TaxTMI 
TaxTMI 
2025 (2) TMI 1360
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....he decision in favour of assessee and against the revenue, though there is no nexus between the conclusion of the fact and primary fact upon which that conclusion is based ?" 3. "Whether on the facts and in the circumstance of the case Id. CIT(A) was justified in drawing a conclusion which can't be drawn by any reasonable person or authority, on the material and facts placed before it?" 4. The order of the CIT(A) is erroneous both in law and on facts. 5. Any other ground which may be adduced at the time of hearing. 3. The brief facts of the case extracted from the order of Ld. CIT(A) are as under: 1. The Appellant is a Private Limited company. Proper books of accounts have been kept and maintained which are audited and there are no adverse comments by the auditors. The Turnover amounted to Rs. 4,53,26,397/- for the A.Y. 2015- 16, the Return of Income was filed originally on 07/09/2015 showing income at Rs. 36,58,430/-.Thereafter the Ld. AO on the basis of information received from DDIT /ADIT(lnv)-1 Raipur through Insight Portal that search & seizure operation u/s 132 of Income Tax Act has taken place in case of M/s. Sky Alloys & Power Pvt.....
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....d that no inquiry was made by the Ld. AO during proceedings u/s 148A and he has acted upon borrowed opinion. Video Conferencing prayed by the Appellant was also not allowed. It was also explained by the Appellant that very short notice of 1 day was allowed and during which period it was difficult to file the explanation and voluminous supporting on the issues involving collection of various data. The submissions made by the Appellant did not find favor & the Ld. AO arbitrarily & on the basis of the borrowed opinion without having formed his own satisfaction held that Rs. 3,81,04,820/- i.e. total of Debit & Credit i.e. Rs. 3,38,04,820/- plus Rs. 43,00,000/- so called amount paid to Sky Alloys and Power Pvt. Ltd. and so called amount received by Sky Alloys and Power Pvt. Ltd. was business income of the Appellant outside the books of a/c & added to the income. 4. On the basis of aforesaid facts emanating from the order of the Ld. CIT(A), since the addition of Rs. 3,81,04,820/- was made by the Ld. AO on account of alleged dubious and out of books transactions carried out by the assessee with M/s Sky Alloys & Power Pvt. Ltd. (SAPPL), which was subjected to Search & Seizure operation ....
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....at specific prayer was made to provide copy of the statement of the parties on which was relying and request was also made to give opportunity to examine which was not accorded. Further a Video Conferencing facility was prayed by the appellant which was also not allowed and that very short notice of 1 day was allowed and during which period it was difficult to file the explanation and voluminous supporting on the issues involving collection of various data. 6.1 The AO in the assessment order noted that a search u/s 142 of the Act was conducted in case of Sky Group and certain incriminating documents and a pen drive was found from the residence of the Director of Sky Alloys & Power Pvt. Ltd} in which the consolidated data related to the assessee company's out of books cash transaction were found in form of the excel sheets wherein the cash transaction is purported to have been carried out through one Mayura Yogesh. In his statement Sh. Vikash Aggarwal admitted to the transaction with the assessee company through Mayura Yogesh. The AO in Para 6 of the assessment order has reproduced the data of the excel sheet showing a credit transaction of Rs. 33804820/- and debit tran....
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.... rejected. The submission of the appellant is examined. The Hon'ble high Court of Orrisa in 143 taxmann.com 120 in case of Auroglobal Comtrade (P.) Ltd. v. Chairman, Central Board of Direct Taxes held that where assessee challenged reopening notice on ground that there was absence of reasons with material particulars for proposed reassessment, since assessee filed revised return in compliance of terms of reopening notice, it would be construed that assessee participated in reassessment proceedings and surrendered to jurisdiction of AO and was conscious about material based on which reassessment proceedings were initiated. In view of the above judicial rulings the appellants challenge to the validity of issuing notice u/s 148 of the Act is dismissed. The ground of appeal is dismissed. 6.3.1 The appellant further in its submission assailed the AO in not providing adequate opportunity and also that no hearing through video conference facility was provided. The AO in Para 17 and 18 of the assessment order noted that 'It is a fact that very short duration of 24 hours was given to the assessee for replying to the show cause notice and that it had sought VC on the penulti....
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....of Sh. Vikash Agarwal and the purported cash transaction by one Mayura Yogesh. The AO in Para 6 of the assessment order had reproduced the whole of the cash transaction. The perusal of the same shows that the same is the reiteration the order passed u/s 148A(d) of the Act dated 30.03.2022. The AO subsequently in the assessment order noted that the submission of the assessee is not holistic and are illogical to be acceptable. The appellant in Para 11 of the assessment order has reproduced the submission of the appellant in the assessment order. The assessee in its reply to the AO has stated that it had business transaction with the searched party valued at Rs. 7808442/- for the purchase of Ingots which is recorded its books of account and nothing to do with the out of books transactions of Sh. Vikash Agarwal of Mis Sky Ally & Power Pvt. Ltd. 6.4.2 The AO has proceeded to add the amount i.e. Rs. 38104820/- being (credit Rs. 33804820/- and debit Rs. 4300000/-) on the basis of the report of the Investigation Wing and has not made any independent enquiry to substantiate that the submission of the assessee is not acceptable and that rejection of the submission is backed by cogen....
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...., the decision of Ld. CIT(A) in deleting the addition is not acceptable. Ld. CIT-DR further submitted that Ld. CIT(A) had erred in deciding the issue without establishing the nexus in the conclusion drawn by him with the primary fact upon which such conclusion have been drawn. Ld. CIT-DR, to establish that the assessee company had direct connect with "Mayura Yogesh", with whom certain unexplained transactions are carried out by SAPPL, had submitted a report prepared by the Ld. AO i.e., ACIT-1(1), Bilaspur dated 13.01.2025 along with statements of Shri Ranjeet Kumar Barman(Ex-Accountant of SAPPL), Shri Chandrasen (Cashier of SAPPL) and Shri Vikas Agrawal (Director of SAPPL), the same was furnished before us, which is extracted hereunder for the sake of completeness of facts: 7. Based on aforesaid report, it was the submission by Ld. CIT-DR that the assessee was afforded with ample opportunities during the assessment proceedings, also all the materials and information available with the department was shared with the assessee, therefore, the assessee's claim that principle of natural justice was violated by the Ld. AO has no basis and the same shall be rejected at the threshold. L....
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.... as M/s Mayura Saria Pvt. Ltd. Ld. AR further submitted that there was no material found during the search on the basis of which the addition was made, it was only on the basis of a report from the Investigation Wing, who had presumed and inferred that since the assessee company had certain transaction with the M/s Sky Alloys & Power Pvt. Ltd. (SAPPL), therefore, there must be certain out of books transactions in cash. A reference was made to certain loose papers and pen drives from which some data was extracted in the form of excel sheets showing some transactions of cash receipts and payments in the name of "Mayura Yogesh", therefore, it was alleged that the name of "Mayura Yogesh" and transaction against the said name belongs to the assessee. All the aforesaid contentions raised by the Ld. AO are contradicted by the assessee at the assessment stage itself stating that the assessee is maintaining regular books of accounts, which are duly audited and the transactions with M/s SAPPL are duly recorded in the books of accounts as purchase of the raw material M S Ingots for Rs. 78,08,442/-. Ld. AR further argued that, the assessee also controverted the allegation by the revenue that a....
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....al, which are part of assessment order, Shri Ranjeet Barman and Shri Chandrasen are on records and even in the reports furnished by the Ld. AO dated 13.01.2025, it could not be brought on record, pointing out the specific question and answer in the statements from where it is said by the aforesaid persons that the transactions in the name of "Mayura Yogesh", are transactions carried out or pertains to the assessee. When Ld. AR was confronted during the appellate proceedings before us to make an statement that the assessee company had no connection with "Mayura Yogesh" or they do not have any person associated with them as an employee or in any other capacity, Ld. AR furnished an affidavit duly sworn by the assessee with a categorical admission that the appellant company are not in knowledge of the "Mayura Yogesh", through whom the alleged transactions of Rs. 3,81,04,820/- was made, the affidavit dated 23.12.2024 furnished before us, however on the next hearing dated 13.01.2025, in the present matter, Ld. AR was confronted with the fact mentioned in the affidavit 23.12.2024 and directed to clarify further that whether the assessee company have any employee / associate by the name of....
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....ssions, it was the prayer by Ld. AR that the issue raised by the assessee before the First Appellate Authority has been elaborately deliberated upon and considering the facts of the case Ld. CIT(A) has decided the issues appreciating the facts of the case in correct perspective, therefore, the arbitrary addition made by Ld. AO on the basis of presumptions, surmises and conjecture under the shadow of borrowed opinion of the Investigation Wing is liable to be quashed and the order of Ld. CIT(A) deserves to be upheld. 14. We have considered the rival submissions, perused the material available on record and case laws relied upon by the Ld. AR. Under the facts of the present case, certain information was surfaced during a Search & Seizure action on M/s SAPPL (3rd party), wherein certain loose papers, pen drives and incriminating material was found by the Search team. From the material found, certain information was unearthed in the form of Excel sheets showing debit and credit transactions aggregating to Rs. 43,00,000/- Lacs and Rs. 3,38,04,820/- respectively, showing under the detail column "Mayura Yogesh". Based on such details, as mentioned by the Ld. AO, that the Search party ha....
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....the statement and the material relied upon has no substance to conclusively prove that such transactions are undertaken by the assessee with M/s SAPPL. 15. After a thoughtful consideration to overall facts and circumstances of the present case, we are of the considered view that the addition made on account of unexplained out of books cash transactions allegedly by the assessee on the basis of certain information, though, could not be substantiated by the revenue, in absence of any cogent evidence or plausible reasonings, have no substance to survive in the eyes of law. The addition was made based borrowed opinion thereby forming a preconceived notion and under the presumptive inferences, surmises and assumptions, which is not permissible under the mandate of law. In view of such observations Ld. CIT(A) had rightly deleted the addition of Rs. 3,81,04,820/- made by the Ld. AO. In view of such observations, we do not find any plausible reason, material, contention or decision brought on record by the revenue, to dislodge the decision of Ld. CIT(A), therefore, the same does not call for any interference, accordingly, we uphold the same. 16. Resultantly, the grounds of appeal rai....
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....s been taken behind the back of the assessee. Therefore, the final order is passed without providing VC to the assessee." 5. From the above, it is clear that assessee was given ample opportunity at the time of assessment proceedings and all the materials and information with the department was also provided to the assessee. Further, as directed copy of statement of Shri Ranjeet Kumar Barman, Shri Chandrasen and Shri Vikas Agrawal is attached herewith for kind reference. 6. Submitted for favour of kind perusal and consideration. Regards (Laiju Jacob) ACIT-1(1), Bilaspur Document 3 à¤à¤¾à¤°à¤¤à¥€à¤¯ गैर नà¥à¤¯à¤¾à¤¯à¤¿à¤• à¤à¤• सौ रà¥à¤ªà¤¯à¥‡ Rs. 100 ONE HUNDRED RUPEES रà¥. 100 सतà¥à¤¯à¤®à¥‡à¤µ जय à¤à¤¾à¤°à¤¤ INDIA INDIA NON JUDICIAL UTÃ…TATTĘ CHHATTISGARH T 728900 AFFIDAVIT BEFORE THE NOTARY PUBLIC 1, Abhishek Garg son of Shri Premchand Agrawal, Age about 46 years, resident of Seth Basantlal Marg, Ambikapur (C.G.) do hereby declare on solemn affimation as under. That I was Direct....