TaxTMI 
TaxTMI 
2025 (4) TMI 1215
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....33,750/- w.r.t. the ingredients of Sec. 68 of the I.T. Act while, the issue was limitedly directed by the ITAT to be examined only from the angle of whether said sum of Rs. 34,71,33,750/- is unclaimed and only in case, it is unclaimed, then only, to the extent it is unclaimed, should be added." 2. Brief facts of the case relating to the issue raised by the assessee are, assessee is an investment company, the nature of activities is tree plantation on behalf of clients and to return the plant/sale value of plant (with assured amount) after 20 years under the scheme known as Kuber Dhanvarsha Scheme which was started in FY 1995-96. The assessee in various years from FY 1995-96 to FY 1997-98 received various deposits under various plantation schemes total amounting to Rs. 86,37,28,750/-. It included Rs. 34,71,33,700/- received in the impugned AY 1997-98 under consideration. 3. In the current assessment year, assessee filed its return of income for AY 1997-98 on 20.04.1998 declaring loss of Rs. 97,55,580. The case was selected for scrutiny. Notices u/s 143(2) and 142(1) of the Income-tax Act, 1961 (for short 'the Act') were issued and served on the assessee. Subsequently, order u/....
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....preferred an appeal before the NFAC, Delhi. Before ld. CIT (A), assessee filed detailed submissions as under :- "7.2 During the course of appellate proceedings, notice for hearing was issued to the appellant on 23.12.2020. In response to the same appellant filed submission. Relevant portion of the same is reproduced as under. GN-7-Addition of Rs. 34,71,33,750/- Assessee received advance of Rs. 34,71,33,750/- for sale of units (trees) during the year. In the current assessment, AO repeated the addition as made in the earlier rounds. In earlier assessments AO made the addition u/s 68 as the assessee failed to substantiate the identity and creditworthiness of depositors. Now, the specific direction of Hon'ble Delhi Tribunal while setting aside the issue is as under:- "ITAT order dated 11.01.2018 in ITA No. 6551Del12011 Para-38, Page-18- .................................................................... The finding of A.O is erroneous and liable to be deleted for the following submissions:- 1. Complete amount is claimed by the Depositors It is submitted that there is no amount which can be t....
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....e assessee in case, the schemes would had been completed. The special auditor, furnished his audit report to SEBI Dtd.15.09.1998. On Pg.3 of the report, the auditor showed the total amt. recd. by the Co. under various schemes at Rs. 86,37,28,750/-. This included Rs. 34,71,33,750/- (under consideration) in A. Y 1997-98. The auditor quantified complete amt. as payable/refundable to depositors. The main report consisted 24 Pgs. It further contained many bulky Annex. In ''Annex.-10'', on Pg.53, the auditor quantified the payable amt., under various schemes w.r.t. various years. The auditor on above Pg., calculated, scheme wise, amt. which became payable, on yearly basis. The impugned scheme was for 20 years. The deposits were taken in FY 1996-97. The same were to mature in FY.2016-17 (A.Y.17- 18). The auditor, for the amts. 34,7133,750/- recd. in F. Y.16-17 calculated the payable amt at Rs. 2239.51 Cr. Accepting this report, the SEBI created a liability on assessee Co. at Rs. 2462 17 Cr. as under:- As per auditor 2339.51 Cr. + 10% penalty 223.95 Cr Total 2463.46 Cr. (due to arithmetical calculation error, SEBI in his order wrongly ....
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.... Investment Schemes, Commission Structure, viability. Feasibility report of the project etc. However, appellant submitted replies to some of the queries with no documentary evidence. Further in para (iv) it has been mentioned that up to the date of completion of the Audit the company had not made any payment of any maturity amount, mid-term return, buy back amount and guaranteed annual return to any of the investors under any of its scheme. Appellant is relying on the Annexure- 10 of the audit report which shows scheme wise/ year wise details of estimated amount of maturity and mid-term returns payable by the company. This is only an estimation (only an assessment based on macro accounts) as the assessee has never given details of specific claimed investors, neither to I T authorities nor to SEBI, not even in the present proceedings. Therefore not even an iota of basic onus to explain the Credits u/s 68 have been fulfilled by the appellant. Further, the said Special Auditor's report appointed by SEBI was available during the proceedings before the Hon'ble Delhi ITAT and still the ITAT directed the appellant to submit the details of unclaimed deposits/ advances. The appellan....
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.... as required u/s 68 of the IT Act and have remained unclaimed/unpaid. Therefore I confirm the addition of Rs. 34,71,33,750/-. Accordingly ground of appeal related to addition of Rs. 34,71,33,750/- is dismissed. Hence ground of appeal no 7 to 9 are partly allowed." 11. Aggrieved with the above order, assessee is in appeal before us and raised various grounds which is reproduced at para 1. 12. We observed during the proceedings that assessee was taking various adjournments without properly representing the case and on 19.09.2024, the Bench remanded the matter to the AO to collect information from the assessee and submit the report as per the directions of the coordinate Bench vide order dated 11.01.2018 within three months. Accordingly, the case was posted for hearing on 19.12.2024. Finally, on 23.01.2025, the matter was heard and concluded. At the time of hearing, we observed that assessee has not submitted any information before AO and AO was not able to submit any report. However, ld. AR of the assessee submitted as under:- "1. A.O. was directed to submit his report by 16.12.24 Vide O/S Dtd.19.09.24 A.O. was directed to submit the report on unclaimed deposi....
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....the court, clearly proves that impugned 34.7133 Cr. was reed. from investors, it did not belong to assessee, therefore addition u/s. 68 is unwarranted." 13. At the direction of the Bench, ld. AR of the assessee submitted the Balance Sheet as on 31.03.2018 and 31.03.2022. Further assessee has also submitted copy of Folder No.1 containing details of 14,296 depositors with name, address, amount, date of receipt and receipt number in the form of paper book and further submitted that from the total 15 folders which are similar to the folder no.1 submitted before us containing details of 1,67,907 depositors. 14. On the other hand, ld. DR of the Revenue brought to our notice page 58 of the paper book submitted by the assessee wherein it was submitted that ITAT has remanded the issue back to AO to confine the same to the extent of unclaimed deposits to be considered as income of the assessee. However, it was submitted that AO has sustained whole deposits against the direction of the ITAT. On this count, he submitted that assessee has not submitted any information before the authorities to comply with the directions of the ITAT. Further he brought to our notice recent decision of SEBI....
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....t any point of time. It is an admitted fact that no winding up report has been filed by accused persons before SEBI. They failed to prove that proviso to Section 27 of SEBI Act with respect to exercising due diligence in order to prevent the commission of offence was applicable to accused no.3. Under these facts and circumstances, accused no.1 company i.e. Kuber Planters Ltd. is held guilty of the offence under Section 11B, 12(1B) of SEBI Act and Regulation 5(1) r/w Regulation 68(1), 68(2), 73 and 74 of CIS Regulations, punishable under Section 24 of SEBI Act and accused no.3 Rowena Sharma is held guilty of the offence under Section 11B, 12(1B) of SEBI Act and Regulation 5(1) r/w Regulation 68(1), 68(2), 73 and 74 of CIS Regulations, punishable under Section 24 r/w Section 27 of SEBI Act and convicted accordingly." 16. From the above, we observed that SEBI has clearly held that the assessee has trapped innocent public by promising them return which were unrealistic and could never be given. The assessee had failed to prove that any payment to any of the investors under the scheme floated was made at any point of time. It is an admitted fact that no winding up report was filed by....
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....that assessee has kept non-current liabilities as on 1997 at Rs. 3732.73 lakhs, in 31.03.1990 assessee has received further deposit from the customers and in 31.03.2018, the liability was kept at Rs. 7497.43 lakhs and in 31.03.2023 the same was Rs. 7,582.30 lakhs. It clearly shows that the deposits received by the assessee were kept pending and no effort was made by the assessee to return the same even after several directions from SEBI. At the same time, we also observed that in 1997, assessee had fixed assets of Rs. 674.21 lakhs and other current assets of Rs. 2500.92 lakhs and in 1998, fixed assets were increased to 2096.46 lakhs and other long term advances stood at Rs. 4031.49 lakhs and other long term assets and other current assets. In 2023, assets were reduced to Rs. 1,999.72 lakhs and other non-current assets were reduced to Rs. 4010.64 lakhs. From the above, it is clear that assessee has not repaid any deposits to the depositors and there is some movement of assets being encashed during the period. After considering the detailed findings of the SEBI, it is clear that assessee has no intention to return any deposits. At the same time, before us, Folder No.1 of details of 1....
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....ore, in our view, the whole collection of deposit is nothing but income of the assessee u/s 28 of the Act not under section 68 (since the assessee has submitted the details of the depositors but not proved the genuineness. It is debatable issue.) The ill gotten money also taxable under the Act. Therefore, we are inclined to sustain the additions proposed by the tax authorities and we do not see any reason to disturb the findings of the ld. CIT (A). 19. In the result, the appeal filed by the assessee is dismissed. Order pronounced in the open court on this 9th day of April, 2025. ============= Document 1 1970 code name add2 18 add3 pin scheme no_unit amount br_code ag_code for_date rec_date receipt no sec_name 24686 VIRENDRA KUMAR SINGH 83 GAURI MAGAR HARDOI. 241001 B 1 $5000,00 HADO HADO\ 123 27-09-96 27-09-96 117913 A SHIVE DEVI 24687 KAMAR JAHAN CHYDEL COLONY DHAKRANI (DEHRADUN 248142 B 1 6000,00 DAXP ( DAKPY 4 05-10-96 05-10-96 9666 - 24688 CHANDRAPAL SINGH CHAUHAN FC 352 NEW YAMNA CL - DAKPATHAR 0 F 1 11250.00 DAKP & DAKP\ 1 03-10-96 03-10-96 9665 24689 HOOR JAHAN TD/O MOHARRAM ALI .ATR D 593 NEW YAMUNA 248125 A 1 DAKP DAXP....
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....746 24705 KAUSTURM SURENDRA SIN, - 167419 4TH FLOOR VACHEMENTA BLOG & D . TAMBERKAR MARG KALA, CU- 40003 F 1 11250.00 MALD \ MALD\ 81 12-09-96 12-09-96 57747 - 24706 SANCHITA SURENDRA SING. (8/419 D4TH FLOOR VIGNAHARTA BLDG G D. FAMBERKAR M KALACHOURI 1400033 B 1 15000.00 MALD MALD\ 81 12-09-96 12-09-96 57748 724707 JAMARDAN KATALU INGOLE. CHO G N LAKHE 3 P & T . /COLONY SHARAMAPUR MASIK 422005 B 1 15000.00 MALD Y MALD\ 69 11-09-96 (0639 16 6554 11-9-16 24708 MANOJ KUMAR MOTILAL V - GIMQUALAY SEVA MANDAL KRANTI HASAR AKURLI RD . KANDIVALI E MUMBAI . 400101 B 1 5000.00 WALD MALD\ 51 13-09-96 \13-09-96 57749 - (24709 SAMOJ KUMAR MOTILAL V @NQUALAV SEVAMANDALg Ly KRANTI MAGAR AKURLI AD KANDIYALI E MUMBAI 400101 B 1 (5000.00 MALD { MALD\ 51 13-09-96 13-09-96 5750 24710 KIRAN RAMANLAL PAMCHAL CVITRU PATIL BERG OPP . FUGGA FACTORY HR SAVARKAR MARG VIRAR E 411303 8 1 5000.00 MALD Y MALD\ 44 13-09-96 13-09-96 60001 - SHANTABEM RAMANLAL P [ 24711 KODORI PRAVEEN 1376/38/6 MUNICIPAL CL MALMAMI MALAD WEST MUBAI ---. 400095 F 1 1250.00 MALD HALB\ 131 13-09-96 13-09-96 60002- 124712 KODORI SAMPATHI RAD . *1376/38/6 MUNICIPAL CL MALMANI MALAD W MUMBAI _ 400....