TaxTMI 
TaxTMI 
2024 (4) TMI 312
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....ri. Umed Mehta and his floated concerns [Umedmal (HUF), Chakra Exports and Pranav Enterprises] are not genuine, inasmuch as Shri. Umed Mehta accepted that the entire transaction relating to M/s. Kawarlal group was only accommodation in nature. 2.3. The ld. CIT(A) erred in holding the impugned transactions with Umedmal (HUF), Chakra Exports and Pranav Enterprises were taxed in the hands of the appellant's group concern at source, without appreciating that the offer made for A.Y 2009-10 before the Income-Tax Settlement Commission (ITSC), Chennai, did not cover the impugned transactions and that the transaction with Pranav Enterprise was never offered for transaction in any of the assessment years. 3. For these grounds and any other ground including amendment of grounds that may be raised during the course of the appeal proceedings, the order of Id. CIT(A) may be set aside and that of the Assessing Officer be restored. As is evident, the sole issue that arises for our consideration is addition of unexplained cash credit for Rs. 2.47 Crores as made by Ld. AO while framing an assessment for this year. 2. Pursuant to the directions of the bench vide order sheet entry dated 24-0....
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....ne of the floated proprietory concern of Shri Umed Mehta) a) Amount received from Kawarlal & sons by Kesaria Marketing Pvt Ltd (Umed Mehta group) Rs. 97,53,700/- Amount received from D.K. Enterprises by Kesaría Marketing Pvt Ltd (Umed Mehta group) Rs. 51,00,570 Rs. 1,48,54,270 b) From the above, amount diverted to Vim Mines & Minerals Rs. 1,25,00,000 c) Out of this Rs. 1.25 Crores a sum of Rs. 75 Lakhs is diverted by Vim Mines & Minerals to M/s Chakra Exports. d) From the above, the assessee company received back Rs. 75 lakhs as unsecured loan from M/s Vim Mines & Minerals. 3. Unsecured loan received from M/s. Pranay Enterprises: Finally, the assessee Company has received Rs. 39,00,000/- from M/s. Pranav Enterprises (one of the floated propriety concern of Umed Mehta group) which is nothing but the money given to Shri Umed Mehta. The assessee has shown outstanding amount as Rs. 42,00,000/- including the interest payable (Rs.2.57 lakhs) to M/s.Pranav. From the nature of transaction discussed above, it could be easily gathered that the transactions in issue involved circulation of funds among the assessee's group c....
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.... from concerns of Shri Umed Mehta out of commission paid to the assessee's group concerns viz. M/s Kawarlal & Sons and M/s D.K. Enterprises. Since, now both these entities offered additional income and paid taxes under settlement, the same could not be taxed in the hands of the assessee. In support, ledger copies of both these entities were also enclosed. The assessee also tabulated the commission & interest expenditure in its written submissions. The assessee also established chain of flow of funds in support of its claim. 4.2 Concurring with assessee's submissions as well as working, Ld. CIT(A) deleted the impugned additions as under: - 7. I have gone through the facts of the case and the material available on record. The Assessing Officer had added Rs. 1,30,00,000 towards unsecured loan received from C. Umedmal HUF; Rs. 75,00,000 from M/s. Chakra Exports and Rs. 42,00,000 from M/s. Pranav Enterprises. The appellant contended that the assessee group as a whole surrendered additional income of Rs. 22,76,15,808 towards the transactions with the concerns of Umed Mehta; in the concerns of Kawarlal & Sons and M/s. D.K. Enterprises and pleaded that the addition made in the hands of ....
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....ion and expenditure from concerns of Umed Mehta, that is evident from the table supra, I am of the view that the impugned sum is part of the offer of additional income disclosed before the Hon'ble ITSC . 9. In view of the foregoing discussions and in view of the facts of the determination of total income arrived at by the Hon'ble ITSC wherein the source for the impugned credits brought to tax by the Assessing Officer has been subjected to tax, l am of the view that the impugned additions of Rs. 2,47,00,000 [Rs.1,30,00,000 from C. Umedmal HUF; Rs. 75,00,000 from M/s. Chakra Exports and Rs. 42,00,000 from M/s. Pranav Enterprises] are untenable. The AO is therefore directed to delete the additions. 10. In the result, the appeal for A Y 2009-10 is allowed. The Ld. CIT(A) has rendered clear finding that the impugned credits brought to tax by Ld. AO had already been subjected to tax in settlement application of assessee group. The impugned amount was part of additional income disclosed by assessee's group concerns viz. M/s Kawarlal & Sons and M/s D.K. Enterprises. Therefore, it was held that the source of impugned credits as brought to tax by Ld. AO had already been subjected to....
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....ns and M/s D.K. Enterprises, sum of Rs. 1,25,00,000/- was diverted to M/s Vim Mines & Minerals. It has been further submitted that out of this amount only a sum of Rs. 75,00,000/- was transferred to M/s Chakra Exports which was in turn transferred to the assessee company. 8. It has also been submitted that out of the amounts so transferred to Umed Mehta concerns only, a sum of Rs. 39,00,000/- was transferred from M/s Pranav Enterprises to the assessee as unsecured loan. But such nexus to the above amount declared is not proved. There is no declaration before the ITSC about transaction with or through Pranav Enterprises. There is no information in the Settlement. 9. All the above are only claims of the assessee in the appeal proceedings and the assessee has not proved the fund flow from one concern to the other and finally to the assessee company, chronologically, to prove that the amount of additional income declared by the group concerns of the assessee in their settlement applications before the Hon'ble ITSC is the ultimate source for the unsecured loans received by it. The assessee has not produced the ledger accounts and relevant bank account statements of the concerns ....