TaxTMI 
TaxTMI 
2024 (9) TMI 265
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....sclosed during the search proceedings on 11.02.2016 but the unregistered sale agreement was submitted by the assessee during the assessment proceedings, and therefore, it was on afterthought? 2. Whether on facts and circumstances of the case and in law, the Id. CIT(A) was justified in deleting the addition of Rs. 32.80 Cr. made by AO on account of cash deposits made in bank account of the assessee on 30.03.2015 and claimed to out of sale of land on the basis of unregistered sale agreement dated 30.03.2015 submitted by the assessee during the assessment proceedings, and which was not seized/produced/ disclosed during the search proceedings on 11.02.2016 and therefore, it was on afterthought? 3. Whether on facts and circumstances of the case and in law, the Id. CIT(A) was justified in deleting the addition of Rs. 32.80 Cr. made by AO on account of cash deposits made in bank account of the assessee on 30.03.2015, as the assessee failed to prove the genuineness of transaction of sale of land with M/S Bhagwati Lacto Vegetarian Exports Ltd.? 4. Whether on facts and circumstances of the case and in law, the Ids CIT(A) was justified in deleting the addition of Rs. 32.80 Cr. made by A....
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.... by observing as under: "5.3 Ground of Appeal No. 3: In this ground, the AR has contested the addition of Rs. 32,80,00,000/- on account of deposits represent sale proceed of the property after withdrawing cash from the same bank account on same day. The AR during the course of appellate proceedings has submitted that during the course of assessment proceeding, assessee firm was asked for the source of cash deposit of Rs. 32.80 Crore in its bank account maintained with State Bank of Patiala (now SBI, Ferozepur). As per AR, during the year under consideration assessee company was entered into an agreement of sale of property measuring 5 Acre, near Village Ballo Majra, Tehsil Kharar for a consideration of Rs. 45.00 crore with M/S Bhagwati Lacto Vegetarian Exports Pvt. Ltd. and against this agreement assessee firm received Rs. 34.00 Crore in advance and deposited the same in its bank account. The AR further stated that the information was called from bank regarding time of deposit and withdrawal and the bank furnished its submission, wherein it is represented that cash was deposit between 10.39.34 AM to 11.59.13 AM and withdrawal in the bank account of M/S BLVE was made on 30.03.2015....
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....o held that on the date 30.03.2015, when the impugned transaction was transacted, there was a heavy rush in bank due to closings and also due to last date of income tax returns, so number of challans were pending with the staff. Also, as per the AR, that the staff of bank put the entries in bank account of M/S GNMP and M/S BLVE as per his/her convenience because both accounts were maintained in the same branch. 5.3.3 Further, the AR stated that the AO admitted this fact that assessee entered into an agreement for sale of land and registration deed of said land to prove the ownership of assessee has already been filed on record and as per AR also, the AO stated that deal was still pending and final sale deed has not been executed which as per AR, proves that the agreement of sale of land and receipt of advance in cash is a made-up story since no prudent businessman will hand over the substantial amount of Rs, 34 Crore as advance without getting ownership title transferred in its name for years and there would and should have been some purpose for giving the money and in the present case money was given for purchase of property. Also, the AR furnished the copies of Affidavit of Sel....
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.... entity from where the cash was withdrawn and deposited into appellant's bank account. (c) Both the entities are part of same group, and such there is no introduction of any money/cash from outside. (d) Statement of the branch manager was recorded by the AO. In this statement, the bank manager of the branch has also accepted this fact - that there is no movement of cash. He has mentioned that although the #1me stamp as per the bank record is correct, but due to heavy rush in bank on 30th and 31 st March, there was no physical movement of cash. In the statement of Bank manager, he also clarified the fact that the entries were post as per the convenience of their staff as there were heavy rush in the bank being the closing date of Financial Year (e) The Branch Manager also stated that the branch, where these transactions were happened, is a very small bank having only 7 employees. (f) The statement of Sh. Suraj Kumar who was one of the company's employees, who went to carry out these transactions was also recorded by the AO during remand proceedings. He has confirmed the fact that the transactions were carried by him, and same information was provided by the bank to t....
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....of material and relevant evidence or partly on evidence and suspicions, conjectures or surmises and if it does anything of that sort, its finding even though on questions of fact, will be liable to be set aside by - Held, yes" The Hon'ble Supreme Court in the case of Dhakeshwari Cotton Mills . CIT reported at 26 ITR 151 775 held as under: "When making an assessment u/s 143(3), the AO is not entitled to make a pure guess without any evidence or material at all, Reliance is also placed on the following judgments: * International Forest co, vs. CIT [1975] 101 ITR 721 (J&K), * Mohammad Hayet vs. CIT 5 ITC 159 * Gunda Subbayya vs. CIT 7 ITR 21 28 (Mad.) (FB) * Radhaylal vs. CIT 4 ITC 454 * Binjraj vs. CIT 5 ITC 303 * Dhunichand vs. CIT 2 ITC 188 * Mrs. Hirabai D. Desai & sons vs. CIT [1936] 4 ITR 95 (Bom.) * A. S. Sivan Pillai vs. CIT [1958) 34 ITR 328 (Mad.) * Commissioner of Agricultural Income Tax v s. M J Cherian [1979) 117 ITR 371 (Ker.) * Messrs. Laichand Bhagat Ambical Ram vs. CIT [19591 37 ITR 288 (SC)/1959 AIR 295, 1960 SCR (1) 301. 5.3.5.3 In view of above discussion and stated legal position, I agree with submission of the appellant. it is therefor....
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.... the assessee on 30.03.2015 as the assessee failed to prove the source of seed money by way of transfer of Rs. 744 Cr. from bank account of M/S Bhagwati Lacto Vegetarian Exports Ltd. from Andhra Bank to its account in State Bank of Patiala? 7. Per contra, the defendant, ld. Counsel for the assessee that during the course of assessment proceeding, assessee has explained the source of cash deposit of Rs. 32.80 Crore in its bank account maintained with State Bank of Patiala (now SBI, Ferozpur) as the said was out of sale consideration duly supported with an agreement of sale of property measuring 5 Acre, near village ballo majra, tehsil kharar for a consideration of Rs. 45.00 crore with M/S Bhagwati Lacto Vegetarian Exports P. Ltd. (hereinafter referred as M/S BLVE) and against the said agreement assessee has received Rs. 34.00 Crore in advance and deposited the same in its bank account and duly disclosed the same in the Audited Books of Accounts while filing the return of income. He argued that the addition made by the Ld. Assessing Officer was based on presumption without examining the bank statement relevant, with reference to volume of cash and time given of few minutes used for ....
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.... to the persons who filed affidavits in order to verify the genuineness of the claim made by the assessee during appellate proceedings and the AO could not controvert the evidence filed by the assessee on record. From the statement of Sh. Gurmeet Singh, it is evident that the cash deposited in the bank account of the assessee firm by the employee of M/S Bhagwati Lacto Vegetarian Exports Pvt. Ltd. was on account of sale of land situated at Village Ballo Majra by the assessee company to M/S Bhagwati Lacto Vegetarian Exports. b. That no physical cash was involved in the transaction since it was not possible to count huge cash in such time as mentioned in the letter. In the remand proceeding, the bank manager stated that no cash was involved, for the reason that the bank accounts of both the firm/company were in the same bank branch, so there was no need of actual movement of cash, since the funds were to be actually transferred from one bank account to another within the same branch, without the actual involvement of cash. Thus, it is concluded from the statement of Sh. Sudhanshu Kumar, i.e. Branch Manager, that the certificate given by bank with respect to timing of cash deposit and ....
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....ition of Rs. 32.80 Cr. 11. Accordingly, we find no merit and substance in the ground of the department and therefore, the order of the CIT(A) is upheld on the issue of deleting the addition of Rs. 31.80 Cr. 12. The appellant assessee has raised the following grounds of appeal in I.T.A. No. 320/Asr/2023: 1. That the order passed by the Hon'ble CIT (A) dated 18.10.2023 is against the law and facts of the ease. 2. That having regard to the facts and circumstances of the case, Hon'ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in assuming jurisdiction and framing the impugned assessment order u/s 153C/143(3) of the Act which is bad in law and against the facts and circumstances of the case and is not sustainable on various legal and factual grounds. 3. That having regard to the facts and circumstances of the case, Hon'ble CIT(A) has erred in law and on facts in confirming the action of Ld. Assessing Officer in making an addition of Rs. 60.20,750/- on account of disallowance of interest paid on CC account, without considering the facts of the case and without observing the principles of natural justice. 4. That having regard to the fact....
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....bmission, peruse the orders of venue authorities and consider the documents available in the record. Related to ground no., the assessee already placed that the activities of the assessee are more requirement of lands for maintaining the livestock, chilling of milk, distribution. All are related to business, Further, the opening and closing balance of cash credit limit does not reveal that there is no use funds of the assessee. The Id AR relied on the order of Hon'ble Apex Court in the case of Vardhman Polytex Ltd. v. Commissioner of Income-tax[ 2012] 25 taxmann.com 281 (SC), the relevant paragraphs are reproduced as below:- "The question which arises for determination in these civil appeals filed y the assessee is as follows: Whether interest paid in respect of borrowings for acquisition of capital assets not put to use in the concerned financial year can be permitted allowable deduction under section 36(1)(iii) of the Income-tax Act, 1961? This question has been answered in favour of the assessee. In the case of CIT v. Core Health care Ltd [2008] 298112194/167 206 (SC). Consequently, the civil appeals filed by the assessee are allowed with no order as to costs. " We....
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....hese are also entries of unaccounted sale, as in annexure A-2 without controverting the contention of the appellant with supporting corroborative documentary evidence on record. 14.2 The Ld. AR submitted that CIT(A) has erred in law and on facts in confirming an addition of Rs. 1,76,57,729/- without appreciating the facts of the case that the total receipts as per A-2 amounts Rs. 6,45,07,729/-, out of which part receipt pertain to the AY 2016-17 and remaining amount of Rs. 4,76,57,729/- pertain to Assessment Year under consideration. The Ld. CIT(A) had allowed the benefit of Rs. 3,00,00,000/- (being amount surrendered during search declared in the Audited balance sheet) and confirmed the addition of Rs. 1 76,56,729/- (Rs. 4,76,57,729- Rs. 3,00,00,000) without considering the facts of the case regarding sale receipt although he has confirmed the profit percentage on the same sale receipts. Meaning thereby that the Ld. CIT(A) has accepted the facts of sale receipt amounting to Rs. 4,76,57,729/- computed as per Annexure A-2. 14.3 It is noted that the observation of the Ld. CIT(A) regarding the alleged entries in the names of a number of persons, indicating the amounts mostly receive....