TaxTMI 
TaxTMI 
2025 (6) TMI 212
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....rmation obtained during a survey u/s 133A of the Act conducted in the case of a third party, Shri Pravin S. Shah (Prop. Manibhadra), who was allegedly engaged in providing cash loans through hundis. The AO concluded that the assessee received cash loan of Rs. 2,65,00,000/- during Financial Year (FY) 2016-17. After issuing notice u/s.148 of the Act and subsequent notices u/s.142(1) of the Act, the AO issued a show-cause notice dated 15.03.2022. The assessee replied on 19.03.2022, denying any such transaction, citing technical difficulties in e-filing return in response to notice u/s 148 of the Act, and reiterating that its original return may be treated as return filed in compliance. The AO, however, passed the assessment order ex- parte u/s.144 r.w.s. 147 and 144B of the Act, making the addition of Rs. 2.65 crore u/s. 69A of the Act on the basis of information obtained from third-party survey proceedings. 3. The assessee filed an appeal before the CIT(A), who allowed the appeal of the assessee. The assessee submitted that it had never received any such cash loan and the addition was arbitrary and solely based on unverified information. It was also pointed out that the AO did not....
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....rroborated and subjected to the test of cross examination. The CIT(A) concluded that there was no tangible material before the AO to establish that any transaction of cash loan had taken place between the assessee and Shri Pravin S. Shah. The assessment was made purely on assumptions, without meeting the legal requirements for invoking section 69A of the Act. Accordingly, the CIT(A) allowed the relevant grounds and directed deletion of the entire addition of Rs. 2,65,00,000/-. 4. Aggrieved by the order of the CIT(A), the Revenue is in appeal before us raising following grounds before us: 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 2,65,00,000/- made u/s 69A of the Act in the order passed u/s 147 r.w.s. 144 of the Act, ex parte and without appreciating the facts of the case. 2. The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary. 3. It is, therefore, prayed that the order of Ld. CIT(A) may be set aside and that of the Assessing Officer be restored. 4.1. The Revenue also filed following additional grounds of appeal: ....
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.... Manibhadra, pursuant to a survey conducted under section 133A of the Act. However, the AO failed to bring on record any direct or corroborative evidence to establish that the assessee had received any cash loan from the said party. 7. The AR submitted that the assessee had duly responded to the show cause notice dated 15.03.2022 by filing a reply on 19.03.2022, clearly denying any transaction with Shri Pravin S. Shah. The AR also submitted that, the assessee clarified, by way of reply to notice, that due to technical difficulties, it could not file a fresh return in response to notice under section 148 and had therefore requested that the original return filed earlier be treated as the return filed in compliance. The AR argued that the Revenue's contention regarding violation of Rule 46A was factually incorrect, since the reply was filed before completion of the assessment and formed part of the assessment records. Hence, it could not be treated as "additional evidence," and Rule 46A had no application. 7.1. It was further pointed out that despite repeated requests, the AO failed to furnish the assessee with copies of the alleged hundis, the statement of Shri Pravin S. Shah ....
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....ly on 19.03.2022, categorically denying any transaction with the said third party. The assessee also submitted that it faced technical issues in filing the return electronically and had requested that the original return already on record be treated as return filed in response to notice under section 148 of the Act. The Assessing Officer, however, did not acknowledge or discuss the said reply and proceeded to make the impugned addition solely based on the third-party information, without bringing any independent corroborative material on record or allowing cross-examination of the said third party, despite specific request. 8.2. It is settled law that for invoking the provisions of section 69A of the Act, the Revenue must establish that the assessee is the owner or possessor of the alleged unexplained money and that such money has not been recorded in the books of account. In the present case, there is no material brought on record by the Assessing Officer to prove the existence of any actual transaction between the assessee and Shri Pravin S. Shah. No copy of the alleged hundi, no date-wise loan record, no signature of the assessee, and no statement of Shri Pravin S. Shah relie....