assessee and to get the source of jewellery was not difficult for the assessee, if old jewellery was explained/disclosed. Accordingly, addition of Rs. 3,50,50,852/- was made. 4. In the appeal learned First Appellate Authority has dele....

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.... 6. Heard and perused the record. 7. The learned Sr. DR submitted that the learned CIT(Appeals) has fallen in error in not considering the circumstantial evidences which have been duly weighed to reach a finding by learned AO. Relying upon the order of learned AO it was submitted that learned CIT(A) has fallen in error in not appreciating that the creditworthiness of the depositors with source remained unexplained. 8. Learned AR, however, submitted that all the relevant information were provided to the learned AO and also to the learned First Appellate Authority . It was submitted that learned AO has failed to respond to the evidences during the remand proceedings. It was specifically submitted that learned AO has fallen in making fa....

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....ale transactions. As such he has merely added the LTCG amount earned by respective parties on the jewellery sold. It is also coming up that these parties in fact had transactions earlier and they were old depositors of the assessee who had received further deposits during the previous year. Learned CIT(Appeals) has also made a valid observation that there was no legal mandate for them to furnish wealth-tax returns. 10. In regard to one of the depositors Nitasha Singhal it is established that learned AO has fallen in error in considering an amount of Rs. 13,01,000/- to be the source from a gift, while in fact the copy of capital account of Nitasha Singhal in the books of account as reproduced at page nos. 23 & 24 of the order of learned C....