TaxTMI 
TaxTMI 
2025 (5) TMI 2222
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....unting to Rs.84,04,300/- was found. Later on, the Ld. Principle DIT(Investigation), Kanpur issued warrant of authorization to convert survey proceeding into Search and Seizure action under section 132(1) of the Act. During the course of search, besides cash, various other incriminating documents were found and seized and statements of the Directors and other persons were recorded under oath under section 132(4) of the Act. Thereafter, notice under section 153A of the Act dated 16.05.2019 was issued to the assessee- company, requiring the assessee to file the return of income. In response, the assessee stated that it had already e-filed return of income for the year under consideration on 30.05.2019, declaring a total income of Rs.38,60,720/ -. Later on, notices under Officer (AO) completed the assessment at a total income of Rs.8,65,93,630/- after making the following additions: Sl. No. Head of addition Amount of addition (Rs.) 1 Addition u/s. 68 of the Act on account of bogus loan. 25,00,000/- 2 Addition u/s. 37 of the Act on interest paid on bogus loan. 34,767/- 3 Addition u/s. 68 of the Act on account of bogus loan. 2,78,00,000/- 4 Addit....
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.... on bogus loan. 35,951/- 6 Addition u/s. 68 of the Act on account of bogus loan 37,50,000/- 7 Addition u/s. 37 of the Act on interest paid on bogus loan. 6,01,886/- 3. Aggrieved, the assessee approached the Ld. First Appellate Authority, who partly allowed the appeals of the assessee, confirming most of the additions made by the AO. 4. Now, the assessee has approached this Tribunal, challenging the orders of the lower authorities by raising the following grounds of appeal: GROUNDS IN IT(SS)A NO.149/LKW/2022 BY THE ASSESSEE: 1. BECAUSE the Id. CIT(A) has erred in law and on facts in conforming the assessment order passed u/s 153A of the Act, even though the said assessment order as also the additions made therein are not in consonance with the settled position of law viz-a-viz search cases. 2. BECAUSE the approval u/s 153D of the Act granted by the Ld. Joint Commissioner of Income tax is mechanical, without due application of mind, hence violative of the provisions of law and consequently assessment order passed u/s 153A deserved to be quashed being bad in law. 3. BECAUSE the Ld. CIT(A) has erred in law and on facts in confirm....
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....ily rejected by the Id. Assessing Officer as not satisfactory, without any reason or justification; (iii) most of the loans were returned back to the lenders and there was no direct/indirect or circumstantial evidence brought on record by the Assessing Officer for treating the loans as bogus or not genuine; and (iv) no specific admission was made by the appellant in respect of the aforesaid loans in the statement recorded during the course of search. 6. BECAUSE no adverse material relating to such loans held in the assessment order as unexplained / bogus was found during the course of search of the appellant or at any other place and none of the lenders or other persons have ever stated that the loans were in the nature of bogus accommodation entry and non-genuine. 7. BECAUSE in the absence of opportunity of cross examination of the persons giving statement of culpable nature, as had been sought by the appellant, the assessment stood wholly vitiated and consequently the addition made deserved to be deleted as per decision of the Apex Court in umpteen number of cases. 8. BECAUSE the addition of the loan amounts along with interest paid th....
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....1,17,00,000/- 15,97,083/- 1,32,97,083/- 3 Samtal Finance Ltd. 25,00,000/- 61,583/- 25,61,583/- Total addition 1,68,79,083/- without appreciating the supporting documentary evidences and explanation of the appellant placed on record of the authorities below. 3. BECAUSE while confirming the additions aggregating Rs. 1,68,79,083/- the Ld. CIT(A) failed to appreciate that with respect to the unsecured loans obtained by the appellant from the three loan creditors, namely (i) Cityon Infrastructure Put. Ltd. (ii) Neil Industries Ltd. (iii) Samtal Finance Ltd., the appellant had duly discharged the onus of proving all the three vital ingredients of Section 68 of the LT. Act, namely; identity and creditworthiness of the lenders as well as genuineness of the loan transactions and consequently, the entire addition aggregating Rs. 1,68,79,083/- deserved to be deleted. 4. BECAUSE while confirming the additions made by the Ld. Assessing Officer u/s 68 and 37 of the Act aggregating Rs.1,68,79,083/- the Ld. CIT(A) missed to note and appreciate; particularly that- (i) the nature, source, identity, credit wo....
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....able from the facts of the present case. 10. BECAUSE the lower authorities have failed to consider various case laws relied upon by the appellant as also the guidelines issued by CBDT with regard to the procedure to be adopted by AO before making addition under section 68 of the Act. 11. BECAUSE various adverse observations and allegations made by the lower authorities are contrary to the facts, material & evidences available on record. 12. BECAUSE the order passed by the Ld. CIT(A) is contrary to facts, law and principles of natural justice. GROUNDS IN IT(SS)A NO.148/LKW/2022 BY THE ASSESSEE: 1. BECAUSE the Id. CIT(A) has erred in law and on facts in conforming the assessment order passed u/s 153A of the Act, even though the said assessment order as also the additions made therein are not in consonance with the settled position of law viz-a-viz search cases. 2. BECAUSE the approval u/s 153D of the Act granted by the Ld. Joint Commissioner of Income tax is mechanical, without due application of mind, hence violative of the provisions of law and consequently assessment order passed u/s 153A deserved to be quashed being bad in law. ....
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....s unexplained / bogus was found during the course of search of the appellant or at any other place and none of the lenders or other persons have ever stated that the loans were in the nature of bogus accommodation entry and non-genuine. 7. BECAUSE in the absence of opportunity of cross examination of the persons giving statement of culpable nature, as had been sought by the appellant, the assessment stood wholly vitiated and consequently the addition made deserved to be deleted as per decision of the Apex Court in umpteen number of cases. 8. BECAUSE the addition of the loan amounts alongwith interest paid there-on, as has been upheld by the Id. CIT(A), is based on irrelevant considerations, surmises and presumption, without rebutting the overwhelming evidences and documents placed by the appellant on the record of the lower authorities. 9. BECAUSE it is settled legal principle that before an addition u/s 68 is made the AO has to conclusively prove that the assessee had failed to discharge his onus to prove the identity and creditworthiness of the loan creditor and genuineness of the loan transaction and in the present case all the three ingredients having....
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.... department at various instances after physical verification of given premises pertaining to lender companies, all action being done for verification of genuineness, creditworthiness and identity of said lender companies. 3. Whether on facts and circumstances of the case and in law, Ld CIT(Appeal)-IV, Kanpur has erred in not appreciating the acceptance statement recorded on oath of Shri Rajesh Agarwal dated 13.09.2017 and Shri Amit Goenka dated 02.01.2018, both key person and director of assessee company, wherein they both have accepted the dubious receipts in form of bogus unsecured loan in assessee company and surrendered Rs.20 Crore on account of that. 4. That the above grounds are without prejudice to each other and appellant craves leave to add or amend any other more ground of appeal as stated above as and when needs for doing so may arise. GROUNDS IN IT(SS)A NO.156/LKW/2022 BY THE REVENUE: 1. Whether on facts and circumstances of the case and in law, Ld. CIT(Appeal)-IV, Kanpur has erred in ignoring that the cogent fact that during the course of survey action at the assessee company excess cash of Rs.71,86,882/- was recovered which implies dubiou....
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....ctual findings of commission(s) made u/s 131(1)(d) of the Income Tax Act, 1961 which were issued to various authorities holding the territorial jurisdiction over the lenders company, summons issued u/s 131 of the Income Tax Act, 1961 to various persons/ entities related to lender company and enquiry reports made by Inspector of department at various instances after physical verification of given premises pertaining to lender companies, all action being done for verification of genuineness, creditworthiness and identity of said lender companies. 3. Whether on facts and circumstances of the case and in law, Ld. CIT(Appeal)-IV, Kanpur has erred in not appreciating the acceptance statement recorded on oath of Shri Rajesh Agarwal dated 13.09.2017 and Shri Amit Goenka dated 02.01.2018, both key person and director of assessee company, wherein they both have accepted the dubious receipts in form of bogus unsecured loan in assessee company and surrendered Rs. 20 Crore on account of that. 4. Whether on facts and circumstances of the case and in law, Ld. CIT (Appeal)-IV, Kanpur has erred in law by not making the matter remand back to A.O. to make afresh enquiry in respect o....
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....der dated 27.12.2019 in cases pertaining to different assessees and different assessment years. He further submitted that the order passed by the DCIT within four days of approval granted by the ACIT, i.e. 27.12.2019, was without application of mind and without appreciating the facts and the same did not follow the mandate of section 153A of the Act. The Ld. A.R. in support of his arguments placed reliance on various case laws, which were placed in paper book. 5.2 Inviting our specific attention to order dated 22.11.2024 by the Co-ordinate Bench of ITAT Lucknow in the cases of M/s Standards Frozen Exports Pvt. Ltd., M/s Standard Agro Vet Pvt. Ltd., Shri Kamal Kant Verma and Shri Sachin Verma in IT(SS)A Nos. 41 to 45/LKW/2022, 46 to 49/LKW/2022, 50 to 53/LKW/2022 and 54 to 59/LKW/2022 respectively, the Ld. A.R. submitted that these appeals were decided in favour of the assessee by holding that the approval(s) granted under section 153D of the Act were done in a mechanical manner without application of mind. He submitted that likewise in the present set of appeals, the approval granted by learned Addl. CIT under section 153D of the Act, for passing the assessment orders was done i....
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....CIT (D.R.) submitted that the assessee's argument that the approval under Section 153D of the Act was granted mechanically without application of mind was not supported by the factual matrix of the case. The Ld. CIT(DR) prayed that the submission of assessee on the ground of mechanical approval under section 153D of the Act by Addl. CIT/ Jt. CIT before the Tribunal may kindly be rejected and the order of the Assessing Officer may kindly be upheld. 7. In his rejoinder, learned Counsel for the assessee again emphasized that there was nothing on record to suggest that there was any application of mind while granting the approvals and that granting of approval in 110 cases in just two days pointed out to complete non-application of mind while granting the approvals. 8. We have heard both sides and we have also perused the materials on record. There is no dispute that approvals were given by the Addl. CIT in a huge number of cases within an extremely short period of time. The requirement of statutory approval of draft assessment order is an inbuilt protection against any unjust, improper, illegal or arbitrary exercise of power of the Assessing Officer. This cannot be done in a....
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.... Supreme Court in [2024] 163 taxmann.com 118 (SC). 8.3 Similar view was taken by ITAT in Kamal Kant Verma vs. DCIT in I.T.(SS)A. No.50 to 53/Lkw/2022, Sachin Verma vs. DCIT in I.T.(SS)A. No.54/Lkw/2022 and Sachin Verma vs DCIT in I.T.A. No.55 to 59/Lkw/2022. In fact, the ITAT allowed relief to the assessee in these group of cases on facts identical to the facts in these present group of appeals. The captioned appeals were part of the 110 approvals granted on 27.12.2019 and 28.12.2019 and so were the Standard Frozen Foods Exports Pvt. Ltd., M/s Standard Agro Vet Pvt. Ltd., Shri Kamal Kanth Verma and Shri Sachin Verma group of cases (supra) which have already been allowed relief by the ITAT by holding that the approvals granted under section 153D of the Act were granted without due application of mind by the Addl. CIT. The ITAT in these group of cases annulled the assessments by placing reliance on number of judicial precedents viz .: (i) Hon'ble Allahabad High Court in the case of Pr. CIT vs. Subodh Agarwal in ITA No.86 of 2022, dated 12.12.2022; (ii) Hon'ble Orissa High Court in the case of ACIT vs. Serajuddin & Co. (2023) 150 taxmann.com 146 (Orissa); ....
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....se refer to your letter bearing F.No. DCIT/CC-I/KNP/Search Cases/ Draft Assessment Orders/2019-20/606 dated 27.12.2019 on the above subject requesting for approval of draft assessment order u/s 153A/ 143[3] of the I.T. Act, 1961. 2. In the context of captioned matter, the approval u/s 153D of the Income Tax Act, 1961 in the following cases is hereby accorded as per the details given below: - B1. No. Name of the assessee PAN A.Y. Case 1 SATVIK POLYCHEM PRIVATE LIMITED AANC81781L 2013-14 153A 2 SATVIK POLYCHEM PRIVATE LIMITED BANCS1781L 2014-15 153A SATVIK POLYCHEM PRIVATE LIMITED AANCB1781L 2015-16 153A BATVIK POLYCHEM PRIVATE LIMITED AANC81781L 2016-17 153A SATVIK POLYCHEM PRIVATE LIMITED AANC31781L 2018-19 143|3| RAJESH AGARWAL AICAPA 1394M 2013-14 163A RAJESH AGARWAL ARAPA1:194M 2014-16 163A RAJESH AGARWAL AEAPAI 394M 2015-16 153A lo RAJESH AGARWAL AEAPA1 394M 2018-19 143(3) 10 SHRIYA AGARWAL ALHPA9S53E 2018-19 143(3) ANJU GOENKA ABOPO927ON 2018-19 12 SANGITA AGARWAL AAPPA9 172E 2012-13 153A 13 SAROJ GOENKA ACTPG3872D 2012-15 153A 14 SOM ARORA ABBPA2178H 2008-09 153A BOM ARORA ABBPA2178H 2011-12 153A SOM ARORA ABBP....