TaxTMI 
TaxTMI 
2025 (2) TMI 1506
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssee. 2. The Id. CIT(Appeal) erred in holding that there is no cogent material to support the addition of Rs. 2,92,09,400/- though the assessing officer brought out sufficient material on record from seized material based on which the addition was made. 3. The Id. CIT(Appeal) erred in not appreciating the fact that the claim of source of the cash deposits being alleged land syndication advances taken in 2002 and 2006 from M/s Sonic Battery (India) P. Ltd. and M/s Clutch Auto Ltd. by Mr. Amit Bansal, employee of the key person Mr. Ajaz Farooqi, was not genuine. 4. The Id. CIT(Appeal) erred in ignoring the findings of the survey conducted on Sonic Battery (India) P. Ltd. and M/s Clutch Auto Ltd. and failed to appreciate that no prudent person would have advanced crores of rupees in cash in 2002 and 2006 to an employee drawing salary of Rs. 40000/- that to without proper documentation. 5. The Id. CIT(Appeal) erred in holding that no adverse inference can be drawn on the affairs of Sonic Battery (India) P. Ltd. though the company was not in existence at the given address and directors of the company are not traceable and also erred in ignoring the st....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assessee firm was summoned to explain the cash deposited into bank account. In the absence of any explanation of sources of cash deposits by assessee firm and its partners, the cash was seized on 28.03.2017. Consequent to search, notice u/s. 153A of the Act was issued and called upon the assessee to file return of income for the A.Y.2010-11 to 2015-16. In response, the assessee has filed return of income on 16.08.2018, declaring total income of Rs. 18,41,446/- for the A.Y.2011-12. 4. The case was selected for scrutiny and during the course of assessment proceedings, the Assessing Officer called upon the assessee to file necessary evidences, including source for cash deposited into bank account. In response, the assessee submitted that Mr. Amit Bansal has made land syndication agreement, received advances from M/s Sonic Battery Pvt. Ltd. and M/s Clutch Auto Ltd., way back in the year 2002 and 2006 respectively, in terms of MOU between Mr. Amit Bansal and the above companies. Further, Mr. Bansal, in turn entered into land syndication agreement with Mr. Afzal and advanced money to him. Since the land syndication is failed due to various reasons, Mr. Bansal has received the advan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Pvt. Ltd and Clutch Auto Ltd. way back in the year 2002 to 2006 is not supported by necessary evidences, because, enquiries conducted during post search investigation and during the post search proceedings clearly shows that those companies are paper companies and are not carrying out any business activity. Further, a survey u/s. 133A of the Act was conducted at the registered office of M/s Sonic Battery India Pvt. Ltd. and found that, no such company was operating from the said premises. Similarly survey operation conducted at the registered office of M/s Clutch Auto Ltd. and a statement recorded from Mr. Manish Roy, Legal Advisor of the company, revealed that, the company is under litigation before NCLT. Further, he was not aware of any land syndication agreement with Mr. Amit Bansal. A statement was also recorded from Mr. Vijay Krishna Mehta, Managing Director of the company on 27.09.2017, where he stated that he never met Mr. Amit Bansal and the company, M/s Clutch Auto Ltd. never entered into any kind of agreement with him for land syndication. Therefore, he opined that the assessee has not explained the source for cash deposit into bank account and thus, rejected the explanat....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... refund of cash received from Mr. Afzal towards land syndication purpose and in the absence of any evidence to the contrary, the Assessing Officer, cannot made additions, merely on the basis of enquiries conducted on Delhi based companies and statement recorded from certain individuals. Therefore, directed the Assessing Officer to delete the additions made towards deposits made in the bank account as unexplained cash deposits. The relevant findings of the Ld.CIT(A) are as under : viii) On consideration of the findings of AO, the contention of the appellant and the material placed on record it is seen that the AO relied on the fact that cash was deposited in the bank accounts of the appellant over a period of time in tranches of less than Rs. 10 lakhs a day, the firm has not obtained PAN/filed return of income though it had taxable income, different balance sheets filed, statements of Mr. Amit Bansal, enquiry at office of M/s. Sonic Battery (India) P Ltd and statements of Mr. Ravi and Mr. V.K. Mehta of M/s. Clutch Auto Ltd. a. The deposition of cash of less than Rs. 10 lakhs a day and not obtaining PAN/not filing return in time are definitely indication for manipul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....receivables and Mr. Amit Bansal's advances were not effected as no money was given back to him. No adverse inference can be drawn from the above entries/differences. ix) On behalf of the appellant and Mr. Bansal documentary evidences as to 'advances for land syndication agreements (MoUs) confirmation of M/s. Sonic Battery (India) P Ltd and M/s. Clutch Auto Ltd, MoU with Mr. Afzal and cancellation thereof. MoUs with the firms in which Mr. Bansal is partner are filed. The Returns of the appellant are for various years are filed before the Search. The affairs of Mr. Amit Bansal have not been disturbed in his assessment. There is no finding/incriminating material as to earning of undisclosed income by the appellant firm. x) Keeping in view the over all circumstances and the evidences on record, it is difficult to hold that AO has successfully brought out that transactions as recorded in the books of the appellant are not correct and real. Mr. Amit Bansal has been searched and no incriminating material is seized from him. No enquiries were made with Mr. Afzal who is said to have returned the cash which was deposited in the bank account of the appellant. In view....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Mohan Rao submitted that, the Assessing Officer erroneously made additions u/s. 68 of the Act towards cash deposit, without appreciating the fact that, the assessee has filed relevant evidences, to prove the source for cash deposited including land syndication agreement, MOU between the parties, confirmation from Delhi based companies etc. The learned counsel for the assessee, further submitted that the Assessing Officer, solely relied upon the statement recorded from certain individuals from Delhi and the enquiry conducted on two companies, during the course of search u/s. 132 of the Act, but the fact remains that, nowhere in such statement, there was any adverse finding on the advances given to the assessee company for land syndication purpose. The Assessing Officer also has not disputed the fact that Amit Bansal has entered into MOU with Mr. Afzal and given advance from Delhi based companies for land syndication purpose and because of failure of transactions, Mr. Afzal returned advances to the assessee in the A.Y.2007-08 and the same was stood as opening cash in hand as on 01.04.2009. The assessee has filed all evidences including relevant cash book, to explain source for cash ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s deposited in the bank account of the assessee. Further, the assessee had also explained the remaining amount of deposits, out of amount received from other group companies and for which, relevant ledger extracts and confirmation letters have been filed. Therefore, from the evidences filed by the assessee, it is undisputedly clear that the assessee is having sufficient opening cash in hand as per books of account as on 01.04.2009, which is available to explain the deposit of cash into the bank account for the year under consideration. The Ld.CIT(A), after considering relevant facts has rightly held that the assessee is able to explain the sources for cash deposited into the bank account. 11. Having said so, let us come back to the various reasons given by the Assessing Officer, to come to the conclusion that, the land syndication agreement and MOU between the parties is an afterthought and not supported by relevant evidences. We find that the Assessing Officer came to the above conclusion only on the basis of post search enquiries conducted on two Delhi based companies, where, during the course of survey u/s. 133A of the Act, it was noticed that the said companies were non-exis....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to establish source for the cash deposit. Therefore, we are of the considered view, that the Assessing Officer is erred in making advances towards cash deposit, as unexplained deposit u/s. 68 of the Act. The Ld.CIT(A), after considering the relevant facts, has rightly deleted the additions made by the Assessing Officer. Thus, we are inclined to uphold the findings of the Ld.CIT(A) and dismiss the appeal filed by the Revenue. 12. In the result, appeal filed by the Revenue is dismissed. ITA 102/Hyd/2021, A.Y.2011-12 (Assessee's Appeal) 13. Coming back to appeal filed by the assessee. The assessee has filed appeal and raised grounds on various legal aspects, including validity of notice issued u/s. 153A, in light of warrant of authorisation in the name of the assessee and argued that the bank account statement of the assessee firm was not incriminating in nature and based on the said material, no additions can be made. In this regard, the assessee has also taken support from the decision of Hon'ble Supreme Court, in the case of Principal Commissioner of Income-Tax Vs. Abhisar Buildwell (P.) Ltd. (2023) 149 taxmann.com 399 (SC). Although the assessee has challenged the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....acts and issues, which we had considered in assessee's own case in ITA No.71/Hyd/2021 and ITA No.102/Hyd/2021 for the A.Y.2011-12. The reasons given by us in preceding paragraph Nos.10 to 12 shall apply equally to these appeals as well. Therefore, for similar reasons, we are inclined to uphold the order of the Ld.CIT(A) and dismiss the appeal filed by the Revenue. Similarly, for the reasons stated in paragraph No.13, we dismiss the appeal filed by the assessee as infructuous. 18. In the result, appeal filed by the Revenue and the assessee for the A.Y.2012-13 are dismissed. ITA No.104/Hyd/2021, A.Y.2013-14 and 105/Hyd/2021, A.Y.2014-15 (Assessee's Appeals) 19. At the time of hearing, the learned counsel for the assessee submitted that the assessee wish to withdraw the appeal filed by the assessee for the A.Y.2013-14 and 2014-15 for which the Ld.DR has not raised any objection. Therefore, the appeal filed by the assessee for the A.Y.2013-14 and 2014-15 are dismissed as withdrawn. ITA No.73/Hyd/2021 (Revenue Appeal) and ITA No.106/Hyd/2021 (Assessee Appeal), A.Y.2015-16 20. The facts and issues involved in the appeal filed by the Revenue and the appeal filed by the asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee submitted that Mr. Amit Bansal has made land syndication agreement, received advances from M/s Sonic Battery Pvt. Ltd. and M/s Clutch Auto, way back in the year 2002 and 2006 respectively, in terms of MOU between Mr. Amit Bansal and the above companies . Further, Mr. Bansal, in turn entered into land syndication agreement with Mr. Afzal and advanced money to him. Since the land syndication is failed due to various reasons, Mr. Bansal has received the advances given to Mr. Afzal and the same has been deposited into bank account. In support, the assessee has submitted relevant MOUs, land syndication agreement, cancellation of land syndication agreement and ledger extracts in the case of Ankaa realtors. 24. The Assessing Officer, after taking into account relevant submissions of the assessee and also taking note of the main business activity of the assessee, observed that although the assessee has made huge cash deposits into bank account year after year, converted cash deposits into fixed deposits and earned huge interest income, but has not filed its return of income u/s. 139(1) of the Act. Further, the assessee firm has not obtained PAN and furnished to bank and because of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....yndication agreement with Mr. Amit Bansal. A statement was also recorded from Mr. Vijay Krishna Mehta, Managing Director of the company on 27.09.2017, where he stated that he never met Mr. Amit Bansal and the company, M/s Clutch Auto Ltd. never entered into any kind of agreement with him for land syndication. Therefore, he opined that the assessee has not explained the source for cash deposit into bank account and thus, rejected the explanation of the assessee and made additions towards cash deposit of Rs. 2,72,16,570/- as unexplained cash deposit and added back to the total income of the assessee. 25. Being aggrieved, the assessee preferred an appeal before the CIT(A). Before the Ld.CIT(A) the assessee has filed written submissions on the issue, which has been reproduced at para 5.1 on pages 28 to 30 of the Ld.CIT(A) order. The sum and substance of the arguments before the Ld.CIT(A) are that the cash deposited in the bank account has been explained, out of opening cash in hand available as per books of accounts of the assessee maintained for the relevant assessment year, which is further supported by refund of advances given to various parties for land syndication purpose. The ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....akhs a day, the firm has not obtained PAN/filed return of income though it had taxable income, different balance sheets filed, statements of Mr. Amit Bansal, enquiry at office of M/s. Sonic Battery (India) P Ltd and statements of Mr. Ravi and Mr. V.K. Mehta of M/s. Clutch Auto Ltd. a. The deposition of cash of less than Rs. 10 lakhs a day and not obtaining PAN/not filing return in time are definitely indication for manipulation. But the same itself can not be ground for addition on the basis of improbability. Some other cogent material is to be brought on record to take adverse view. The above factual position gives rise to doubt which should be starting point for investigation. b. The statement of Mr. Ankit Bansal is gone through. Initially he confirms the transactions as recorded and after some questions he changes his answer and says that no such transactions took place during the course of Search. During his statement on 31.08.2016 he again goes back to his original statement but was evasive on details/evidences. Again he filed affidavit retracting part of his statement which is adverse to him/assessce. In view of the above. the statements of Mr. Bansal are no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iew the over all circumstances and the evidences on record, it is difficult to hold that AO has successfully brought out that transactions as recorded in the books of the appellant are not correct and real. Mr. Amit Bansal has been searched and no incriminating material is seized from him. No enquiries were made with Mr. Afzal who is said to have returned the cash which was deposited in the bank account of the appellant. In view of the above position, it is held that the addition made by the AO is not warranted and the same is deleted. 27. Shri Srinath Sadanala, Ld.DR, submitted that the Ld.CIT(A) erred in deleting the addition towards cash deposited in the bank account as unexplained cash deposit, without appreciating the fact that the claim of source of the cash deposit has been alleged land syndication advances taken in 2002 and 2006 from M/s Sonic Battery (India) Pvt. Ltd. and M/s Clutch Auto Ltd by Mr. Amit Bansal, employee of key person Mr. Ajaz Farooqi was not genuine. The Ld.CIT(A) erred in ignoring the survey conducted on M/s Sonic Battery (India) Pvt. Ltd and M/s Clutch Auto Ltd. and failed to appreciate that no prudent person would have advanced huge amount in cash in....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... has not disputed the fact that Amit Bansal has entered into MOU with Mr. Afzal and given advance from Delhi based companies for land syndication purpose and because of failure of transactions, Mr. Afzal returned advances to the assessee in the A.Y.2007-08 and he same was stood as opening cash in hand as on 01.04.2009. The assessee has filed all evidences including relevant cash book to explain source for cash deposit. The Ld.CIT(A) after considering the relevant facts has rightly deleted the additions and therefore, their order should be upheld. 29. We have heard both the parties, perused the material on record and gone through the orders of the authorities below. The Assessing Officer made addition of Rs. 2,72,16,570/- towards unexplained cash credit, on the ground that the assessee could not explain the source for cash deposited into the bank account. The assessee explained total amount of additions made by the Assessing Officer, in light of relevant bank statements. On perusal of relevant bank statements of State Bank of Hyderabad, Himayat Nagar Branch, we find that three fixed deposits aggregating to Rs. 1,63,22,637/- were matured and credited to the current account of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ring the relevant facts has rightly deleted the additions made by the Assessing Officer. Thus, we are inclined to uphold the findings of the Ld.CIT(A) and dismiss the appeal filed by the Revenue. ITA No.107/Hyd/2021, A.Y.2016-17 (Assessee's Appeal) 31. Coming back to appeal filed by the assessee. The assessee has filed appeal and raised grounds on various legal aspects, including validity of notice issued u/s. 153A, in light of warrant of authorisation in the name of the assessee and argued that the bank account statement of the assessee firm was not incriminating in nature and based on the said material, no additions can be made. In this regard, the assessee has also taken support from the decision of Hon'ble Supreme Court, in the case of Principal Commissioner of Income-Tax Vs. Abhisar Buildwell (P.) Ltd. (2023) 149 taxmann.com 399 (SC). Although the assessee has challenged the assessment order passed by the Assessing Officer, in light of notice issued u/s. 153A of the Act on legality of proceedings, but the grounds taken by the assessee in their appeal is purely academic in nature, for the simple reason that the additions made by the Assessing Officer, towards cash deposit....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... In response, the assessee submitted that Mr. Amit Bansal has made land syndication agreement, received advances from M/s Sonic Battery Pvt. Ltd. and M/s Clutch Auto, way back in the year 2002 and 2006 respectively, in terms of MOU between Mr. Amit Bansal and the above companies . Further, Mr. Bansal, in turn entered into land syndication agreement with Mr. Afzal and advanced money to him. Since the land syndication is failed due to various reasons, Mr. Bansal has received the advances given to Mr. Afzal and the same has been deposited into bank account. In support, the assessee has submitted relevant MOUs, land syndication agreement, cancellation of land syndication agreement and ledger extracts in the case of Ankaa realtors. 35. The Assessing Officer, after taking into account relevant submissions of the assessee and also taking note of the main business activity of the assessee observed that although the assessee has made huge cash deposits into bank account year after year, converted cash deposits into fixed deposits and earned huge interest income, but has not filed its return of income u/s. 139(1) of the Act. Further, the assessee firm has not obtained PAN and furnished to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ware of any land syndication agreement with Mr. Amit Bansal. A statement was also recorded from Mr. Vijay Krishna Mehta, Managing Director of the company on 27.09.2017, where he stated that he never met Mr. Amit Bansal and the company, M/s Clutch Auto Ltd. never entered into any kind of agreement with him for land syndication. Therefore, he opined that the assessee has not explained the source for cash deposit into bank account and thus, rejected the explanation of the assessee and made additions towards cash deposit of Rs. 12,97,27,500/- as unexplained cash deposit and added back to the total income of the assessee. 36. Being aggrieved, the assessee preferred an appeal before the CIT(A). Before the Ld.CIT(A) the assessee has filed written submissions on the issue, which has been reproduced at para 5.1 on pages 27 to 29 of the Ld.CIT(A) order. The sum and substance of the arguments before the Ld.CIT(A) are that the cash deposited in the bank account has been explained, out of opening cash in hand available as per books of accounts of the assessee maintained for the relevant assessment year, which is further supported by refund of advances given to various parties for land syndic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of less than Rs. 10 lakhs a day, the firm has not obtained PAN/filed return of income though it had taxable income, different balance sheets filed, statements of Mr. Amit Bansal, enquiry at office of M/s. Sonic Battery (India) P Ltd and statements of Mr. Ravi and Mr. V.K. Mehta of M/s. Clutch Auto Ltd. a. The deposition of cash of less than Rs. 10 lakhs a day and not obtaining PAN/not filing return in time are definitely indication for manipulation. But the same itself can not be ground for addition on the basis of improbability. Some other cogent material is to be brought on record to take adverse view. The above factual position gives rise to doubt which should be starting point for investigation. b. The statement of Mr. Ankit Bansal is gone through. Initially he confirms the transactions as recorded and after some questions he changes his answer and says that no such transactions took place during the course of Search. During his statement on 31.08.2016 he again goes back to his original statement but was evasive on details/evidences. Again he filed affidavit retracting part of his statement which is adverse to him/assessce. In view of the above. the statements....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... x) Keeping in view the over all circumstances and the evidences on record, it is difficult to hold that AO has successfully brought out that transactions as recorded in the books of the appellant are not correct and real. Mr. Amit Bansal has been searched and no incriminating material is seized from him. No enquiries were made with Mr. Afzal who is said to have returned the cash which was deposited in the bank account of the appellant. In view of the above position, it is held that the addition made by the AO is not warranted and the same is deleted. 38. Shri Srinath Sadanala, Ld.DR, submitted that the Ld.CIT(A) erred in deleting the addition towards cash deposited in the bank account as unexplained cash deposit, without appreciating the fact that the claim of source of the cash deposit has been alleged land syndication advances taken in 2002 and 2006 from M/s Sonic Battery (India) Pvt. Ltd. and M/s Clutch Auto Ltd by Mr. Amit Bansal, employee of key person Mr. Ajaz Farooqi was not genuine. The Ld.CIT(A) erred in ignoring the survey conducted on M/s Sonic Battery (India) Pvt. Ltd and M/s Clutch Auto Ltd. and failed to appreciate that no prudent person would have advanced ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessing Officer also has not disputed the fact that Amit Bansal has entered into MOU with Mr. Afzal and given advance from Delhi based companies for land syndication purpose and because of failure of transactions, Mr. Afzal returned advances to the assessee in the A.Y.2007-08 and he same was stood as opening cash in hand as on 01.04.2009. The assessee has filed all evidences including relevant cash book to explain source for cash deposit. The Ld.CIT(A) after considering the relevant facts has rightly deleted the additions and therefore, their order should be upheld. 40. We have heard both the parties, perused the material on record and gone through the orders of the authorities below. The assessee has explained cash deposit of Rs. 2,87,77,500/-, out of opening cash in hand available with the assessee firm as on 31.03.2016 for Rs. 3,44,38,282/- and the source for opening cash in hand was out of refund of land syndication advance given to Mr. Afzal. The assessee has filed relevant evidences including land syndication cancellation agreement between Mr. Amit Bansal and two Delhi based companies and the land syndication agreement between Mr. Amit Bansal and Mr. Afzal. The assessee a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Auto Limited., MoU with Mr. Afzal and cancellation of their all MOUs with firms, in which Mr. Amit Bansal was partner was also filed. The return of income of the assessee was also filed before the date of search and the same has been accepted by the Assessing Officer. Therefore, in our considered view, in the absence of any material as to incriminating in nature, which suggest unaccounted income of the assessee firm, merely on the basis of enquiries carried out on Delhi based companies no adverse inference can be drawn against the assessee. The Ld.CIT(A), after considering relevant facts has rightly deleted additions made by the Assessing Officer. Thus, we are inclined to uphold the findings of the Ld.CIT(A) and dismiss the appeal filed by the Revenue. ITA No.108/Hyd/2021,A.Y.2017-18 (Assessee's Appeal) 41. The assessee has filed appeal and raised grounds on various legal aspects including validity of notice issued u/s. 153A in light of warrant of authorisation in the name of the assessee and argued that the bank account statement of the assessee firm was not incriminating in nature and based on the said material, no additions can be made. In this regard, the assessee has al....