TaxTMI 
TaxTMI 
2025 (5) TMI 1543
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....13-14 08.08.2024 ACIT, Central Circle-2, Raipur, u/s 153A dated 30.09.2021 Condonation of delay: 2. On perusal of the case records, it is noticed that the captioned appeals filed by the assessee are barred by limitation on account of delay in filing of appeal No. ITA No. 452/RPR/2024 by 11 days and Appeal No. ITA 519/RPR/2024 by 36 days, as pointed out by the registry. To remove this defect the assessee had furnished the applications for condonation of delay along with affidavit to explain the sufficient cause on account of which the delay was occasioned. 3. On a thoughtful consideration of the facts and reasons for delay as explained in the condonation petition by the assessee, which are confronted to the other side i.e., Ld. CIT-DR. On perusal of the same, we find substance in the request of the assessee that the delay was on account of justifiable reasons, we find it appropriate to condone the delay of 11 and 36 days involved in the aforesaid appeals, accordingly, the delay in filing of aforesaid appeals are condoned. 4. All the aforesaid appeals pertain to a single assessee having interconnected, identical and interlinked issues, therefore, all these appeals a....
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....t of assessee's non-appearance before the Ld. CIT(A) on the dates of hearings fixed. The issues raised by the assessee are not dealt with properly on the merits, moreover the legal ground raised by the assessee challenging the validity of reopening of the assessment u/s 147 r.w.s 148 of the Act for which all the relevant facts and details are available on the assessment records. The issues were decided only on the basis of absence of assessee, stating that the appellant is not interested in perusing the appeal, such observations of the Ld. CIT(A) could not be considered to be judicious, just and proper in the eyes of law, whereas the reopening in the case of assessee was totally against the mandate of law, which can be gathered from the documents / evidence like reasons to believe, approval u/s 151 etc., therefore, the assessment framed was to be quashed. 6.3 Per contra, Shri S. L. Anuragi, Ld. CIT-DR representing the revenue submitted that assessee had adopted evasive approach before the Ld. CIT(A) to prolong the litigation. Under such circumstances, Ld. CIT(A) had rightly appreciated the issue on the basis of facts available with him and in absence of any contention raised by ....
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....ides Explanation to sub-section (2) of Section 251 of the Act also makes it dear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is co-terminus with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore, just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of nonprosecution of the appeal by the assess....
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....the facts and in the circumstances of the case, the Ld. CIT(A) ought to have directed the A.O. to apply a reasonable G.P rate as against the G.P rate of 8% applied by the A.O. on undisclosed sales, thereby, wrongly confirming the addition of Rs. 36,43,972/- over and above the declared G.P. of Rs. 21,83,330/- in the return filed u/s 153A. 5. (a) For that on the facts and in the circumstances of the case, the Ld. CIT(A) grossly erred in confirming the addition of Rs. 4,83,47,607/- made by the A.O. on account of addition made in the earlier assessment framed u/s 144 r.w. section 147 even when the assessee company has filed an appeal which was pending at the time of assessment proceedings. (b) For that, Ld. CIT(A) failed to appreciate that the aforesaid addition of Rs. 4,83,47,607/- amounted to double addition, which is not permissible in the eyes of law. 6. For that the Ld. CIT(A) ought to have directed the A.O. to compute proper interest u/s 234A, 234B and 234C as per law. 7. The appellant craves leave to add further grounds of appeal or alter the grounds at the time of hearing. 8.1 The additional grounds of appeal raised by the assessee vide ap....
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....0560 52,470,085 4.2, 5.10, 6.3 24900879 28,389,766 2014-15 153A 6079700 4,542,365 5.10, 6.3 C 10,622,065 2015-16 153A 0 51,216 5.10. 0 51,216 2016-17 153A 3195013 35,446 5.10. 0 3,230,459 2017-18 153A 0 280,497 5.10. 0 280,497 2018-19 153A 0 52,491 5.10. 0 52,491 2019-20 153A 22418260 3,445,970 7.3 0 25,864,230 8.3 First, we shall be dealing with the additional grounds of appeal raised by the assessee in IT(SS)A No. 12/RPR/2024 for AY 2011-12, challenging the validity of approval granted u/s 153D, being the same has been passed under a consolidated / common order for AY 2011-12 to 2019-20. The dispute raised based on such contention was that assessment framed, or demand raised for the instant year is vitiated in law and is nullity for want of prior approval of the approving authority, as the approval granted in a manner which is not inconsonance with the law. 8.4 The aforesaid issue raised under the additional ground has been discussed and decided by us in assessee's own case in IT(SS)A No. 14 & Anors/RPR/2024 vide our order dated 16.01.202....
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....consider the question of correct assessment of tax liability of the case. The only objective of the assessee behind raising these legal grounds is to obviate the correct tax liability. Nevertheless, since the issue of limitation and natural justice, while processing the return, has been raised in the legal grounds, we deem it proper to consider these grounds on merits as well. 14.3 We have considered the rival submissions, perused the material available on record and the case law relied upon by the revenue. As in the case referred to by the Ld. CIT-DR, the issue raised under additional ground was also covered by certain legal grounds by the assessee, therefore, those are dealt with separately, whereas the issue in present case has been decided by the coordinate bench of ITAT, Raipur in a recent decision in the case of Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur in ITA no. 2,3,4,5 & 6 /RPR/2024 dated 26.12.2024, wherein the findings of Tribunal are as under: 7.4 Regarding additional ground no. 1 & 2 in ITA No. 5/RPR/2024 for AY 2013-14, raised by the assessee challenging the validity of assessment order passed u/s 153A r.w.s. 143(3) and ap....
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....see for the year under consideration, i.e. A.Y. 2013-14, therefore, we, in terms of our aforesaid observations finding no merit in the contentions advanced by the Ld. AR, thus, reject the same. The validity of combined / consolidated assessment order, therefore, also acceptable following the analogy drawn in the case of Hitesh Golecha (supra). Thus, the additional ground of appeal 1 & 2 raised by the assessee are dismissed in terms of our aforesaid observations. 14.4 Respectfully following the decision in the aforesaid case, wherein a view has been formed by us, which is duly supported by the principle laid down by Hon'ble Jurisdictional HC, vide judgment in the case of Hitesh Golecha vs. ACIT, Central Circle-1, Raipur, TAXC No.76/2024, dated 10.04.2024, therefore, we are inclined to follow a view adopted by us, which in absence of any further clarification or any decision contrary to the aforesaid decision by any higher forum i.e., by the Hon'ble Apex Court, cannot be deviated. Under such circumstances, we do not find any substance in the additional ground raised by the assessee, thus, we dismiss the same. 8.5 Considering the aforesaid view adopted by us, as the facts ....
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....ce of justified explanation with documentary evidences, the share capital and premium received from the various shell/paper company should not be considered you unaccounted money routed through the said shell company and accordingly added to your income for the relevant A. Ys as you undisclosed income." 4.17. In reply filed vide the letter dated 25.09.2021, the assessee submitted as "The above share capital have been duly added in the order passed u/s 143(3), the copy of which is duly submitted for your kind reference in our submission marked "Reply to Part-A". Out of the total share capital, Capital received amounting to Rs.1.81 Cr had not been assessed relating to A.Y 2013-14. Sir In A.Y 2013-14, unaccounted income had been duly declared by the assessee amount to Rs. Sir the income declared is the source and the share capital received is the application in relation to the same. Addition of both source and application will lead to double taxation for the assessee. Sir it is request to kindly not add the same since it will led to double taxation and will not implement justice for the assessee." 4.18. The contention of the assessee company ls considered and accepte....
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....ge investments in companies at much higher price than their real worth the AO did not make any enquiry regarding same orders being erroneous and prejudicial to interest of revenue, Commissioner was empowered to revise assessment order. The expression used in the section clearly lays the burden on the assessee to explain the nature and source of the fund. The extent of the power of the Assessing Officer while considering the materials produced by the assessee is very wide. It is a question of examining as to whether the apparent is real. Section 68 clearly permits an Assessing Officer to make enquiries with regard to the nature and source of any or all the sums credited in the books of account of the company irrespective of the nomenclature or the source indicated by the assessee. The Assessing Officer is empowered to lift the corporate veil and examine the real nature of the transaction. It is for the assessee to prove and establish the identity of the investors. their creditworthiness and the genuineness of the transaction which is a principal ingredient. Apart from identification of the shareholders, there should be creditworthiness and also genuineness of the t....
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....uments, and evidence on record, the Court cannot be oblivious to the surrounding facts and circumstances of the case and human probabilities. This was the principle laid down by the Hon'ble Supreme Court in the case of CIT vs Durga Prasad More 82 ITR 540(SC) wherein the Hon'ble Supreme Court has observed :- "It is trite that an apparent must be considered to be real until it is shown that there are reasons to believe that the apparent is not the real. In a case of the present kind a party who relies on a recital In a deed has to establish the truth of those recitals, otherwise it will be very easy to make self-serving statements in documents either executed or taken by a party and rely on those recitals. If all that an assessee who wants to evade tax is to have some recitals made in a document either executed by him or executed in his favour then the door will be left wide open to evade tax. A little probing was sufficient in t e present case to show that the apparent was not the real. The taxing authorities were not required to put on blinkers while looking at the documents produced before them. They were entitled to look into the surrounding circumstances to find....
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....usiness activity. They merely rotated money, which was coming through the bank accounts, which means deposits by way of cash and issue of cheques. The bank accounts, therefore, did not reflect their creditworthiness or even genuineness of the transaction. The assessee, do not give any share-dividend or interest: to the said entry operators/subscribers. The profit motive normal in case of investment by any shareholder was entirely absent. Any person, who would invest money or give loan would certainly seek return or income as consideration. These are undoubtedly relevant and material facts for ascertaining creditworthiness and genuineness of the-transactions. The Hon'ble Delhi High Court in the case of N Tarika Properties Investment (P) Ltd (2013) 40 taxmann.com 525 (Delhi HC), the HC held that "We have heard the Id counsel for the parties. We are of the considered opinion that the orders of the CIT(A) and the ITAT in deleting the additions made by the AO u/s 68 are perverse and are clearly unsustainable." The Delhi High Court In the case of Commissioner of Income-tax v. Nipun Builders and Developers Pvt. Ltd. (350 /TR 407) had confirmed the addition on account....
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....ders & Exporters Ltd. (2003) 263 ITR 300 (Cal) and CIT v. Nivedan Vanijya Niyojan Ltd. (2003) 263 ITR 623 (Cal) etc, the law is now absolutely clear that unless the assessee is able to establish the identity of the subscribers, their creditworthiness as well as genuineness of the transaction will be regarded as non genuine for the purposes of Section 68 of the Income Tax Act, 1961. It is also well settled law that onus of proving credits in its book of accounts lies squarely on the assessee and such proof consists of proving the identity of the subscriber or creditor, capacity of such creditor or subscriber to make payment and also to prove the genuineness of the transaction. It is only when the assessee discharges this primary onus, that onus shifts to the Department. Merely establishing the identity of the creditor is not sufficient. This is the ratio in a large number of decisions including: • Shankar Industries vs CIT (1978) 114 ITR 689(Cal); • C. Kant & Co vs CIT (1980) 126 ITR 63 (Cal); • Prakash Textile Agency vs CIT (1980) 121 ITR 890(Cal); • Oriental Wire Industries P. ltd vs CIT (1981) 131 ITR 688(Cal); ....
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....arch and during the course of assessment proceedings, the worthlessness of the subscriber companies have been established by marshalling their financial data. 4.20. In view of the facts and circumstances discussed in forgoing paragraphs that all the above indicate that the share capital, share premium and unsecured loan has been introduced in the name of Kolkata based paper companies are not genuine and not in existence in real. The above mentioned shareholder company was exist only on paper and to provide entry to the beneficiaries by liquidating their bogus investments. They do have their PAN and file their return of income; however, their actual business was to provide accommodation entries. Further, the introduction of share capital, share premium and unsecured loan of beneficiaries non-existence and non-creditworthiness of share applicants, nongenuineness of transactions of share application money and unsecured loan, it follows that the identity, creditworthiness or genuineness of the transaction is not established by merely showing that the transaction was through banking channels or by account payee instrument. It would be incorrect to state that the onus t....
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....port of the receipt of the share capital and share premium. The appellant has shown that he is not interested in pursuing the appeal. The laws aid those who are vigilant, not those who sleep upon their rights. Under these circumstances, in my opinion the appellant is not interest in the appeal. On merit also, the assessee has failed to establish the creditworthiness of the creditors during the assessment proceedings. On the other hand during search action detailed investigation was done to prove the entry of share capital and share premium a sham transaction. The introduction of share capital, share premium and unsecured loan of beneficiaries non-existence and non- creditworthiness of share applicants, nongenuineness of transaction of share application money and unsecured loan, it follows that the identity, creditworthiness or genuineness of the transaction is not established by merely showing that the transaction was through banking channels or by account payee instrument. It would be incorrect to state that the onus to prove the genuineness of the transaction and creditworthiness of the creditor stands discharged in all cashes if payment is made through banking channels. Certific....
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....hrough RPAD at the address given in Form No.36. However, the said notice was received back from the postal authorities with the remark "Unclaimed -Return to Sender". The assessee has not intimated any change of address to the registry. Adjournment application has also not been filed. Therefore, in the facts and circumstances of the case, we presume that the assessee is not interested in prosecuting this appeal. Following the decision of the Tribunal reported in the case of CIT vs. Mu/tip/an India (P) Ltd.38 /TD 320 (Del) and the decision of the Hon'ble Madhya Pradesh High Court in the case of Estate of Late Tukojirao Holkar vs. CWT, 223 /TR 480 (M.P) we dismiss the appeal filed by the assessee in limine." No explanation has been furnished by the appellant at this stage on the findings and conclusion of the Ld. AO. In absence of any explanation & on the basis of facts gathered and discussed by the Ld. AO, considering entire facts in the assessment order. I find that Ld. AO is justified in assessing the total income of the appellant as discussed above. when repeated opportunity in this regard was provided clearly shows that the appellant is not interested in pursuing the....
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....ussing the facts of issue, which even after further opportunities could not be substantiated or explained by the assessee. Ld. CIT-DR further submitted that only a clerical mistake has happened while sustaining the addition that the amount of Rs. 3,27,00,000/- was erroneously picked up at Rs. 3,25,00,000/- due to our side, therefore, the addition of Rs. 3,25,00,000/- deserves to be sustained with enhancement at Rs. 3,27,00,000/-. 8.12 We have considered the rival submissions, perused the material available on record and the contentions raised by the parties. Admittedly, the issue of unexplained money received by the assessee in the garb of share capital / premium / application money was discussed at length by Ld. AO. Undoubtedly, sufficient opportunities are afforded to the assessee to explain the basic ingredients required u/s 68, i.e., identity / creditworthiness of the investors and genuineness of transactions, however, the assessee fails in discharging the onus cast upon it to satisfy such conditions. The contention by Ld. AR that such unexplained investments received by the assessee are declared by the assessee, which was raised before Ld. AO and such contentions are noted ....
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....ofit (A* B) Declaration of the assessee Addition 2011-12 72,841,269 8% 5,827,302 2,183,330 3,643,972 2012-13 16,920,113 8% 1,353,609 507,160 846,449 2013-14 799,298,672 8% 63,943,894 33,268,687 30,675,207 2014-15 149,297,831 8% 11,943,826 7,464,891 4,478,935 2015-16 1,707,205 8% 136,576 85,360 51,216 2016-17 443,080 8% 35,446 - 35,446 2017-18 3,506,208 8% 280,497 - 280,497 2018-19 656,132 8% 52,491 - 52,491 TOTAL 1,044,670,510 83,573,641 43,509,428 40,064,213 16.2 Aggrieved with the aforesaid additions, assessee preferred an appeal before the Ld. CIT(A), however, assessee remain absent before the Ld. CIT(A) on various occasions, when the matter was fixed for hearing. Ld. CIT(A) thereafter had deliberated on the issue in absence of any representation on behalf of the assessee based on material available on records. The observation of the Ld. CIT(A) after deliberating upon the merits of the issues are that "I find that Ld. AO is justified in assessing the total income of the appellant as discussed above....
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....re of the considered opinion that there was no infirmity in the order of Ld. CIT(A) in confirming the addition made by the Ld. AO in absence of any plausible explanation by the assessee to dislodge the same. We, thus, uphold the order of Ld. CIT(A), with no interference on our part. In result, ground no. 3 of the assessee stands dismissed. 8.15 At the threshold, on the issue of estimation of GP rate, no further explanation, clarification or evidence to dislodge our aforesaid view or the findings of Ld. AO or Ld. CIT(A) are brought on record by Ld. AR of the assessee, we, therefore, are of the considered view that the issue is already covered by our earlier order in the assessee's own case in IT(SS)A No. 14 & Anors/RPR/2024 (supra), therefore, our findings therein shall squarely apply in the present case, accordingly, ground no. 4 of the present appeal stands rejected. 8.16 Ground No. 5: Regarding confirming the addition of Rs. 4,83,47,607/- on account of addition made in the earlier assessment year framed u/s 144 r.w.s. 147 even when the assessee company has filed an appeal which was pending at the time of assessment proceedings. 8.17 At the outset, it was the submission b....
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....nattended, and the appeal of assessee was dismissed on exparte basis. Considering the totality of facts, in the interest of justice, we deem it fit to restore this issue back to the file of Ld. CIT(A). Resultantly, Ground No. 5 of the instant appeal of the assessee is partly allowed for statistical purposes. 8.20 Ground No. 1, 2, 6 & 7: These grounds are general, academic and consequential in nature, which do not call for any separate adjudication, the same, therefore, are disposed of with no categorical findings. 8.21 In result, appeal of assessee in IT(SS)A No.12 is partly allowed, in terms of our aforesaid observations. 9. The grounds of appeal raised by the assessee in ITA No. 519/RPR/2024 For AY: 2012 - 2013, are extracted as under: 1. For that on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in passing an ex-parte order. 2. For that the assessment order dated 30.09.2021 passed u/s 153A is bad in law and is liable to be quashed. 3. (a) For that on the facts and in the circumstances of the case, the Ld. CIT(A) grossly erred in confirming the addition of Rs. 3,45,00,000/- made by the A.O. on account of share ....
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....round No. 3(a) Ground No. 3(a) Partly allowed for statistical purposes Ground No. 3(b) Ground No. 3(b) Dismissed as not pressed Ground No. 4 Ground No. 4 Dismissed Ground No. 1,2, 5 & 6 Ground No. 1,2, 6 & 7 General, academic and consequential in nature, does not call for any separate adjudication 9.3 In view of aforesaid observations / decision, ITA No. 519/RPR/2024 for the AY 2012-13, is partly allowed. 10. The grounds of appeal raised by the assessee in IT(SS)A No. 13/RPR/2024 for 2013 - 2014, are extracted as under: 1. For that, on the facts and in the circumstances of the case, the Ld. CIT (A) was not justified in passing un ex-parte order. 2. For that, the assessment order dated 30.09.2021 passed u/s 153A is bad in law and is liable to be quashed. 3. (a) For that, on the-facts and in the circumstances of the case, the Ld. CJT(A) grossly erred in confirming the addition of Rs. 2,11,00,000/- made by the A.O. on account of share capital / share premium received by the assessee company by treating the same as unexplained cash credit u/s 68 r.w. section 115BBE of the Act. (b) For that. the Ld. CIT(A) failed....
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....ecision for Ground of appeal in IT(SS)A No. 12/RPR/2024 Result Additional Ground dated 12.12.2024 Additional Ground dated 12.12.2024 Dismissed Ground No. 3(a) Ground No. 3(a) Partly allowed for statistical purposes Ground No. 3(b) Ground No. 3(b) Dismissed as not pressed Ground No. 4 Ground No. 4 Dismissed Ground No. 1,2, 6 & 7 Ground No. 1,2, 6 & 7 General, academic and consequential in nature, does not call for any separate adjudication Ground of appeal in IT(SS)A No. 13/RPR/2024 Covered by our decision for Ground of appeal in IT(SS)A No. 14 & Anors/RPR/2024 vide order dated 16.01.2025 Result Ground No. 5 Ground No. 4 (ITA No. 513/RPR/2024, for AY 2014-15) Dismissed - in terms of our observations / decision in IT(SS)A No. 14 & Anors/RPR/2024, reproduced hereunder. 10.3 Our observations qua ground No. 4 for AY 2014-15, ITA No. 513/RPR/2024 decided by us vide our order dated 16.01.2025 in IT(SS)A No. 14 & Anors/RPR/2024, having identical issues except quantum of addition, which are squarely applicable on the issue in the present case, therefore, our observations therein are extracted hereunder for the sa....
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.... 11.03.2013 to 22.03.2013 200.640 53,25,999 50,72,379 Balbeer Rolling Mills Ltd 19.03.2013 46.520 18,02,055 18,06,700 Lakshmichand Ispat 09.05.2013 3.245 1,22,727 1,22,727 Total 6,87,05,631 During the assessment proceeding the assessee company was asked to explain as to why in absence to justified explanation with documentary evidence, and show cause why in absence of proper explanation and reconciliation with books of accounts, the above cash transaction should not be treated as your unaccounted cash transaction and added back to the total income for respective year. In reply the assessee submitted that all the above transaction are not related to the regular books of accounts. All the above transactions are duly part of the accounted sales as per the audited books of accounts and the respective taxation on the same had been duly paid with, sir, addition of the same of the same again will lead to double taxation and will not prevail justice for the assessee. The contention of the assessee has been considered however it is not acceptable. As per incriminating document it reveals t....
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....he basis of incriminating material impounded during the search & seizure action conducted on the premises of the assessee and a commission of 1% is added to the income of the assessee. Though the assessee during the assessment proceedings submitted before the Ld. AO that all the transactions of RTGS are part of regular books of accounts of the assessee accounted for a sale and as per audited books of accounts, the tax on such transactions are being offered, therefore, it would not be justifiable to assessee the same income again. On this issue, Ld. AO had made exhaustive exercise to find out cash payments by the assessee against the RTGS received from various parties, he consider the contentions of the assessee but are not found acceptable for the reason that the assessee is involved in providing of Bogus Sales bills in lieu of commission, therefore, in light of incriminating documents commission @ 1 % was added to the income of the assessee. The issue has been challenged by the assessee before the Ld. CIT(A) however, there was no representation by the assessee on 06 occasions, when the appeal was fixed for hearing. Under such circumstances, Ld. CIT(A) was compelled to decide the a....