TaxTMI 
TaxTMI 
2021 (4) TMI 1405
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....e assessment proceedings or during the course of the remand proceedings. 2. The Learned Commissioner of Income-tax (Appeals) has erred in law and in facts in not determining the income based on the final books of account thereby confirming the manner of determination of income by the Assessing Officer. The Learned CIT(A) ought to have accepted book results shown by the appellant. 3. The Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in upholding the working of unexplained investments relying on the various sources of information. 4. The Learned Commissioner of Income-Tax (Appeals) has erred in law and in facts in upholding the determination of unaccounted investments as per Annexure 1 of the assessment order amounting to Rs.19,86,14,228/- on the basis of the information collected from various sources allegedly showing the shareholding of the appellant without appreciating that the copies of the said letters/information was neither provided to the appellant during assessment proceedings nor during remand proceedings. 5. The Ld. Commissioner of Income-Tax (Appeals) has erred in law and in facts in confirming the addition....
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....ppeal before us. The assessee could not produce the books of accounts during the assessment proceedings because they were not complete due to several unforeseen and uncontrollable reasons beyond the control of the assessee and consequently the assessment was framed on the basis of information/details and material gathered by the AO and the information supplied by the assessee. The AO made several additions on account of dividend and interest of Rs.31,43,803/-, unexplained receipts Rs.11.63,200/- and unexplained investments Rs.19,86,14,220/-. Although the Tribunal had directed Ld. CIT(A) to admit and consider the books of accounts, the Ld. CIT(A) did not examine the books and passed the appellate order without considering the books of accounts. The reason cited by the Ld. CIT(A) was that the assessee was directed to produce the books before the AO and the AO was directed to submit the remand report but inspite of that no such remand report was furnished despite several opportunities given to the AO. 6. The Ld. A.R. submitted before the Bench that the books of accounts are important piece of evidence for the purpose of determination of income. The Ld. A.R. submitted that since the....
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....T(A) in the first round of litigation but filed before the Tribunal for the first time, can not be relied upon and was rightly rejected by the authorities below. 8. After hearing both the parties and perusing the material on record, we find that dividend and interest income was determined by the AO on the basis of bank statements and dividend warrants filed by the assessee and the said income was duly accounted for by the assessee in the books of accounts. We also note that in view of such massive search on the assessee the books of accounts could not be produced before the AO in the first round of litigation because these could not be computed and only computed in the later series on the basis of information on record available with the assessee. We note that these books were filed as additional evidences for the first time before the Tribunal in the first round and Tribunal after admitting the same restored the matter to the file of the Ld. CIT(A) with the direction to decide the appeal of the assessee after considering the said books of accounts. However, we note that Ld. CIT(A) has again disregarded the books of accounts filed by the assessee without even pointing a single d....
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....rious sources was treated as the investments of the appellant made during the year. The said list was marked as Annexure 1 to the assessment order. The assessee was called upon by the AO to furnish the evidences in respect of the investments as listed in Annexure 1 and made by her during the year. Accordingly, the assessee filed Investment in Share Account and contract notes in support of purchase of shares to substantiate and explain the investments made by her. The AO, however, concluded that the evidences filed by the assessee till 20.02.1995 are considered as explained though no such notice was given and the assessment order which could have been passed by 31.03.1995 was suddenly passed on 28.02.1995 after seeing the compliance being made by the assessee. In fact, a list of the investments made and supported by evidences filed vide and upto letter dated 20.02.1995 is prepared and marked as Annexure 2. It was explained that for the reasons best known to AO, he ignored the evidences filed vide letter dated 21.02.1995, 28.02.1995 and 01.03.1995. He accordingly passed the order on 28.02.1995, treating the difference between the investment, as per Annexure 1 and the investments as p....
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....ing the aforesaid reliefs. The Ld. CIT(A) also directed the Assessing Officer that the amount of addition so sustained should be determined by adopting the purchase rate of the shares so treated as unexplained on the basis of the date of purchase found in the various correspondences and the information gathered by the AO and also after considering the submissions of the assessee. Thus, even the challenge to valuation adopted by the AO was granted in favour of the assessee. 12.The ld. AR submitted that such residual additions sustained by the Ld. CIT(A) were incorrect and unjustified for several reasons. It is stated that the additions sustained by the Ld. CIT(A) are summarised at Page 1 of PB. The ld AR submitted that investments treated as unexplained are liable to be deleted as they were duly recorded in the aforesaid books of accounts and can also be proved with the help of contemporary evidences which are available on record that these were accounted for investments of the assessee. In this regard, reliance is placed by the ld AR on the following evidences which conclusively prove that these investments were made by the assessee and that the same does not represent unrecorde....
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....and 8 of the statement, he accepted that the contract notes were issued by him to various clients which includes the appellant. [Page No. 109-112 of PB No. 1]. m. Corresponding ledger account of the appellant in books of all the 3 brokerage firms reflecting these very transactions made by them on behalf of the appellant [Page No. 506-515 of PB No. 3] n. Affidavit dated 11.10.2006 filed by the appellant before the Hon'ble Special Court in MA No. 337 of 2006 (Para 9, 12-15 of the Affidavit)confirming purchase of shares being made by brokers on credit on behalf of the assessee.[Page No. 627-645 of PB No. 4] 13.Further, the ld. AR also submitted that the fact that the shares were purchased by the assessee through the aforesaid 3 brokerage firms of the family was also accepted by the Hon'ble Special Court and Hon'ble Supreme Court. The appellant relied on the following orders in the cases of other family members wherein the averments have been made that the purchase of shares made by the appellant were sourced out of funds provided by the 3 brokerage firms and that these shares were acquired on credit extended by them and decided in favour of these entities: ....
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....ellant in the books of accounts and that the investments were made out of the credit granted by the 3 brokerage firms in the family. Under these circumstances, these investments cannot be treated as unexplained u/s. 69 of the Act. This is because not only these investments have been proved to be recorded in the books of accounts, the nature and source of the said investments have also been explained by way of several evidences listed above. 17. The appellant further submitted that identical nature of addition was made in the case of Hitesh S. Mehta v. ACIT [ITA No. 5190/Mum/2017][Page 713-736 of PB No. 4]for A.Y. 199293 wherein identical addition was made by the AO and the relief granted by the Ld. CIT(A) was also of the identical nature. In the said case, the Hon'ble Tribunal has deleted the said addition and decided the issue in favour of the assessee (Para 8-14, Page 9-14 of the order). In light of the above, the appellant humbly prayed that the addition made in the case of the appellant may kindly be deleted. 18. Per contra ld DR relied heavily on the order of authorities below and justified the additions made by AO on account of unexplained investments in shares and secu....
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....08 of PB No, 1. We have gone through these affidavits and find that the brokerage firms who have purchased shares on behalf of the appellant and duly confirmed these purchases. In fact, they have also provided the list of shares purchased by them on behalf of the appellant, which covers the investments treated by the Assessing Officer as unexplained. Our attention was also invited to the statement of Shri Ashwin Mehta recorded u/s. 131 of the Act on 22.06.1996, wherein he had accepted that shares were purchased by his brokers on behalf of the family members including the appellant. It is also noted that the custodian in its affidavit dated 01.03.2006 has accepted that the shares are purchased on behalf of the family members including the appellant by the brokerage firms of Harshad Mehta, Ashwin Mehta and Jyoti Mehta. As such, in our opinion, there are ample evidences submitted by the appellant to prove that the shares were acquired by her through the brokerage firms on credit, and that the shares are duly reflected in your books of accounts and that they are fully explained. We also note that this plea of the assessee has been accepted by the Hon'ble Special Court and also the ....
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....the mentioned that the order of the Tribunal was challenged of the revenue before the Hon'ble High Court and Hon'ble Bombay High Court vide order dated 07.06.2016 in ITA. No. 2490 of 2013 has upheld the views of Tribunal and dismissed the question of law raised by the revenue. The case of the assessee is also supported by the decision of the Tribunal in the case of assessee's brother Late Shri Harshad S. Mehta in ITA. No.637/M/2007 dated 02.01.2008 wherein it was categorically observed that wherever additions were made on the basis of seized material or material collected from third parties and copies thereof were not provided to the assessee, in that case, the addition cannot be made. It was also held that if the assessee has requested for the cross examination, an opportunity must be provided to the assessee for such cross examination. So far as, the second amount of 7,28,925/- representing the addition made on the basis of letters filed by four companies as mentioned at serial no. 9 to 12 in para no. 9 above, we find that in the said letters details provided were incomplete as it is not clear whether the same pertain to the year under consideration. For example, the details and ....
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.... were shown in the respective income and other accounts respectively and prayed before the Bench that the addition may kindly be deleted as all the details of these credits are available in the books. 23. The Ld. D.R., on the other hand, relied heavily on the order of authorities below. 24. After hearing both the parties and perusing the material on record, we find that the assessee has furnished the details of these deposits at page No.119 which is reproduced as under: Sr. No. Dates Particulars Amount 1 31.03.92 Refund of share application money and interest on shares 6,94,863 2 31.03.92 Saving Bank Interest 5,912 3 15.02.92 Suspense 1,35,300 4 06.07.91 Cash deposit-reversed 1,100 5 17.09.91 Dividend income 2,402 6 01.10.91 Interest Income 14,150 7 01.10.91 Miscellaneous Income 12,300 8 19.10.91 Dividend income 750 9 12.12.91 Refund of share application money and interest on shares 2,95,000 10 11.01.92 Dividend income 450 11 12.01.92 Dividend income 224 12 15.02.92 Dividend income 600 13 12.03.92 Dividend i....
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....7 and others] for A.Y. 2010-11 and others dated 28.12.2017 (Para 32-333 of the order) [Page 772-812 of PB No. 4]. b. Hitesh S. Mehta v. DCIT [ITA No. 5190/Mum/2017] for A.Y. 1992-93 dated 31.08.2020 (Para 18-22 of the order) [Page 713736 of PB No. 4]. c. Growmore leasing and investments Ltd v. DCIT [ITA No. 6091-6093/Mum/2018] for A.Y. 2013-14 to A.Y. 2015-16 dated 16.12.2020 (Para 7-8 of the order) [Page 737-754 of PB No. 4]. d. Harsh Estates Pvt. Ltd. v. DCIT [ITA No. 69576959/Mum/2018] for A.Y. 2013-14 to A.Y. 2015-16 dated 15.09.2020 (Para 4-18 of the order) [Page 755-771 of PB No. 4]. 27. The Ld. D.R., however, relied on the grounds of appeal and order of authorities below. 28. We have heard the rival submissions of both the parties and perused the material on record. We find that the issue has been decided by the coordinate benches under identical facts in the assessee's own case in ITA No.5804/M/2017 & others for A.Y. 2010-11 & ors. vide order dated 28.12.2017. We, therefore, respectfully following the decision of the co-ordinate bench of the Tribunal in assessee's own case in A.Y. 2010-11 and also in the case of family members set aside the ....
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.... referred paras as under : "6. The only other issue in this appeal is with regard to the chargeability of interest under section 234A, 234B & 234C of the Act. On this aspect, pleas of the assessee are two fold. First, the plea is to the effect that the provisions of section 234A, 234B and 234C are not applicable to notified entity. This aspect of the matter is required to be held against the assessee following the judgment of the Hon'ble Bombay High Court in the case of Divine Holdings Pvt. Ltd( ITA No.3334 of 2010 dated 7/3/2012), as decided by our Co-ordinate Bench in the case Eminent Holdings Pvt. Ltd. in ITA NO.2139/Mum/2013 dated 18/6/2014, which also was a case of notified entity under the Special Court (Trial of Offences relating to transactions in Securities) Act, 1992. At the time of hearing this aspect of the matter was fairly conceded by the Ld. Representative of the assessee. 6.1 The second plea of the assessee is with regard to the quantum of interest chargeable under section 234A, 234B & 234C of the Act which is to the effect that the interest should be charged after considering the amount of tax deductible at source on the income assessed. Similar plea of th....
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....elete the addition in respect of shares which were received by the assessee as bonus issue received by the company and also shares received upon conversion of convertible debentures. We also note that a similar relief has been granted by Ld. CIT(A) in assessee's husband's case namely Shri Sudhir S. Mehta vide order dated 11.03.2014, a copy of which is filed at page No.338 to 374 of paper book No.1 and the said relief was not challenged by the Revenue before the Tribunal. The impugned order of the Tribunal in case of Shri Sudhir S. Mehta in ITA No.3917/M/2014 dated 16.12.2015 is filed at page No.377 to 383 of paper book No.1. During the course of hearing before us the Ld. A.R. also referred to the decision of the family member wherein similar reliefs were granted and all these orders of Ld. CIT(A) were accepted by the AO and no further appeal was preferred. The details of such orders are as under: a. Order of Ld. CIT(A) dated 20.01.2012 in the case of Smt. Deepika A. Mehta for A.Y. 1992-93.[Page 163-199 of PB No. 1] b. Order dated 29.08.2012 giving effect to Ld. CIT(A)'s order in the case of Smt. Deepika A. Mehta for A.Y. 1992- 93.[Page 200-202 of PB No. 1] ....