TaxTMI 
TaxTMI 
2024 (12) TMI 906
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.... record, the PCIT is not right in stating that the AO has framed the appellant's assessment without application of mind. 4. The AO after due application of mind and consideration of all facts has added the cash found of Rs. 33,48,921/- in the premises of the firm, in the appellant's hands, due to the reason that the same was out of unaccounted finance mediation business carried out by the appellant. 5. The AO having carried out the exercise to add the cash found in the firm's premises in the appellant's hands, the PCIT's erroneous contention that the order of assessment is erroneous is incorrect and on an improper piece-meal consideration of the total facts of the case. 6. The income from. the unaccounted finance mediation business having been added as unexplained money of the appellant, the order of assessment can by no stretch be stated to be prejudicial to the interest of the revenue. 7. The PCIT has grossly erred in stating that the issue of debtor balance was not considered in the appeal before the CIT(A) when cash of Rs. 33,48,921/- found during the search of the partnership firm, added as appellant's unexplained money was disputed in appeal be....
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....o suitably assess the sources for investment made in the money-lending business. The same makes order erroneous and prejudicial to the interest of revenue and hence, liable for revision in terms of Explanation 2(a) to Section 263. Accordingly, the assessee was show-caused on 13-03-2024. 2.3 The assessee defended the assessment on the ground that the debit balance of Rs. 34.61 Crores was already considered in the hands of firm M/s. Sri Ram Studio by the AO in the assessment proceedings which had been deleted by the CIT(A) in the appellate order of M/s Sriram Studio. Further, it was also stated that the assessee only mediated for arrangement of finance for a commission of 0.1% and cash addition was on account of unaccounted cash generated out of his commission business. The assessee thus stated that this issue was already considered in the assessment proceedings and therefore, revision was not justified. 2.4 The Ld. Pr. CIT noted that an appeal was filed by M/s Sriram Studios against the assessment order passed in their own case. The assessment and appeal proceedings in the case of M/s Sri Ram Studios were entirely independent of any revisionary proceedings u/s 263. In the case of ....
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....ter giving suitable opportunity to the assessee. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 3. Upon perusal of documents as placed in the paper-book, it could be seen that the assessee was searched and his statement was recorded on 21-01-2020 and 22-01-2020. Subsequently, notices were issued u/s 153C to the assessee for AYs 2014-15 to 2016-17. Another notice u/s 142(1) was issued to the assessee for AYs 2014-15 on 20-02- 2021 (Page No.31 of the paper-book). In this notice, the assessee was inter-alia, required to explain the seized documents vide Annexure- ANN/SM/SS/SS/B&D/S1 to S11 and the tally data present in Annexure ANN/SM/SS/ED/S and excel book named as Annexure - SRS daybook ledger. On the basis of the same, it was noted that the assessee was in the habit of sourcing funds by way of cash loan from the persons who are involved in money lending business un-officially and advancing them to various entities including Vellammal Group. In Point No.13, the summary of debit and credit balances as found in SRS day-book from FYs 2011-12 till 2019-20 was tabulated. The assessee was directed to explain the same and these amounts were proposed....
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....en framed by same Assessing Officer, Central Circle 2(4), Chennai. In the light of above factual matrix, it could very well be said that the source of investment in money lending business was duly enquired into by Ld. AO during the course of assessment proceeding. The assessee had furnished the replies to the satisfaction of Ld.AO. It was duly explained that out of total amount in circulation in money lending, almost 98% represent borrowed funds. It was also explained that the quantification of debits / credits as shown in the notices was not a true reflection of either the gross amount lent or borrowed and therefore, these amounts could not be considered as income of the assessee. The assessee also explained that the amount outstanding as debtors on the date of search was Rs. 35 Crores and the source for this could only be out of the income generated from money-lending business over the period. The Ld. AO also failed to take into consideration the corresponding amount outstanding on the same date in the loan creditors' account. The detail of creditors and debtors as on 21-01-2021 was duly furnished as Annexure-1 and Annexure-2 of the reply. Thus, the issue of investment in money l....