TaxTMI 
TaxTMI 
2025 (4) TMI 24
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....4.2022 determining total income at Rs.213,65,88,529/- after making an addition of Rs.4,97,14,659/- representing unexplained expenditure under the head 'xyz' expenses u/s 69C read with section 115BBE of the Act, addition made of Rs.2,77,79,000/- representing cash payment made to Chetak Enterprises for purchase of an old machinery and held as unexplained investment by invocation of section 69B read with section 115BBE of the Act and further addition made of Rs.1,00,00,000/- representing alleged cash payment made to supplier namely Aggarwal Spun Pipes and Verticast Concrete (P) Ltd. and held as unexplained expenditure by invocation of section 69C read with section 115BBE of the Act. 3. Aggrieved, the assessee preferred an appeal before the ld. CIT(A). After considering the submissions made by the assessee, the ld. CIT(A) confirmed the aforesaid additions made in the assessment order dated 11.4.2022 u/s 153A of the Act. 4. Aggrieved, the assessee is in appeal before us and has raised the following grounds of appeal :- "1 That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the assumption of jurisdiction u/s 153A of....
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.....1 That while confirming the above addition, the learned Commissioner of Income Tax (Appeals) has failed to appreciate the factual substratum of the case, statutory provisions of law and as such, addition so made and sustained is highly misconceived, totally arbitrary, wholly unjustified and therefore, unsustainable. Prayer It is therefore, prayed that it be held that notice issued u/s 153A of the Act and also assessment framed u/s 153A of the Act are without jurisdiction and deserve to be quashed as such. It be further held that addition made and sustained by the learned Commissioner of Income Tax (Appeals) be deleted and appeal of the appellant company be allowed." 5. Grounds No.3 to 3.2 relate to addition of Rs.4,97,14,659/- representing alleged expenditure incurred under the head 'xyz' expenses and held as unexplained expenditure u/s 69C read with section 115BBE of the Act. 6. Considered the rival contentions and perused the material on record. We are of the considered view that since the facts relating to the above said grounds are identical to the Grounds 4 to 4.2 in ITA No.2321/D/2023 for Assessment year 2014-15 in the case of assessee which have alrea....
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....; 5,42,000 7,31,200 5,00,000 45,000 1,21,200 35,000 98,45,975 2,05,26,700 2,08,85,557 4,97,14,659 78. The relevant text for the impugned year based on which addition has been made is as under: 79 During the course of appellate proceedings, Vide letter dated 04.07.2023,a Copy of the impugned document was sent and confronted to the appellant. The appellant in response to the letter has stated as under (vide his letter dated 04.07.2023) :- "It is respectfully submitted that it is undisputed that the printout now supplied was never confronted to the appellant during the assessment proceedings. It is submitted since the aforesaid printout has never been made the basis of addition by confronting the same to the appellant no addition can now be validity be made particularly when it is a apparently third party document and not a document signed by the appellant or prepared by the directors of the appellant. It is thus submitted in absence of any inquiries h....
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.... a sheet marked as page no. 182 Annexure 8 was found and seized from the office premises of the assessee at 4th Floor, Vikas Surya Shopping Mall, Rohini, Delhi. The sheet is reproduced by the ld. CIT(A) in his order at page 17 as Image 8.1 and the same is retyped as under: S.No. Buyer Vehicle Type Number Total Amount of Sale Cash Bill amount GST Bank Amount 1 BGCC U.P. Vogek Payer 7500000.00 3000000.00 4500000.00 810000.00 5310000.00 2 BGCC U.P. Vogek Payer Punjab 7500000.00 4300000.00 3200000.00 576000.00 3756000.00 3 BGCC U.P. CAT Grader 3500000.00 2700000.00 800000.00 144000.00 914000.00 4 BGCC Haryana CAT Grader 3500000.00 2700000.00 800000.00 144000.00 914000.00 5 BGCC Haryana CAT Grader 3500000.00 2700000.00 800000.00 144000.00 914000.00 6 BGCC Haryana Tandem Roll 950000.00 550000.00 400000.00 720000.00 472000.00 BGCC U.P. Tandem Roll 950000.00 550000.00 400000.00 720000.00 472000.00 BGCC U.P. Tandem....
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....ya Shopping Mall, Rohini, Delhi. As the addition is made on the basis of seized material, therefore, the Assessing Officer was justified in bringing into tax in assessment u/s 143(3) of the Act. Additionally, this is the year in which the search took place. 35. By virtue of section 69B of the Act, it becomes obligatory on the part of the appellant to explain, to the satisfaction of the AO, the source of /investment made by the appellant of Rs.2,77,79,000/. The appellant during the course of assessment and appellate proceedings has failed to prove the source money available for making investment in cash to the extent of Rs.2,77,79,000/-. In view of the facts discussed above, the impugned issue is decision in against of the appellant. Consequently, the addition of Rs.2,77,79,000/- is confirmed. Grounds 10 is dismissed." 11. Before us the learned AR submitted that assessee purchased old machinery from M/s Chetak Enterprises during the financial year 2020- 21 relevant to assessment year 2021-22. The details of the purchase of old machinery is as under: Sr.No. Date of Invoice Invoice No. Amount (Rs.) Tax (Rs.) Total Bill (Rs.) i) 3.6.2020 CEL/GZB/0....
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....e entire transaction is duly supported by the valuation report of an independent valuer taken before the purchase of machinery. Reliance was placed on the following propositions: I. That seized material in absence of any corroborative evidence found from the possession of the appellant, cannot form basis for making any addition. i) 291 ITR 36 (Del) CIT v KulwantRai ii) 293 ITR 43 (Del) CIT v. S.M. Aggarwal iii) 296 ITR 619 (Del) CIT v. GirishChaudhary iv) 305 ITR 245 (Del) CIT vs. VedParkashChaudhary v) 308 ITR 230 (Del) CIT vs. D.K. Gupta vi) 383 ITR 320 (Del) CIT v. VatikaLandbase (P) Ltd. vii) 393 ITR 276 (Bom) CIT v. Arpit Land (P) Ltd. viii) 332 ITR 468 (P&H) CIT v. Atam Valves (P) Ltd. ix) 212 Taxman 1 (Del) CIT v. Jai Pal Aggarwal x) 187 ITD 289 (Asr) Smt. HarmohinderKaur v. DCIT xi) 165 TTJ 145 (Del) ACIT v. SharadChaudhary II That statements recorded/material relied and gathered behind the back of the assessee and without any opportunity for cross examination despite specific request made during the course of assessment proceedings, cannot be relied upon as ....
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....ts of the assessee stands accepted. However, it is noted that sheet marked as page no. 181 and 182 of Annexure A8 seized from the office premises of assessee at 4th Floor, Vikas Surya Shopping Mall, Rohini, Delhi are print outs in the shape of loose paper. It is noted that these loose papers are dumb documents. The assessee during the course of assessment proceedings denied making any such payment and vide reply dated 7.7.2022 filed by the assessee submitted as under: "i. It is submitted that the assessee has purchased second hand machinery from M/s Chetak Enterprises Ltd. State-wise ledger accounts of M/s Chetak Enterprises Limited in the books of M/s BrijGopal Construction Company Pvt. Ltd. for the financial year 2020-21 are enclosed herewith at Annexure-1. Further no cash was paid at all by the assessee in lieu of the said machinery. ii. Copy of Invoices along with e-way bills of M/s Chetak Enterprises Limited for the financial year 2020-21 are enclosed herewith at Annexure-2 iii. Further it is submitted that being second hand machinery the said transactions was entered into as per the valuation report of a govt. registered valuer. Copy of valuation re....
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.... is neither dated nor signed/stamped, there is no head note on the paper which could suggest the purpose for which it was created, the loose paper contained list of many other property transaction which were related neither to the assessee nor to Sh. Buti Singh (seller) which demonstrates that neither the assessee nor the seller was the author of the document. The loose paper did not belong to the assessee or to the seller, there is no description or comment explaining the hand written jottings-whether it represented a proposal for purchase or construction by the builder or payment between assessee and right seller, there is no date of receipt or payment mentioned against any figure, the content of the paper was incorrect as the total sales consideration did not match to the sales consideration as per the agreement. Further, the sales consideration as per the loose paper did not even match to the handwritten jottings which raise serious doubts on its validity and accuracy. 14. Thus, the above said loose paper was not speaking document and it is a dumb document which can be used as a basis for making the addition u/s 69 of the Act in the absence of any substantive enquiry t....
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....ss examine the said person. The AO has not even made any enquiry about the value of the old machinery purchased by the assessee. Considering the totality of the facts and circumstances, in the light of the above discussions, there was no justification for the ld. CIT(A) to have sustained the addition of Rs.2,77,79,000/- and accordingly, we delete the addition of Rs.2,77,79,000/- made u/s 69B of the Act. In view of the above discussion, Grounds 4 to 4.2 raised by the assessee are allowed. 20. Grounds 5 to 5.1 are regarding that addition made of Rs.1,00,00,000/- representing alleged cash payment made to supplier namely M/s Aggarwal Spun Pipes and Verticast Concrete (P) Ltd. and held as unexplained expenditure by invocation of section 69C read with section 115BBE of the Act. 21. The relevant facts in brief are, that as a consequence of search, a sheet marked as page no. GO-2, A-12 found/seized during the course of search and seizure proceedings from the office premises of the assessee at 201- 206, 2nd floor, Manglam Place, Sector-3, Rohini. The sheet is reproduced by the CIT (A) in his order at page 19 and the same is retyped as under :- Brij Gopal Construction, Jhajjar Verti....
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....the entries on the ledger on all pages is found to be written continuously in continuity and purposefully. Hence, the amount which could not be explained with relation to the cash withdrawals hereby remained unexplained. On a perusal of the documents, it is evident that the payments as appearing are required to be reconciled with the books of accounts. If assessee is unable to reconcile with the books of accounts then naturally the payments become unaccounted and so the onus upon the assessee is to explain the source thereof. Clearly the expenses which have been made in cash, have not been recorded in the books of accounts. Thus by virtue of sec 69, it becomes obligatory on the part of the assessee to explain, to the satisfaction of the AO, the source of expenditure/investment made by him, with a rider that if the explanation is not satisfactory, the AO could use his discretion to add the expenditure as deemed income for the year in which the expenditure was incurred. In view of the above discussion, the assessee has failed to discharge his onus to explain such expenditure/investment with his bank withdrawals/ other corroborative evidences and as such addition is warranted....
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....o admission of receipt of cash by M/s Aggarwal Spun Pipes or Verticast Concrete (P) Ltd. It is noted that the payments were made through banking channel only and it had not made any such payment in cash. The assessee during the course of assessment proceedings denied making any such and has been stated vide reply dated 10.7.2023 filed by the assessee and submitted as under: "i. It is submitted that the assessee was not involved in any cash transaction with M/s Aggarwal Spun Pipes and M/s Verticast Concrete Pvt. Ltd. Further all the transactions made by the assessee with these parties are genuine in nature and are supported by invoices and bank statements and also duly recorded in books of account of the assessee. The ledger account of M/s Aggarwal Spun pipes and M/s Verticast Concrete Pvt. Ltd. is enclosed herewith as Annexure-4. Further supporting bank statement has already submitted by the assessee vide reply dated 07.04.22 for AY 2021-22. ii. Further it is submitted that sheet marked as GO-2, A-12 seized from 201-206, 2" floor, manglam place, sector 3, Rohni, are print outs in the shape of loose paper seized from the office premises of M/s BrijGopal Constructio....