TaxTMI 
TaxTMI 
2025 (7) TMI 1745
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.... the Act carried out as on 21st September 2017 at the Coffee Day Group and its associates. During the search several materials were found & impounded, and statement of several persons were recorded. Late Shri V.G. Siddhartha, who was the promotor and CMD of Coffee Day Group of companies, based on materials found and statement recorded agreed to offer additional income for the relevant assessment years. Accordingly, the proceedings under section 153A of the Act were initiated against late Shri V.G. Siddhartha for A.Ys. 2013-14 to 2017-18 by issuing notice dated 14th November 2018 and assessment proceeding for A.Y. 2018-19 was initiated under section 143(3) r.w.s. 153D of the Act. 2.1 During the pendency of the assessment proceeding, Shri V.G. Sidhartha died as on 29th July 2019. In the assessment proceedings, several notices and show cause notices etc were issued which were replied by the legal heirs of late Shri V.G. Sidhartha. Finally, the AO came to finalized the assessment order for respective assessment years i.e. A.Ys. 2013-14 to 2018-19 as on 31st December 2019 and the order was passed jointly in the name of 3 legal heirs namely Smt. Malavika Hegde, Shri Amartya, and Shri ....
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....ed in ignoring the fact that, the statement of Mr.Sadanand Poojary U/s.132(4) of the act, dated 22.09.2017 wherein he has clarified the nature of transaction of resale of 100 acres of coffee plantation pertains to owners. 5. The learned Commissioner of Income Tax (Appeals)-1 1, Bangalore erred in confirming the addition of Rs. 3,00,00,000/- in the hands of the appellant when M/s.Kumergode Estates Ltd shares are purchased by M/s.Gonibedu Estates Ltd and not by appellant clarified in statement U/s.132(4) of the act, dated 22.09.2017, answer to Question No.19 to 22. 6. The learned Commissioner of Income Tax (Appeals)-11, Bangalore, has erred in ignoring the position of law laid down in various decisions wherein it is held that, merely on admissions U/s.132(4) of the act no additions can be made unless substantiated by corroborative evidences. PRAYER The appellant prays that the Hon'ble Tribunal may kindly hold that, for the facts and circumstances of the appellant there was no case of addition of Rs. 3,00,00,000/- under the provisions of section 69 of the act and hence the same deserves to be deleted." 4. The assessee vide letter dated 28-10-....
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....nted investment. 6. The relevant facts are that, during the search at the premises of the manager of the assessee group companies, namely Shri Javeed Parvez, certain documents marked as Annexure A/S/JP/03 were found in connection with the acquisition of M/s Kumergode Estate Pvt Ltd by M/s Gonibedu Estate Pvt Ltd. These documents contained information regarding the payment of cash over and above the documented price. 6.1 Upon confrontation with the seized materials, Shri Javeed Parvez, in his statement recorded under section 132(4) of the Act, explained that the assessee group i.e. M/s Gonibedu Estate Pvt Ltd. had entered into an MOU for the purchase of 75% (i.e. 67500 shares out of the total 90,000 shares) of M/s Kumergode Estate Pvt. Ltd from the existing shareholders. The purchase consideration for the acquisition was agreed upon at Rs.46.50 crores, with the payment to be made through banking channels as well as in cash, in the ratio of 75:25 (i.e., 75% through bank and 25% in cash). Thus, a cash payment involved is of Rs.11.625 crores over and above the disclosed price. 6.2 The seized material, along with the statement of the manager, Shri Javeed Parvez, was confronted ....
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..... 6.7 Furthermore, the assessee highlighted that the noting in the seized sheets of loose papers was only estimates and not actual transactions. The assessee in this regard contended that as per the seized document, the payment through banking channel was for Rs. 34,87,50,000/- whereas the final payment, as per the company's ledger and balance sheet, i.e. the payment via banking channels was of Rs.33.71 crores only, which evidences that the payment was not made entirely on the basis of seized material. 6.8 Considering these facts, the assessee submitted that the total cash component required to be paid had been reduced, and an undisclosed income of Rs.8.625 crores had already been offered in the return filed in response to the notice issued under section 153A of the Act. Therefore, the additional Rs.3 crores should not be added back, as it had already been adjusted against the land transaction. The assessee urged the AO to consider this reconciliation and avoid double taxation of the same amount. 6.9 However, the AO rejected the assessee's submission regarding the reconciliation of Rs.3 crores, stating that the noting in the seized documents was clear evidence of a....
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....tion 132(4) of the Act during the search proceedings, without considering that the appellant had subsequently retracted the statement recorded on 22.09.2017 in response to Question No. 24. The retraction, coupled with the absence of any corroborative evidence, rendered the addition unjustifiable. 9.1 It was also pointed out that the CIT(A) had ignored the statement of Mr. Sadanand Poojary, recorded under Section 132(4) on 22.09.2017, which clarified that the resale of 100 acres of coffee plantation land pertained to its rightful owners. Accordingly, the ld. AR urged to consider that the ld. CIT(A) wrongly attributed the alleged unaccounted cash investment to the appellant when, in fact, the shares of M/s Kumergode Estates Ltd. were acquired by M/s Gonibedu Estates Ltd. and not by the appellant personally. This fact was explicitly clarified in the statements recorded during the search proceedings. 9.2 Furthermore, the learned AR emphasized that judicial precedents establish that mere admissions under Section 132(4) of the Act do not warrant additions unless substantiated by corroborative evidence. Given the facts and legal principles, the learned AR strongly asserted that the ....
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..... 6890 per share an amount of Rs. 1690 per share (6890- 5200) paid through unaccounted cash. Thus, around Rs. 11.17 crores were payable through cash. It is pertinent to note that as per seized document and statement of Shri Javeed Parveez and late Shri V.G. Siddhartha the cash component was agreed at Rs. 11.625 crores which he agreed to offer to tax. However, we note that such cash component was for 67500 share which valued at 46.25 cored whereas the assessee purchased 66108 shares only. Finally, the assessee offered income of unaccounted investment for Rs. 8.625 crore only leading to difference of Rs. 3 crores. 11.3 It is further noted that out of 45900 shares sold by the promotor group, there were 15,840 shares held by the family member of Shri M.M. Anandram which is detailed as under: S. No. Name of person No. of share 1 M. M. Anandram 9260 2 Premkumar M.A. 4160 3 Premkumari Mysore Anandram 2420 Total 15840 11.4 From the search materials found from one Shri Sadanand Pujary and statement of Shri Sadanand Pujary as well as of Late Shri V.G. Siddhartha, it is discernible that Shri Peremkumar M.A. and Premkumari Mysore Anandr....
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....rties and power under section 133(6)/ 131 of the Act. Therefore, in the given facts and circumstances no addition can be made in the hand of the assessee under section 69 of the Act. Hence the ground of appeal of the assessee is hereby allowed. Coming to the issue raised by the assessee in additional ground of appeal. 12. The assessee, in the application for the admission of additional grounds, argued that the issue raised is legal in nature and fundamental to the resolution of the case. Consequently, the assessee's learned AR requested that these additional grounds be admitted for adjudication. 13. On the other hand, the learned DR opposed the admission of the additional ground of appeal. 14. We have heard the rival submissions of both the parties and perused the materials available on record. The Hon'ble Supreme Court in the case of National Thermal Power Co. Limited vs. CIT reported in 229 ITR 383 has held as under: "Under section 254 of the Income-tax Act, 1961, the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeal....
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....order under section 143(3) r.w.s. 153A of the Act in the name of 3 persons namely Smt. Malavika Hegde, Shri Amartya and Shri Ishan by holding them as legal heir. The assessee through the additional ground of appeal filed before us has challenged the validity of assessment order made in the name of 3 different legal heirs. 15.1 The learned AR of the assessee argued that the AO has erred by assessing the same income in the hands of multiple legal representatives on a substantive basis and raising a demand under section 156 of the Act, which is three times more than the amount that would have been payable if the deceased assessee were alive. This results in an unjustified and excessive tax burden that contradicts the fundamental principles of taxation. 15.2 The learned AR further contend that under section 159 of the Act, the liability of legal representatives is limited to the extent of their share in the estate of the deceased. It does not impose joint and several liability on all legal heirs. The AO's approach of issuing parallel assessments to all legal representatives creates legal lacunae in recovery and is contrary to settled legal principles, which mandates that income s....
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....arallel assessments were made, and there was ambiguity regarding individual who was liable for the tax. In contrast, the present case pertains to a joint and combined assessment in the name of all three legal heirs of the deceased, and no separate individual proceeding has been initiated against any one of them. The learned DR submits that since the assessee has not disputed their status as the legal heirs of Shri V.G. Siddhartha, they are collectively liable under section 159 of the Act. Additionally, the assessee has failed to specify their respective shares in the estate or their proportionate liabilities, reinforcing the Revenue's position that liability should be equally distributed among all three legal representatives. 16.2 The learned DR also highlights that judicial precedents prohibit the same income from being taxed multiple times in different hands. However, in this case, the department has merely sought to ensure tax collection from the estate of the deceased, rather than assessing each legal heir independently. The AO's actions are in line with legal provisions that allows recovery from legal representatives up to the extent of the assets inherited by them. ....
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....7 SC) 17.5 These cases establish the principle that the same income cannot be assessed substantively in multiple hands. However, these rulings primarily deal with situations where the AO assessed multiple legal heirs separately on a substantive basis, resulting in multiple tax demands. In contrast, in the present case, the AO has not issued separate independent assessments for each legal heir but rather a single consolidated assessment order in the names of all three legal representatives. This approach does not violate the fundamental principle that the same income should not be taxed multiple times. 17.6 Furthermore, in Lalji Haridas (1961 43 ITR 387 SC), the Supreme Court clarified that while proceedings can be initiated against multiple legal representatives, the final liability should be determined in a manner that ensures tax recovery from the estate, rather than creating a disproportionate burden on any individual heir. The AO's approach in the present case aligns with this principle. 17.7 The AO's decision to assess the deceased's estate in the combined name of all three legal heirs does not automatically impose joint and several liability on them beyond their ....
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....uffer from a jurisdictional error that would render the assessment void. The assessment order is, therefore, legally valid. Hence, the additional ground of appeal raised by the assessee is hereby dismissed. 18. In the result, the appeal of the assessee is partly allowed. Coming to ITA No. 1443/Bang/2024, an appeal by the assessee namely Smt. Malavika Hegde being a legal heir Late Shri VG Siddhartha for A.Y. 2014-15. 19. The assessee has raised as many as 7 grounds of appeal which are interconnected to each other. The effective issue raised by the assessee is that the learned CIT(A) erred in confirming the addition of Rs. 16,42,50,969/- by treating the unsecured loan as unexplained cash credit u/s 68 of the Act ignoring the fact that no incriminating material found/unearthed during the search in relation to impugned loan. Further erred in confirming the addition for the want of confirmation only ignoring the other evidence. 20. The necessary facts are that the AO during the assessment proceedings under section 153A r.w.s. 143(3) of the Act noticed that the assessee during the year has received unsecured loans from several parties. Accordingly, the assessee was required t....
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....elation to the year under consideration and based on the same, the addition was also made to the total income of the assessee, though such incriminating material was not in connection with the impugned loan transaction. The learned CIT(A) based on the Hon'ble Supreme Court's ruling in PCIT vs. Abhisar Buildwell (P.) Ltd (supra) held that the AO can assess the total income of the unabated/completed assessment after considering the incriminating material as well as other materials available with the AO including income declared in return. In the present case, the AO has made addition to the total income of the assessee based on incriminating materials and additionally made addition of unexplained loan credit based on other materials available with the AO including income declared in the return. Accordingly, the learned CIT(A) dismissed the assessee's argument that no addition can be made in the absence of incriminating material in the case of unabated/completed assessment year. 23. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 24. The learned AR before us among the other contentions argued that the year under consideration is an unabat....
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....o consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns." 26.1 Without going into the veracity of inference drawn by the learned CIT(A) based on above extracted observation of Hon'ble Supreme Court, we note that the AO in the assessment order, besides the addition of Rs. 16,42,50,969/-, has also made addition of Rs. 12.5 crores on account of cash loan or cash transaction with the party namely Shri Parkash B Talreja and further made addition of Rs. 34,07,000/- on account of unaccounted interest payment to the certain farmers. These additions were allegedly made by the AO based on certain loose paper of diaries found during the search and statement of the late Shri V G Siddhartha. We note that the assessee against these additions was in appeal before the learned CIT(A) who deleted the addition of Rs. 12.5 crore in relation to cash transaction with Parkash B Talreja by holding that the transactions does not pertain to the year under consideration. Likewise, the addition of Rs. 34,07,000/- was also deleted by the ld. CIT-A in relation to the payment of interest to the farmers by ....
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....Ground No. 1 of assessee's appeal is general in nature and therefore, the same does not require any separate adjudication. Hence the same is dismissed as infructuous. 30. The interconnected issue raised by the assessee through ground Nos. 2 to 7 of the appeal pertains to the addition of alleged unaccounted cash loan of Rs. 4 crores from the parties namely Shri Rachith & Shri Ankith. 31. The relevant facts are that during the search proceedings at the residence of Shri Javeed Parveez (the manager of the assessee group), an excel spread file namely "Timber Statement" was found from his email. The impugned excel sheet contains the details of receipt and payments as per the instruction of late Sri VG Sidhartha from/to various parties. The sheet contains the name of one such party as "Mrs. Nivedhithakka cash" indicating cash receipt of Rs. 70 lakhs. Shri Javeed Parveez in the statement recorded under section 132(4) of the Act explained the cash loan of Rs. 70 lakhs received from the said party which was deposited into the bank account namely Corporation Bank at Chikmagalur and interest of Rs. 8,36,740/- was also paid through cash on the impugned loan amount. He also stated that am....
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....ection 132(4) of the Act, to which he agreed to offer an additional income in the A.Y. 2015-16 for Rs. 5.7 crores on account of cash loan from Smt. Nivedithakka, Shri Ankith and Shri Rachet and an amount of Rs. 1.15 crores on account of interest paid to them in the A.Y 2015-16. 31.5 Subsequently, the proceedings under section 153A of the Act were initiated and the assessee filed return of income under section 153A of the Act wherein the assessee late Shri VG Siddhartha offered additional income on account of cash loan from Smt. Nivedhithakka for Rs. 70 lakhs only. In the case of other parties, the assessee failed to offer income of Rs. 5 crores as admitted against the receipt of cash from Shri Ankit and Shri Rachet. Likewise, the assessee also did not offer the income on account of payment of interest for Rs. 1.15 crores. 31.6 The AO from the seized material (being page 37 & 39 of annexure A/S/JP/07, Advance-1 ledger, statements etc) observed that the interest in cash paid to Shri Ankith, Shri Rachit and Smt. Niveditha in cash over the period of A.Y. 2015-16 to 2018-19 which are detailed as below: Name A.Y. Interest Total Ankith 2016-17 17,83,850 47,08....
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....rporation Bank account of M/s MACEL either on the same day or the day immediately following the cash movement. The ledger records and cash book entries corroborating these transactions were enclosed along with the explanation. Moreover, the credits to the bank accounts reflected the internal nature of these transactions and not any loans received from third parties. The assessee emphasized that M/s MACEL had maintained complete and regular books of accounts, and the sources for the credits were fully explainable and documented. 31.11 Another significant point raised by the assessee was that these cash transactions spanned multiple financial years, namely A.Ys. 2015- 16, 2016-17, and 2017-18. Therefore, even if considered, the entire sum of Rs.5 crores could not be brought to tax exclusively in assessment year 2015-16. Furthermore, since the transactions were recorded in the books of M/s MACEL, the assessee contended that they could not be subjected to assessment in the individual case of late Sri V.G. Siddhartha. The assessee reiterated that the original declaration of Rs.5 crores was made under a mistaken understanding and undue pressure during the search, and was based solely ....
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....cial banking channels and duly recorded in the books, no income can be deemed to have arisen outside the books or classified as undisclosed. 31.15 Furthermore, the assessee reiterated that there was no loan taken from Mr. Ankith or Mr. Racheth. The transactions in their names merely reflect inter-office fund transfers from the head office in Bangalore to the Chikmagalur branch which were duly recorded in the books of MACEL. As there is no existence of loans, the question of interest payments to these individuals does not arise. The alleged declaration of Rs.1.15 crore as interest payment appears having been misunderstood or misreading of the seized materials by Mr. Javeed Parveez, who gave statements based on memory without corroboration from the accounting records. Late Sri V.G. Siddhartha, relying on those unverified statements, appears to have admitted the declaration, which the assessee now retracts upon verification. 31.16 It is also highlighted that three of the cited payments were passed as journal entries, while the remaining were direct cash withdrawals made through self-cheques. Since no interest expenditure has been claimed by M/s MACEL or late Sri V.G. Siddhartha,....
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....t Late Shri V.G. Siddhartha, in his sworn statement, confirmed these facts and voluntarily agreed to offer the sum of Rs. 5 crores on account of loan and Rs. 1.15 crore on account payment of interest as undisclosed income, as he could not substantiate the genuineness of the transactions. 31.21 The AO found that it was clearly established that unaccounted cash transactions had taken place with individuals namely Ankith, Racheth, and Niveditha. These transactions involved interest payments and cash loans, and the assessee himself admitting to an unaccounted loan in Niveditha's case. Despite the assessee's claims that there were no loans from Ankith and Racheth and that payments were mere internal transfers recorded in MACEL's books, but no proper documentation was submitted to establish these transactions as genuine business movements. 31.22 The AO highlighted inconsistencies in the assessee's explanation regarding the source and purpose of cash withdrawals from Corporation Bank account No. 898. While the assessee argued these were accounted for via journal entries and treated as receivables in MACEL's books, it was revealed that these entries were not recorded as payments ....
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....ellants, the assessment order and the facts of the case has been duly perused. It is noticed that substantive addition is made in respect of unaccounted cash loan and interest transactions in the case of late Shri. V G Siddhartha and protective addition in case of MACEL. The appellants have not explained the sources of cash amount of Rs 2.5 crores received from Racheth and Rs. 1.5 crores received from Ankit on which interest is shown to be paid of Rs. 8.12 lac and Rs. 4.87 lacs respectively as per entry dated 6.7.2016 in the ledger reproduced in assessment order, whereas in the other entries in the ledger it is clearly stated that interest is being paid to shareholders in Kumergode estates. Racheth and Ankit are not shareholders in Kumergode estates, and therefore as per the narration the amount of Rs. 2.5 crores and Rs. 1.5 crores (for AY 2015-16) stands unexplained. Appellants has failed to submit any cogent reason for linking the cash transactions with Racheth and Ankit to the transactions with shareholders in Kumergode estates. It is also noted by the AO that appellants has failed to prove the role and responsibility of Ankit and Racheth in the Coffee Day Group and why these pe....
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....he cash withdrawal from MACEL. Unless it is proved that such withdrawals have been used for some other purpose, the same is presumed to available for making the interest payments. 7.4.1 Therefore, additions made u/s 69A (towards interest payments made in respect of loan transactions) with Ankit, Racheth and Nivedita for the AYs 2015-16 to 2018-19 are deleted in case of the appellants. 7.4.2 Considering the above, Grounds of appeal no 12 to 18, Grounds of appeal no 7 to 10, Grounds of appeal no 10 to 13, and Grounds of appeal no 10 to 16 respectively for AYs 2015-16 to 2018-19 are allowed. 33. Being aggrieved by the order of ld. CIT-A, both the assessee and the revenue are in appeal before us. The assessee is appeal against the confirmation of the addition in respect of alleged cash loan from Shri Ankit and Shri Rachit whereas the revenue is in appeal against the deletion of addition made on account of payment of interest on the alleged cash loan. 34. The learned AR before us argued that the addition of Rs.4,00,00,000/- was wrongly made by the AO and confirmed by the learned CIT(A). He explained that there were no loans from Mr. Rachith or Mr. Ankith in the a....
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....ctions forming the crux of the dispute-being cash movements and alleged interest payments- pertain squarely to MACEL and not to the individual assessee, Late Shri V.G. Siddhartha. The use of Shri Siddhartha's statement-given under presumed duress during a search and based on the unverified remarks of an employee-cannot alone be a conclusive basis for sustaining the addition. As such, the admissions made during search proceedings, especially when based on statements of employees and made without verification of accounting records, cannot be solely relied upon to justify additions, particularly where the transactions are later clarified and appropriately explained. Furthermore, the protective additions made in MACEL's hands further reinforce that the real entity responsible for the questioned transactions is MACEL, not the assessee. Accordingly, we hold that the addition of Rs.5 crores cannot be made in the hands of the assessee, as the transactions relate to MACEL, and there is no evidence proving otherwise. 36.3 Similarly, the interest payments allegedly made to Shri Ankith and Shri Rachit are claimed to have been made out of cash withdrawn from MACEL's bank account thro....
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.... to offer income on account of impugned claim of capital loss of Rs. 59,40,45,851/- (Rs. 21,97,52,425/- + Rs. 37,42,93,426/-). 37.2 However, the assessee, while filing the return of income in response to the notice issued under section 153A of the Act, did not offer/disallow the claim of the impugned capital loss. 37.3 During the assessment proceeding, the legal heir of the assessee explained that M/s Kesar Marbles & Granites Ltd, as on 28th March 2007, issued fully convertible debenture of Rs. 129,84,00,000/- to M/s Lehman Brothers, a USA based global financial service firm/investment banker. The debentures were due for conversion into preference shares on or before 30th June 2009. Before the due date of conversion, M/s Lehman Brothers announced its intention to file petition under US Bankruptcy code. Therefore, the debenture was not converted into preference share and an arrangement was made between late Shri V.G. Siddhartha and M/s Lehman Brothers through agreement dated 19th February 2010. As per the agreement late Shri V.G. Siddhartha agreed to purchase the debenture held by M/s Lehman Brothers in phased manner starting from March 2010 to August 2013 for a consideration ....
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..... Consequently, the loss claimed by the assessee on account of debenture redemption was held to be nongenuine and liable to be disregarded. Hence, the AO disallowed the above loss claimed by the assessee. 38. The aggrieved assessee preferred an appeal before the learned CIT(A). 39. The learned CIT(A) dismissed the ground of appeal of the assessee and confirmed the disallowance made by the AO by holding that the assessment order is very well reasoned and based on relevant case laws. Hence, the order of the AO does not require any interference. 40. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 41. The learned AR before us submitted that the Late Shri V.G. Siddhartha, had made genuine investments amounting to Rs. 189,24,45,851/- in fully convertible debentures of M/s Kesar Marbles & Granites Ltd. This investment was made over several years, from 2010 to 2014, and was properly recorded in the books of accounts and reflected in the financial statements. 41.2 During the financial year relevant to Assessment Year (A.Y.) 2015-16, these debentures were redeemed for a consideration of Rs. 129,84,00,000, which led to a net capital loss....
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...., no incriminating material was seized or found during the search to challenge the genuineness of the capital loss. Therefore, the disallowance made by the AO and upheld by the learned CIT(A) was both factually and legally incorrect. 41.8 In conclusion, the learned AR respectfully requests us to carefully consider the genuine nature of the investment and the losses suffered, the complete evidence placed on record, and the legal principles applicable to such cases, and accordingly request to allow long-term capital loss of Rs. 59,40,45,851 as per the provisions of the Act. 42. On the other hand, the learned DR before us submitted that the assessee has accounted the impugned loss by carrying out the transaction with the closed group of companies. Therefore, the same does not represent a genuine loss as claimed by the assessee. The ld. DR Vehemently reiterated the findings contained in the order of the lower authorities. 43. We have heard the rival contentions of both the parties and perused the materials available on record. The main issue in this case is the assessee's claim of capital loss of Rs. 59,40,45,851 arising from the redemption of debentures of M/s Kesar Marbles &....
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....rove that the debenture purchase and subsequent loss were sham or fabricated. The transactions involved independent third parties, were conducted through legal banking routes, and were duly documented and accounted for. Simply because the assessee incurred a loss does not mean the transaction was not genuine or that it lacked business purpose. 43.6 It is also important to note that a mere statement under section 132(4) of the Act is not enough to sustain an addition or disallowance unless it is supported by independent and corroborative evidence. In the present case, no such supporting evidence has been provided. Moreover, there is also no allegation by the revenue suggesting that such loss was set off against the income of the assessee in the year under consideration or subsequent assessment year. 43.7 In view of all these facts and the settled legal position, we hold that the assessee's claim of capital loss is genuine and allowable under the law. The waiver of interest does not attract disallowance since the corresponding party has not claimed it as an expense. Moreover, the department cannot question the assessee's business judgment or commercial decisions. We, therefore,....
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....all the loan creditors under dispute were provided to the AO except the confirmation letter due to short time. The transaction was carried out through the banking channel and very much identifiable. The assessee before the learned CIT(A) further submitted additional evidence in the form of complete address of the creditors, PAN, ledger account showing the repayment detail and mode of repayment and settlement agreement with creditors. 47. The submission of the assessee along with the additional evidence was forwarded to the AO for the remand report. The AO in the remand report submitted that there were incriminating materials found during the course of search evidencing that the assessee was indulged in unaccounted cash transactions. Based on such documents, the assessee has admitted additional income. Further the additional evidence submitted includes detail of the person from whom the loan was claimed to be received, PAN of some of the lenders, extract of ledger copy from the assessee's book and settlement agreement. However, none of these documents satisfactorily explained the identity, creditworthiness and genuineness of the loan transaction in relation to which the addition ....
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....also pointed out that while the AO accepted some confirmation statements during the assessment, in the remand report, the AO dismissed the additional evidence without doing proper checks or pointing out specific flaws. 48.3 The learned CIT(A) found that the additional evidence provided complete details, like names, addresses, PAN, amount repaid, repayment dates, and settlement agreements in each case. Accordingly, the learned CIT(A) was of the view that loan accepted by the assessee are genuine as some of the loan amount repaid in full and in some case. However, the learned CIT(A) in case of some of the loan creditor the confirmation is still not furnished. 48.4 Thus, the ld. CIT(A) concluded that the additions made by the AO in respect of those parties from whom proper confirmations and supporting documents were received are not sustainable, and therefore, the additions were deleted to that extent. However, in cases where confirmations or settlement agreements were not furnished despite opportunities, the ld. CIT(A) upheld the additions made by the AO. The ld. CIT(A) also tabulated the details of parties for different assessment years and made clear distinctions based on whe....
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....ailable on record. From the preceding discussion we note that the assessee during the year under consideration has accepted an unsecured loan from 24 individuals for a sum of Rs. 5.27 crore. The AO treated the entire unsecured loan from these 24 individuals as unexplained credit under section 68 of the Act in the absence of confirmation. subsequently the assessee during appellate proceedings filed certain additional evidence to substantiate the genuineness of the impugned loan credit. The leaned CIT(A) based on the same accepted the genuineness of part of loan credit and found confirmation from certain individual from whom sum of Rs. 4.59 crore received still not furnished by the assessee. Hence the learned CIT(A) confirmed the addition to that extent. Those loan creditors in whom respect the addition confirmed are detailed as under: S. No. Name Amount Status 1 Anand Rao T.N 5 lakh Paid in full 2 Rajesh Kamath 60 Lakh Settlement 3 Suchetha HP 40 Lakh Paid in full 4 B L Kalpana 4 Lakh Paid in full 5 Vedakumari BP 3 Lakh Paid in full 6 Shreenthji Enterprises 25 Lakh Paid in full 7 Ekta Kukreja ....
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....of Rs. 30 lacs. Hence, a total of Rs. 90 loan was payable to the said party. We find that an amount of Rs. 60 lakh repaid to the said party through banking channel in March 2018 and June 2019 and remaining amount of Rs. 30 lakh transferred in the name of Smt. Malvika Hegde. This fact can be verified from the ledger copy, bank statement, ledger confirmation available at page 425 to 429 of paper book. Thus, considering the facts that loan amount received through banking channel and repaid through banking channel in subsequent years. The genuineness of such credit is established and addition made under section 68 of the Act cannot be sustained. 52.5 Coming to loan amount of Rs. 2 Preetha MC we note that the assessee has already provided name address and PAN of the impugned party. Therefore, considering the facts that the assessee has established the genuineness of almost entire loan credit we hold that assessee has discharged primary onus reading the credit of Rs. 2 lakh from Preetha MC. 52.6 Hence considering the overall material fact we set aside the finding of the learned CIT(A) to the extent of addition confirmed and direct the AO to delete the entire addition. Thus, the gro....
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.... The fact was confronted to the Late Shri VG Siddhartha, which he ultimately agreed to offer income of Rs. 22.65 crore (12.75 Cr + 6.9 Cr + 3 Cr) as an unexplained income on account of cash loan transaction with Shri Prakash B Talreja (Rs 12.75 Cr), Shri Mahesh Ramchand (Rs. 6.9 Cr) and Shri Chiman Lal (Rs. 3 Cr). However, in the return filed under section 153A for the year under consideration he only offered an amount of Rs. 20.65 crore which included Rs. 12.75 crore Rs. 6.9 Crore and Rs. 1 Crore against the receipt of cash loan from Shri Prakash Talreja, Shri Mahesh Ramchand and Shri Chiman Lal respectively. In other words, the assessee offered only an amount of Rs. 1 crore against the loan of Rs. 3 crores from Shri Chiman Lal. Accordingly show cause notice issued proposing to make addition of Rs. 2 crores on account of loan from Chiman Lal. 56.2 The legal heirs of Shri VG Siddhartha submitted that on verification of books of account it is noticed total of Rs. 3 of unsecured was arranged by the Shri Chiman Lal from different persons out of which an amount of Rs. 2 crore was received through banking channel duly recorded in the books of M/s Sivan & Co (a proprietary concern of ....
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....come filed in response to notice u/s 153A of the Act, whereas the additions of Rs. 2 crores for the AY 2015-16 and the protective addition of Rs. 3 Crore for the AY 2017-18 are deleted. 59. Being aggrieved by the order of the learned CIT(A) the Revenue is in appeal before us. 60. The learned DR before us reiterated the findings contained in the assessment order. 61. On the other hand, the learned AR before us vehemently supported the order of the learned CIT-A. 62. We have heard the rival contentions of both the parties and perused the materials available on record. The main issue relates to the addition of Rs. 2 crores as unaccounted cash loan allegedly received from Shri Chiman Lal, in addition to Rs. 1 crore already offered by the assessee in the return filed under section 153A of the Act. The AO based this addition primarily on the statements recorded during the search proceedings from Late Shri V. G. Siddhartha and the employee Shri K. M. Deekshith, who mentioned that a loan of Rs. 3 crore was received in cash and repaid along with interest, also in cash. 62.1 However, we note that the legal heirs of Shri V. G. Siddhartha provided a plausible explanation, suppor....
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....re liable to be deleted. Accordingly, we uphold the order of the learned CIT(A) and direct the AO to delete the addition made by him. Hence, the ground of appeal of the Revenue is hereby dismissed. 63. The next issue raised by the revenue is that the learned CIT(A) erred in deleting the addition of interest paid to Shri Prakash B Talreja in cash. 64. The relevant facts continuing from previous ground of appeal is that Shri KM Deekshith in the statement recorded under section 132(4) of the Act admitted the cash loan of Rs. 12.75 crore received from Shri Prakash B Talreja. He further stated that on the impugned loan interest of Rs. 3 crores per annum for A.Y. 2015-16 to 2017-18 and Rs. 10 lakhs for A.Y. 2018-19 paid through cash. 64.1 The assessee Late Shri VG Siddhartha agreed to offer the amount of Rs. 12.75 crore and finally offered the same. The AO was of the view that the assessee also required to offer the amount of interest paid to Shri Praksh B Talreja as the same was paid through unaccounted cash. Hence, the AO relying on the statement of Shri KM Deekshith made an addition of Rs. 3 crores to the total income of the assessee. 64.2 The aggrieved assessee preferred ....
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....lly when there is no proof. 68.1 Even if it is assumed that interest was paid, it could reasonably be considered to have been paid from the same loan amount that has already been taxed. In such a case, the assessee should get the benefit of "telescoping", which means avoiding double taxation on the same funds. 68.2 Therefore, we agree with the findings of the learned CIT(A). The AO's addition of Rs.3 crores was not backed by any evidence beyond a single statement. The addition is unjustified and cannot be sustained. Hence, the ground of appeal filed by the Revenue is dismissed. 69. The next issue raised by the Revenue is that the learned CIT(A) erred in deleting the addition made on account of unaccounted cash payment of interest to Mamta Ajila. 70. The necessary facts are that along with the search on the assessee group, a search was also carried out on the residence of Smt. Mamta Ajila on the same day i.e. 21st September 2017 where 2 diaries were found and marked as annexure A/MAR-CCD/01 and A/MARCCD/ 02. As she was not available on the date of search her statement was recorded under section 131(1) of the Act as on 20th November 2017. While explaining the noting made ....
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....y premises suggesting transaction carried with Smt. Mamta Ajila. It was further claimed that the assessee has information about the simultaneous search being carried out on the residence of Smt. Mamta Ajila. The seized material and her statement not provided for rebuttal, nor any explanations sought by the AO in this regard. The AO without providing the material and opportunity of being heard, opportunity of cross examination and without issuing show cause noticed in this regard made the addition which is against the principle of natural justice. Accordingly, the assessee prayed to the learned CIT(A) to delete the addition made by the AO. 71.2 The learned CIT(A) after considering the facts in totality found that the Late Shri VG Sidhartha was not confronted with the statement of Smt. Mamta Ajila and material found from her residence at any stage of search proceeding or post search proceeding. The AO also failed to provide the opportunity of cross examination. The learned CIT(A) also observed that at this stage, providing the opportunity of cross examination also does not arise as Shri VG Sidhartha is no more. Hence, the learned CIT(A) in view of the above deleted the addition ma....
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.... Ajila could not arise. In the absence of any evidence found from the assessee's side, and since the additions were made purely based on third-party statements and documents without the assessee's involvement or opportunity to respond, the learned CIT(A) rightly held that the addition was unjustified and deleted it. Agreeing with the order of ld. CIT(A), we find that the AO's actions were procedurally flawed and lacked sufficient evidentiary support. Therefore, the deletion of the addition is upheld. Hence the ground of appeal filed by the Revenue is hereby dismissed. 73. The next issue raised by the Revenue is that the learned CIT(A) erred in deleting the addition made by the AO on account of payment of interest on cash loan received from Shri Ankith, Rachit and as well as addition made for the payment of interest to M/s Kummergodu Investors. 74. At the outset, we note the issue regarding the addition on account of payment of interest to Shri Ankith and Shri Rachet has been adjudicated along with the assessee's ground of appeal in ITA No. 1444/Bang/2024 for A.Y. 2015-16. We have decided the impugned issue in favour of the assessee and against the Revenue vide paragraph N....
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....blish, based on the documentary evidence, that the impugned payment of interest was paid out of the cash withdrawal from the bank of the company namely M/s MACEL. Therefore, the AO disallowed the same by treating as unexplained cash payment and added to the total income of the assessee for relevant assessments years. 76. On appeal, the learned CIT-A deleted the addition made by the AO by observing as under: 6.74 The submissions filed by the appellants, the facts of the case and the reasoning given by the AO in the assessment order passed are duly considered. It is noticed that these interest payments were paid mostly through self-cheque withdrawal from Mysore Amalgamated Coffee Estates Limited and some through account payee cheque from Mysore Amalgamated Coffee Estates Limited. As such source of payment found explained. The AO's contention that the self-withdrawal cheque are not supported with any other evidence is misplaced. It is notice that the appellant has explained the sources to be out of self-withdrawal cheque and the same cannot be negated unless any other evidence exist contrary to the same. The AO has not carried out any independent inquiry which could sustai....
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....h no 52 of this order. For detailed discussion, please refer to the aforesaid paragraph of this order. Hence, the ground of appeal of the revenue is hereby dismissed. 82. In the result, the appeal of the Revenue is hereby dismissed. Coming to ITA No. 1445/Bang/2024, an appeal by the assessee namely Smt. Malavika Hegde being legal heir of Late Shri VG Siddhartha for A.Y. 2016-17. 83. The assessee has raised as many as 8 grounds in the appeal which are interconnected. The effective issue raised by the assessee is that the learned CIT(A) erred in confirming the addition of Rs. 4,39,98,000/- by treating the unsecured loan as unexplained cash credit u/s 68 of the Act ignoring the fact that no incriminating material was found/unearthed during the search operation in relation to impugned loan. Further, the ld. CIT-A erred in confirming the addition for the want of confirmation only after ignoring the other evidences. 84. The necessary facts are that the AO during the assessment proceedings under section 153A r.w.s. 143(3) of the Act noticed that the assessee during the year has received unsecured loans from several parties. Accordingly, the assessee was required to produce the....
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....9 taxmann.com 399. 85.2 On merit, the assessee submitted that during the assessment name and PAN of all the loan creditor under dispute was provided to the AO except the confirmation letter due to short time. However, the transaction was carried through banking channel and very much identifiable. The assessee before the learned CIT(A) further submitted additional evidence in the form of complete address of the creditor, copy of ledger account, detail of repayment and mode of repayment and settlement agreement with creditor. 85.3 The submissions of the assessee along with the additional evidence were forwarded to the AO for the remand report. The AO in the report submitted that there were incriminating materials found during the course of search evidencing the assessee is indulge in unaccounted cash transactions, based on which, the assessee has admitted additional income. Further, the additional evidence submitted includes detail of the person from the loan was claimed to be received, PAN of the some of the lenders, extract of ledger copy from the assessee's book and settlement agreement. However, none of these documents satisfactorily explained the identity, creditworthiness....
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....as further noted that the appellants had also furnished ledger copies and other documentary evidence establishing the identity, creditworthiness, and genuineness of the transactions. The ld. CIT(A) recorded a categorical finding that the evidence produced during the appellate proceedings sufficiently established the genuineness of the loans and repayments in respect of many parties. 86.3 Accordingly, the CIT(A) concluded that the additions made by the AO in respect of those parties from whom proper confirmations and supporting documents were received are not sustainable, and therefore, the additions were deleted to that extent. However, in cases where confirmations or settlement agreements were not furnished despite opportunities granted to the assessee, the ld. CIT(A) upheld the additions made by the AO. The ld. CIT(A) also tabulated the details of parties for different assessment years and made clear distinctions based on whether confirmations were provided or not. As per the table, the total addition made by the AO for the year under consideration was of Rs. 6,27,98,000/- out which the confirmation and other details were provided for the loan amount of Rs. 1.88 crores only. M....
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....dividuals for a sum of Rs. 6,27,98,000/- only. The AO treated the entire unsecured loan from these 25 individuals as unexplained cash credit under section 68 of the Act in the absence of confirmation. Subsequently, the assessee during appellate proceedings filed certain additional evidence to substantiate the genuineness of the impugned loan credit. The learned CIT(A) based on the same accepted the genuineness of part of the loan credit and found confirmation from certain individuals from whom sum of Rs. 4,39,98,000/- received still not furnished by the assessee. Hence the learned CIT(A) confirmed the addition to that extent. Those loan creditors in whom respect the additions were confirmed are detailed as under: 1. Devanand A Kalavase Rs. 20,00,000/- 2. Ekta Kureja Rs. 1,25,00,000/- 3. Pavana Kishore Rs. 2,75,00,000/- 4. Radha MB Rs. 19,98,000/- 90.1 As far as the revenue ground of appeal is concerned, we find the learned CIT(A) before accepting the additional evidence provided sufficient opportunity to the AO. However, the AO, besides opposing the admittance of additional evidence, has not pointed out any infirmity in such evidence. Therefor....
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....ll material facts, we set aside the finding of the learned CIT(A) and direct the AO to delete the entire addition made by him. Thus, the ground of appeal filed by the assessee is allowed whereas the ground of appeal of the revenue is hereby dismissed. Coming to the issue raised in the additional ground of appeal: 91. At the outset, we note that the issue raised by the assessee in the additional grounds of appeal for the AY 2016-17 is identical to the additional ground raised by the assessee in ITA No. 1442/Bang/2024 for the assessment year 2013-14. Therefore, the findings given in ITA No. 1442/Bang/2024 shall also be applicable for the assessment year 2016-17. The additional ground of appeal of the assessee for the A.Y. 2013-14 has been decided by us vide paragraph No.12 to 17 of this order against the assessee. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2013-14 shall also be applied for the assessment year 2016-17. Hence, the issue raised by the assessee in additional ground of appeal is hereby dismissed. 92. In the result, the appeal of the assessee is partly allowed. Coming to ITA No. 2130/Bang/2024 an appeal by t....
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....ar 2016-17. The appeal of the Revenue for the A.Y. 2015-16 has been decided by us vide paragraph No. 74 & 79 of this order against the Revenue. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2015-16 shall also be applied for the assessment year 2016-17. Hence, the ground of appeal filed by the Revenue is hereby dismissed. 96. The last issue raised by the Revenue is that the learned CIT(A) erred in providing the relief on account of addition made under section 68 of the Act on the unexplained loan credit based on additional evidence. 96.1 At the outset, we note that the issue raised by the revenue in its captioned ground of appeal has been adjudicated along with assessee's ground of appeal in ITA No. 1445/Bang/2024 for the AY 2016-17. The detailed finding in this regard given in paragraph No. 90 of this order where we have allowed the issue in favour of the assessee and against the Revenue. Hence, the ground of appeal filed by the revenue is hereby dismissed. 97. In the result the appeal filed by the revenue is hereby dismissed. Coming to ITA No. 1446/Bang/2024, an appeal by the assessee namely Smt. Malavika Hegde being l....
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.... search evidencing that the assessee is indulged in unaccounted cash tractions, based on which, the assessee has admitted additional income. Further, the additional evidence submitted includes detail of the persons from whom the loan was claimed to be received, PAN of the some of the lenders, extract of ledger copy from the assessee's book and settlement agreement. However, none of these documents satisfactorily explained the identity, creditworthiness and genuineness of the loan transaction in relation to which addition was made. The extract of ledger account is from the assessee's books only, hence the same does not constitute independent evidence to substantiate the genuineness of the transaction. Likewise, the settlement agreement cannot prove the post facto credibility to the cash credit; the AO further submitted that the assessee has claimed that the transaction was carried out through banking channel. However, no bank account was submitted to verify the claim. Even assuming the transaction was carried through banking channel does not absolve the assessee from discharging the burden to prove the identity, credit worthiness and genuineness of the transactions. 100.3 The lea....
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....re in the appeal before us. The assessee is in appeal against the confirmation of addition to the extent of Rs. 1,77,75,000/- whereas the Revenue is in appeal against the relief provided by the AO based on additional evidence in ground No. (v) in ITA No. 2130/Bang/2024. 102. The learned AR before us argued that during the assessment, the credits raised by the appellant were genuine, made through banking channels, and properly recorded in the regular books of accounts. The AO added the total receipts of Rs.12,00,55,326/- to the income without making proper inquiries or giving the appellant a chance to explain the sources, which goes against principles of natural justice. The learned AR also argued that no incriminating material was found during the search, and no adverse evidence was seized. The ld. AR pointed out that after the unfortunate demise of late Sri V.G. Siddhartha, the legal heirs discussed repayment with creditors, and in most cases resulted in settlement agreements or repayments through banks. The appellate authority learned (CIT(A)) accepted confirmations up to Rs.1,77,75,000/- but ignored the rest, even though the names, PAN, addresses, and repayment proofs and set....
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....ness of such loan transaction cannot be questioned. In holding so, we draw support and guidance from the judgment of Hon'ble Gujarat High Court in the case of PCIT vs. Ojas Tarmake Pvt Ltd reported in 156 taxmann.com 75 where it was held as under: 3. What is evident is that the Tribunal found on facts that the amount of loan received by the assessee was returned to the loan party during the year itself and all transactions were carried out through banking channel. The ITAT on the decision of CIT v. Rohini Builders [2003] 127 Taxman 523/[2002] 256 ITR 360 (Guj.), held in favour of the assessee. 104.3 In view of the above, we hold that addition in respect of loan credit from these 13 parties to whom the loan amount was repaid in full, cannot be sustained in the given facts and circumstances. 104.4 Now coming to the remaining loan amount of Rs. 3,76,30,326/- received from 38 individual parties, in this regard, we note that the legal heir of late Shri VG Siddhartha has reached a settlement agreement with those parties where they have settled the loan amount for part payment. Some of the loan parties are detailed here under on sample basis for ready reference. - ....
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.... additional ground of appeal is hereby dismissed. 106. In the result, the appeal of the assessee is partly allowed. Coming to ITA No. 2131/Bang/2024 an appeal by the Revenue for A.Y. 2017-18 in case of legal heir of late Shri VG Sidhartha represented by Smt. Malvika Hegde. 107. The first issue raised by the Revenue is that the learned CIT(A) erred in deleting the addition on account of cash loan from Shri Chiman Lal. 108. At the outset, we note that during the search it was found that the unsecured loan of Rs. 3 crores were received from the party namely Shri Chiman Lal. Late Shri VG Siddhartha in the absence of detail to prove the source admitted the said amount as unexplained income. Finally, when return was filed by the assessee in the A.Y. 2015-16, he offered only an amount of Rs. 1 crore on account of loan from shri chiman Lal on the premises that the amount of Rs. 2 crores were received through banking channel and duly recorded in the books, therefore only part of cash loan of Rs. 1 crore which is not recorded in the books is offered to tax as unexplained. 108.1 The AO added the remaining amount of Rs. 2 crores in the A.Y. 2015-16 on substantive basis and entir....
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....filed by the Revenue is hereby dismissed. 111. The next issue raised by the Revenue is that the learned CIT(A) erred in deleting the addition on the payment of interest to Shri Ankith, Shri Rachet and the investor of M/s Kummergodu. 111.1 At the outset, we note that the issue raised by the Revenue in its grounds of appeal for the AY 2017-18 is identical to the issue raised by the Revenue in ITA No. 2129/Bang/2024 for the assessment year 2015- 16. Therefore, the findings given in ITA No. 2129/Bang/2024 shall also be applicable for the assessment year 2017-18. The appeal of the Revenue for the A.Y. 2015-16 has been decided by us vide paragraph No. 74 & 79 of this order against the Revenue. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2015-16 shall also be applied for the assessment year 2017-18. Hence, the ground of appeal filed by the Revenue is hereby dismissed. 112. The last issue raised by the Revenue is that the learned CIT(A) erred in providing the relief on account of addition made under section 68 of the Act on the unexplained loan credit based on additional evidence. 112.1 At the outset, we note that the issue r....
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....were sufficient cash balance in the books of various estates owned by late Shri VG Sidhartha. As the cash payment of Rs. 50 Lakhs was made out of available cash balance in the books, the amount was not offered to tax. It was further submitted that during search, cash amounting to Rs. 5,84,215 was seized from the possession of late Shri VG Sidhartha. Hence, considering the substantial cash balance available in the books and seizure of only small amount of physical cash, it is very much evidencing that the cash of Rs. 50 Lakh was paid towards purchase of Atigere Estate was out of available cash in the books. 115.2 The submission of the assessee was not accepted by the AO for the reason that the assessee's claim is based on preponderance of probability and not based on material facts. Hence, the AO made addition of Rs. 50 Lakh to the total income of the assessee under the provisions of section 69 of the Act. 116. The aggrieved assessee preferred an appeal before the learned CIT(A). The assessee during the appellate proceedings reiterated the submission made before the AO. However, the learned CIT(A) dismissed the assessee's ground and concurred with the finding of the AO. 117....
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....cash was maintained and utilized by the estates in the normal course of business. 120.2 Importantly, there is no material brought on record by the AO demonstrating that the available cash balance reflected in the books of the assessee was utilized elsewhere or was not available on the date of payment. In absence of any adverse material evidencing diversion of funds or sourcing of the cash from an alternative undisclosed source, the presumption drawn by the AO is merely based on conjecture and surmise. The existence of substantial cash balance in the books stands uncontroverted. 120.3 The addition was made solely on the basis of an admission recorded during search, without corroborating it with independent material disproving the assessee's explanation regarding the source, cannot be sustained in the eyes of law. The Hon'ble Courts have repeatedly held that while an admission is a relevant piece of evidence, it is not conclusive, and where an assessee is able to satisfactorily demonstrate with cogent material that the amount in question is duly explained, no addition ought to be made. 120.4 In the present case, the assessee has successfully demonstrated that the cash paymen....
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....neesh Gopinath and Shri K M Deekshith was confronted to Late Shri VG Siddhartha to which he replied cash was kept with Shri Rajneesh Gopinath for the purpose of traveling outside Bangalore. He further stated that the cash does not belong to any of the group company but belong to his personal account of coffee plantation. He claimed that to meet day to day requirement at coffee plantation, he keeps cash balance around 1 crore. The impugned cash of Rs. 1.2 crore found from Shri Rajneesh Gopinath was kept there just 2 days before the search for safety purpose and the same was withdrawn from the bank which was duly recorded in books of account. 123.3 However, the AO during the assessment proceeding found that the assessee has not provided any documentary evidence to support his claim the cash found was out accounted cash of coffee plantation. The assessee also not provided the cash book. Hence, the AO in the absence of supporting documentary evidence treated the cash of Rs. 1.2 crores found from the residence of Shri Rajneesh Gopinath as unexplained money under section 69A of the Act and added to the total income. 124. On appeal by the assessee, the learned CIT(A) confirmed the f....
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....perational needs, and specifically affirmed that the said cash had been withdrawn from bank accounts and was duly recorded in the books of account. There is no statement on record from any of the persons involved that even remotely suggests that the cash originated from unaccounted or unexplained sources. 128.2 The AO, however, proceeded to make an addition under section 69A of the Act on the ground that documentary evidence like cash books or bank withdrawal records were not furnished. Nevertheless, it is a settled position in law that when the assessee offers a plausible explanation, supported by consistent statements from all persons concerned, and there is no material evidence brought on record to disprove or contradict such explanation, the addition solely on the basis of alleged absence of documents cannot be sustained. In fact, the consistent oral evidence corroborated by the background of regular cash handling in plantation activities lends strong credibility to the assessee's explanation. 128.3 Furthermore, Late Shri V.G. Siddhartha's statement was clear in asserting that the impugned amount had been placed with Shri Rajneesh Gopinath just two days before the search ....
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.... and the DR also agreed that whatever will be the findings for the assessment year 2013-14 shall also be applied for the assessment year 2018-19. Hence, the issue raised by the assessee in additional ground of appeal is hereby dismissed. 131. In the result, the appeal of the assessee is partly allowed. Coming to ITA No. 2132/Bang/2024 an appeal by the Revenue for A.Y. 2018-19 in case of legal heir of late Shri VG Sidhartha represented by Smt. Malvika Hegde. 132. The first issue raised by the Revenue is that the learned CIT(A) erred in deleting the addition on account of payment of interest by allowing the benefit of telescoping of income offered on account of receipt of cash loan. 132.1 At the outset, we note that the issue raised by the Revenue in its grounds of appeal for the AY 2018-19 is identical to the issue raised by the Revenue in ITA No. 2129/Bang/2024 for the assessment year 2015- 16. Therefore, the findings given in ITA No. 2129/Bang/2024 shall also be applicable for the assessment year 2018-19. The appeal of the Revenue for the A.Y. 2015-16 has been decided by us vide paragraph No. 68 of this order against the Revenue. The learned AR and the DR also agreed t....