TaxTMI 
TaxTMI 
2025 (2) TMI 1576
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....ected u/s 145(3) of the Act by pointing out any specific discrepancy or mistake. This fact is evident from the Body of the Assessment and Appeal orders. As on date, it is a settled Law that without rejecting book results u/s 145(3) of the Act, no valid addition can be made. The Authorities Below have however ignored this vital fact while dismissing the appeal and confirming the addition of Rs. 50,90,194/- on the basis of misconceived presumptions and surmises that the sale proceeds of the Vehicles as shown in the Audited Books were a 'Colorable Device', relying heavily on the judgment of honorable Supreme Court in the case of M/s Mac Dowells & Compay vs. CTO (1985). Such presumptions were totally unfounded for and without any basis in absence of any incriminating material brought on record. Thus such findings of the Authorities Below are factually and legally incorrect and the same deserve to be quashed summarily on this sole ground and addition made on the basis of such findings deserves to be deleted summarily. (b) The Authorities Below did not address the objection of the appellant Company that the provisions of section 68 of the Act were incorrectly invoked in ....
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....." 3. Condonation of delay: It is pointed out by the Registry that the appeal is filed belatedly by 51 (fiftyone) days. The appellant has filed an application for condonation of delay in form of an affidavit sworn by the director of the appellant company Mr. Sandeep Prabhakar, explaining the fact that the name of the appellant company was originally M/s Sangam Hire Purchase Company Ltd, with address at old Nehru Market, Jammu PIN: 180001, and subsequently the name of the company has been altered to Hindvee Small Finance Limited, its registered address has been changed to Vaishali Nagar, Jaipur, Rajasthan 302021, and the same was intimated to the income tax department on 19/04/2023, and subsequently all communications from the department is being received at the new address. In course of hearing the Ld AR of the assessee explained that in the instant case the order of the Ld CIT(A) has been passed on 27th December, 2023, and the appeal should have been filed within sixty days there from ie by 28th February, 2024, but the same was actually filed on 18th April, 2024, because the order was not communicated to the new address at, Jaipur, Rajasthan, and the new email is stated to be k....
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.... of the individual taxi operators and drivers as the case may, with hypothecation in favour of the assessee company, till continuation of the loan tenure. The entire business of hire purchase finance are duly recorded in books of accounts and due compliance with all Government authorities has been made as per requirements under various Acts. 9. During the year under appeal, regular return has been filed along with copies of statutory audit reports and audited balance sheet and in course of scrutiny proceedings, full set of books of accounts, cash book, ledger, journals, registers, along with supporting documents, invoices and bank statements, were produced before the AO, along with full details and identity of the clients (customer) to whom advances has been given and the respective registration numbers of vehicles (which has been financed), and registered against each customer on hire purchase basis, details of installments collected from each persons, mode of collection and all other supporting particulars as required and called for by the AO. 10. Subsequently, the assessment has been completed on a total income of Rs. 57,90,683/- u/s 143(3) of the Act 61, by making an addi....
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....nal the assessee has filed a paper-book containing 196 pages, consisting of the print out of the entire cash book for the FY 2016-17 (relevant to the assessment year under appeal), copy of audited financial statements along with audit report, details of date wise receipts serially numbered, consisting of names of hire purchase parties with respective vehicle registration numbers and amounts received (collected) from each, pertaining to the period 5th September 2016 to 8th November, 2016 (both days inclusive) along with copies of corresponding receipt books serially numbered, bearing names of each person, as supporting documentary evidence of receipt(collection) of funds, and copies of written submissions filed before lower authorities in course of assessment and first appeal. 13. The Ld AR of the assessee submitted that though the grounds of appeal contained in the memorandum of appeal is in essay form, there is only one single issue of dispute in this appeal, which relates to the addition of Rs. 50,90,194/- u/s 68 of the Act 61, on account of alleged cash credit, which has been subsequently deposited in bank during the demonetization period. 14. He further submitted that dur....
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....on do not appear to be genuine by any stretch of imagination. It is very clear that this has been done to incorporate the cash balance so as to justify the cash deposited during the demonetization period." 17. The Ld AR explained that the original money receipt are in the custody of the borrowers from whom collection is made and it is the 2nd copy of the receipts which are part of the records of the assessee (which are produced for verification) and the said copy also contains full names and address of borrowers with corresponding registration number of vehicles financed by the assessee (on hire purchase) and since all the vehicles are duly registered before Motor Vehicle authorities, the identity and genuineness of the driver or tour operator are already proved before the State Government authority, evidenced by individual driving license, without which registration would not have been possible and it was always open to the AO to have made any verification or enquiry, from the office of the M V Department, to clear any doubt regarding the genuineness or existence of the motor vehicles financed by the assessee, because these are all subject to clearance of hypothecation in the b....
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.... the submission filed by the assessee dated 29/11/2023, before the Ld first appellate authority, to argue that copies of registration certificates of vehicles (commonly known as the blue book), containing the vehicle owners name and identity, were all submitted before the AO and also before the first appellate authority, which contains full address of the owners (customers), but no verification or enquiry has been conducted, at any stage, and without bringing any material on record to disprove the authenticity or genuineness of the money receipts, or without pointing out, any discrepancy in such documents, the same cannot be branded as un reliable, simply on assumption, and the same is not legally acceptable . 21. The Ld AR thereafter, referred to the financial statements and audited balance sheet (placed at pb. page 34 to 39) to explain that cash collections (receipts) during the year are all documented and supported by proper receipts relating to each specific parties (customers) which are identifiable, and during this FY, there has been reduction of outstanding amount of hire purchase stock under long term loans by Rs. 25.10 lakhs item-8 of audit report (recovery of principal....
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...., and he prays for deleting the addition of Rs. 50.90 lakhs, sustained u/s 68 of the Act by the Ld first appellate authority. 24. Per contra the Ld DR, relied on the order of the Ld. CIT(A) and argued that on the facts of the case the assessee has not been able to explain and justify the source of cash deposit in bank during demonetization period and as such the order of the Ld first appellate authority needs to be sustained, more so considering the fact that only five I.D. proofs has been provided (as per page 3 of Asstt. Order), to which the ld. AR, countered that copies of vehicle registration certificates are all on record, which is the proof of I.d. and address of vehicle owners itself. 25. We have heard the rival submissions and considered the materials on record and the contents of the paper book submitted by the assessee. Firstly we look into the cash book as contained in the paper book (page - 23), and we observe that the closing cash balance as on 8th November, 2016, is reflected at Rs. 54,49,531/-, and the cash in hand as on the 8th November, has been immediately deposited in bank on three successive days, i.e. on the 10th, 11th and 12th November (9^th November bei....
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....the submitted evidence cannot be simply brushed aside. 30. In the instant case we find that the nature of hire purchase finance of vehicles is a business which is carried on by the assessee in normal course for many years and the financing of the motor vehicles against specific registration numbers (registered before RTO), cannot be denied and the outstanding balance as at the beginning of the financial year as on 01/04/2016, is reflected in the audited balance sheet at Rs. 64.73 lakhs, under the head Hire Purchase Stock (Long Term), and an amount of Rs. 32.14 lakhs is reflected under the head H.P. stock recoverable within one year (short term) out of which the recovery of the principal amount is being made and the remaining portion is out of the hire purchase charges recovered, which is already offered as income as revenue from operations for the year under appeal. In support of its contention the assessee has produced serially numbered date-wise money receipts, containing vehicle numbers and corresponding names and address available in the registration blue book, and the same has not been proved to be false and no single case of cross verification has been done by the AO, to d....
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....iod from 1-Apr-2016 to 31-Mar-2017 23 Paracadas Vch Type Vich No. Dece Balance 1-11-2016 H/M 1093 ABBAS SIDIQU JK12-1367 716 10.000.00 38.73.578.00 2-11-2016 /C 1100 MOHD.SHAFIQ JKO2AM-8924 717 15,000.00 38.58.578.00 2-11-2016 H/M 1106 SR RAJINDER SINGH JKO2AF-8715 719 14.000.00 38.72,578.00 2-11-2016 H/M 1133 JOGINDER SINGH JK02AE-9957 720 10.000.00 38.82,578.00 2-11-2016 H/M 1127 DARSHAN LAL JKO2AE-3071 721 15.000.00 . 38.97,578.00 3-11-2016 Telephone & Postage 722 580.00 38.96.998.00 3-11-2016 1/C 1100 MOHD SHAFIQ IKOZAM-8924 723 14,680.00 38.82.318.00 3-11-2016 Misc Expenses A/c 724 160.00 38.82.158.00 3-11-2016 Car Maintanance A/c 725 1,000.00 38.81,158.00 3-11-2016 H/M 1113 GAGAN ARRORA JKOZAD-6883 72% 3.48.800.00 42.29.958.00 3-11-2016 H/M 1164 KAFEEL HUSIAN JKOZAP-5327 727 10.350.00 42.40.308.00 3-11-2016 H/M 1152 RIAZ AHMD JK021-4803 Jourval 723 7,500.00 42.47.808.00 4-11-2016 Car Maintanance A/c 729 1.000.00 42.46,808.00 4-11-2016 1/C 1054 MOHD JAMIL JK14A-3781 730 11,038.00 42,35,770.00 5-11-2016 News Paper & Periodicals 734 = 120.00 42.35.650.00 5-11-2016 Staff Wellare A/c. 355.00 42.3....
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.... 20,000 07-09-2016 JK 11 9748 15625 Mustaq Humrain 11,500 07-09-2016 JK 02 AL 0637 15626 Younus Ali 14,350 08-09-2016 JK 02 M 0795 15627 Mohd Riaz Khan 10.200 08-09-2016 JK 06 2443 15629 Mohd Ahmd 8.500 09-09-2016 IK 02 AF 8715 15630 Rajinder Singh 14,000 09-09-2016 JK 02 E 6787 15631 Bashart Husain 20,000 09-09-2016 JK 02 E 6787 15632 Bashart Husain 480 10-09-2016 JK 02 AE 3071 15633 Darshan Lal 5.522 10-09-2016 IK 020 T 4658 15634 Neel Kumar 5,000 10-09-2016 JK 02 AT 6495 15635 Sushil Kumar 5.00€ 12-09-2016 JK 02 T 4658 15636 Neel Kumar 52,920 17-09-2016 JK 14 A 4876 15642 Mohd, Saghir 27,300 19-09-2016 JK 02 T 4658 15643 Neel Kumar 100 19-09-2016 JK 14 9287 15644 Harvinder Singh 34,760 19-09-2016 JK 02 AT 1393 15645 Tara Chand 12,000 19-09-2016 JK 02 M 0713 15646 Kulbir Singh 21,000 20-09-2016 JK 02 AL 0637 15648 Youns Ali 4,19,000 20-09-2016 JK 02 AE 3071 15650 Darshan Lal 25,000 21-09-2016 JK 14 A 2211 15651 Sarfaraz Ahmed 5.000 22-09-2016 JK 02 AH 4386 15654 Payara Lal 34,460 23-09-2016 JK 02 AS 3783 15655 Gagan Arrora 26,100 23-09-2016 JK 02 AD 6883 15656 Gagan Arrora 23,900 23-09-2016 JK 02 AE 9957 1....
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....sod Ahmed 80,057 13-10-2016 JK 02 T 4658 15713 Neel Kumar 65,000 14-10-2016 [K 12 3033 15714 Mohd. Safir 1,10,100 14-10-2016 [K 12 9287 15715 Harvinder Singh 2.915 14-10-2016 JK 025 9769 15716 Mohinder Singh 15,000 14-10-2016 JK 02 E 6787 15718 Bashart Husain 41,105 14-10-2016 [K 14 B 1769 15719 Gulam Mustafa 84,960 14-10-2016 JK 02 AG 6717 15720 Mohd. Tazeem 44,200 14-10-2016 JK 02 AA 9635 15721 Nasrulah Khan 53,910 15-10-2016 JK 02 T 4658 15723 Neel Kumar 2.500 15-10-2016 JK 14 A 8173 15724 Mohd. Safeer 37,620 15-10-2016 JK 02 X 6950 15725 Abdul Gani 27,157 15-10-2016 IK 12 2783 15726 Manzor Ahmd. 51,000 15-10-2016 JK 02 AR 8529 15727 Shaid Kahn 46,457 17-10-2016 JK 02 AG 6717 15728 Mohd. Tazeem 1,64,750 17-10-2016 JK 02 AT 1393 15729 Tara Chand 10,000 For Hindvee Small Finance Ltd. Page 2 Director Document 4 12 SANGAM HIRE PURCHASE CO. LTD. Details of receipts with Vehicle Registration Number, Receipt Number and names From 1st September to 8th November-2016 Date of receipt Vehicle Registration No. Receipt No. Hire Purchase party name Amount received 17-10-2016 JK 02 AC 8353 15730 Ravi Chowdhary 49,815 17-10....