TaxTMI 
TaxTMI 
2025 (4) TMI 200
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.... as to whether the ld. CIT(A) was justified in deleting the addition made in the sum of Rs 96,28,600/- towards unsecured loans u/s 68 of the Act in the facts and circumstances of the instant case. 4. We have heard the rival submissions and perused the materials available on record. The return of income for the Asst Year 2017-18 was filed by the assessee company on 29.3.2018 electronically declaring total income of Rs 12,15,810/ -. A search and seizure operation u/s 132 of the Act was conducted at business and residential premises of VVIP Group of Companies / Directors, Partners and Employees on 3.11.2016. The year under consideration being the year of search, a notice u/s 143(2) of the Act was issued to the assessee on 24.8.2018 and served on the assessee. The ld. AO observed that assessee had received unsecured loans from the following parties :- a) Shri Abhay Rajni Mittal 10,00,000 b) M/s Goel Steel Traders 8,28,600 c) M/s G S Medical (Prop. Ikwal Kha) 20,00,000 d) M/s Nidhi Trading Co (Prop. Mool Chand) 4,00,000 e) M/s Shri Sai Enterprises 18,00,000 f) M/s Surbhi Aggarwal 6,00,000 g) M/s Papa Global Corporation (Prop....
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....8,600/- from M/s. Goel Steel Traders, the appellant furnished the ledger account of the party in the books of the appellant, from which it is found that Rs. 8,28,600/- are received on 31.03.2017. However this amount has been returned back on 05.06.2017. The bank statement of M/s. Goel Steel Traders in SBI, Navyug market, Ghaziabad in account no. 33761916342 is furnished from which this transfer of 31.03.2017 and repayment on 05.06.2017 are clearly reflected. Copy of return of income of M/s. Goel Steel Traders of AY 2017-18 is filed alongwith audited balance sheet as on 31.03.2017 from which it is found that total capital and liabilities of this concern are Rs. 2.48 crores. The turn-over of this concern as on 31.03.2017 is Rs. 12 65 crores. In the books of M/s. Goel Steel Traders, on 31.03.2017 Sh. Yogender Singh i.e. the appellant is shown as debtor of Rs. 8,28,600/ -. Therefore all the three limbs of a genuine cash credit i.e. identity, genuineness of transaction and source of the fund stand explained with regard to this unsecured loan: receipt of Rs. 8,28,600/ -. 6.4.3 In the matter of unsecured loan of Rs. 20,00,000/- from M/s. G.S. Medicare Prop. Ikwal Kha, the appella....
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....before the transfer of the unsecured loan amount. Looking to the facts of the case, it is clear that all the three limbs of a genuine cash credit i.e. identity, genuineness of transaction and creditworthiness are well established. Therefore no adverse inference needs to be drawn in the matter of this cash credit. 6.4.5 In the matter of unsecured loan of Rs. 18,00,000/- taken from M/s. Shri Sai Enterprises, the appellant has furnished the ledger account of the party in the books of the appellant. It has been found that Rs. 18,00,000/- are taken on 31.03.2017 but the same are returned back on 05.06.2017. Further the bank statement of Sh Sai Enterprises in PNB account no. 0674002190415964 is furnished In which the payment of Rs. 18,00,000/- on 31.03.2017 and returned back of the same on 05.06 2017 is reflected. Copy of bank account of the appellant reflecting these receipts/payments is also filed. In the return of income of Sh. Ravi Kumar prop. of M/s. Shri Sai Enterprises for AY 2017-18, income of Rs. 16,70,500/- is declared. In the balance sheet of M/s. Shri Sai Enterprises as on 31.03.2017, share capital and loans of Rs. 1,86,58,852/- are reflected. In the loans and advanc....
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....nce sheet as on 31.03.2017 this concern has capital and liabilities amounting to Rs. 2.52 crores. From the copy of Bank statement, it has been seen that there are no cash deposits before the transfer of the unsecured loan amount. Looking to the facts of the case, it is clear that all the three limbs of a genuine cash credit ie identity, genuineness of transaction and creditworthiness are well established. Therefore no adverse inference needs to be drawn in the matter of this cash credit. 6.5 The assessee company has furnished the following in respect of the loan creditors - Confirmation of loan creditors - Copy of bank statement of the unsecured loan providers. - PAN Details/ITR copies/ Balance sheet. The assessing officer has himself not made any inquiry from the unsecured loan creditors. The loan creditors are existing income tax assessees. Under section 68 of Income Tax Act, 1961, the onus of the assessee is discharged if he furnishes the documentary evidences proving the i) identity of the creditors ii) genuineness of the transaction and iii) the creditworthiness of the creditor. In the present case, the identity of the loan creditor....
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....CIT(A) ought not to have taken cognizance of all the additional evidences filed before him. But it is pertinent to note that the ld. AO also had one more occasion in the remand proceedings to examine these documents, but he chose not to do so. Hence the ld CIT(A) proceeded to examine all the factual details with supporting evidences. Hence we reject the plea of the ld. DR before us to restore this matter to the file of ld AO as in our considered opinion, these facts are not going to change. The ld CIT(A) is having co-terminus powers with that of ld AO and in the instant case, entire evidences had been verified and examined by the ld CIT(A) himself and relief was granted to the assessee. Hence we do not find any infirmity in the order of the ld CIT(A) in this regard. Accordingly, the grounds raised by the revenue are dismissed. 8. In the result, the appeal of the revenue is dismissed. ITA No. 1413/Del/2022-Yogender Singh - Asst Year 2017-18 - (Assessee Appeal) 9. The Ground No. 1 raised by the assessee is challenging the confirmation of addition by the ld CIT(A) in the sum of Rs 21,00,000/- towards cash found in the course of search. 10. We have heard the rival submissio....
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....aid company, we find that the said company indeed had sufficient cash balance to explain the source of Rs 21,00,000/ -. Hence no addition towards the cash found could either be made in the hands of the said company or in the hands of the assessee herein. Accordingly, the Ground No. 1 raised by the assessee is allowed. 12. The Ground No.2 raised by the assessee is challenging the chargeability of interest u/s 234A, 234B and 234C of the Act. In the instant case, the return was filed by the assessee belatedly. Hence interest u/s 234A of the Act is leviable as per the Act. The chargeability of interest u/s 234B of the Act is consequential in nature and does not require any specific adjudication. It is well settled that interest u/s 234C of the Act is to be made only on the returned income and not on the assessed income. The Ground No. 2 raised by the assessee is partly allowed. 13. The Ground No. 3 raised by the assessee is challenging the initiation of penalty u/s 271AAB and 271AAC of the Act. The adjudication of the same at this stage would be premature and hence dismissed. 14. The Ground No. 4 raised by the assessee is general in nature and does not require any specific adj....
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....s conducted u/s 132 of the Act at the business and residential premises of VVIP & SSG Group of cases/ directors and partners on 03.11.2016. Accordingly, a notice u/s 153A of the Act stood issued to the assessee. The assessee filed his return of income on 05.09.2018 in compliance to notice issued u/s 153A of the Act disclosing total income of Rs. 17,09,970/ -. During the course of search, a document containing details of payment made by various persons for sale of units in VVIP project was found and seized from the residential premises of Shri Praveen Tyagi, Director of M/s Vaibhav Vibhor Infrahome Private Limited (VVIP Ltd). The documents contained details of payments received by the said concern i.e. WVIP in cheque and in cash. Shri Praveen Tyagi explained the documents during the course of search proceedings and offered an amount of Rs.16.65 crores for taxation as undisclosed income of VVIP Ltd. Relevant seized documents in this regard is Annexure-A page 26 of the paper book. Shri Praveen Tyagi in his statement u/s 132(4) of the Act had stated that amounts reflected in the said seized documents were received by VVIP Limited against the booking of flats in financial year 2015-16 i....
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....h Court are reproduced herein :- "1. Ms. Agarwal states a physical copy of reply has been handed over to her this morning and she may have to file a rejoinder. 2. Having considered the petition, we do not think there is any need to file a rejoinder. Petition can be disposed at this stage because we are not at all satisfied with the order passed by Respondent. In our view, it is an unacceptable order. 3. Petitioner is a senior citizen aged 75 years. During the year under consideration, i.e., Assessment Year 2015-2016, for which Petitioner has not filed return of income since there was no taxable income, Petitioner paid a sum of Rs. 10,00,000/- in two tranches, i.e. Rs. 5,00,000/- on 28th February 2015 and another Rs. 5,00,000/- on Gitalaxmi 2/6 406-aswp- 1746-2024.doc 2nd March 2015 to one M/s. Lucina Land Development Limited ("Lucina") against allotment of a flat being Flat No. 5C-2061, Rose in the joint name of Petitioner and her grand-daughter Divya. 4. It is Petitioner's case that this amount as well as the amounts paid earlier to Lucina came out of redemption of Fixed Deposits, Loans from the daughter and son-in-law etc. It is also Petiti....
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....e form of an 'asset', which has escaped assessment amounting to Rs. 50,00,000/- or more and therefore, the notice issued under Section 148 of the Act was not valid. 7. After the order dated 23rd July 2022 under Section 148A(d) of the Act was passed, an assessment order has been passed and Petitioner admits having filed an appeal. But the concern is, Petitioner will be directed to deposit 20% of the tax amount and Petitioner is not in a position to pay the same. 8. Ms. Agarwal stated that when on the face of order under Section 148A(d) of the Act it could not have been passed, Petitioner who is 75 years old and looking after her 88 years old husband suffering from Parkinson, should not be made to go through the misery of waiting for the appeal itself to be heard and also having to deposit 20% of the demand. Ms. Agarwal also submitted that penalty proceedings will also be issued and Petitioner will have to endure that also. 9. In view of the peculiar facts and circumstances of the case, we decided to entertain this petition under Article 226 of the Constitution of India. 10. In the order dated 23rd July 2022 passed under Section 148A(d) of ....
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....r how can the amount be taxed again in the hands of Petitioner. 13. In the circumstances, in our view, the impugned order dated 23rd July 2022 passed under Section 148A(d) of the Act has to be quashed and set aside. Ordered accordingly. Consequently, the notice issued under Section 148 of the Act and the assessment order also are quashed and set aside. 14. In view of the above, Ms. Agarwal states they shall immediately take steps to withdraw the appeal filed. Statement accepted. 15. Petition disposed. No order as to costs." 23. Though ultimately the Hon'ble Bombay High Court had quashed the reassessment notice, the observationsmade in paras 6,10, and 11 above would be very much relevant and equally applicable to the facts of the instant case before us and no addition could be made in the hands of the assessee herein based on the statement of Praveen Tyagi, which was recorded during the course of his search in the capacity of Chief Managing Director of VVIP Ltd. 24. Even assuming that assessee had made had made the cash payment, there is absolutely no evidence from the seized documents, indicating that the said cash payment of Rs.39,07,928/- was ....
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....s. Hence, in the instant case, when Shri Praveen Tyagi was confronted by the search team with the seized documents Annexure -A, page 26, he admitted the fact that the transaction reflected therein pertaining to cheque and cash transaction received by VVIP Ltd from various flat owners. He never denied that this transaction does not belong / pertain/ relate to VVIP Ltd. It is also relevant to note that the statement of Shri Praveen Tyagi was recorded by the search team of Chief Managing Director in the capacity of Chief Managing Director of VVIP Ltd. If part of a transaction reflected in such seized documents is being used against the third-party, like the assessee herein, then the logical recourse provided in the statue to the revenue is to record a satisfaction note in the hands of searched person that part of document pertains/ relates/ belongs to 3rd party like the assessee herein and hand over such seized documents to the ld AO of the 3rd party like the assessee herein to take any further action known to law. Thereafter, it is the duty of the ld AO of the 3rd party like the assessee herein, after due examination/ enquiries of the transaction of the assessee qua the returns filed....
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....ar Singhania V. DCIT reported in 168 ITD 271 (Kolkata Tribunal). Relevant operative portion of the said order is reproduced here in below :- "10. We have heard the rival submissions. We find that it is not in dispute that there were no documents that were seized from the premises of the assessee except loose sheets vide seized document reference KKS /1 comprising of 8 pages, for which satisfactory explanation has been given by the assessee and no addition was made by the Id AO on this seized document. The seized document used by the ld AO for making the addition in section 153A assessment is CG/1 to 11 and CG/HD/1 which were seized only from the office premises of Cygnus group of companies in which assessee is a director. In this regard, it would be pertinent to note that as per section 292C of the Act, there is a presumption that the documents, assets, books of accounts etc found at the time of search in the premises of a person is always presumed to be belonging to him/them unless proved otherwise. This goes to prove that the presumption derived is a rebuttable presumption. Then in such a scenario, the person on whom presumption is drawn, has got every right to state tha....
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....usion of the following words "and such other material or information as are available with Assessing Officer relevant to such evidence." It is pertinent to note that this expression is conspicuously absent in section 153A of the Act. Hence, the decision relied upon by the ld DR in the case of S. Ajit Kumar (supra) does not advance the case of the revenue. Further, we find that the Hon'ble Jurisdictional High Court in the case of PCIT vs Anand Kumar Jain HUF in ITA No. 23/2021 dated 12.02.2021 had an occasion to address the very same legal issue. The relevant question raised before the Hon'ble Jurisdictional High Court High Court was as under :- "a. Whether the ITAT is justified in deleting the additions made on account of bogus long term capital gain on the ground that the evidences found during search at the premises of entry provider cannot be the basis for making additions in assessment completed u/S. 153A in the case of beneficiary ignoring the vital fact that there was a common search u/s 132 conducted on the same day in both the cases of the entry provider and the beneficiary." 26.1. This question was answered by the Hon'ble Delhi High Court as under :....
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....ential in nature and does not require any specific adjudication. 29.2. The law is very well settled that interest u/s 234C of the Act is chargeable only on the returned income and not on the assessed income. 30. In the result, appeal of the assessee is partly allowed. ITA No. 1414/Del/2022- Sarika Tyagi-AY 2016-17 31. Identical original and additional grounds are raised by this assessee as were raised in case of Shri Naveen Tyagi except the fact that no ground was raised on the addition made towards cash deposit of by Ms. Sarika Tyagi. Hence the decision rendered by us hereinabove for Shri Naveen Tyagi shall apply mutatis mutandis for Ms. Sarika Tyagi also except with variance in figures. 32. In the result, the appeal of the assessee in case of Ms. Sarika Tyagi case in ITA No. 1414/Del/2022 is allowed. ITA No. 1386/Del/2022-Sushil Tyagi-AY: 2011-12 33. Ground No. 1 raised by the revenue is with regard to deletion of partial addition made on account of gross profit 34. We have heard the rival submissions and perused the material available on record. The assessee is a proprietor of M/s. Manak Developers, engaged in the business of contractorship and t....
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.... year predominantly is only from trading business. Hence, for the purpose of arriving on the comparable data, net profit for the year is to be determined based on the net profit from trading business declared in earlier years and not subsequent years. The ld CIT(A) observed that the assessee had earned net profit @1.25 % during the year as against the net profit of 1.23% in earlier years. Accordingly, the ld CIT(A) has determined to resort to estimation of profit @ 8% of contract receipt of Rs.33,75,505/- and an addition of Rs.2,70,040 (33,75,505 X 8%) was made. In respect of trading business, the ld CIT(A) observed that the assessee has shown gross profit of 4.09% last year and same rate of 4.09% applied on the turnover of trading business during the year and addition of Rs. 1,55,50,606/- was determined in trading business. We find that the ld CIT(A) had taken cognizance of actual business predominantly carried during the year i.e. trading in electrical goods and it compared the gross profit derived in earlier years from the very same trading activity. He has also taken cognizance of the fact that the assessee had started subcontract work related to civil work only during the year....
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....e revenue is challenging the deletion of addition made on account of investment in shares of Rs. 10,00,000/ -. 38. We have heard the rival submissions and perused the material available on record. On verification of the seized documents Annexure LP- 1 page 26, it was found that the assessee had acquired 10,000 shares of Rs. 10 each of Ms/ Frystal Polymers on transfer from Central Himalayan Farms (P) Ltd on 19.10.2010. This transaction valued at Rs.10 lakhs was sought to be treated as unexplained investment for purchase of shares in the assessment as there was no representation from the side of the assessee. From the order of the ld CIT(A), it was duly clarified that the investment is only Rs. 1 lakh (10,000 X 10) and not Rs. 10 lakhs. Accordingly, the ld CIT(A) confirmed the addition only to the extent of Rs. 1 lakh and deleted the remaining arithmetic error of Rs. 9 lakhs. We do not find any infirmity in the order of the ld CIT(A) as what is sought to be corrected is only an arithmetic error committed by the ld AO. Accordingly, ground No. 3 raised by the revenue is dismissed. 39. Ground No. 4 is general in nature and does not require any specific adjudication. 40. To sum ....