TaxTMI 
TaxTMI 
2024 (9) TMI 729
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....ch operation. The assessee is a charitable registered trust and is a society registered under the provisions of section 12A of the Act. The AO has referred the assessee as "assessee - company". As per assessment orders, during the years under consideration the society maintained a cremation ground and small temple and received petty donation such as Rs. 10/-to Rs. 50/- donated by the person who join the cremation procession. The assessee has also shown unsecured loan of Rs. 10.99 crores from late Sh. Sanjay Grover during the AY 2016- 17 and Rs. 11.67 Crore in AY 2015-16. The assessee trust filed its returns of income for AY 2015-16 on 08.03.2016 declaring total loss of Rs. 26,41,151/- & for AY 2016-17 on 16.10.2016 declaring nil income. Notices u/s 153A of IT Act were issued on 03.09.2019 for both the years and in compliance to the same the assessee declared same incomes i.e. loss of Rs. 26,41,151/- for AY 2015-16 and nil income for AY 2016-17. Consequently notices u/s 143(2) of I.T. Act were issued on 11.11.2019 in both the years and duly served upon the assessee. Later on, notices u/s 142(1) of the Act along with questionnaire were also issued and A.O made an addition of Rs. 11,6....
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....se on 19.10.2016. Accordingly the AO alleged that Sh. Sanjay Grover was merely a conduit for crediting the said amounts. 5.1 The assessee responded to the notice by the reply dated 17.12.2019 submitting that Sanjay Grover, S/o Harbans Lal, was an Indian national holding Passport no. 21834921, previously residing at Flat No. 801, A B Plaza 8, Al Mamzar, Dubai UAE PO Box 90329, Bur Dubai UAE and having his address in India at A 28 behind Pine Wood School, Mission Compound, Saharanur, UP, India. Mr Sanjay Grover was a NRI having moved abroad in the year 2006 and was having his permanent source of income in UAE (outside India) as the beneficial owner of several companies in the United Arab Emirates since 2010. That, within knowledge of assessee, Late Mr. Grover was associated with Global Corporation LLC, (Limited Liability Company) Dubai vide registration No. 1059971 DCCI No. 183388 which was engaged in General Trading, as per commercial license, copy of which was enclosed, issued by the Department of economic Development, Dubai in which his shareholding holding stood at 49% share. This Company was apparently liquidated. Hence in the process of liquidation of the company, distributi....
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....Late Shri Sanjay Grover has stated that she was not aware of the entire financial activity of her husband. This submission is also not acceptable as Smt. Renu Grover always used to live with her husband alongwith her children. Therefore, it is hard to believe that if the transaction of Sanjay Grover with the assessee for such a huge amount were true, she would not have no need. The loan/donation for such a huge amount cannot be without the knowledge of wife. The assessee has further stated that the transactions between Sanjay Grover and the assessee are through cheques so there cannot be any doubt about its genuineness. In this connection, the decision of Hon'ble Kolkata High Court 208 ITR 465 (CAL) vs. Precision Finance Pvt. Ltd. can be cited wherein it is held that mere transaction through cheque is not sufficient. The Hon'ble Supreme Court are held that in the case of credits in the name of third party, it is the duly of the assessee to prove identity of creditor, capacity of the creditor to advance money and genuine of transaction (1977) 107 ITR 938 Roshan De Hatti Vs. CIT(SC). (v) The assessee has further stated that in the case of a non-resident all ....
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....had failed to furnish evidences to prove the financial worthiness of M/s Global Corporation LLC, Dubai and bank account of this company and its reliable financial statements. On facts and circumstances of the case and in law, the Ld. CIT(A) erred in observing that the assessee had 2 stated that M/s Global Corporation, LLC, Dubai was apparently in process of liquidation and in the process of liquidation, the distribution of assets might have yielded money to Late Shri Sanjay Grover The assessee had not stated as to when Late Shri Sanjay Grover held 49% share in the above company. what was the business activities of the company and how the company earned such a huge amount in a short period of time. It appears that the company created was a paper/shell company created for accommodation entries. 3 On facts and circumstances of the case and in law, the CIT(A) erred in observing that the contention of the assessee that the receipt of donation from Late Shri Sanjay Grover has been incorporated in the income and expenditure account. Hence, it cannot be taxed again. This submission of the assessee is also not acceptable as the money was originally credited in the books of....
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....ven to much credence to the fact of transaction being from the banking mode. 9.1 On the other hand the AR has reasserted the averments as raised before CIT(A) and relied the order of the CIT(A). 10. Appreciating the matter on record and the rival contentions it comes up that CIT(A) has taken into cognizance the fact that Sh. Sanjay Grover as an individual and non-resident was assessed to tax by the same AO completing assessment u/s. 153C and 144 of the Act and no addition was made in his assessment. This, to our mind is of great assistance to the assessee as where the credibility of source is doubted and the assessment of source is on the reported income then it is not justified to doubt the source and specially when the matter pertains to a charitable and religious society whose funds are to be used for public utility only. 10.1 It further comes up that the CIT(A) has appreciated the fact that funds in the account of Sh. Sanjay Grover had come from Dubai from his bank account with Bank of Baroda. Thus there is no doubt that AO accepts the funds in the NRE account of Mr. Sanjay Grover were remited from abroad. The CIT(A) also appreciated that the source of deposits in NRI ....