TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 621
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....ors 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 the hands of the Assessee and Rs. 1,22,248/- has been disallowed u/s 40(a)(ia....
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....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 have admitted that they have advanced money to the Assessee for booking commercial space (shop....
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....ed 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 Details of Repayment Date Amount Bank Name 1 Ajay Gupta 2183, Sector-7 A, Faridabad, Haryana- 121006 841,916 - 10.06.2014 841,916 KOTAK BANK....
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....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 22 Ashok Kumar Gupta E-32, Rajouri Garden, New Delhi-110027 2,400,000 10.07.2018 1,100000 INDUSIND BANK 31.07.2018 1,100000 INDUSIND BANK 01.12.2018 200,000 INDUSIND BANK 23 Balvinder Kaur A-76, UdayVihar, Delhi- 110041 350,000 11.10.2017 350,000 INDUSIND BANK 24 KanakLataC-801, New Jyoti Apartments, Plot No. 27, Sector-4, Dwarka, New Delhi- 110078 500,000 - 10.09.2015 500,000 INDUSIND BANK 25 Khandelwal Timber & Plywood Khandelwal Building, MG Road, Village Sikanderpur, Opp. Sikanderpur,....
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....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 500,000 KOTAK BANK 05.09.2016 500,000 KOTAK BANK 110,081,859 It can be seen from the above table that all the creditors have been paid in the subsequent periods. Considering the fact that the AO has passed the order u/s 144 of the Income Tax Act, 1961 and the Appellant has submitted all the confirmations and other relevant documents in case of all the sundry creditors during the appellate proceedings, the details filed by the appellant have been considered. Further, it is also seen from ledger accounts submitted along with written submission dated 28.12.2018 vide page no. 18-59 (filed during appellate proceedings and kept of record) that the amount has been paid in full as per details given in the chart above. In view of the fact that all the accounts are squared up as on date, all relevant documents have been submitted during the appellate proceedings including con....
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....mand 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 remaining creditor and also examined to those persons', accordingly the Assessee itself requested to recall the Remand Report for want of opportunity to produce remaining creditors. Thus,it is clear that the Assessee has not produced remaining creditors before the A.O. during the Remand Proceedings. However, the Ld. CIT(A) by accepting the contention of the Assessee that the entire dues of the creditors have been paid and squared up, without verifying the said fact with the bank statement of respective creditors and in the absence of any confirmation from the creditors, deleted the addition. In our considered opinion, when an Assessee claims that all the creditors have been paid back, it is the dutyof the authorities to verify the genuineness of the said claim and should make sure that the list of creditors are not fictitious and the same are genuine by corroborating the same with tangible evidence such as bank statements, confirmation letter etc. In the present case, the Ass....