TaxTMI 
TaxTMI 
TaxTMI 
2024 (7) TMI 705
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....e facts and circumstances of the case as well as in law, the learned CIT(A) has erred in confirming the action of learned Assessing Officer in making addition of Rs. 150,13,10,676/- as unaccounted cash credit u/s 68 rws 115BBE of the Act. 5. On the facts and circumstances of the case as well as in law, the learned CIT(A) has erred in confirming the action of learned Assessing Officer in treating the loan from Dinesh Kumar Singhi of Rs. 78,39,89,104/- as accounted cash credit u/s 68 rws 115BBE of the Act. 6. On the facts and circumstances of the case as well as in law, the learned CIT(A) has erred in confirming the action of learned Assessing Officer in treating the loan from Snehalatha Singhi of Rs. 1,03,21,572/- as unaccounted cash credit u/s 68 rws 115BBE of the Act. 7. On the facts and circumstances of the case as well as in law, the learned CIT(A) has erred in confirming the action of learned Assessing Officer in treating the loan from Laxmipat Dudheria of Rs. 70,70,00,000/- as unaccounted cash credit u/s 68 rws 115BBE of the Act. 8. That the authorities below erred in resorting to section 68 and section 115BBE of the Act. 9. That the authorities below erred in i....
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....going through the details, the ld. AO did not seek any further details nor expressed any adverse view about the details filled or raised any issue of contention. From the assessment order in para 3.6, it is seen that the AO has caused certain enquiry and collected information on 25.12.2019 from Karur Vysya Bank with a stated view to verify money trail related to unsecured loan. The AO is on record to say that it received only partial details. The assessee received the assessment order dt. 31.12.2019 and was utterly shocked and dismayed to learn that as against the loss of Rs. 247,23,15,045/-, the AO had made addition of Rs. 150,13,10,676/- u/s 68 rws 115BBE of the Act. The details of the addition is in para 5.11 of the assessment order. 2.1. Against this assessee went in appeal before NFAC. NFAC confirmed the order of the ld. AO. Against this assessee is in appeal before us. 3. The above ground Nos.1, 2, 14 & 15 are general which do not require any adjudication. 4. Ground Nos.4 to 10 are with regard to sustaining addition of Rs. 1,50,13,10,676/-. 4.1 The ld. A.R. submitted that the assessee has furnished the details sought for and also duly appeared before ld. AO. On going thro....
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....here is any element of any type of adverse finding. Hence it is requested that no recourse be made to section 68 or section 115BBE of the Act. If you need any further information we are more than happy to furnish the same even at a short notice and oblige." 4.3 The ld. A.R. submitted that a perusal of the query in show cause notice shows that the query was pertaining to directors who are related parties. The details were submitted by the assessee vide letter dt.20.12.2019. No other details were called for. Since no specific names were mentioned in the SCN, the assessee submitted the details to the best of its understanding and the AO did not ask for any further details. The query in the SCN appears that the AO had already made up its mind to somehow make an addition indicating a pre-judgment. The assessee has produced the standard details as is required to establish the genuinity of the transaction. No further hearings were given after the info was received albeit partially from Karur Vysya Bank. Further, no question was asked about the transaction with Shri Laxmipat Dudheria. The fact that all the parties being Dinesh Kumar Singhi, Snehalatha Singhi and Laxmipat Dudheria are ass....
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.... Laxmipat Dudheria. Hence, even according to the ld. AO, Dinesh Kumar Singhi source is from Laxmipat Dudheria. On the basis of this finding, addition both on account of Dinesh Kumar Singhi and Laxmipat Dudheria indicates a clear case of double addition to say the least and also clearly explains the source. He submitted that the Hon'ble Supreme Court has repeatedly held that the scope of section 68 is confined to verifying the source and not source of source. Thus, it is clear that the ld. AO has fallen in error. Hence, there is a complete failure to follow even the basic principles of natural justice before making such a huge addition on a loss making company with debilitating consequence. Thus, he submitted that the assessee is aggrieved by the above arbitrary addition u/s 68 rws 115BBE of the Act of Rs. 150,13,10,676/-, levy of interest u/s 234B of Rs. 23,12,38,305/-, u/s 234C of Rs. 3,88,450/- and the assessment order. The ld. A.R. submitted regarding these cash credits as below: Laxmipat Dudheria - Rs. 70,70,00,000/- 4.5 The ld. A.R. submitted that a perusal of the query in show cause notice shows that the query was pertaining 16 directors who are related parties. The detail....
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....details as is required to establish the genuinity of the transaction. Without calling for any further detail/explanation from the assessee, the AO has alleged that Dinesh Kumar Singhi did not have source to advance loan to the assessee. The discussion by the AO on the issue of transaction between said Dinesh Kumar Singhi and Sagar Cements (erstwhile BMM Cements) and the alleged discrepancy mentioned in para 5.5.2 is not relevant for making the impugned addition. It is a matter of intrigue why the AO never sought for any clarification from the assessee and has chosen to rely on irrelevant material to castigate and hold against Dinesh Kumar Singhi and the assessee by making the impugned addition. Needless to say the material relied on and the inference drawn on the alleged transaction and the outstanding balance between Dinesh Kumar Singhi and Sagar Cements and patently erroneous and irrelevant to say the least. A bare verification of the ledger copies of Sagar Cements in Dinesh Kumar Singhi books and the confirmation of accounts given by Sagar Cements indicates that the closing balance of Rs. 1.57 crore matches with each other and indicates no discrepancy, Evidently the AO has misgu....
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.....R. submitted that the arbitrary addition of Rs. 150,13,10,676/- requires to be deleted in the interest of justice. 4.8 Thus, the ld. A.R. submitted that the assessee has proved the identity and capacity of parties and thus, the transactions are genuine since it was routed through the banking channels. The ld. AO without calling any details or making any further enquiry made the addition without application of mind. There was no effort by the ld. AO except summarily and erroneously passing a wrong addition. Any clarification could have been submitted by assessee and examined by ld. AO had the same been brought to the knowledge of the assessee. Even the NFAC has not made or caused any enquiry and in a random basis sustained the addition, which is to be deleted in to to. He relied on the following judgements: 1) Decision of Hon'ble Bombay High Court in the case of Orient Trading Co. Ltd. Vs. CIT (1963) 49 ITR 723 2) Decision of the Hon'ble High Court of Delhi in the case of Toby Consultant (P) Ltd. Vs. CIT (2010) 324 ITR 338 3) Decision of the Hon'ble High Court of Delhi in the case of PCIT Vs. Bikram Singh (2017) 399 ITR 407. 4) Decision of the Hon'ble High Court of Gujarat....
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.... The burden of proof is on the assessee in the matter of justification of receipts, which are of suspicious and dubious nature." 6.1 In the case of CIT Vs. Durga Prasad More (82 ITR 540) (SC), wherein their Lordship laying down the significance of human probabilities held as under: "In the case where a party relied on self-serving recitals in documents, it was for that party establishing the truth of those recitals; the taxing authorities were entitled to look into the surrounding circumstances to find out the reality of such recitals. Similarly, in the case of Sumati Dayal Vs. CIT (214 ITR 801) (SC), it was held that in view of section 68 of the Act, where any sum is found credited in the books of accounts of the assessee for in the previous year, the same may be charged to income tax as the income of the assessee of that previous year if that explanation offered by the assessee about the nature and source there of is, in opinion of the ld. AO not satisfactory. In such cases, there is a prima-facie evidence against the assessee namely the receipt of money, and if he fails to rebut the said evidence being unrebutted, can be and used against him by holding that it was a receipt o....
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....As seen from the facts of present case, the lower authorities concerned has to examine the evidences furnished by conducting independent enquiry and there after to state whether he is satisfied with the details of evidences produced by the assessee and conducting of enquiry made by him. If he is not satisfied with the details of evidence and enquiry made by him after confronting the same to the assessee, he should take a decision to make an addition or not to make addition. At this point of time, it is not possible to hold that assessee has successfully discharged its primary onus cast upon him to explain the source of alleged credits in its books of accounts. Though the lower authorities noted the various shortcomings in the compliance made by the assessee, the lower authorities has not carried out the enquiry to the full extent. 6.4 As observed by Hon'ble Kolkata High Court in the case of PCIT Vs. Swathi Bajaj (446 ITR 56) (Kol) where their Lordship referred the judgement in the case of NR Portfolio Ltd. (2ITR-OL 68) (Del) wherein held that the AO is both an investigator and an adjudicator. The AO can also refer to incriminating material or evidence available with him and call u....