TaxTMI 
TaxTMI 
2024 (11) TMI 532
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.... the Ld. CIT(A) erred in deleting the addition of Rs. 3,44,2700/- despite the fact that M/s Sneha Ferromet Pvt. Ltd. is a group company of assessee concern which had provided loan to the assessee of Rs. 1,85,00,000/- while balance sheet of this group company has capital of Rs 24,41,033/- only?" 3. Where as in the cross objection assessee has challenged the validity of reopening u/s. 147. 4. The brief facts are that the assessee has filed its return of income on 28/09/2011 declaring total income of Rs. 35,00,611/- The same was duly accepted u/s. 143(1). Earlier, a search and seizure action u/s. 132 was conducted on 12/10/2011 of M/s. Pipava Defence and Offshore Engineering Co. in which assessee was also included. Accordingly, assessment was passed u/s. 143(3) r.w.s. 153A vide order dated 26/03/2014 declaring total income at Rs. 49,06,660/- after making certain additions / disallowance. Later on, an information was received from Investigation Wing vide letter dated 16/03/2018 that assessee had purchased property for Rs. 3,44,27,000/- in F.Y.2010-11 and had shown gross total income of Rs. 29,15,842/- in his return of income. Further, there is no nexus between the income of the asses....
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..../2018 declaring total income of Rs. 28,02,890/-, raised objections stating that during the course of original assessment proceedings, all the details of immovable properties were filed and were examined. Assessee had submitted specific details which were called for re-conciliation of entries in light of AIR information alongwith return of income; copy of purchase agreement, bank statements highlighting the source of purchase of property made during the year. Assessee had already responded and filed the detailed reply vide letter dated 12/03/2014 wherein all the necessary purchase agreement alongwith ledger account, bank statement etc. were filed for the property (i.e. residential Flat Neel Kamal and land at Alibaug Zirad). Further, during the course of assessment proceedings u/s. 153A, ld. AO had again specifically examined the claim of the assessee for purchase of whole of property and the same was duly accepted after considering the explanations. Therefore, reopening the case once again u/s. 148A is bad in law and the amounts to 'change of opinion'. Alongwith the said objection assessee had filed all the details filed earlier during the course of assessment proceedings and in res....
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....Court in the case of Sumati Dayal (214 ITR 801) held that if the explanation offered by the assessee about the nature and source thereof any sum credited in the books of accounts then the same is chargeable to tax as income of the assessee. Considering the above facts and circumstances of the case, it is held that the assessee failed to prove the creditworthiness of person from whom loan and advances was provided. Thus, the source of income of the property purchased amounting to Rs 3,44,00,000/- remains unexplained and found suspicious and the same is being added to the total income for the year under consideration. Penalty u/s 271(1)(c) of the Act, 1961 is being initiated for concealment of income." 7. Before the ld. CIT (A) assessee has challenged the reopening u/s. 147. However, the ld. CIT(A) dealt the issue on merits. In so far as addition made by the ld. AO, ld. CIT(A) after considering the entire material placed on record have deleted the addition after observing as under:- 7.3 In this regard, it is observed that the identity of the lender is proved by the ITR. Further, the genuineness of the transactions can also be safely concluded from the confirmations filed and the....
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..... He submitted that Assessee had already submitted the source of investment in the reply dated 16/11/2018 before the AO. Regarding source from Sneha Ferromet Pvt. Ltd., he submitted that assessee is a Director of the said company and assessee has given the bank statement, confirmation of account and the balance sheet to prove the source of the funds for giving the loan. Thus, the source of purchase of the property could not have been disputed. Accordingly, the ld. CIT(A) has rightly deleted the said addition. 11. We have heard both the parties and also perused the relevant material placed on record. First of all it is seen that ld. AO has reopened the case completed u/s. 143(3)/153A solely based on information from the Investigation Wing which too was based on analysis of the value of the property, gross total income shown by the assessee and presumed incapacity of the company M/s. Sneha Ferromet Pvt. Ltd who has provided such loan on the premise that the income of such company was meager. There was neither any inquiry by the Investigation Wing nor by AO from the Company. There is no application of mind by the AO on the information received to verify the records whether assessee h....