TaxTMI 
TaxTMI 
2024 (3) TMI 765
X X X X Extracts X X X X
X X X X Extracts X X X X
....3A of the Act is wholly illegal and without jurisdiction as no search had been conducted under Section 132 of the Act in any of the business premises of the appellant - company. 4. That on the facts and in the circumstances of the case, the finding recorded in the assessment Orders that search and seizure operations were carried out under Section 132 of the Act in the case of the appellant -company, is perverse and wholly erroneous and therefore, the Order of assessment passed under Section 153A of the Act is without jurisdiction. 5. That the additions made in the assessment Order are not based on any corroborative and relevant incriminating material stated to have been unearthed during the course of any search by the Assessing Officer, though no search has taken place on the appellant and therefore, the Order of Assessment is wholly illegal and without jurisdiction in view of the judgment in the case of Commissioner of Income-tax (Central)-III v. Kabul Chawla [2016] 380 ITR 573 (Delhi)/[2015] 281 CTR 45 (Delhi). 6. That the learned CIT(A) has wrongly upheld addition of Rs. 10,00,000/- received from Sh. S.K. Arora without any justification. 7. That the learned CIT(A) ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....round No. (b). 6. The ld. CIT(A), in para 10 of the impugned order, has observed, inter alia, that a letter dated 7.9.2022 had been sent to the A.O., requiring him to furnish details of the warrant executed / 'Panchnama' prepared,' on the basis of which, proceedings u/s 153A of the Act were initiated; that in response, the A.O. had furnished the copy of the warrant which was duly executed in the name of the Assessee on 6.2.2018, in respect of the premises situated at SCO 80-81, 4th Floor, Sector 17-C, Chandigarh; that the said warrant was found containing the name of the Assessee; that accordingly, it was found that the warrant of authentication u/s 132(1) of the Act had been executed in the name of the Assessee; and that, therefore, the A.O. was justified in initiating assessment proceedings u/s 153A of the Act. 7. Before us, on behalf of the Assessee, it has been contended that neither any search was conducted on the Assessee company, nor any 'Panchnama' was prepared in its name; that the Assessee company filed an application under the RTI Act, bearing Registration No. CCITC/R/E/20/0001 dated 7.1.2020, seeking information with regard to copy of last warrant, a copy whereof has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d that the "Assessing Officer furnished the copy of the warrant which was duly executed in the name of the appellant on 16.2.2018 in respect of the premises situated at SCO 80-81, 4th Floor, Sector 17-C, Chandigarh. The said warrant was found containing the name of the appellant"; that the ld. CIT(A), by simply observing so, agreed with the action of the Assessing Officer and held that the Assessing Officer was justified in initiating assessment proceedings u/s 153A of the Act; that the ld. CIT(A) did not provide the Assessee with the copy of the warrant, nor reproduced the same in the order; that since none of the Income Tax Authorities provided the Assessee with the copy of the search warrant, the Assessee company was suspicious that its name was not mentioned in the search warrant. 9. In the above situation, the Bench had called for the original search warrant from the Department, which was produced. The name of the Assessee company was found mentioned in the search warrant. It is seen that a copy of the 'Panchnama' has been placed at APB 519-522. At APB 519, at item A, it is mentioned: 'Warrant in the case: M/s Kansal Singla and associates'; at item (B), it has been stated tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch warrant, which was produced in the original by the Department before us. Therefore, this puts this entire controversy at rest and the Assessee's objection in this regard is found to be unjustified and it is, accordingly, rejected, while rejecting Ground No. 2. 13. Now, coming to Ground Nos. 3, 4 and 5, these Grounds correspond to Additional Ground Nos. 1, 2 and 3 taken by the Assessee before the ld. CIT(A). The matter pertaining to Ground Nos. 3 and 4 has been effectively decided by us in the preceding paragraphs, where we have found that the search warrant did contain the name of the Assessee company. Therefore, the grievance of the Assessee by way of Ground Nos. 3 and 4 also does not contain any merit and, accordingly, Ground Nos. 3 and 4 are rejected. 14. According to Ground No. 5, the additions made are not based on any incriminating material found during the search. In this regard, the ld. CIT(A) has held that the Assessing Officer was having jurisdiction to assess the income of the Assessee on the basis of the material available at the time of the assessment and he was not to restrict the additions subject to the incriminating material found during the search. For holdin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....'ble Apex Court in M/s Apar industries (Citation not provided). The Tribunal however held that once the SLP is not admitted, the decisions given by the High Court in the case of Kabul Chawla and Meeta Gutgutia became final and binding." 15. The ld. Counsel for the Assessee has contended that therefore, the addition made by the learned assessing officer cannot be sustained in the present case in the order passed under section 153A of the Act, in the absence of any incriminating material found during the course of search action, where there was no pending assessment which could be said to have abated on the date of search. 16. Reliance has been placed on the judgment of Hon'ble Apex Court in the case of 'PCIT vs M/s Abhisar Buildwell P. Ltd.', CA No. 6580, dated 24.04.2023, wherein, the Hon'ble court held that "in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ubmitted that the CIT(A), on pages 127 & 128 of his order, has observed that the Assessee has stated that the additions made in the order u/s 153A of the Act cannot be sustained in the absence of any incriminating material found during the search proceedings; that the CIT(A) observed that consideration of above ground of appeal, it had been noted that in terms of the provisions of section 153A(1)(b), the Assessing Officer was required to assess/reassess the total income for the year under consideration; that the CIT(A) observed that it has been held by the Hon'ble Kerala High Court in the case of 'CIT vs KP Ummer' that when a notice u/s 153A is issued, it enables the Department to carry out assessment/re-assessment with respect to 6 immediate prior years and this does not require any incriminating material recovered during search relating to those prior years in which there is no time left on the date of search for an assessment u/s 143 (3); that the CIT(A) observed that the same view has been up-held by the Hon'ble Allahabad High Court in the case of 'Rajkumar Arora'; that the CIT(A) observed that the Hon'ble Kerala High Court, in the case of 'EN Gopakumar vs CIT', (2016)7....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eserwani Zarda Bhandar', (supra); that the ld. CIT(A) has correctly held that in view of the provisions of the Act and the ratios of these decisions, the Assessing Officer was indeed having jurisdiction to assess the income of the Assessee on the basis of the material available at the time of the assessment and he was to restrict the additions subject to incriminating material found during the course of search. The ld. DR has contended that in this view of the matter, there being no merit therein, Ground Nos. 3 to 5 may be rejected. 23. We have heard the parties on Ground No. 5 raised before us. 24. The grievance of the Assessee is that the additions made by the Assessing Officer do not emanate from the search proceedings, as no incriminating material was found, pertaining to the year under consideration. In this regard, it is seen that no assessment was pending for the year under consideration and as such, had not abated on the date of search. In such a case, as held by the Hon'ble High Court in the case of 'Kabul Chawla', 380 ITR 573 (Del) and as also similarly held in 'Pr. CIT Vs. Meeta Gutgutia' 395 ITR 526 (Del), if no incriminating material so found in the search, no ad....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncluding the source thereof, which cogent voluminous documentary evidence the Department was been not able to rebut. The Assessing Officer, rather, having not been satisfied therewith, had not deemed it necessary to undertaken any inquiry in this regard. Also, no material was brought on record to establish that the bank entries were unexplained entries. This being so, the provisions of section 68 of the Act were wrongly applied. 26. In view of the above, Ground No.5 is found to carry merit and, accordingly, the same is accepted. 27. Coming to ground No.6, the AO made addition of all credit entries in the assessee's bank account, amounting to Rs. 3,22,01,650/- without considering each credit separately on merit and holding that the purpose and utilization of the funds was not explained by the assessee. Before the ld. CIT(A), the assessee submitted, vide reply (APB 47-51), dated 21.03.2020, the following documents : 1. ITR-V of Sh. Surinder Kumar Arora for A.Y. 2014-15.(Paper book page 47) 2. Copy of Affidavit of Sh. S.K. Arora. (Paper book page 48-49) 3. Bank Account statements of Sh. S.K. Arora for A.Y. 2014-15 (Paperbook page 50) 4. Copy of account of Sh. S.K. Aro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ows that the Learned Assessing officer was not using his wits, common sense and there was no application of mind by him whatsoever. Further, the following documents, as also submitted before the ld. CIT(A), have been filed before us : 1. ITR-V of Sh. Surinder Kumar Arora for A.Y. 2014-15. (Paperbook page 47) 2. Copy of Affidavit of Sh. S.K. Arora. (Paperbook page 48-49) 3. Bank Account statements of Sh. S.K. Arora for A.Y 2014-15 (Paperbook page 50) 4. Copy of account of Sh. S.K. Arora in the books of M/s TJR Properties Private Limited for A.Y.2014-15 (Paperbook Page 51) 5. Copy of Assessment order dated 24.12.2019 of S.K. Arora for A.Y. 2014-15 passed u/s 153A(1)(b) r.w.s. 143(3) of the Act (Paper Book page 52-53) 31.1 The assessee company contends that the company received advance Rs. 10,00,000/- from Sh. S.K. Arora on 01.06.2013 and the same were returned back on 30.06.2014. The company submitted all the documentary evidences before the AO as well as before the CIT(A) but neither authority raised any objection in the documents submitted by the company during assessment proceeding and appellate proceedings. The AO ignoring all the documentary proofs followed the d....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... initiated proceedings under Sections 133(6) or 131 of the Act for further investigation. However, it is noteworthy that neither the AO nor the CIT(A) extended any such notice to the lender for additional inquiries. Instead, an addition of Rs. 10,00,000/- was made based on the directive of a third party. 32. On the contrary the same AO has assessed the case of Sh SK Arora for the same assessment year wherein the returned income of Shri SK Arora has been accepted by the AO. 33.1 The ld. DR on the other hand, has placed strong reliance on the impugned order, contending that it has not been successfully rebutted, as observed by the ld. CIT(A) that mere submission of Bank Account Statement does not amount to explaining the credit worthiness of Shri S.K. Arora, particularly when the amount given to Shri S.K. Arora is of Rs. 10 lacs, as contrasted with his income shown in the ITR of Rs. 3,62,000/-. 33.2 It is seen that as available from the assessment order (supra) dated 24.12.2019, passed in the case of Shri S.K. Arora in assessment year 2014-15, the credit worthiness of Shri S.K. Arora has been accepted. On the contrary, in the case of the assessee, for the same assessment year, the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was available with the CIT(A) then the CIT(A) could have asked the assessee to furnish all other documents as mentioned in the written submission. No such inquiry was made by the CIT(A). Neither the CIT(A) nor AO asked the appellant submit any other documentary evidence with regard to the amount received or given back to Sh. SK Arora. 33.4 The CIT(A) wrongly confirmed the addition made by the AO on the plea that the company did not submit any documentary evidence other than the bank statement but on the other hand the CIT(A) himself is mentioning the list of documents submitted by the assessee in point 1, page 104 of his order, thereby contradicting his own statement. The CIT(A) ought to have raised any query or issued any notice asking the assessee to submit the same. But no such query was raised nor any notice was issued to the assessee in this regard. Additionally, the CIT(A) confirmed the addition of Rs. 10,00,000/- made by the AO for an absurd reason without giving any findings on the documents which was already submitted by the assessee company during the assessment proceeding and remand proceeding. 33.5 The AO found the documentary evidence furnished by the assessee compa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e, the advance given was received back by the company within the same year, hence, these were squared up loans and advances and in support of such squared up loans and advances the company submitted the copy of account of the party in the books of the company. No other document was either asked by the AO or by CIT(A) in their respective proceedings. 39.3 The company has filed written submission before CIT(A) in 2020, the CIT(A) had more than 2 years to examine the documents submitted by the assessee company and ask the assessee to submit any other document, if required. But neither the CIT(A) nor AO asked the appellant submit any other documentary evidence in this regard. 39.4 The CIT(A) has reproduced the entire written submission of the assessee company in its order, and on page 76 and 80 of the CIT(A) order, the following facts were mentioned by the assessee in its submission which were reproduced by CIT(A):- (page 76 of CIT order) DATE RECEIPT INWARD (CR) REMARKS PROOF OF IDENTITY, GENUINES AND CREDIT WORTHINESS OF THE PARTY AMOUNT (IN RS) PARTY NAME/ ACCOUNT NO. 09/11/2013 4,01,650/- RAKESH KUMAR (FRIEND OF DIRECTOR) AND INCOME DURING THE YEAR ADVANCE GIVEN TO RAK....
X X X X Extracts X X X X
X X X X Extracts X X X X
....age 59-70) as additional evidence along with confirmation which was submitted before CIT(A) and AO. The submission of said documents are neither challenged nor disputed in the appeal by the department. 39.7 The ld. DR has, again, placed strong reliance on the impugned order. 40.1 We find that here also, the addition has been so confirmed without taking into consideration the documentary evidence filed by the assessee. It remains undisputed that these were squared up loans and advances, the company having given advance of Rs. 4 lacs to Shri Rakesh Kumar on 28.10.2013 and the same having been received back through banking channel, on 09.11.2013, in respect of which, the assessee has placed on record before the authorities below, the copy of account of Shri Rakesh Kumar in the books of the assessee company. 40.2 Further, the CIT(A) has reproduced the entire written submission of the assessee company in its order, and on page 76 and 80 of the CIT(A) order, the following facts were mentioned by the assessee in its submission which were reproduced by CIT(A):- (page 76 of CIT order) DATE RECEIPT INWARD (CR) REMARKS PROOF OF IDENTITY, GENUINES AND CREDIT WORTHINESS OF THE PARTY AM....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... company, therefore the assessee company has now submitted copy of computation, ITR-V and bank account statement of Sh. Rakesh Kumar (Paperbook page 59-70) as additional evidence along with confirmation which was submitted before CIT(A) and AO. The submission of said documents are neither challenged nor disputed in the appeal by the department. 41. In view of the above, the addition of Rs. 4 lacs is deleted and Ground No.7 is accepted. 42. Turning to Ground No.8, this relates to addition of Rs. 20 lacs received by the assessee from M/s Ajit India. Here too, the addition was made by the AO, holding that the purpose and utilization of funds had not been explained by the assessee. 43. Before the ld. CIT(A), the assessee submitted that the AO, while wrongly holding that the assessee could not explain the purpose and sources of the funds, had failed to mention any deficiency whatsoever on the part of the assessee, in the face of the documentary evidence filed before him, in the shape of copy of account of M/s Ajit India in the books of the assessee company in the year under consideration and the pay-in-slip of M/s Ajit India, dated 21.03.2014, of Rs. 20 lacs; and that in the assessme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....013 AND RECEIVED BACK ON 22/03/2014 LEDGER ACCOUNT Page 80 of CIT order DATE RECEIPT INWARD (CR) REMARKS PROOF OF IDENTITY, GENUINES AND CREDIT WORTHINESS OF THE PARTY AMOUNT (IN RS) PARTY NAME/ ACCOUNT NO. 22/03/2014 20,00,000/- AJIT INDIA ADVANCE OF RS 20,00,000 GIVEN ON 25/07/2013 AND RECEIVED BACK ON 22/03/2014 LEDGER ACCOUNT 45.4 The CIT(A) in his order has himself acknowledged the submission of copy of account by the company while upholding the addition the CIT(A) has wrongly taken the plea that no documentary evidence was submitted by the company during the appellate proceedings. The above documents were submitted before the CIT(A) which were neither considered by the CIT(A) nor discussed by the CIT(A) in its order. The CIT(A) wrongly confirmed the addition made by AO without carrying out any verification with regard to the copy of account submitted by the company and wrongly confirmed the addition of Rs. 20,00,000/- by taking a plea that no documentary evidence was submitted by the company to establish the creditworthiness of M/s Ajit India. 45.5 The AO found the documentary evidence furnished by the assessee company to be unsatisfactory while the CIT(A) obse....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... taxing authorities had even as much as put any question to the assessee in this regard. 48. The factum of the ledger account having been filed by the assessee before the ld. CIT(A) is also evident from pages 77 and 78 of the order under appeal, where the ld. CIT(A) has taken note of the submission made by the assessee in this regard. Moreover, there is no rebuttal by the ld. CIT(A) to the copy of account filed by the assessee. Therefore, the ld. CIT(A) confirmed the addition of Rs. 20 lacs in utter oblivion of the documentary evidence produced on record by the assessee as above and thereby arriving at a wrong finding that no documentary evidence had been filed by the assessee. 49. Accordingly, finding force therein, Ground No.8 is accepted and the addition of Rs. 20 lacs is deleted. 50.1 Ground No.9 questions the confirmation of addition of Rs. 1 lac received by the assessee company from Shri Sahil Singla. Again, the AO while making the addition, has alleged that the purpose and utilization of the funds could not be explained by the assessee. 50.2 Vide reply dated 21.03.2020, before the ld. CIT(A), the assessee, inter-alia, produced on record ITR-V of Shri Sahil Singla for the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ces, the AO, though he was initially of the opinion that no addition be made, later on went on to make the additions following dictat of a third party; that the ld. CIT(A) also illegally confirmed the addition, overlooking the fact that in the cases of both, Shri Sahil Singla and Smt. Kiran Singla, these cash deposits stood accepted by that very AO himself; that the ld. CIT(A) has erred in observing that the assessee company had failed to submit any documentary evidences other than the bank statement. 50.5 The ld. DR has placed strong reliance on the impugned order. 51.1 Here also we find that it is a case of confirmation of addition wrongly made. The ld. CIT(A)'s order is a result of complete misreading and non reading of material documentary evidence brought on record by the assessee. 51.2 The assessee had submitted evidence in the shape of ITR-V of Shri Sahil Singla for assessment year 2014-15, a copy of account of Shri Sahil Singla and Smt. Kiran Singla in the books of the assessee company, for assessment year 2014-15 and bank account statements Shri Sahil Singla and Smt. Kiran Singla, for assessment year 2014-15. Copies of these documents have been filed before us at pages ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er rebutted the documentary evidence brought on record by the assessee, nor did he ask the assessee the submit any other documentary evidence concerning the amount received and given back by the assessee to Shri Sahil Singla and Smt. Kiran Singla. In fact, documents furnished by the assessee in the evidence were not even commented upon adversely by the ld. CIT(A). Rather, they were not at all commented upon, leading to the conclusion that these documents were not at all looked into by the ld. CIT(A). In the absence of any rebuttal to such documentary evidence, the ld. CIT(A) erred in confirming the addition. Whereas the ld. CIT(A) observed that the assessee company had failed to submit any documentary evidence other than the bank statements, no proceedings, either under Section 133(6), or Section 131 of the Act, were taken out, for making any further investigation into the matter. 52. In view of the above, finding force therein, Ground No.9 is accepted and the addition of Rs. 1 lac is deleted. 53.1 Apropos Ground No.10, amount of Rs. 3 lacs received by the assessee from Shri Triloki Nath Singla, HUF was added by the AO. The AO made addition of all the credit entries in the bank, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rawn on 06.08.2013, as is available from the bank statement. It has been submitted that all the documentary evidences were filed before the AO as well as the ld. CIT(A); that however, neither authority raised any objection against the documents so filed; that the AO ignored all the documentary proofs and followed the dictat of the third party and made addition of Rs. 3 lacs and the ld. CIT(A) wrongly confirmed such addition, holding that there was immediate cash deposit of Rs. 3 lacs in the bank account and that the source thereof had not been explained; that the assessee had filed an elaborate written submission before the ld. CIT(A) in 2020; that the ld. CIT(A) had more than two years to examine the documents submitted by the assessee, or to ask the assessee to submit any other document, if so required; that however, it was not so done and the assessee was never asked to submit any other documentary evidence. 53.4 The ld. DR, on the other hand, has placed strong reliance on the impugned order in this regard also. 54. Having considered the rival contentions in the light of the material placed on record, we find the grievance of the assessee to be justified. The documentary evide....
X X X X Extracts X X X X
X X X X Extracts X X X X
....holding that the purpose and utilization of such funds had also not been explained by the assessee. 57.1 The ld. CIT(A) confirmed the addition, holding that no evidence/details giving the particulars of the person from whom such cash was received, or the nature of the transaction with them, had been furnished by the assessee, due to which, the cash deposit of Rs. 7 lacs had remained unexplained. 57.2 The ld. Counsel for the assessee has submitted that the assessee had filed copy of income account alongwith copy of cash account, bank account statement, profit & loss account and copy of hire charges account in the books of the assessee company for assessment year 2014-15, before the AO as well as the ld. CIT(A), neither of whom had considered such documentary evidence filed; and that no explanation or further documentary evidence was ever asked for either by the AO or by the ld. CIT(A). 57.3 We find that since undisputedly the assessee had furnished the aforesaid documentary evidence before both the taxing authorities. The ld. CIT(A) was factually incorrect in observing that no evidence/details giving the particulars of the person from whom such cash was received, or the nature of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he explanation of the credit entries. This was done by way of Deviation Note, addressed to the Deputy Director of Investigation, Mohali, on 26.12.2019, in the letter No. 1733, dated 24.12.2019, passed on his satisfaction, which had been arrived at with regard to the source of the transactions as per the evidence filed on behalf of the assessee and its regular books of account, which stood duly explained. However, the ADIT (Investigation) Mohali, though she was not authorized to do so and though she did not have any jurisdiction over the matter, rejected the Deviation Note of the AO in a short time of twelve hours of receipt of the Deviation Note. While doing so, the ADIT (Investigation) Mohali observed that the assessee company was a shell company. Vide letter No.1763 dated 27.12.2019, addressed to the AO, the ADIT (Investigation) Mohali rejected the proposal/Deviation Note suggesting that no addition be made and directed the AO to make additions by assigning flimsy reasons. It was on the basis of such dictat and that too, of a third party, that the AO made the additions including the one in question by way of Ground No.11. Accordingly, all the credit entries in the bank account of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng registered sale deed on 30.11.2011 and paying stamp duty. The same AO has assessed Long Term Capital Gain in the hands of M/s TJR from the said transaction. It is not the case of the AO that the said land was a Benami asset held in the name of M/s TJR. Further, M/s TJR paid earnest money of Rs. 1,50,00,000/- during F.Y. 2016-17 for purchase of a plot to build flat/apartment and paid TDS of Rs. 1,50,000/- @1%. Thus, on facts, it is observed that M/s TJR was having income generating apparatus in past and future years and was undertaking business activities. There is no definition of shell company given under the provisions of Income Tax Act, 1961 or Companies Act, 1956/2013. Every case needs to be examined on merits as per the peculiar facts and circumstances to draw such inference and consequences out of the same as per the provisions of Income Tax Act. In order to decide the merit of addition made by the AO on account of unexplained bank credits u/s 68 of the Act, it is required to examine the source and nature of credits received by the appellant terms of conditions laid down in the provisions of section 68 of the Act. Thus, it required to examine the identity and creditworthin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t could not explain the purpose and utilisation of such credits. However, the AO failed to take cognisance of the fact that addition u/s 68 of the Act is to be made if the appellant doesn't offer any explanation regarding the source and nature of credits received in the bank account or if the explanation offered is not found satisfactory by the AO. Whereas in this case the appellant has duly furnished its explanation in respect of bank credits received during the year under consideration alongwith necessary documentary evidence. If the AO was not satisfied with the explanation of the AO in respect of source and nature of credits received, he should have recorded such dissatisfaction in the assessment order. However, no adverse finding has been recorded in the assessment order in respect of the documentary evidence furnished by the appellant in support of bank credits. The submissions and documents furnished by the appellant during the appellate proceedings were also forwarded to the AO for remand report. In the remand report also, the AO has not even discussed the documentary evidence furnished by the appellant in support bank credits let alone pointing out any defect in the sa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2,77,01,650/-. Curiously, though the addition of Rs. 45 lacs was illegally confirmed by the ld. CIT(A), without considering that since the assessee had discharged its onus of proving the identity and credit worthiness of its lenders and the genuineness of the transaction, it was the AO who had failed to discharge the onus which had thereafter shifted on to him, and who had also failed to rebut the evidence filed by the assessee. 59.4 Reliance has rightly been placed by the ld. Counsel for the assessee on the decision of the Hon'ble Delhi High Court in the case of "Pr. CIT (Central)-I Vs, M/s Adamine Construction Pvt. Ltd.", 2018 (2) TMI, 1815 (Delhi), holding, under similar facts and circumstances, that the AO had gone into by the report received and had not made the necessary further enquiries, like any enquiry into the bank accounts, or the other particulars available with him and rather basing his entire findings on the report; that this could not be considered as primary material, and that the assessee company had discharged the onus cast upon it, by providing the basic details, which were not suitably enquired into by the AO. The ld. Counsel for the assessee has contende....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ready in the possession of the Department. 62.3 Further, the assessee is also correct when it contends that the books of account were examined by the AO at the time of sending his Deviation Note to the Investigation Wing. Further still, even during the remand proceedings, the assessee had submitted the books of account before the AO, on 16.02.2022. 63. On the basis of the above, we find the addition of Rs. 2,97,834/- to be unsustainable and the same is, accordingly, deleted, while accepting Ground No.13. 64.1 According to Ground No.14, the ld. CIT(A) has erred in upholding the disallowance of depreciation on vehicle to the extent of Rs. 9,11,484/- 64.2 It is seen that the disallowance of Rs. 9,11,484/-, representing depreciation on vehicle, has been made by the AO without entering any discussion with regard thereto in the assessment order. The ld. CIT(A) confirmed the disallowance, again, without any discussion. The assessee had filed before the authorities below, the computation sheet of M/s TJR Properties Pvt. Ltd., for assessment year 2014- 15, the Fixed Assets Schedule and the Registration Certificate of the car. The stand taken is that the vehicle was registered in the nam....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment has contended that the ld. CIT(A) erred in holding that the identity and credit worthiness of the persons from whom the credits comprising the amount of Rs. 2,77,01,650/- were received, stood proved, whereas the genuineness of the transactions had not been established by the assessee, since the purpose of the credits had not been explained and thereby all the three limbs of the provisions of Section 68 of the Act did not stand proved by the assessee. 68. The ld. CIT(A), it is seen, in the impugned order, has observed inter-alia that the assessee had explained that the AO had used the statement of Shri Jagdish Rai Gupta, selectively, in parts, by drawing a wrong inference that M/s TJR Properties Pvt. Ltd. was a shell company; that the assessee had submitted that that M/s TJR Properties was having land which was purchased during F.Y. 2007-18 for Rs. 1,73,00,000/- and sold during A.Y. 2012-13 for Rs. 5,00,05,000/-by executing registered sale deed on 30.11.2011 and after paying stamp duty. Further, M/s TJR paid earnest money of Rs. 1,50,00,000/- during F.Y. 2016-17 for purchase of a plot to build flat /apartment and paid TDS of Rs. 1,50,000/- @1%; that the assessee had submitted ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat the AO had not discussed each and cred separately on merits in the assessment order before drawing the inference that the credits were unexplained; that during the assessment proceedings, it was observed by AO after going through the reply of the appellant dated 19.12.2019 in respect of particular of such persons from whom such credits were received that the appellant had cred amounting to Rs 3,22,01,650/- in its bank account and the appellant could not explain purpose of such credits. Thus, the addition of Rs. 3,22,01,650/- was made by the AO on the ground that the appellant has failed to explain the purpose and utilisation of such credits; that the assessee submitted during the appellate proceedings that it had received credits of Rs. 3,22,01,650/- in its bank account maintained with Bank of Maharashtra and furnished documentary evidence in support of identity and creditworthiness of such persons a genuineness of transaction which have been also furnished during the assessment proceedings; that the AO was again directed during appellate proceedings vide letter no.295 dated 12.08.2021 to examine such credits on merit in respect of identity and creditworthiness of such persons ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng independent perusal of documents furnished by the appellant, it was noted that the assessment order is non speaking, mechanical in nature and has been passed without discussing merits of the documents. The ld. CIT(A) held that there was no direct or indirect evidence pointed out by the AO before making such additions. Therefore, after considering the merits of the case, analysis of credits as per the above table and strength of documentary evidence, it was observed that there was no justification in such addition made in the hands of the appellant u/s 68 of the Act. Therefore, the addition of Rs. 2,77,01,650/- was deleted by the ld. CIT(A). 69.1 In sum, the ld. CIT(A) held that M/s TJR Properties Pvt. Ltd. was having income generating apparatus in the earlier and later years and was undertaking business activities and that as such, it was not a shell company; that the source and nature of the credits received were required to be examined separately in case of each credit by examining the identity and credit worthiness of the lenders and the genuineness of the transactions; that this had not been done by the AO; that the AO had observed that the assessee had credits amounting to....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... however, the AO had not recorded any adverse finding in the assessment order in respect of the documentary evidence furnished by the assessee in respect of the bank credits; that the submissions and documents furnished by the assessee during the appellate proceedings had also been forwarded to the AO for a remand report; that in the remand report also, the AO had not even discussed the documentary evidence furnished by the assessee, let alone pointing out any defect therein; that as such, the assessment order was non- speaking and mechanical in nature and had been passed without discussing the merits of the documents; that there was no direct or indirect defect pointed out by the AO before making the additions; and that therefore, there was no justification in such addition made in the hands of the assessee u/s 68 of the Act. It was on the basis of the above observations that the addition of Rs. 2,77,01,650/- was deleted by the ld. CIT(A). 69.2 Immediately, we do not find any error whatsoever in the detailed reasoned order passed by the ld. CIT(A) while deleting the addition of Rs. 2,77,01,650/-. Remarkably, there is no rebuttal before us to the finding of the ld. CIT(A) that in ....