2025 (6) TMI 621

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....d report that except seven creditors and rest of the creditors and rest of the creditors either did not appear or their letter have returned back with the remarks "No such office", No such person", left without address? 3. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in ignoring the fact that the identity and creditworthiness of most of the creditors could not be established and merely filing of confirmation of PAN before Ld.CIT(A) and return to the amount in subsequent years is not sufficient to discharge onus casted upon the assessee. 4. The appellant craves leave to add, amend, modify, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal." 3. Brief facts of the case are that the Assessee filed return of income declaring total income of Rs. 51,190/-. The case was selected for scrutiny under CASS. An assessment order came to be passed u/s 144(1) r.w.s. 145(3) of the Act by making addition of Rs. 11,00,81,859/- u/s 68 of the Act Rs. 22,37,314/- made by treating the total accumulated profit of lender company, loan amount as deemed dividend in th....

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....e A.O. during the Assessment proceedings and not produced any documents before the A.O. Therefore, an ex-parte assessment order came to be passed on 26/12/2016. During the first appellate proceedings, the Assessee filed additional documents such as confirmations of the creditors and other relevant documents in the case of all the Sundry Creditors. The Assessee has also produced ledger accounts and claimed that the entire amount has been paid to the respective Sundry Creditors. 8. The Ld. CIT(A) called for the Remand Report from the A.O. During the Remand Proceedings, A.O. in order to verify the genuineness of the creditors issued notices to 25 parties, out of which, only 7 creditors namely Sh. Manoharlal Arora (Rs. 35 lakh), Smt Manju Arora (Rs 35 lakhs), Sanjay Tandon (Rs. 23 lakhs), Sh. Hem Chand (Rs. 50 lakhs ), Sh. Gopal Yadav (Rs. 10 lakhs ), Sh. Vijay Yadav (Rs. 24 lakhs ), Sh. B B Srivastava (Rs. 12 lakhs) have filed their confirmation, but remaining creditors either did not appear or their letters have been returned with remarks 'no such office, no such person, left without address'. The Ld. A.O. in his Remand Report stated as under:- 'The above seven persons ha....

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....al, he should exercise his power judicially and should make enquiry where facts so demand. Reliance is also placed on the decision of Keshav Mills Co. Ltd. 56 ITR 365 (SC).; the Bombay High Court in Prabhavati S. Shah 231 ITR 1 NarrondasManordas 31 ITR 909 (Bom); Scindia Steam Navigation Co. Ltd. 80 ITR 589 (Bom); P. N. Balsubramaniam 112 ITR 512 (AP); Kanpur Coal Syndicate 53 ITR 225 (SC); Jute Corp. of India Ltd. 187 ITR 688 (SC); National Thermal Power Co. Ltd/229 ITR 383 (SC); and Ahmedabad Electricity Co. Ltd. 199 ITR 351 (Bom) (FB). In view of the above discussion, the additional evidence is admitted. FINDINGS: GROUND 2, 3 & 4 4.3.5.3. The facts of the case are that the appellant company filed original return of income on 28.11.2014 declaring a Total Income of Rs. 51,190/- and assessment order u/s 144 r.w.s 145 (3) of the Act was passed, with additions u/s. 68 and 41(1) of Rs. 11,00,81,859/-. The Details of Sundry Creditors and the repayment done is given below: The Details of Sundry Creditors and the repayment done is given below: S.No. Name of the Sundry Creditors & Latest Address Bal. as on 31.03.2014 Bal. as on TODAY Deta....

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....85,989 - 18.08.2014 5,000,000 KOTAK BANK 20.08.2014 5,600,000 KOTAK BANK 21.08.2014 6,000,000 KOTAK BANK 15 Mahinder Singh Dahiya& Sons Huf 3702, Sector-15, Sonipat, Haryana- 131001 952,776 0 16.06.2014 952,776 KOTAK BANK 16 SanjeevDahiya& Sons Huf3702, Sector-15, Sonipat, Haryana- 131001 1,937,034 - 17.06.2014 1,937,034 KOTAK BANK 17 Shree LadduGopalan Infrastructure P. Ltd H -12, Tropical Building, Connaught Place, New Delhi- 110001 1,607,690 - 17.06.2014 1,607,690 KOTAK BANK 18 VinodTyagiH-12, Tropical Building, Connaught Place, New Delhi-110001 937,035 - 16.06.2014 937,035 KOTAK BANK 19 Ajay Sharma G-38, SFS Flats, Saket, New Delhi-110017 600,000 - 03.07.2015 600,000 KOTAK BANK 20 Anglican Indian Consultancy Pvt. Ltd. A-13, Green Park, Extension 2,000,100 - 15.04.2018 1,000,000 INDUSIND BANK 20.06.2018 1,000,100 INDUSIND BANK 21 Aqua Sunlife H. No. 148/25 Shakti Nagar, Gurgaon 1,000,000 - 25.09.2016 500,000 KOTAK BANK 25.10.2016 200,000 KOTAK BANK 05.11.2016 300,000 KOTAK BANK ....

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.....10.2016 300,000 KOTAK BANK 25.10.2016 300,000 KOTAK BANK 36 Shift Focus C-103, Sector-40, Noida-201301 1,400,000 - 26.05.2016 400,000 KOTAK BANK 18.08.2016 500,000 KOTAK BANK 20.09.2016 500,000 KOTAK BANK 37 Shri Shyam Enterprises H. No. 1749, MarutiKunj, Bhondsi, Sohna Road, Gurgaon 1,100,000 - 15.09.2016 200,000 KOTAK BANK 05.10.2016 200,000 KOTAK BANK 05.11.2016 200,000 KOTAK BANK 38 Shubh Karman Projects 10/11, East Patel Nagar, New Delhi- 110008 4,900,000 - 04.07.2015 4,900,000 KOTAK BANK 39 Sudhir Kumar Sharma 1608, Gali No. 3, Sector-29, Noida 300,000 - 08.12.2016 300,000 KOTAK BANK 40 SupriyoSain Sharma H-21, Karampura, New Delhi-110015 1,000,000 - 25.08.2018 250,000 INDUSIND BANK 25.09.2018 250,000 INDUSIND BANK 25.10.2018 250,000 INDUSIND BANK 25.11.2018 250,000 INDUSIND BANK 41 Sunita Sharma 11B/3, Floor, New Sahibpura, M.B.S. Nagar, Delhi-110018 1,000,000 - 31.03.2015 1,000,000 KOTAK BANK 42 VikramBagga115, Arjun Nagar, Delhi 1,000,000   25.05.2016 ....

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....se, the appeal on ground nos. 2, 3 & 4 are allowed." 10. In the present case, it is a matter of fact that the Assessee has produced all the confirmation of the Sundry Creditors and other relevant documents before the CIT(A) for the first time to prove the genuineness and identity of the creditors. As per the ledger account submitted before the Ld. CIT(A), the entire amount has been paid in full as per the chart reproduced in the order of the Ld. CIT(A) and as per the Assessee, all the accounts are squared up. It is seen from the record that, during the Remand proceedings before the A.O., except seven creditors, other creditors to whom notices were issued remained absent as the notices issued were not served as the same were retuned with an endorsements 'no such office, no such person, left without address', therefore, the Ld. A.O. drawn adverse inference that the genuineness and identity of the rest of the creditors could be verified. 11. When the said Remand Report is produced by the A.O. before the Ld. CIT(A), the Assessee by way of a letter dated 26/11/2018 submitted that 'the Assessing Officer did not provide any opportunity to the Appellant to present the remaini....