AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1499
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.... the matter and made addition of Rs. 5,57,10,000/- u/s. 68 on protective basis, therefore order u/s. 263 passed by the Pr. Commissioner of Income Tax, Central, Nagpur is unjustified, unwarranted and excessive. 3. The Pr. Commissioner of Income Tax, Central, Nagpur ought to have considered order passed u/s. 143(3) r.w.s. 147 by the assessing officer is not erroneous and not prejudicial in the interest of revenue and assessment were made on protective basis. Therefore order passed u/s. 263 is unjustified, unwarranted and excessive. 4. The assessee has preferred the appeal against order passed u/s. 143(3) r.w.s. 147 which is pending before the CIT(A) on same subject matter; therefore order passed u/s. 263 is unjustified, unwarranted and excessive. 5. The Pr. Commissioner of Income Tax, Central, Nagpur has not considered the entire written submission of the assessee and passed order u/s. 263 without going into merits of the case; therefore the order passed is unjustified, unwarranted and excessive. 6. The Pr. Commissioner of Income Tax, Central, Nagpur erred in not considering that the order passed by assessing officer making addition of Rs. 5,57,10,....
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....led appeal. 6. Due to above misunderstanding between the counsel the deponent/assessee inadvertently has not filed the appeal against the order passed by Pr. CIT(A), Central, Nagpur u/s. 263. The deponent/assessee company has approached to new counsel on 19/02/2025 and as per advise of new counsel deponent/assessee is filing this appeal on 22/02/2025 alongwith delay of 294 days which may kindly be condoned. The delay be kindly condoned in the interest of justice as appeal be heard and decided on merits. 7. However due to above reason the assessee is being filed appeal on 22/02/2025 therefore delay of 294 days, delay be kindly condoned in the interest of justice. Hence this affidavit." 4. After considering the submissions of the learned Authorised Representative for the assessee and the averments made in the affidavit, we are of the opinion that the assessee was compelled in filing the appeal belatedly and we are satisfied that the delay in filing the appeal is due to reasonable cause. The assessee was actively pursuing the matter for appropriate legal remedy and he must not suffer for un-precedented latches. Liberal and proactive approach is desirable ....
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....ification. In fact the, the assessing officer has also submitted the proposal under section 263 of the I.T. Act on this issue. 4.1 On verification of the assessment records and the Assessment Order for the A.Y 2013-14, it was noticed that as per the closing balance as on 31-03-2012 the non-current investment of the assessee was at Rs. 13,05,10,000/-. Out of which Rs. 3,00,00,000/- were investment in the shares of Tapadia Polyesters Pvt. Ltd. as on 31-03-2012. During the financial year 2012-13 relevant to the A.Y. 2013-14, remaining investment of Rs. 10,05,10,000/- in the shares of different companies have been sold by the assessee and further invested Rs. 4.24,49,000/-in the shares of (TPPL). During the yea year the assessee has also M/s. Tapadia Polyster Pvt. Ltd. (TPPL). provided unsecured loan of Rs 1,32.61,000/- to M/s. Tapadia Polyster Pvt. Ltd. (TPPL). As such total investment in M/s. Tapadia Polyster Pvt. Ltd. (TPPL) work out to be Rs. 5,57,10,000/-. As it had been concluded that the money actually belonged to TPPL only, the same was added in TPPL on substantive basis and on protective basis in the case of assessee. It was observed that out of total receipt....
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.... not satisfactorily explained. The addition was made on protective basis as it was alleged that the assessee company provided accommodation entry to TPPL in the form of investment in share capital and unsecured loan to the tune of Rs. 5,57,10,000/-. Your goodself proposed to bring the balance amount of Rs. 4,48,00,000/- (Rs. 10,05,10,000/- (-) Rs. 5,57,10,000) out of total investment sold by assessee company during the year to tax also in the hands of assessee company on protective basis. The addition of impugned amount is already made in the hand of TPPL on substantive basis. We object to the proposed action of bringing the impugned amount to tax. No incriminating document was found during the course of search which could be made basis for the addition already made and proposed now in the show cause notice issued u/s. 263. (2) We have to submit that the assessment order u/s. 143(3) r.w.s. 147 is passed after making inquiry on the alleged amount of investment sold during the year and after having examined the replies of the assessee with due application of mind. The AO issued various notices during assessment proceedings in which he enquired about the investment made in TP....
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....ceived full amount from ABPL. The copy of ledger account of ABPL for the year under consideration was furnished. The amount was received through Banking channel only. We draw your kind attention to the show cause notice issued during assessment proceedings dated 21.03.2022. The AO also proposed to disallow the remaining amount of Rs. 4,48,00,000/- u/s. 68 of the Income Tax Act as now proposed in the 263 proceedings. However, AO after being satisfaction with the explanation, made no addition with respect to the same in the assessment order. Copy of notices issued and reply furnished are attached herewith. Thus, it is not the case where no inquiry was made. Proper notice for inquiring the transaction was issued by the AO and detailed submission alongwith evidences were furnished. Therefore, such a case cannot be treated as a case of "no inquiry" as envisaged in clause (a) of Explanation 2 to section 263(1) and in para 4 of the notice issued u/s. 263 that the impugned issue in the assessment order has not been dealt with by AO is incorrect in view of above facts of the case and further examination and verification of the impugned issue as mentioned in para 4 of the n....
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....Rs. 4,60,00,000/- which is on account of amount invested by Antariksh Barter Pvt. Ltd. in the share of TPPL by way of purchasing the same from assessee company is already made in the hands of Antariksh Barter Pvt. Ltd. on protective basis. The copy of assessment order passed in case of Antariksh Barter Pvt. ltd. for A.Y. 2013-14 dated 28.09.2021 is attached herewith. We draw your kind attention to para 7.1 of the assessment order wherein AO has mentioned the above facts of making investment by Antariksh Barter Pvt. Ltd. in the share of TPPL and made addition of total investment by ABPL in TPPL amounting to Rs. 14,10,00,000/- (which includes above share of Rs. 4.60 Cr. purchase from assessee company) as unexplained credit u/s. 68 of the Act on protective basis as mentioned in para 8 and 8.1 of the assessment order. Thus, once the addition of impugned amount of Rs. 4.60 Cr. is already made in the hands of Antariksh Barter Pvt. Ltd. on protective basis, the same cannot be made in the hands of assessee as well. The proposal of making addition thereof is therefore not in accordance with law. (4) Further and more importantly, an assessment order should not be subject to....
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...., he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify including (i) ..... (ii) ..... (iii) ..... Explanation 1. - For the removal of doubts, it is hereby declared that, for the purposes of this sub-section (a) ....... (b) ...... (c) Where any order referred to in this sub-section and passed by the Assessing Officer or the Transfer Pricing Officer, as the case may be had been subject matter of any appeal filed on or before after the 1st day of June, 1988, the powers of the Principal Commissioner or Commissioner under this sub-section shall extended and shall be deemed always to have extended to such matter as had not been considered and decided in such appeal Considering the above provisions of law, we have to submit that the action of invoking revision proceedings would cause substantial prejudice to the petitioner. In fact, the consequential order would render the appeal otiose and leaving the assessee high and dry. We place reliance on following decis....
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....nsecured loan given to the Tapadia Polyester Pvt. Ltd. It is seen that the assessment order is erroneous inasmuch as it is prejudicial to the interests of Revenue for the reason stated by the learned PCIT in his order. Accordingly, the learned PCIT negated the submissions of the assessee. She set aside the assessment order and directed the Assessing Officer to reframe the assessment after making necessary enquiries to ascertain the income of the assessee by passing fresh assessment order in accordance with law. The observations of the learned PCIT are as follows:- "The reply of the assessee is not acceptable as already pointed out above the sale of shares by the assessee to the Antariksha Barter Pvt. Ltd. is a subsequent action. The entire investment was made by the assessee itself in the Tapadia polyester Pvt. Ltd. The AO should have added the entire amount of Rs. 10,17,10,000/- as the assessee failed to explain the source of investment in the Tapadia Polyesters Pvt. Ltd. (b) It is seen from the record that during the course of assessment proceedings. the AO vide show cause notice dated 21/03/2022 has asked out of Rs. 10,05, 10,000/- you have invested Rs. 5,57,10....
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....ain the income of the assessee and pass the assessment order afresh in accordance with the law, after providing an opportunity of being heard to the assessee." Upon issuance of the impugned order so passed by the learned PCIT, the assessee being aggrieved is in appeal before the Tribunal. 6. In the course of hearing, the learned Authorised Representative for the assessee furnished a Paper Book running into 163 pages, containing following documents:- "1. Copy of acknowledgment of return and computation of income 2. Copy of notice u/s. 148 of the Act dated 19/02/2021 3. Copy of notice u/s. 142(1) dated 26/02/2021 alongwith annexure 4. Copy of assessment order u/s. 143(3) r.w.s. 147 dated 26/03/2021 computation sheet alongwith computation sheet 5. Copy of notice u/s. 143(2) r.w.s. 147 dated 14/06/2021 6. Copy of reply to notice u/s. 148 7. Copy of acknowledgment of e-proceedings response showing the details submitted by the assessee 8. Copy of notice u/s. 142(1) dated 28/12/2021 alongwith annexure 9. Copy of reply filed in response to notice u/s. 142(1) 10. Copy of Tax Audit Report and audi....
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.... ii) CIT v/s Arvind Jewellers(2003) 259 ITR 0502 (Guj. HC); iii) CIT v/s Max India Ltd. (2004) 268 ITR 0128 (P&H HC); iv) Smt. Lila Choudhury -Vs.-Commissioner of Income Tax & Ors. (2007) 289 ITR 0226 (Gau. HC); v) Chenai Finance Co. Ltd. -Vs.-Assistant Commissioner of Income Tax, (2004) 89 TTJ 0591 (Hyd. ITAT); vi) Ashok Leyland Finance Ltd. -Vs.-Assistant Commissioner of Income Tax, (1997) 59 TTJ 0736 (Chen. ITAT); vii) CIT v/s Nirav Modi, (2017) 390 ITR 0291 (Bom. HC); viii) Micro Inks Ltd. -Vs.-Pr. Commissioner of Income Tax, (2018) 407 ITR 0681 (Guj. HC)." 8. The learned Authorised Representative for the assessee suggested that invocation of provisions of section 263 of the Act is unwarranted and the Assessing Officer has taken a plausible view after carrying out a full-fledged enquiry. He reiterated the submissions made before the learned PCIT and drew attention to the numerous notices issued by the Assessing Officer and replies submitted thereto to demonstrate enquiry and application of mind. 9. Per-contra, the learned Departmental Representative pressed that there is an underassessment as the addition ought to h....
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....use notice, the underassessed sum was initially determined Rs. 4.48 crore, but in the order, it is quantified at Rs. 4.60 crore. This is a clear pointer to the fact that there was no independent application of mind by the learned PCIT, because the directions as per order is at variance with show cause notice and the assessee was never put to notice about enlargement. Moreover, the addition of Rs. 5,57,10,000, in Tapadia Polyster Pvt. Ltd. was made on substantive basis. The Assessing Officer in equivocal terms has clearly held that the real cash belongs to Tapadia Polyester Pvt. Ltd. The operative portion of the assessment order dated 26/03/2021 of Tapadia Polyester Pvt. Ltd. is highlighted below:- "8. In view of the elaborate discussion in the foregoing paras, it is held that the share capital and the unsecured loan advanced by these 2 companies are being treated as accommodation entries and the real cash belongs to the assessee company which is routed through these companies. Hence the sum of Rs. 14,10,00,000/- said to have been received from ABPL and Rs. 5,57,10,000/- said to have been received from GFCPL are being added u/s. 68 of the IT Act and taxed u/s 115BBE accordi....
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.... 8. In view of all of the above discussion of seized documents and books of accounts of the assessee, the only inference that can be drawn is that the Assessee Company, has only provided accommodation entry to M/s TPPL In the form of share capital of Rs 7,00,00,000 and unsecured loan of Rs 7,10,00,000 totalling to Rs. 14,10,00,000/- during the FY 2012-13. The Assessee Company has not provided the supporting documents in respect of Share Capital and unsecured loans Introduced In TTPL. Hence it is treated as unexplained cash credit amounting to Rs 14,10,00,000/- u/s. 68 of the IT Act. Penalty proceedings u/s 271(1)(c) of the Act is hereby Initiated separately for concealment of income.. 8.1 Hence, in order to protect the interest of the revenue, the addition of Rs. 14,10,00,000/- is made in the case of the Assessee......." 13. The learned PCIT has held that Rs. 4.60 crore has to be explained by Antariksh Barter Pvt. Ltd. However, we find that the same has already been subsumed by the total addition of Rs. 14.10 crore on protective basis. This is a clear pointer that the learned PCIT did not examine the record prior to passing the order. At this juncture, we deem it appro....
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....laced on record at Page-50 & 51, 83 To 85, 89 & 90, 110 & 111 of the Paper Book, which demonstrates that the assessee has already disclosed all the necessary issues and facts before the Assessing Officer. The assessee pointed out that the details of sale of non-trade investment company-wise to establish that funds were received on liquidation of assets disclosed in regular boa (Paper Book Page-60, Note no.7 - Non-current investments). The Assessing Officer, after considering the entire record, has consciously formed an opinion and accordingly, he taxed the assessee and made addition under section 68 of the Act of Rs. 5,57,10,000. The contentions of the assessee were incisively examined during the assessment proceedings in case of both the other companies namely M/s. Tapadia Polyester Pvt. Ltd. and Antriksh Barter Pvt. Ltd. However, the additions were again made by the Assessing Officer on a protective basis which tantamount to double taxation on the same income. It is a trite law that protective assessment has to be passed simultaneously where there is a doubt as to the hands in which income is to be assessed. The principle is well settled by the Hon'ble Supreme Court decision in L....
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....any had made investment in previous years. In this regard, notice u/s 142(1), dated 31.01.2022 has been issued to you. In response to the said notice, you have submitted the list of name of the purchaser companies through which the above mentioned amount has been received. 1.1 Further, it is observed on perusal of the information available to this office that the all the purchaser companies from which you have received fund of Rs. 10,05,10,000/- are shell companies and have been stroked off by MCA for being mere shell companies and used for providing accommodation entries to various beneficiaries all over India. 1.2 It is clear that these companies have provided accommodation entries to the assessee company. Out of Rs. 10,05,10,000/- you have invested Rs. 5,57,10,000/- in M/s TPPL. You are requested to show cause why the remaining amount Rs. 4,48,00,000/- should not be added to your total income u/s 68 of the Income Tax Act, 1961." iv) Subsequently, the assessee replied on 25/03/2022, which is reproduced below:- "Sir, We object to the proposed addition mentioned in the show cause notice dated 21st March, 2022. The assessee received amount from va....
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....e funds were received on account of realization of book debt from the said companies on account of sale of stocks in previous years without any supporting evidences. During the course of this assessment, notice u/s 142(1) was issued calling for documentary evidences in support of these transactions. The same have not been furnished till date. Further on verification of the books of accounts of Mis Gajanand Financial Consultancy Pvt. Ltd. it was found that the outstanding debtors as on 01.04.2012 were NIL. Hence, the reply given by Shri Pravin Tapadia that the funds received by M/s Gajanand Financial Consultancy Pvt. Ltd. were on account of realization of book debt is factually incorrect. In the view of above facts, the nature and genuineness of transactions of M/s Gajanand Financial Consultancy Pvt. Ltd. with the said companies from whom funds were received is not explained satisfactorily by the assessee. Further, the credit-worthiness of the parties from whom funds were received by M/s Gajanand Financial Consultancy Pvt. Ltd. also remains unexplained. Further it is seen that M/s Gajanand Financial Consultancy Pvt. Ltd. is also a mere conduit for transferring the ....
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....the Act") and taxed under section 158BBE of the Act vide Para-8 of the order is extracted below Para-11 of this order. viii) As per notice dated 14/06/2021 under section 143(2) r/w section 147 of the Act (Paper Book Page-37-40) the reasons for reasoning are encapsulated below:- "Notice under section 143(2) read with section 147 of the Income-tax Act, 1961('Act) Dear Taxpayer, Thank you for filing your retum of income for under section 148 of the Act, vide Ack, no. 274133141250221 on 25/02/2021. income for Assessment Year 2013-14 in response to notice 2. While acknowledging the care and diligence you have taken in preparing the return, there are certain issues as mentioned below which need further clarification:- Issues as per reasons recorded for reopening 1. M/s Gajanand Financial Consultancy Pvt Ltd is a company registered in Kolkata. Its registered address during FY 2012-13 and 2013-14 was 14/15, Munshi Sadruddin Lane, Kolkata. This company was taken over by the Garg family (Vinod Garg and Vaibhav Garg) who are also shareholders and Directors in Assessee Company. The case was centralised to this circle as the sea....
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.....75 lakhs respectively. But the total amount of cash deposits in the above-mentioned 5 bank accounts is substantially more than these sale receipts shown by Tapas Purkait in his ITR, Further it is found that Tapas Purkait has has transferred the amount of cash deposits in his bank accounts on the same day to various Kolkata based Shell Companies namely Astabhuja Sales Pvt. Ltd., Pujya Commercial Pvt. Ltd., Astabhuja Sales Pvt. Ltd., Paryapt Sales Pvt. Ltd., etc. It was found that Astabhuja Sales Pvt. Ltd., from whom amount was transferred to Gajanand Financial Consultancy Pvt. Ltd., is struck off by MCA for being mere paper company without any business activity. 7. During the course of post search enquiries, statement of Shri Pravin Tapadia was recorded on oath u/s 131 of the IT, 1961 at Nagpur on 19.02.2020. He was asked to produce the bank statement and books of accounts of M/s Gajanand Financial Consultancy Pvt. Ltd. He produced the same. He was further asked to explain the nature of transactions with the companies and persons from whom funds were received by M/s Gajanand Financial Consultancy Pvt. Ltd. during FY 2012-13 along with documentary evidences. He stated that ....
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....n 2 to section 147 are applicable to facts of this case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessment. 3. In view of the above, you may submit your response with supporting documents (if any) on the above mentioned issues to undersigned electronically in 'E-proceedings' facility through your account in e-Filling website(www.incometaxindiaefiling.gov.in) at your convenience on or before 29/06/2021 4. In course of assessment proceedings, if required specific questionnaire(s) or requisition(s) for 5. A brief note on E-Proceeding is enclosed for your kind reference. In case you require any assistance in filing your response, you may contact toll free Call Centre number 1800 103 4215." Notice under section 148 dated 19/02/2021 (Paper Book Page-3) was issued after obtaining necessary satisfaction of the learned PCIT (Central), Nagpur. ix) It is worthwhile to reproduce Para-4.1 of show cause notice dated 21/11/2023 (Paper Book Page-127). Simultaneous reference to Para-7 supra, will clearly establish that the proposition as laid down by the learned PCIT i....