TaxTMI 
TaxTMI 
2024 (11) TMI 1422
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....A notice u/s 153C of the Act was issued and served upon the assessee. In response, the assessee filed the return of income on 08.11.2021 declaring total income at Rs. Nil. The assessee was engaged in the business of hospitality segment. During the course of search operations, cash amounting to Rs. 12,35,30,000/- was found and seized. Also various incriminating documents in the form of note books/diaries have been seized vide Annexure A-38 to A-47 from the residence of Shri Jiten Pujari, who was one of the key employee of the Triton Group, drawing salary from the account of M/s. Noble India Construction Company (proprietary concern of Shri Shivshankar Sharma.The AO has reproduced the extract of some of the statements of Sh.Jitin Pujari in respect of cash transaction carried out on the instruction of Sjivshankar sharma and Ratnakar Sharma. The assessment u/s 153C of the Act was finalized on 29.03.2022 after making various additions u/s 69C, 68 and u/s 37 of the Act. Further facts of the cases are discussed while adjudicating the various grounds of appeal filed by the revenue and by the assessee. 3. Ground No. 1: Deleting addition of Rs. 3,00,000/- out of the addition of Rs. 6,00,0....
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.... During the course of assessment proceeding on perusal of the audited financial statement of the assessee for the year under consideration it was found that assessee had taken loan of Rs. 55,00,000/- from M/s. Malvika Herbo Pharma Pvt. Ltd. On query, the assessee submitted detail of unsecured loan along with address of the party, PAN, amount received, interest paid, bank account statement, confirmation of account, ITR Form etc. as required by the assessing officer. However, the AO has not agreed on the basis of the financial of the above mentioned lender and concluded that the assessee failed to establish the creditworthiness of the lendor. Therefore, the loan amount was added to the total income of the assessee as unexplained cash credit u/s 68 of the Act. 7. The assessee filed appeal before the ld. CIT(A). The ld. CIT(A) deleted the impugned addition holding that assessee has submitted confirmation of ledger account, ITR, ROC particulars and also stated that said entity was having substantial long term borrowings as well as advances given and only on the basis of such financial statement it would be inappropriate to hold that loan amount was not genuine. 8. Heard both ....
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.... 12. Heard both the sides and perused the material on record. It is undisputed fact that AO had made disallowance of purchase expenses on estimation basis and the AO had not brought any relevant material on record to prove that in fact the expenditure claimed were nongenuine. Further, on the submission of the assessee, we find that the impugned assessment was non-abated assessment and no incriminating material was found and seized on the impugned issue of disallowance of expenditure. Therefore, the same is not sustainable as held by the Hon'ble Supreme Court in the case of Abhisar Buildwell Private Limited (293 taxman 141). Considering the aforesaid facts and finding, we do not find any error in the decision of ld. CIT(A) therefore this ground of appeal of revenue is dismissed. 13. Ground No. 5: Deleting addition of Rs. 5,74,451/- u/s 69C of the Act: The assessing officer was of the view that assessee had also paid commission on the disallowed 2% of purchases as discussed above in ground no. 4 of appeal of the Revenue. Therefore, the AO has also estimated commission @ 2% to the amount of Rs. 5,74,451/- and added u/s 69C of the Act to the total income of the assessee. The ld. ....
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....ciate the submission made by the appellant wherein it was submitted that the said amount was repeated on page nos. 19, 27 of the Annexure 39 and diary page no. 8 of Annexure 41. Thus, the said entry was a repeated entry which was already taxed in the hands of the appellant in para 21 of the Assessment Year. 4.6 The appellant has also drawn my attention to the rectification application filed before the AO on 26.04.2022. On a perusal of the said pages, it is seen that these entries are repetitive in nature. They appear to be in the nature of ledger and journal type where one entry is posted from one annexure to another in some kind of double entry system. While I agree with the AO on the merits of these additions, they can be made only once and cannot result in double addition. For the reason that the said addition gets covered by the larger addition made by the AO in para 21 of assessment order, this addition stands deleted. Hence, this part of the claim of the appellant stand allowed." 16. After perusal of the material before us and on perusal of the finding of the ld. CIT(A), it is clear that the AO has made the double addition on the basis of similar entries appearing....
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.... sides and perused the annexure A-42 containing the ledger account of Malkiyat Singh. In the said ledger account there were two entries of Rs. 12,00,000/- and Rs. 20,00,000/- in respect of aforesaid party. The assessee has recorded the same entries with narration in the general ledger as found and seized vide annexure A-39. This fact shows that actually there was double addition made by the AO of the same amount therefore we do not find any mistake in the decision of ld. CIT(A). This ground of revenue is dismissed. 21. Ground No. 4: Addition amounting to Rs. 112,04,750/- on the basis of titled 'Sameer/Orise/Ankit China' as found in Annexure A42. However, the ld. CIT(A) has deleted the same as double addition: During the course of assessment on the basis of page no. 57 of Annexure A - 42, the assessing officer had added back the payment made to 'Sameer/Orise/Ankit China'. However, the ld. CIT(A) has deleted the same as double addition. On perusal of the material on record, we find that the similar amount was also mentioned in the journal entries of the transaction as per Annexure 41 wherein this amount was mentioned as Rs. 37,37,500/-, 37,50,000/-, 37,17,250 aggregating ....
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....ound of appeal of the revenue is dismissed. 25. Ground No. 7: Addition of Rs. 30,00,000/:- On perusal of Annexure A-42 at page 82, the AO found that payment has been made to 'Jaipur Lights Mahima Ent' of Rs. 30,00,000/- on 11.11.2019, the ld. CIT(A) deleted the same as duplicate addition. In this regard, we find that same amount has been mentioned in the record of journal entries mentioned in Annexure A-39 wherein on 11.11.2019 amount of Rs. 30,00,000/- was posted with the narration of the transactions matching with the entry posted in the ledger account maintained in annexure A42. Therefore, this ground of the revenue is dismissed because of repetitive additions. 26. Ground No. 8: Addition of Rs. 1,10,00,000/-: During the course of assessment on perusal of Annexure A-42 page 73 the AO noticed that in the ledger account 'Udaipur Construction A/c' an amount of Rs. 50,00,000/- on 07.11.2019 Rs. 30,00,000/- on 07.02.2020 and Rs. 31,00,000/- on 03.03.2020 aggregating to Rs. 1,10,00,000/- were mentioned and the assessing officer treated the same as unexplained expenditure u/s 69C of the act. The ld. CIT(A) deleted the same as double addition as the same was also reflected....
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....he assessee. The ld. CIT(A) has deleted the addition on the reason of absence of linking of such payment to the assessee in the form of unexplained expenditure. We find that assessing officer has not brought any material on record to substantiate that M/s. Warden Baker has made payment to Randolph Gray Design Company Ltd. on behalf of the assessee company and nowhere in the entries it is mentioned that such payment had been made on behalf of the assessee. Therefore, this ground of appeal of the Revenue is dismissed. 29. Ground No. 11: Addition of Rs. 3,12,88,054/- u/s 69C of the Act: The assessing officer has made addition of Rs. 3,12,88,054/- on the basis of entries found in the annexure containing ledger account stating that M/s. Warden Baker has made payment to Shri Ashok Ummat on behalf of the assessee. However, the ld. CIT(A) has deleted the addition on the ground that transactions were pertained to two foreign entities and AO has failed to substantiate with any evidence that the said payment has been done on behalf of the assessee. We find that these were the transaction between two foreign entities and there was no linking of such transaction with the assessee-company.....
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....of the Act: During the course of assessment on examination of the back-up of iphone - 11 of Ratankant Sharma the assessing officer retrieved document in the form of debit note issued by AI Garhoud General Trading LLC, UAE to M/s. Warden Baker. The AO was of the view that such payment has been made by M/s. Warden Baker to various entities on behalf of the assessee therefore same was added u/s 69C of the Act. The ld. CIT(A) deleted the addition holding that AO could not link the same as unexplained expenditure incurred by the assessee. Similar to the findings as discussed supra while adjudicating the identical issues we consider that AO has not brought on record any relevant evidence to demonstrate that actually such foreign payments have been made on behalf of the assessee. Therefore, this ground of revenue is dismissed. 33. Ground No. 15: Deleting addition of Rs. 3,85,66,850/- made u/s 69C of the Act: During the course of assessment, the assessing officer made addition on the basis of debit note and invoice raised by M/s. Biosilk International Pte. Ltd. on M/s. Warden Baker as retrieved from the phone of Shri Ratankant Sharma. The AO was of the view that payment to Biosilk....
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....otal inflated expenses of Rs. 10,52,30,750/- since the cash generated out of accommodation entries has been utilized towards unexplained expenditure. On perusal of material placed on record we find that there is clear entries of receipt appeared on the left side and entries of payment reflected on the right side of the journal in Annexure A-39. Therefore, we consider that ld. CIT(A) has rightly allowed the set off of Rs. 4,66,00,000/- after co-relating the transactions as discussed. Therefore, looking to the facts and material placed on record, we do not find any reason to interfere in the decision of ld. CIT(A). Accordingly, this ground of appeal of revenue is dismissed. ITA 3141/Mum/2023 (Revenue Appeal) 36. Ground No. 1: deleting addition of Rs. 8,00,000/- made u/s 69C of the Act by treating the addition as duplicate addition. Actually we find that the assessee has contested before CIT(A) deleting of addition of Rs. 40,00,000/- not Rs. 8,00,000/- as per ground no. 1 of appeal filed before the ld. CIT(A). During the course of assessment, the assessing officer noticed in the ledger account titled 'Sameer/Orise/Ankit China' as per note book found/seized vide Annexure A-42 ....
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....aipur-Fabric/Duvet etc. In the said ledger a/c there was detail of transaction of payment of Rs. 10,00,000/- made to the above referred parties therefore assessee was asked to explain why the same should not be considered as unexplained expenditure u/s 69C of the Act. The assessee submitted that the said diaries were maintained by Shri Jiten Pujari without their knowledge and they were not able to comment upon the contents of the same. It is also submitted that nowhere in the diary, the name of the assessee was mentioned. The AO has not agreed with the submission of the assessee and treated the amount of Rs. 10,00,000/- as unexplained expenditure u/s 69C of the Act. 39. In the appeal, the ld. CIT(A) has deleted the addition holding that there was repetitive addition therefore same was deleted. Similar to the finding given while adjudicating ground no. 1 of the appeal of the assessee as above in the order, we find that there was double addition of same amount made by the assessing officer on the basis of transaction reported in the ledger account and the similar transaction mentioned in the journal entry. Therefore, this ground of appeal of revenue is dismissed. 40. Ground No.....
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....nbsp; 5,61,47,010 43. On query the assessee submitted that all these transactions were genuine in nature and no disallowance be made in this regard. The assessee had also submitted sample copies of invoices and also submitted that aforesaid purchases have been debited to capital work in progress. The assessing officer has not agreed with the submission of the assessee and treated the impugned expenses amounting to Rs. 561,47,010/- as non-genuine and disallowed the same u/s 37(1) of the Act. 44. In the appeal, the ld. CIT(A) has deleted the impugned addition holding that assessing officer has neither made any examination nor made any independent enquiry to demonstrate that such expenditure was non-genuine expenditure. 45. Heard both the sides and also perused the material on record. We find that the assessing officer had not brought any material on record to substantiate that in fact the aforesaid expenditure was non-genuine expenditure. Further, the AO has not carried out any enquiry with any of the party to controvert the submission of the assessee and to disprove the genuineness of the transactions. In view of the aforesaid material facts and circumstances w....
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.... ld. CIT(A) has sustained the addition. During the course of appellate proceedings before us, the ld. Counsel submitted that the AO has made this addition on the basis of ledger account of Mr. Adsure found in the diary of Mr. Jiten Pujari and there was no reference of assessee's name on these entries. Further Mr. Jiten Pujari nowhere stated that such expenses related to the assessee. After hearing both the sides and perusal of material on record we find that at page 28 to 29 of the assessment order the assessing officer had reproduced the ledger a/c in the name of "adsure" maintained at page no.87/59 of the ledger found and seized as per annexure A-42. The authenticity and correctness of the transactions made through banking channels were not controverted. Therefore, we consider that it is evident that aforesaid party has been engaged for providing legal professional services to the assessee and only the amount which was reflected in the ledger account as paid in cash to the said party was added to the income of the assessee. Since the source of cash payment was not explained therefore we do not find any infirmity in the decision of ld. CIT(A). Accordingly, this ground of appeal of....
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....he different years. There is a transaction of Rs. 3,00,000/- of making cash payment to Shri Sandeep Putambekar for availing architectural services therefore we do not find any reason to interfere in the decision of ld. CIT(A). Therefore, this ground of appeal is dismissed. 54. Ground No. 4: Action of the assessing officer in invoking the provisions of section 115BBE of the Act without considering the facts and circumstances of the case: This ground of appeal was not discussed before us therefore same stand dismissed. 55. Ground No. 5: The ld. CIT(A) and assessing officer was erred in making addition on the basis of statement of Shri Jiten Pujari without appreciating that he himself has denied during crossexamination before the assessing officer about authenticity of date in the seized diary: During the course of appellate proceedings before us, the assessee pointed out that all the third parties have retracted their statement after the search therefore the same have no evidential value unless based on seized document co-related with the assessee. Heard both the sides on this issue and perused the material on record. We have discussed the nature of additions and the r....
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....e Supreme Court as referred above no addition can be made. However, in respect of addition of loan taken from Krish Chemicals Private Limited, we find that AO has referred Annexure A-41 wherein transaction pertaining to Krish Chemicals Pvt. Ltd. was recorded of R.2,76018. The assessing officer treated the same as unexplained cash credit u/s 68 of the act. However, we find merit in the submission of the Ld. Counsel that the said transaction was carried out through banking channel as evident from the details mentioned at page 7A of annexure A-41 with relevant details of amount, cheque no. and submission made on the point that that same was duly recorded in the books of the assessee. Therefore, the action of the assessing officer in treating the same as cash credit is not justified we direct the assessing officer to delete the addition of Rs. Rs. 2,76,018/- made u/s 68 pertaining to Krish Chemicals Pvt. Ltd. Accordingly the ground of appeal of the assessee is partly allowed. 58. Ground No. 2: Addition to the extent of Rs. 6,50,000/- made u/s 69C of the Act in respect of payment made to Shri Rabindra Adsure unexplained expenditure: As discussed during the course of search a....
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....td. as unexplained expenditure: During the course of assessment on perusal of the whatsapp chat data retrieved from the phone of Shri Ratankant Sharma, the assessing officer observed that conversation in the whatsapp chat was pertained to pending designs/drawings from M/s. Belt Collings International (Singapore) Pte. Ltd., M/s. KLD Consulting Pte Ltd. and Randolph Gray Design Company Ltd. for Raffles Udaipur Project. Therefore, the AO opined that M/s. Belt Collings International (Singapore) Pte. Ltd. has been engaged by the assessee for its refers Udaipur Hotel Project. The AO has also referred the contents of the e-mail from the g-mail backup account of Shri Jiten Pujari and Vardha Enterprises Pvt. Ltd. wherein mail from M/s. Belt Collings International (Singapore) Pte. Ltd. was found. The assessing officer further noticed from page 54 of the Annexure A-42 in the name of M/s. Belt Collings International (Singapore) Pte. Ltd. as reproduced at page no. 42 of the assessment order and observed that total amount of USD 165000 has to be paid to M/s. Belt Collings International (Singapore) Pte. Ltd. against which total payment of USD 100000 had been made to M/s. Belt Collings Internat....
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....source of such foreign currency receipt in the hands of the assessee. On the other hand, ld. DR relied on the order of lower authorities. The ld. DR has also referred the case of Hon'ble Supreme Court in the case of Sumati Dayal vs CIT (1995) 80 taxman 89 (SC) and CIT vs Durga Prasad More (1971) 82 ITR 540 (SC). Heard both the sides and perused the materials on record. The assessing officer opined that amount in USD mentioned at page no.54 of the annexture A-42 was the unexplained payment made to M/s Belt Collins International Singapore by the assessee. On perusal of material on record it is noticed that the assessing officer has not conducted any enquiry and brought on record any material to substantiate that such amount has been paid by or on behalf of the assessee. Even the email referred by the assessing officer was related to making arrangements of the persons from the Accord Group. The ld. Counsel also submitted that in other cases of foreign payment the CIT(A) has deleted the additions. Nowhere in the referred documents mode of making payment was mentioned. We consider that the case laws referred by the ld. DR are not applicable to the facts and circumstances of ....
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....e of Shri Ratnakant Sharma come to the conclusion that payment was made to M/s. KLD Consultant Pte. Ltd. by M/s. Warden Baker in USD on behalf of the assessee for providing lighting design etc. However, the assessee has denied making such payment to the aforesaid parties in USD. 68. On perusal of material on record, we find that the AO had not made any enquiry to ascertain the truth of the fact to prove that foreign parties had made payment to the other parties in USD on behalf of the assessee, therefore, we consider that ld. CIT(A) is not justified in sustaining the addition in contrary to his findings on the foreign payment issue in other cases as discussed supra in this order without establishing the fact that payment has been made actually on behalf of the assessee by one foreign party to other foreign party. Accordingly, this ground of appeal of the assessee is allowed. 69. Ground No. 7: Addition of Rs. 49,58,640/- u/s 69C of the Act by considering alleged payment made to Randolph Gray Design Company Ltd. as unexplained expenditure: During the course of assessment on perusal of page no. 52, 53 and 55 of the Annexure A-42 seized and page no. 7 of Annexure A-46 seized f....
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....y the assessee. The assessing officer has not carried out any enquiry with those parties therefore, the lower authority has drawn negative inference purely on presumption basis against the assessee company. He also submitted that even the transaction was recorded in USD which was not possible from the end of the assessee without showing any source of such foreign currency in the hands of the assessee. The ld. DR supported the order of lower authority. 71. Heard both the sides and perused the material on record. We find that aforesaid transaction was carried out in USD between the foreign based entities. The AO has made the impugned addition only on the basis of statement of Shri Ashok Ummat that M/s. Warden Baker was a foreign company known to the assessee. The AO had not examined its veracity by making further inquiries to ascertain the relevant supporting material and evidences to substantiate that foreign party had actually made payment to the other foreign party on behalf of the assessee. Similar to the ground no.5 of the assessee as discussed supra the assessing officer has neither conducted any enquiry with the parties about the involvement of the assessee nor brought any ....
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....de of A-39 and 41 were as under: FY Particular Amount FY: 19-20 Payment towards construction of Hotel 10,11,20,500 FY: 20-21 Payment towards construction of Hotel 1,80,00,000 76. Before the assessing officer, the assessee submitted that the said loose sheets were maintained by Shri Jiten Pujari without their knowledge and they were not in a position to comments upon the contents of the same within short span of time. The assessee also submitted that during the cross examination proceeding dated 10.03.2022 Mr. Pujari has confirmed that the same were personal noting and repetitive entries. The AO has not agreed with the submission of the assessee and after detailed examination and corelation of the seized note book and other material concluded that these entries contained systematic record of unaccounted transaction carried out by the various Triton Group entities including the assessee. Therefore, the aforesaid payments of Rs. 10,11,20,500/- was considered as unexplained expenditure and added back u/s 69C of the Act. During the course of appellate proceedings, the ld. CIT(A) after considering the submission of the assessee found that there was repetitiv....
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....sp;This ground of appeal filed by the assessee has already been discussed while adjudicating ground no. 2 of appeal filed by the assessee. Therefore, for the reason as discussed while adjudicating ground no. 2 of appeal this ground of appeal become infructuous and the same stand dismissed. 82. Ground No. 4: The ld. CIT(A) has erred in confirming the action of assessing officer in invoking the provisions of section 115BBE of the Act without considering the facts and circumstances of the case. This ground of appeal was not discussed therefore, the same stand dismissed. 83. Ground No. 5: Erred in restricting the benefit of telescoping to the extent of Rs. 4,66,00,000/- without telescoping appreciating the fact that addition sustained in earlier year is also available for the telescoping: This issue is discussed while adjudicating ground no. 2 of appeal filed by the assessee. Before us, the ld. Counsel submitted that as discussed in para 20 page 15 of the assessment order, assessee has inflated certain expenses debited to work in progress account in F.Y. 2017-18, 2018-19 and 2019-20 and received back cash. It is also submitted that ld. CIT(A) confirmed addition u/s 69C on v....