TaxTMI 
TaxTMI 
2025 (6) TMI 560
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....rom the proceeding of the lower authorities are that the assessee is having business of construction and development of real estate projects and has filed its return of income for AY 2016-17 on 16/10/2016 declaring total taxable income at Rs. Nil. The return was proceed u/s. 143(1) of the Act. However an information was received regarding this case on the inside portal having been uploaded by ADIT (investigation), unit 1 (3 Mumbai) regarding search and seizure action and survey action in case of Ramesh Chaurshiya, Shri Achal Chaurshiya and ARC group. As per information, the group was involved in illegal online batting and gambling activities and was generating huge amount of unaccounted cash from these activities; that the cash was being routed in the books of accounts of more than 35 group concerns through various types of accommodation entries which were being sourced against cash with the help of various intermediaries including Chartered Accountants, Company Secretary and Entry Operators. It was noted that CA Sanjay Shah was one of the intermediaries who had sourced and provided accommodation entries of different types like bogus purchases, bogus trading income, bogus long term....
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....of PLATINO CLASSIC MOTORS INDIA PVT. LTD. in WP(C) NO. 7997 OF 2023 dated 26.10.2023 has made the following observations/directions which is as under "From perusal of Section 14 of the IBC and several Judgments of the other High Courts as well as the Supreme Court, it is well settled that Section 14 of the IBC does not create a bar for finalisation of the assessment and adjudication proceedings in respect of the taxes." In view of the above your contentions filed in this office on 24.11.2023 is not acceptable. Therefore it is requested to submit the details as per the requirement of this office for completion of Assessment proceedings in the case of M/s VijayGroup Housing Pvt Ltd PAN AADCN1474D for A Y 2019-20." 5. Notice u/s. 142(1) of the Act was sent on 12.02.2024 requesting the assessee to file details in regard to the transaction of Rs. 1,53,06,493/- as mentioned above on or before 25.01.24. In response, it was submitted on behalf of assessee that Corporate Insolvency Resolution Process, (CIRP) in respect of assessee was initiated by Hon'ble NCLT, Mumbai vide order dated 30.12.2022 and vide replacement order dated 15.03.2023, IRP was replaced and Mr. Prakash V. Kukreja was ap....
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....i. Your good office has proposed to make addition to income of Rs. 20,34,000/- in respect of transaction stated to have undertakeri during FY 2018-19 le pre-cirp period. In this regard, RP would like to point out that during the concerned period, the Company affairs were looked after by Board of Directors/Ex-Promoters and RP was appointed by the Hon'ble NCLT, wef. 15th March 2023. Thus, neither RP is privy to the alleged transaction undertaken out of books of accounts nor he is aware about the alleged transaction. iv. Please note that the RP, upon receiving this SCN, also reached out to the ex-promoter to assist in sharing any relevant and available information to appropriately share with the ITO, Since the information pertains to unexplained cash credits u/s 68 of the Income Tax Act, to which RP has no knowledge about. There has been no response from the ex-promoter v. Further, the financials for FY 2018-19 were prepared by the RP based on very limited available information and data provided by the erstwhile management. Hence suitable assumptions and best judgement, alongwith applicable assumptions were taken to complete the financials and the audit. All the relevant docum....
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....bove transaction. 9. Since the assessee has failed to submit any details or any documentary evidence in support of the transaction of purchase of property of Rs. 2,08,06,040/-, the same was treated as unexplained investments and added back u/s. 69 of the Act. Further a sum of Rs. 12 lacs were also added to the total income of the assessee in respect of difference of rental income received from M/s. Vijaya Surksha Reality LLP. Accordingly, total income of the assessee was shown Rs. 3,73,12,533/- as under: Particulars Amount Returned Income Rs. NIL/- Add: 1. Disallowance made -u/s. 68 of the IT Act (as per para 5.2) Rs. 1,50,00,000/- 2. Disallowance-u/s. 69C of the IT Act (as per para 5.3) Rs. 3,06,493/- 3. Disallowance-u/s. 69 of the IT Act (as per para 5.6) Rs. 2,08,06,040/- 3. Income from other sources (Rental Income) (as per para 5.7) Rs. 12,00,000/- Total Income Rs. 3,73,12,533/- 10. Aggrieved, by the assessment order, the assessee filed an appeal u/s. 250 of the Income Tax Act against the addition of Rs. 3,73,12,533/- stating that the said addition by the Ld. AO was unjustified in law. It is stated that dur....
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....s unexplained credit u/s 68 of the Income Tax Act. Reasons assigned by him for confirming the same are wrong and insufficient. Therefore, Appellant prays for the deletion of additions confirmed by the Learned CIT(A). 2. The Learned CIT(A) erred in confirming the addition of Rs 306493 on account of interest paid of Rs. 271233 and brokerage paid of Rs. 35260 by Appellant as unexplained expenditure u/s 69C of the Income Tax Act. Reasons assigned by him for confirming the same are wrong and insufficient. Therefore, Appellant prays for the deletion of additions confirmed by the Learned CIT(A). 3. The Learned CIT(A) erred in confirming the addition of Rs 20806040 on account of purchase of immovable property u/s 69 of the Income Tax Act. Reasons assigned by him for confirming the same are wrong and insufficient. Therefore, Appellant prays for the deletion of additions confirmed by the Learned CIT(A).3. The Learned CIT(A) erred in confirming the addition of Rs 20806040 on account of purchase of immovable property u/s 69 of the Income Tax Act. Reasons assigned by him for confirming the same are wrong and insufficient. Therefore, Appellant prays for the deletion of additions confirmed by....
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....llant company. It is further, stated that the appellant also confirms that factual details are not available even now. 15. The Ld. DR on the other hand submitted that it is an admitted fact that no document/material/submission has been made by the assessee, or on behalf of the assessee against the additions made by the Ld. AO. The assessee has totally failed to establish identity, credit worthiness of the parties and genuineness of the transaction which resulted into the addition by the Ld. AO as unexplained credits u/s. 68 of the Act, unexplained expenditure u/s. 69(C) of the Act, unexplained investment u/s. 69 of the Act and addition as income from other sources respectively. 16. With regard to the legal ground raised against the right of the revenue/income tax department for initiating proceeding despite the insolvency proceedings against the assessee, the Ld. DR has relied upon the order of the Ld. coordinate bench in ITA No. 4517/Mum/2023 AY 2017-18 order dated 27.05.2025 where similar ground was raised with respect to income tax assessment proceeding during CIRP under IBC, 2016. It is argued by the Ld. DR that there is no bar for completing the assessment by the income tax ....
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.... principles and settled legal precedents. It is to be noticed that the resolution professional on behalf of the assessee has also submitted in writing before us that he has no material/evidence/submissions to be made on behalf of the assessee with respect to the additions to the total income challenged in this appeal. Thus, the assessee has totally failed to bring any material against the additions made by Ld. Assessing Officer and confirmed by the Ld. CIT(A). For the above reasons, we find no legal infirmity in the impugned order which may warrant interference by this Tribunal. The ground no. 1 to 4 are accordingly rejected. 20. With respect to legal ground no. 5 we are of the considered opinion that the issue is covered by the order of the Ld. Coordinate bench in ITA No.4517/Mum/2023 order dated 27.05.2024 (supra) and we proceed to quote the following extracts relevant to the issue involved before us as under: "4. In response to the notice issued by the tribunal, Learned Representative for the department appeared and participated in the hearing of the case. 5. We have gone through the materials available on record and Heard learned representatives for both the parties. 6. ....
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....ed Representative for the revenue department has submitted that no leave of the adjudicating authority is necessary to be obtained by the Revenue Department in respect of assessment proceedings. He has referred Official Liquidator, High Court,...Vs Commissioner of Income Tax, West Bengal, AIR 1970 CAL349, in support of his arguments. The relevant para 49a read as under: "49a. Assessment proceedings and recovery proceedings, although both are proceedings under the Income-tax Act, do not, to my mind, stand on the same footing in so far as leave nder Section 446(1) of the Companies Act, 1956 is concerned. So long as the duty of assessment is not performed, the right to recover does not arise at all. Assessment validly done in accordance with the provisions of the Income-tax Act is the only way of creating a debt in favour of the Department and does not affect the assets and properties of the company or the scheme of administration thereof or the winding up of the company in any way. When any debt for payment of taxes arises on an assessment, it is open to the Department to prove the debt in liquidation, claim payment thereof and the debt of the Department will be paid in the same ma....
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..... Liquidator has an obligation to ensure that assessment is legal and he has been provided with sufficient power to question any assessment if he finds the same to be excessive. 13.We accordingly, on the basis of aforesaid binding precedent, hold that the provisions of IBC 2016 would prevail over the Income Tax Act. However, Income Tax authorities have limited jurisdiction to assess/determine the quantum of Income Tax dues but have no authority to initiate recovery of such dues at its own during the period of moratorium in violation of Section 14 or 33(5) of the IBC. The Income Tax Authorities are like any other creditor, may stake their claim before liquidator in the statutory limitation period provided under the IBC. The first point is accordingly determined in positive in favour of the assessee. 14. Secondly, in view of the findings given at point no.1, it is easily concluded that Learned CIT(A) has erred is not adjudicating the matter which was with respect to the determination of tax dues only, more so, when the liquidator, himself, was pursuing the matter. The second point is accordingly determined in positive in favour of the assessee and against the revenue department."....
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....stantiate the transaction as no document/material was produced before the Ld. AO or before the Ld. CIT(A). 26. The ground no. 4 before the Ld.CIT(A) was raised and disposed of as under: "APPELLATE DEICSION W.R.T GROUND NO.-4: The appellant states that, the ".... On the facts and in law the AO has erred in considering income of Rs. 6.64,40,138/- as per intimation u/s. 143(1) as against Nil Income as per Return of income fled without appreciating the fact that there is mistake in the Intimation issued u/s. 143(1) while processing the return of income wherein Business income is considered at Rs. 5.29,71,920/- against Nill Business Income declared in the IT Return fled and set off of Current year business loss against Income from other sources Rs 1,34,68,218/- is not allowed in the Intimation. The appellant is seeking to challenge the AO's order passed u/s. 143(1) of the Act and whereas this appeal filed by the appellant vide no. NFAC/2018-19/10363805, dated 22/04/2024, against the assessment order dated 26.03.2024 passed u/s 147 of the Income Tax Act, 1961, for this AY 2019-20. Thus, it is evident that, the grounds of appeal are incorrect and or not relevant to the assessment....