TaxTMI 
TaxTMI 
2025 (3) TMI 1810
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....ctively. 2. Whether the Ld. CIT(A) is correct in deleting the addition amounting to Rs. 1,93,20,641/- on account of fabricated bills of purchases and sales and completing ignoring the fact that the same was admitted by Shri Ashok Minda, Director and Controlling person in his statement recorded under oath under Section 132(4) of the IT Act. 3. (a) The Ld. Commissioner of Income Tax (Appeals) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, amend any/all the grounds of appeal before or during the course of hearing of the appeal." 3. The grounds raised in Assessment Year 2012-13 reads as under:- "1. The Ld. CIT(A) has erred in law and on facts in holding the fact that the addition made by the AO on account of the difference in value of sales & purchases and considering cost of arranging sales/purchases entries @ 2% is based on wrong facts presumed by the AO w.r.t. business activities of the appellant company for the year under consideration and is not sustainable. 2. The Ld. CIT(A) has erred in law and on facts in holding the fact that the disallowance of direct expenses made by the AO is based on ....
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.... course of hearing of the appeal. 6. (a) The Ld. Commissioner of Income Tax (Appeals) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, amend any/all the grounds of appeal before or during the course of hearing of the appeal." 5. The grounds raised in Assessment Year 2014-15 reads as under:- "1. On the facts and circumstances of the case and in law the Ld. CIT(A) has erred in deleting the addition of Rs: 132.95 cr. under Section 69C of the IT Act despite the fact that the said amount of Rs. 132 cr. was introduced in M/s Minda Capital Pvt. Ltd. by way of amalgamation. 2. On the facts and circumstances of the case and in law the Ld. CIT(A) has erred in deleting the addition of Rs. 68.89 cr. under Section 56(2)(vii) of IT Act despite the fact that purchase of shares of M/s Whiteline Barter Ltd. were made below the book value of shares. 3. On the facts and circumstances of the case and in law the Ld. CIT(A) has erred in deleting the addition of Rs. 39.85 cr. under Section 56(2)(vii) of IT Act despite the fact that purchase of shares of M/s Yojna Management Pvt. Ltd. were made below the book value of ....
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....nsequent to this search, notice under Section 153A was issued on 18.12.2019 and assessment under Section 153A/143(3) was completed on 30.12.2019 upon making addition of Rs. 94,82,057/- on account of difference in purchase and sale of fabric Rs. 3,75,198/- on account of commission for arranging bogus fabric sales Rs. 1,85,557/- on account of commission for arranging bogus fabric purchases and Rs. 1,89,38,664/- on account of disallowance of claimed expenses under Section 69C of the Act. 8. In appeal preferred by the assessee the Ld. CIT(A) by and under the impugned order dated 24.04.2020 has been pleased to allow the appeal partly with the following observations: "5.2.2 It is observed that the assessment order in this case was originally passes u/s 143(3) on 30.3.2014 making addition u/s 14A thus accepting the trading/book results of the activities of the appellant. In the reassessment made u/s 147/143(3) on 17.12.2018, the addition on this issue relying on the same evidences had been made, and repeated in subsequent order passed by the AO u/s 153A which is subject matter of appeal. During the course of appellate proceedings the appellant contended that the bogus trading ....
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.... SCN issued by the AO, draft order sent for approval by the AO, approval given by the Addl CIT and the final order passed by the AO are of same date i.e. 30-12-2019. 7.3 In view of the decision given in para 5.2.2., wherein the addition made by the AO had been deleted on merit, the adjudication on these legal grounds will be of academic value only. Therefore, these grounds raised by the appellant are not being adjudicated." 9. Being aggrieved by the said order passed the Ld. CIT(A), Revenue is in appeal before us. 10. At the time of hearing of the matter, the Ld. Senior Counsel Shri Salil Aggarwal relied upon the order of the Ld. CIT(A) deleting the addition on merit, by contending that the order of the Ld. CIT(A) needs to be upheld even on the ground that the assessment so framed is without jurisdiction as the same is a legal ground, which was taken before Ld. CIT(A) as well. However, the same can be taken at any stage of the proceedings even by making application under Rule 27 of I.T. Rules in the appeal preferred by the Revenue. He further submitted that since the assessee had succeeded in the appeal fully on merits, it did not prefer an appeal. However, the Reven....
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....f assessment framed as per the provisions of Section 153A of the Act". He further submitted that the proceedings were beyond the period of 6 years i.e. AY 2012-13 to 2017-18 as envisaged under Section 153A of the Act and have been initiated by AO on mere estimate without there being any material to reopen the same and the same is also beyond the purview of 4th proviso, Explanation 1 and Explanation 2 of Section 153A of the Act and is liable to be quashed and in view of above submissions, he prayed that proceedings under Section 153A of the Act were bad in law and the order of CIT(A) needs be upheld even on the ground of wrongful assumption of jurisdiction on the part of the AO to have framed assessment under Section 153A of the Act. In order to support his aforesaid contention, he relied upon the several judicial pronouncements including the ITAT, Delhi -B- Bench decision dated 28.2.2019 passed in the case of ACIT vs. Creamy Foods Ltd. & Anr. decided vide ITA No. 1176/Del/2015. 11. On the contrary, Ld. CIT(DR) opposed the aforesaid request of the Ld. AR and supported the orders of the AO and filed the submissions which have been reproduced as under:- 12. After hearing the riv....
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....12 b) Judgment of the High Court of Delhi in the case of CIT vs. Kabul Chawla reported in 380 ITR 573. c) Judgment of High Court of Delhi in the case of PCIT vs Jaypee Financial Services Ltd. reported in 280 Taxman 147. d) Judgment of the High Court of Delhi in the case of PCIT Vs. Meeta Gutgutia reported in 395 ITR 526. e) Judgment of the Supreme Court of India in the case of CIT vs Singhad Technical Education Society reported in 397ITR 344. f) Order of ITAT Delhi in the case of ACIT vs Moon Beverages Ltd. in ITA No. 115 to 118/Del/2018. g) Order of ITAT Delhi in the case of DCIT vs Sundaram IT Parks Pvt. Ltd. in ITA No. 5166/Del/2018. h) Order of ITAT Delhi in the case of ACIT vs M/s Five Vision Planners Pvt. Ltd. in ITA No. 4460/Del/2014. i) Judgment of High Court of Delhi in the case of PCIT vs M/s Dreamcity Buildwell Pvt. Ltd. in ITA No. 1152/2017. j) Order of ITAT Delhi M/s TDI Infrastructure Ltd. vs DCIT in ITA No. 5580, 4409, 4410 and 5072/Del/2012. k) Order of ITAT Delhi ACIT vs Realtech Construction Pvt. Ltd. (ITAT Delhi) in ITA No. 6569/Del/2016. 15. On careful consideration of t....
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....h liabilities and assets of these merged entities in its balance sheet as per scheme of amalgamation approved by Hon'ble High Court". 18. It is further noted that on the issue of under valuation of shares under Section 56(2)(vii) of Rs. 28.89 crores and 39.85 crores, the finding of the Ld. CIT(A) is that "it is observed that the AO had not understood the correct nature of these transactions. The transactions of shares issued by amalgamating company to amalgamated companies shareholders in approved swap ratio, are not covered under Section 56(2)(viib)" 19. Apropos issue of Share Capital under Section 68 of Rs. 69.50 lacs, the findings of the Ld. CIT(A) shows that the said share capital was received by amalgamating company in AY 2010-11, as such, addition cannot be made in impugned Assessment Year. 20. Upon careful consideration of the factual matrix and the precedent referred above, in our considered view the additions so made by AO are not based on any incriminating material. However, the AO has merely referred the statements of Sh. Ashok Minda, having no relevance for the impugned Assessment Years and further, additions have been made on the basis of books of accounts....
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.... fact is that daily milk procurement sheets found and seized during the search proceedings pertains to the period 01.07.2011 to 31.07.2011. This means that the sheets pertain to only 20 days. It is also not in dispute that on the basis of these milk procurement sheets, one of the directors Shri Sandeep Aggarwal admitted to the fact that he is dealing in sale and purchase of milk in his individual capacity. This fact has also been acknowledged by the Assessing Officer. Accordingly, Shri Sandeep Aggarwal offered Rs. 93 lakhs in his return of income for A.Y 2012-13 and the same has been assessed as such in his hands vide assessment order dated 28.03.2014 framed u/s 143(3) of the Act. 14. As exhibited elsewhere, total quantity of milk as per documents found during the course of search is 4932805 litres. Quantity of milk shown in the books of account was 3226341 litres which means the unaccounted quantity of milk was 1706464 litres which comes to 35% to the recorded quantity. Applying this ratio, to the quantity of milk sale recorded in the books of account, at 5135335 litres comes to 1797367 litres, which is wrongly taken by the Assessing Officer as 2716162 litres. If the aver....
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.... We hold and direct accordingly and allow the Additional Ground No. 1 raised by the Assessee. Since we have decided the aforesaid Additional legal issues in favour of the assessee and against the Revenue, hence, there is no need to adjudicate the other additional grounds raised by the Assessee. 23. Taking into consideration that the identical issue involved in all the remaining 04 appeals, thus, this order will apply mutatis mutandis to the remaining 4 appeals. 24. In the result, all the 05 appeals of the Revenue are dismissed with the above observations. Order pronounced in the open court on 07.03.2025. ============= Document 1Table - 1 : Detail of earning of income during the Financial Year 2010-11 S. No. Nature of income Amount Source of income 1 Sale- Export 1,87,59,886 Export to Uzminda LLC, Uzbekistan 2 Management consultancy 2,65,09,143 Management Technical fee from UzMinda LLC 3 Interest Income- on Fixed deposit with bank 3,83,879 Deposit with Karnataka Bank, Karnataka Bank & Kotak Mahindra Bank on interest bearing loan 55,69,249 On loan given to Minda Management Services Ltd & Minda Corporation Ltd on bond 62,500 from Capital Tax saving bond on oth....
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....86,312 03.03 2016 u/s 143(3) 33,67,368 (on account of transfer pricing adjustment of corporate guarantee) 2014-15 29.11.2014 11,12.36,770 26.12 2016 u/s 143(3) . 2015-15 24.10.2015 (5.64,83,060) Processed u/s 143(1) . 2016-17 22.11.2016 (3.66,57,089) Processed u/s 143(1) . 2017-18 07.10.2017 (17,54,21,190) Processed u/s 143(1) . 2018-19 14.09.2018 8,22,30,990 Processed u/s 143(1) . A.O. findings during search(A.O. Order for AY 2011-12)- Same for all yearsupto A.Y. 2017-18: . Books of accounts were not found at registered ofice of the company as well as corporate office of the group. Further, no stock of fabrics was found. (Para 7, P-3) . Books of accounts also not found at JMD Regent, Gurgaon (address as stated by one of the directors). To this the director stated that Minda Capital Ltd., though shown as working in garments trading business, is actually not engaged in any trading or services in this regard. (P-3) . Bogus trading in fabrics is being shown for last years (accepted by company's director). (P-3) · Revenue is shown to be generated to pay off bank interest. (P-11) . From the inquiries made from purchase parties (transaction year 2015-16. 20....
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....bogus trading R$.10,05,36,474/- a) Point (a) and (b) as above b) Evidences are conclusive proof that the appellant was engaged in export of tools and equipment during the year. (Para 5.2.1, P- 15) c) Addition on account of commission and difference in sale/purchase value is not sustainable, as based on wrong facts presumed by A.O. w.r.t. business activities of company. (P-17) d) Addition on account of disallowance of expenses is not sustainable as it is based on wrong facts presumed by A.O. w.r.t. business activities of company and without bringing any adverse material Document 4A.Y. Nature addition made of Amount addition of (in Rs.) Addition by A.O. Findings/Decision of CIT(A) on record. (P-19) Same 2013-14 (Deptt Appeal) Bogus Trading Unexplained expenditure u/s 69C 6.04,62,890 A.O. has made following additions u/s 60C: (P-15-18) 2% Commission on bogus sale Rs 6,55,358 + 2% Commission on bogus purchase Rs 2,87,315 + Difference between sale and purchase Rs. 1,84.02,564 + Unexplained expenditure R$ 4,11,17,543 i.e. Rs. 6,04,62,890/- for bogus trading in line with above (Para 5.2.1 to 5.2.3, P-14-20 of the order) Hold that addition u/s 69C by treating genuine business transa....
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....Le. dividend of Rs. 1,08,62,428/ -. (Pg 6-8) · Assessee not shown expenditure relatable to assets yielding exempt income and also not proved nexus of investment made out of own fund. . Sec 14(3) provides that Rule BD is to be applied even when assessee claims that no expenditure incurred by him in relation to exempt income. . Case law cited: CIT Vs Rajendra Prasad Moody (SC, 115ITR519) . 1% of annual average of monthly average of opening and closing balances of value of investment calculated as disallowance u/s 14A. (Pg-7-8) CIT(A) Order dated 29.04.2020 (Pg 6-10) · AO recorded satisfaction before invocation of sec 14A(3) and then, calculated disalowance as per Rue 8D(2)(1) . Amount of disallowance by AO is neither greater than the total expenses claimed by appelant in P&L Ale nor than the amount of exempt income. . Held that disallowance by AO u/s 14A r.w.Rule 8D is as per law and upheld. Note 1: Additional findings of A.O. for A.Y. 2014-15 (mentioned in A.O. Order) . Spark Minda Group is controlling mapy non-descript entities which otherwise, on paper, are managed and controlled by different management from different places. (P-3) . During the year, various comp....
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....52) . Difference in consideration paid and actual consideration made out on the net worth of company, being treated as unexplained unaccounted income (P-58) Pg-43 to 50 (Para 6) . Increased shareholding in these companies is only reflection of investment in share capital held by amalgamating companies. (P-50) . No issue of inadequate consideration, as adequacy of consideration of these assets is reflected in SWAP Ratio of issued share capital and these transactions not taxable Addition u/s 56(2)(va) o/a of purchase of shares of Yojna Management Pvt Ltd below Book Value 39.85.07.059 . Shares trfd. to entities controlled by Spark Minda Group at face value. while book value was much high. Then, those entities amalgamated with Minda Capital. thereby making YMPL subsidiary of Minda Capital. (P-58-02) . Difference in consideration paid and actual consideration made out on the net worth of company, being treated as unexplained unaccounted income (P-63) u/s 56(2)(vib) of IT Act. (P.50) . Both the additions u/s 56(2)(vii) based on wrong appreciation of facts and wrong application of law, thus deleted(P-50) Unaccounted income o/a share application money by merger of Accredit Financial Cons....