AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (10) TMI 1594
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....4 to 2018-19 followed by notices u/s 143(2)/142(1). Ultimately, the AO passed separate assessment- orders of all assessment-years u/s 153A. The present appeals relate to AY 2018-19 for which the AO passed assessment-order after making these additions, namely (i) Addition of Rs. 1,45,12,645/-, (ii) Addition of Rs. 9,04,623/-, and (iii) Addition of Rs. 14,17,535/-. During first-appeal, the CIT(A) deleted first two additions but upheld the last addition. Now, both sides are aggrieved by the order of CIT(A), accordingly these cross-appeals before us. Assessee's IT(SS)A No. 30/Ind/2022: 4. The assessee has raised following grounds in this appeal: 1. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in upholding the validity of addition of Rs. 14,17,535/- made by the AO to the total income of the appellant on account of contract payment made to various parties by treating it as bogus/unexplained expenditure u/s 69C of the Income-tax Act, 1961, in case of non-abate assessment and that too in absence of any incriminating documents found and seized during the course of search. 2. That on the facts and in the circumstances of ....
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....issed as non-pressed/non-pleaded. Ground No. 2 and 3: 7. In these grounds, the assessee claims that the CIT(A) has erred in upholding the addition of Rs. 14,17,535/- made by AO in disregard of the submissions made by assessee and without issuing any show-cause notice to assessee prior to making addition. 8. Ld. AR drew us to Page No. 30 of assessment-order where the AO has considered payments made by assessee to following persons (contractors) as bogus and thereby made addition: 1 Shri Govind Cheema 3,44,250/- 2 Shri Vishal Devgirkar 4,24,500/- 3 Shri Gulab Chand Kumau 3,08,175/- 4 Shri Tarun Virwani 3,40,610/- Total 14,17,535/- 9. The AO has dealt this addition in Para 5 / Page 17-31 of assessment- order. The detailed findings given by AO in sub-para 5.1, 5.2, 5.3, 5.4 and 5.12 qua these additions, are as under: (i) Shri Govind Cheema - The AO noted that the assessee has claimed deduction of Rs. 3,44,250/- for Bill dated 31.03.2018 of Shri Govind. When the statements of Shri Govind were recorded u/s 131 on 23.11.2020 during assessment-proceeding, he stated that he was employed as 'Hammal' with M/s ....
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....se of his bank A/c. Finally, the AO concluded that the assessee has adopted a modus operandi for making cash available for personal use of directors/key persons and for other unaccounted expenses of the Group. With these observations, the AO concluded that the assessee has claimed bogus/unexplained expenses and made addition u/s 69C read with section 115BBE. 10. During first-appeal, the CIT(A) agreed with the findings of AO and upheld addition. 11. Before us, Ld. AR for assessee assailed the orders of lower-authorities from various angles, fundamental/legal as well as factual. Firstly, we would like to summarize the fundamental/legal contentions raised by Ld. AR: (i) It is submitted that before passing assessment-order, the AO issued notice dated 01.12.2020 u/s 142(1), copy at Page 68-73 of Paper- Book, with following query: "4. During the assessment-proceedings, you have submitted bank account statement of the company. After anlaysis of bank account statement, it was found that you have made payment to various persons through RTGS/Cheque. In this regard, you are requested to please furnish the year-wise ledger account, bill raised by these persons against w....
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....he present case, the assessee has recorded expenditure in books of account, therefore the source is very much explained. In such a situation, Ld. AR claimed, how section 69C is applicable is beyond his understanding. 12. Apart from above legal/fundamental contentions, Ld. AR raised the factual/other contentions as under: (i) It is submitted that the AO has compared two-sets of bills of all 4 contractors, one related to earlier AY 2015-16 and other related to AY 2018-19. When the bills were related to two different years at a time- gap of about 3 years, it is quite natural that there would be difference in letter-heads, writings, etc. Therefore, the AO has wrongly made an adverse conclusion. (ii) It is submitted that all bills are duly signed and signatures on all bills (contractor-wise) were same and there is no difference. Therefore, the adverse finding given by AO that the bills are not signed or there is a difference in signature, is factually wrong. (iii) It is submitted that those contractors were also employees in searched-group. There is no prohibition in law that the persons who are employees cannot work as contractors; the lower-authorities ha....
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....onting assessee with the statement/affidavit of Shri Govind Cheema. It is an accepted principle in various judicial rulings including Anand Chauhan Vs. CIT (supra) relied upon by Ld. AR that if the AO violates the principle of natural justice by not confronting the assessee with the material in his possession, the irregularity committed by AO could be and must be corrected by remitting the matter. Besides this, Ld. AR is very right in claiming that no enquiry has been done from other 3 contractors, Shri Vishal Devgirkar, Shri Gulab Chand Kumau and Shri Tarun Virwani, and yet the AO has made addition. Looking into these infirmities in the action of AO, we are of the considered view that this is a fit case for remitting to the file of AO who shall resolve the assessee's grievances by making in-depth enquiries qua all contractors and provide sufficient opportunity to assessee to make his submissions and only then, pass order afresh. While doing so, the AO shall consider assessee's all submissions including those made before us and stay uninfluenced by his previous order. 16. We would, at this stage, also like to address one more contention raised by Ld. AR. He has submitted....
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....atever documents/ evidences were filed to AO during assessment-proceeding, were only re-filed to CIT(A). Ld. AR went on submitting that the Bench should impose cost on revenue for adopting a casual approach in raising such grounds. We have paid our careful attention to the submissions of Ld. AR and seen the order of first-appellate authority. We find these grounds of revenue as devoid of any merit; hence the same are hereby dismissed. Ground No. 3: 20. In this ground, the revenue claims that the CIT(A) has erred in deleting the addition of Rs. 1,45,12,645/- made by AO u/s 68 on account of unexplained cash credits. 21. Ld. DR for revenue carried us to Para No. 3 of assessment-order and submitted that the AO has made addition on the basis that the assessee had received advances from customers which remained outstanding for several years. The AO has taken amount of such advances at Rs. 1,45,12,645/- and made addition u/s 68. Ld. DR relied upon order of AO. 22. Per contra, Ld. AR for assessee drew us to the order passed by CIT(A). He submitted that the CIT(A) has passed a well-reasoned order and thereafter deleted the addition. The said order is re-produced below for an imm....
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....a customer can advance amount towards purchase of plot out of borrowed funds, loans, gifts, past savings etc and such advance need not be out of current year income chargeable to tax. I find strong force in the contentions of the appellant for the reason that (i) no evidence has been brought on record by the AO which could establish that the alleged advance amount was moneys emanated from the coffers of the appellant and which could prove that the claim of appellant is incorrect, (ii) neither any of the director or any of the person giving alleged advance amount has ever admitted that the same is unaccounted money of the appellant and (iii) no enquiry was conducted by the AO from any of the person giving advance amount. 3.2.3 Nonetheless, the AO has also made addition of Rs. 9,04,623/- vide para 4 of the assessment order on account of unexplained cash deposit in the bank account. As per contentions of the appellant w.r.t the grounds raised against the addition on account of cash deposit, the amount of cash deposit also includes advance received from customers in cash. The AO has already made addition on account of cash deposited in bank account of the appellant which inclu....
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....18 Ravi Mata Navin Mata ABZPM1509N 100000 Advance received prior to AY 2012-13 19 Rishi Mukesh Mata BGNPM9257P 150000 Advance received prior to AY 2012-13 20 Sanjay Makhija AILPM7507R 1500000 Advance received during AY 2017-18 21 Santosh Radio AEMPM3600E 500000 Advance received prior to AY 2012-13 22 Shivam real Estate ABJFS3779A 39039 Advance received prior to AY 2012-13 23 Sonali Mata & Navin Mata ALFPM3358P ACBPM9364J 100000 Advance received prior to AY 2012-13 TOTAL 14512645 From the above, it is evident that except sum of Rs. 6,00,000/- received from Shri Aman Prajapati all the advance amount have been received in prior years which have been covered under search assessment proceedings and no negative inference has been drawn by the AO on the advance amount received during AYs 2012-13 to 2017-18. The appellant with respect to advance received from Shri Aman Prajapati has furnished copy of bank account statement, confirmation and ITR. On perusal of ....
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.... remand proceedings. The trade customers as appearing in the list are the regular customers making purchases from the appellant for the last many years. A perusal of the statement of accounts of the said parties for the current as well as subsequent year shows that the appellant had supplied the goods in the normal course of the business. The realization of proceeds thereof is an ongoing business activity. The only finding of the A.O. is that the appellant has been unable to produce the confirmations from few of the parties. It is observed from the submissions that the goods have been supplied under various invoices and the payments have been received by account payee cheques from time to time. In view of the totality of facts and circumstances, it is held that the parties from whom the appellant had received the advances are the regular customers of the appellant in the preceding as well as subsequent years. The trade advances received by the appellant have been adjusted against the sales made to them in the subsequent years. Few of the customers from whom substantial amount of advance is received are limited companies. It is not the case of the A.O. that the advance is outstandin....
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....as erred in deleting the addition of Rs. 9,04,623/- made by AO u/s 68 on account of unexplained cash deposits in bank accounts. 25. Ld. DR for revenue carried us to Para No. 4, sub-Para 4.3 and submitted that the AO has made addition for the reason that the assessee could not establish the source of deposits made in Bank A/c. She relied upon order of AO and urged to uphold addition. 26. Per contra, Ld. AR for assessee submitted that there is a serious mistake in the order of AO. He carried us to Para 4.1 of assessment-order where the AO has noted that the deposit in Bank was Rs. 1,05,000/-. Then, Ld. AR carried us to Para No. 3.1 of the notice dated 01.12.2020 u/s 142(1) issued by AO to assessee wherein the AO queried the assessee about the source of deposit of Rs. 1,05,000/- in bank a/c. Thus, Ld. AR submitted that the amount of deposit in bank a/c was Rs. 1,05,000/- only. As far as the figure of Rs. 9,04,623/- picked by AO is concerned, Ld. AR submitted that it was sum total of opening cash of Rs. 7,98,585/- and cash of Rs. 1,06,038/- received back from Shri Sunny Choudhary out of money given to him for deposit of TDS. Ld. AR submitted that the sum of Rs. 9,04623/- is inflo....
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....Therefore, the conclusion drawn by the AO is not factually correct. The appellant before the AO as well as before me has explained that cash was deposited in bank account out of past bank withdrawals, sales/booking advance/other cash receipts and out of opening cash balance available in regular books of accounts. In support appellant has filed copies of relevant bank account, cash book, details of sales and details of advances received from customers. On perusal of evidences on record, which has also been furnished before the AO, it has been observed that there was a closing cash balance of Rs. 7,98,585/- as on 31.03.2017 which has been generated out of cash withdrawal from bank account, sales, booking advance. The brief details are as under :- S. No Particulars Amount 1 Opening cash balance as on 01.04.2016 Rs. 12,98,519/- 2 Add: Cash withdrawn from bank account Cash sales, booking advance and other cash receipts Rs. 10,93,000/- Rs. Nil/- 3 Less: Cash deposited in bank account Payments made in cash Rs. 12,46,500/- Rs. 3,46,434/- 4 Closing cash balance as on 31.03.2017 ....