TaxTMI 
TaxTMI 
2023 (7) TMI 236
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....he appellate proceedings had arisen before learned CIT(A) from the assessment order dated 30.06.2017 passed by AO u/s 143(3) of the 1961 Act. 2. We have heard ld. Sr. DR in open court proceedings through physical hearing mode, while the assessee chose not to appear before the Bench when these appeals were called for hearing before the Division Bench . When these two appeals were called for hearing before Division Bench, the ld. Sr. DR raised serious objection to the adjournment application filed by the ld. Counsel for the assessee. The Department has filed letter dated 26.04.2023 strongly objecting to grant of any further adjournment to the assessee, and the said letter is placed on record in file. The ld. Sr. DR stated before the Bench that the assessee was granted last opportunity by the Bench on the earlier occasion, but still the assessee is seeking adjournment. It was further submitted by ld. Sr. DR that even cost was imposed on the assessee by the Bench, but still the assessee is seeking adjournment and not interested in arguing the matter. It was also submitted that the assessee was directed to file the copy of sale deed w.r.t. transfer of Rohit Stone Product by the Bench o....
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....on account of gift received by the assessee from a genuine party and man of status as made and confirmed by the two lower authorities without appreciating the correct facts is highly unjustified and illegal hence the same is liable to be deleted in the facts and circumstances of the case. 5- That in any view of the matter finding and observations of the two lower authorities in their order for making and maintaining the aforesaid additions ignoring the correct facts are totally unjustified, wrong, illegal and contrary to the actual facts of the case hence the same are liable to be sponged off in all fairness and interest of justice. 6- That in any view of the matter the interest charged under different sections of the IT Act is highly unjustified and illegal in the facts and circumstances of the case. 7-That in any view of the matter the appellant reserves his right to take any fresh ground before hearing of the appeal." 4. The brief facts of the case are that the assessee is engaged in the business of sale & purchase of Stone Grits products having place of business at Bari Dalla in Sonebhadra and Gagaora, in Mohaba. The assessee has two proprietary concerns namely M/s Ravis....
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....x by the AO by invoking provision of section 50 of the Act as short term capital gain on sale of assets in the hands of the assessee. 4b. There is one more addition with respect to gift of Rs. 1,80,000/- received by the assessee from Sh. Saurabh Vaish which is subject matter of challenge before the tribunal. The assessee was asked by the AO to submit complete details alongwith address of the said party and confirmation along with necessary details of creditworthiness of the said party, i.e. copy of ITR complete set with Profit and Loss Account, Balance Sheet and annexure's. The assessee could not file any documentary evidence which could prove genuineness of the transaction and mode of payment/source of funds. The AO observed that the gift of Rs. 1,80,000/- from Sh. Saurabh Vaish remains unsubstantiated and unverifiable, the same was added to the income of the assessee by the AO. 5. Aggrieved by assessment framed by the AO, the assessee filed first appeal with ld. CIT(A) and the assessee submitted before ld. CIT(A) that the said amount of Rs. 78 lac received from M/s Hanumant Enterprise, Mutthiganj was merely advance received from the said party for purchase of his unit M/s Rohit....
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....y on the date of the agreement and running this. The AO held that as per provisions of section 2(47)of the Act since the appellant has transferred whole plant and hand over possession alongwith plant & machinery e.t.c. and further the buyer is running the whole plant, hence transfer has taken place whether full payment has been received or not on the date of transfer or registration. After considering the details of plant and machinery of assets WDV of Rs. 94,76,484/- has been taken and amount of difference of Rs. 35,23,514/-(Rs. 1,30,00,000/- - Rs. 94,76,484) has been treated as short term capital gain or sale of assets as per section 50 of the Act. 9. The appellant has contended that plant and machinery which belongs to M/s Rohit Stone Products, a proprietary concern of the appellant has been sold to M/s Hanumant Enterprises, Muthignaj, Allahabad who advanced Rs. 78,00,000/- through cheque in the A.Y under question against the sale consideration of Rs. 1,30,00,000/-.The appellant has disclosed the capital gain in A.Y. 2015-16 when full payment was received and the same has been accepted by the AO in assessment u/s 143(3) of the Act. 10. On examination, I find that as per agre....
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.... DR that the assessee is not interested in persuing these appeals, and hence no adjournment may be granted to the assessee. It was observed by the Bench that the assessee has taken adjournments in the past on large number of occasions and in fact last opportunity was also granted to the assessee but still the assessee was asking for adjournment. It is also observed that even cost has been imposed on the assessee on earlier occasions, but still assessee is seeking adjournments. It also transpired that the assessee has not filed sale deed for transfer of the unit M/s Rohit Stone Product, despite given several opportunities. After hearing ld. Sr. DR and perusing the material on record and conduct of the assessee as borne out from record before us, the Division Bench declined to grant adjournment to the assessee and proceeded to hear the appeals in the absence of the assessee, after hearing ld. Sr. DR and perusing the material on record. It is also pertinent to mention that both the assessee as well Revenue has filed paper books which are taken on record and are considered while adjudicating the appeal. 6b. The learned Sr. DR, at the outset submitted before the Bench that the assessee....
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....ale of land included in the total sale consideration, but no such details were submitted. The learned Sr. DR submitted that there is no element of slump sale as it does not fulfill the requirement under section 50B. In slump sale under section 50B, all the assets and liabilities must be taken over by the purchaser and it was submitted that the purchaser has taken over the Stone Crashur plant but has not taken over the liabilities. Our attention was drawn to the assessment order a well to ld. CIT(A). 7. We have considered the contentions of ld. Sr. DR and perused the material on record including paper book filed by both the parties. The brief facts of the case are that the assessee is engaged in the business of sale & purchase of Stone Grits products having place of business at Bari Dalla in Sonebhadra and Gagaora, in Mohaba. The assessee has two proprietary concerns namely M/s Ravisha Stone Products at Bari Dalla Sonebhadra and M/s Rohit Stone Products at Gagaora, Mohaba. The assessee filed his return of income online on 27.07.2014 declaring taxable income of Rs. 23,56,940/-. The case of the assessee was selected for compulsory scrutiny by Revenue and statutory notices under secti....
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....ood dismissed. Before us, the assessee has filed paper book as well statement of fact. On the earlier occasion, when the appeal of the assessee came up for hearing before the Bench, the counsel of the assessee had drawn our attention to the agreement to sale dated 01.04.2013 entered into by the assessee with Hanumant Enterprises (placed in Departmental PB/page 134-135) and it was submitted that the stone crusher plant was sold along with land, for Rs. 1,30,00,000/- and possession was handed over in the impugned assessment year. The part payment of Rs. 78 lacs was received in this year, while balance payment of Rs. 52 lacs was not received during the year. It was submitted that during next year, the assessee himself declared capital gains arising from sale of Stone Crusher Plant during assessment year 2015-16, which was accepted by department. It was submitted that since agreement dated 01.04.2013 was on an unregistered agreement on notorized stamp paper of Rs. 100/-, no transfer took place during impugned assessment year, keeping in view provisions of Registration Act as well Transfer of Property Act. Reliance was placed on judgment and order of Hon'ble Supreme Court in the case of....
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....Writ Petition (Civil) No. 114 of 2014 is relevant. The evidence which could be produced but is not produced would, if produced, be unfavourable to the person who withholds it. Section 114(g) of Indian Evidence Act, 1872 is relevant. It is also pertinent to mention that, prima-facie, if the assessee has merely transferred the Stone Crusher Plant, without transfer of any land as the assessee has only right to extract mineral, then on sale of Stone Crusher Plant, Sales of Goods Act shall be applicable, and transfer will be complete on the signing of contract and handing over possession, whether or not registered agreement is made or not as also whether or not complete payments were made, as property in the goods passes under the Sale of Goods Act on agreement and transfer of possession . The ld. Sr. DR has contended that it was not a case of slump sale, as complete assets and liabilities of Rohit Stone Product, were not transferred. The complete details are not on record as the assessee has not furnished the same and also the authorities below have not comprehensively looked into the issue . Thus, it is considered fit and proper, in the interest of justice, to restore the matter back ....
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....ent order dated 30.06.2017 framed u/s 143(3) of the IT Act as passed by the assessing officer and his action as partly maintained by the Commissioner of Income Tax (Appeal) is bad both on the facts and in law. 2-That in any view of the matter a sum of Rs. 50 lacs added under the head other source by the assessing officer ignoring the correct facts and maintained by the first appellate authority is highly unjustified, incorrect and illegal, hence the same is liable to be deleted in the facts and circumstances of the case. 3-That in any view of the matter a sum of Rs. 50 lacs as maintained by the Commissioner of Income Tax (Appeal) without appreciating the correct facts of the case is nothing when it is a duplicate addition because the said amount was already disclosed in the return under the head income from other source, therefore there is no justification to add and maintain the same by the lower authorities. Hence the same is liable to be deleted in the facts and circumstances of the case. 4- That in any view of the matter finding and observations of the two lower authorities in their order for making and maintaining the addition of Rs. 50 lacs as other source income ignori....
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....alance as on-01.04.2014 and Rs. 8.00 lacs received from Ramesh Chandra Vaishya Individual cash book." The AO asked assessee to explain as to how the cash of Rs. 50 lacs as cash deposits which was part of settlement order, was available in cash with the assessee during the financial year 2014-15, which was deposited in bank account . The AO also asked assessee to explain with documentary evidence as to the availability of cash of Rs. 50 lacs which was deposited in bank account, which was claimed as income from other sources. The assessee submitted that the assessee has declared additional income of Rs. 50 lac before the Hon'ble Income Tax Settlement Commission, New Delhi, and on direction of the Commission, the additional income was incorporated in books of account during the financial year 2013-14 as the books of accounts for the previous year were closed and duly audited. It was also submitted that after the approval of the Hon'ble Income Tax Settlement Commission, the cash in hand declared as additional income was deposited in the bank accounts from time to time. An Income Tax as directed by Hon'ble Income Tax Settlement Commission, New Delhi was paid from these bank accounts th....
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....d on-31/03/2013 on the basis of ITSC order. Keeping in view of above facts, it is very much clear a sum of Rs. 50,00,000/- was not available in cash liquid form which can be deposited by the assessee as claimed by him in his reply submitted during the assessment proceedings as mentioned supra. 2. The assessee claimed that the assessee had cash in hand during the year which was deposited in the bank accounts. Since, these cash were not previously incorporated in the books of accounts the same were self- declared and the due taxes were paid as per direction of ITSC. Further the deposits in the bank accounts of the proprietorship firm namely M/s. Ravish Stone Products is from opening cash balance as on-01/04/2014 and in M/s. Rohit Stone Products is from opening cash balance as on-01/04/2014 and Rs. 8,00,000/- received from Ramesh Chandra Vaishya individual cash book. (a) The reply of assessee is considered but found vague & baseless without any supportive evidence except verbal explanation as stated above, which is only after thought and creation of story. On the perusal of balance Sheet of assessee and his both firms the position of cash in hand as on- 31/03/2014 was as under:-....
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.... CIT(A), by holding as under:- "8. I have examined the facts and circumstances of the case. I have considered the findings of the AO in the assessment order and the submission of the appellant made during the appellate proceedings. The AO made an addition of Rs. 1,00,00,000/- since the source of deposit of Rs. 1,00,00,000/- was not satisfactorily explained by the appellant. 9. The appellant vide submission dated 20/05/2019 has contended as below: i) Regarding deposit of Rs. 50,00,000/- That in the present case an application was filed before the Hon'ble Income Tax settlement Commission for settling the appellant's cases and the Hon'ble Commission passed their order dated 20/05/2014 by considering the said application and copy of the said order is already placed on record in second paper book at page no. 17 to 39. In para 9.9 of the order the Hon'ble Commission has stated as under: "A further offer of Rs. 50 lacs was made by the appellant side by his letter dated 05/05/2014" Thus in these background Rs. 50 lacs was credited in the cash book on 30/05/2014 and copy of the cash book is at page no. 65 to 70 of the second paper book. The relevant entry of Rs. 50 lac....
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....ellant which is as per the offer made by the appellant before the Settlement Commission and accepted by the Hon'ble Settlement Commission as the additional income of the appellant. The said amount has been credited in the books of account within 10 days of the order of Settlement Commission dated 20/05/2014 Considering the totality of the facts and circumstances of the case, I find that appellant has satisfactorily explained source of Rs. 50,00,000/-, hence addition of Rs. 50,00,000/-made by the AO is found to be unjustified and is hereby deleted. 13. Further, with regard to another deposit of Rs. 50,00,000/-, I find that the appellant has not adduced any cogent evidence in support of his contention that this relates to income earned as commission from parties in respect of grit business. Since the source of income of Rs. 50,00,000/-, which has been offered as income from other sources in respect of grit business, is found to be not satisfactorily explained by the appellant, addition of Rs. 50,00,000/- made by the AO is held to be justified and is hereby upheld." 12. Aggrieved by the appellate order passed by ld. CIT(A), the assessee has filed second appeal with tribunal. Wh....
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....tention was drawn by ld. Sr. DR to the assessment order and appellate order passed by ld. CIT(A) order as well to the written submission filed by the department and it was prayed that the appellate order of the learned CIT(A) be upheld. 13. We have carefully considered the contentions of ld. Sr. DR and perused the material on record. The assessee has filed paper book which is duly considered. We have observed that the case of the assessee was selected by Revenue for framing limited scrutiny assessment for ay: 2015-16, owing to large cash deposits in the bank accounts of the assessee. There were cash deposits of Rs. 1,43,20,000/- in the bank accounts of the assessee, during the year under consideration. The assessee was asked to explain the same. The assessee came out with explanation, inter-alia, that cash of Rs. 50 lacs was deposited in cash book owing to acceptance of its SOF filed before Hon'ble Income Tax Settlement Commission and further Rs. 50 lacs was deposited in cash with respect to commission income from Grit Business. It is observed that the assessee has declared income of Rs. 92,69,400/-, wherein, interalia, there is income of Rs. 50,00,000/- declared by the assessee a....