9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (2) TMI 591 - AT - Income TaxAddition u/s 69A - Unexplained cash credit - HELD THAT - We find the assessee before the AO had categorically stated that Mamaji Mataji were staying with the assessee and he used to handover business cash to them for safe custody whenever he used to go out of station for either business purposes or personal work. The assessee has also given the availability of cash on 07.07.2010 (the date of entry in the seized document) in the books of accounts of various proprietorship concerns and companies in which the assessee is a director which is more than the amount of 10.00 lakhs. Therefore merely stating that the explanation is not acceptable is not justified. Since the availabilities of cash on 07.07.2010 in the books of accounts of various concerns of the assessee is not doubted therefore we are of the considered opinion that the Ld. CIT(A) is not justified in sustaining the addition of 10, 00, 000/-. The order of the Ld. CIT(A) on this issue is therefore set-aside and the AO is directed to delete the addition Unexplained property purchased - search proceedings - HELD THAT - We find the assessee had stated categorically before the AO that these are rough calculation for purchase of property which did not materialize. It is an admitted fact that no such document or papers pertaining to purchase of any property was found either during the course of search or post search enquiries. Apart from the noting in the seized papers the revenue has no other evidence of purchase of any property by the assessee. No post search enquiry or investigation was conducted by the AO to find out if at all any property has been purchased - no document/paper relating to the so called property was either found during the course of search or post search enquiry and no independent evidence was either found during the course of search or collected subsequent to the search therefore in the light of the above decisions the assessee in our opinion cannot be fastened with the liability. We therefore set-aside the order of the ld. CIT(A) on this issue and direct the AO to delete the addition. Ground of appeal No.4 is accordingly allowed. Addition u/s 69A - HELD THAT - So far as argument of Learned Counsel for the Assessee that telescoping benefit should be given is concerned the same is acceptable in view of the decision of the Hon ble Delhi High Court in the case of CIT vs. Sonal Construction reported 2012 (11) TMI 11 - DELHI HIGH COURT where has accepted the theory of benefit of telescoping. We therefore direct the A.O. to allow the benefit of telescoping and deduct the addition of 10, 55, 000/- from profits from bogus purchases etc. added in the hands of the assessee and his proprietorship concerns and in the case of the 02 companies namely LV Rustore Applications (P) Ltd. and RR Carwell Private Ltd. where he is a Director and is the controlling person. The A.O. shall do the necessary calculation and the ground raised by the assessee on this issue is accordingly partly allowed in terms indicated above. Unexplained money - HELD THAT - As letters were found and seized during the course of search and the letters clearly and categorically mention that an amount of 40 lakhs was given by R.A. Financial Services to Shri Rattan Prakash Mishra President Omshanti Educational Society and the assessee was only an intermediary therefore adding the same to the income of the assessee in our opinion is not justified. Accordingly the order of the Ld. CIT(A) on this issue is set aside and the ground of appeal number 8 raised by the assessee is allowed. Addition based on seized document as an MOU entered into between the assessee and Gyaneshwar Education Trust - HELD THAT - In the instant case we find it is peculiar case where the assessee is denying to have made any payment as per the MOU and the second party in the MOU is absconding and is a proclaimed person. However it is also a fact that the MOUs were found from the premises of the assessee and therefore the onus is on the assessee to prove that the assessee has not paid the amount as mentioned in the first and second MOU and that these MOUs are only for securing the payments made earlier with interest and interest on interest. In our opinion the matter requires a revisit to the file of the AO to examine certain things to find out the truth before making any addition. i. The AO shall summon and record the statement of Mr. Sanjay Gupta who is a witness to the MOU and the notary in whose register the same has been entered to find out the facts and veracity of the MOU. ii. The AO shall also summon and record the statement of Mr. O.P. Gulati in whose name receipts were found and which are related the MOU. iii. In case the above persons do not respond to the summons issued by the AO the onus shall be on the assessee to produce them before the AO. If the assessee fails to produce them and they do not respond to the summons then the AO may take adverse view. AO shall decide the issue in the light of our above observation and in accordance with law after giving due opportunity of being heard to the assessee. Non-granting of credit received from Mr. Abhay Salwan and R.A. Financial Services while computing the peak cash balance - HELD THAT - We find it is the contention of the ld. Counsel for the assessee that benefit of 50 lakhs as per receipt dated 01.01.2012 seized during the search and received back from Mr. Abhay Salwan and R.A. Financial Services should be given for computing the peak cash balance Similarly it is also his submission that the Assessing Officer has not given the benefit of 50 lakhs as per seized documents dated 15.12.2011 seized during the course of search relating to L.V. Rustor Application Pvt. Ltd. where the assessee is shareholder and director and amount being received back from Mr. Abhay Salwan and R.A. Financial Services along with interest should be considered for computing the peak cash balance. Considering the totality of the facts of the case and in the interest of justice we deem it proper to restore this issue to the file of the AO with a direction to decide the issue afresh. Addition being interest @ 2.6% of cash loan - HELD THAT - Since the issue relating to the addition on the basis of the MOU as per ground of appeal No.3 has been restored to the file of the AO for fresh adjudication therefore this ground is also restored to the file of the for fresh adjudication by the AO. Addition to the total income of the assessee being unsecured loans - HELD THAT - As amount of 30, 00, 000/- received by the assessee are in fact the recovery of principal amount earlier given to Mr. Abhay Salwan and the addition made by the AO and sustained by Ld. CIT(A) are on presumption basis. It is the settled position of law that for allowing any cash credit as genuine the onus is always on the assessee to substantiate with evidence to the satisfaction of the AO regarding the identity and creditworthiness of the loan creditor and genuineness of the transactions. However the assessee in the instant case has not discharged the onus. The submission of the ld. counsel for the assessee that these are in fact recovery of principal amount also needs to be established by the assessee.
Issues Involved:
1. Legality of assessment proceedings under section 153A. 2. Additions made under section 69A for unexplained money. 3. Additions based on rough notings and presumption. 4. Telescoping of additions. 5. Interest income on loans given. 6. Disallowance of interest on housing loans. 7. Identity, genuineness, and creditworthiness of unsecured loans. Issue-wise Detailed Analysis: 1. Legality of Assessment Proceedings under Section 153A: The assessee challenged the initiation, continuation, and conclusion of assessment proceedings under section 153A, arguing that no incriminating material was found during the search. The Tribunal dismissed the general grounds as not pressed or general in nature. 2. Additions Made under Section 69A for Unexplained Money: - AY 2011-12: The AO made additions based on entries in seized documents indicating cash transactions. The Tribunal found that the cash available with the assessee in various entities was sufficient to cover the disputed amounts. Therefore, the addition of ?10,00,000 was deleted. - AY 2013-14: The AO made an addition of ?2,39,25,000 based on an MOU indicating a loan given to Gyaneshwar Education Trust. The Tribunal restored the issue to the AO for fresh adjudication, directing the AO to summon and record statements of relevant witnesses and notaries to verify the authenticity of the MOU. - AY 2014-15: The AO made an addition of ?3,59,64,000 based on another MOU. The Tribunal restored the issue to the AO for fresh adjudication, similar to the previous year. - AY 2016-17: An addition of ?1,00,000 was made based on a seized document. The Tribunal upheld the addition but directed the AO to allow the benefit of telescoping. 3. Additions Based on Rough Notings and Presumption: - AY 2011-12: Additions of ?11,00,000 and ?14,00,000 were made based on rough notings. The Tribunal found these to be unsupported by corroborative evidence and deleted the additions. - AY 2013-14: Similar additions were made based on rough notings. The Tribunal restored the issue to the AO for fresh examination. - AY 2014-15: The Tribunal restored the issue to the AO for fresh adjudication. 4. Telescoping of Additions: The Tribunal accepted the principle of telescoping, allowing the assessee to set off unexplained money against profits from bogus purchases and other sources. This was applied across various assessment years. 5. Interest Income on Loans Given: - AY 2011-12: The AO added ?11,25,000 as interest income based on seized documents. The Tribunal deleted the addition, citing lack of evidence and the fact that the debtor was a proclaimed offender. - AY 2013-14: An addition of ?41,86,000 was made as interest on a loan to Gyaneshwar Education Trust. The Tribunal restored the issue to the AO for fresh adjudication. - AY 2014-15: Similar additions were made, and the Tribunal restored the issues to the AO for fresh adjudication. - AY 2015-16: Additions of ?90,00,000 were made as interest income. The Tribunal restored the issue to the AO for fresh adjudication. 6. Disallowance of Interest on Housing Loans: - AY 2013-14: The AO disallowed ?3,04,832 as interest on housing loans, which was upheld by the Tribunal due to lack of satisfactory explanation. - AY 2014-15 and 2016-17: Similar disallowances were upheld by the Tribunal. 7. Identity, Genuineness, and Creditworthiness of Unsecured Loans: - AY 2015-16: The AO added ?30,00,000 as unexplained unsecured loans. The Tribunal restored the issue to the AO for fresh adjudication, allowing the assessee to substantiate the identity, genuineness, and creditworthiness of the loan creditors. Conclusion: The Tribunal provided detailed directions for fresh adjudication of several issues, particularly those involving significant amounts and complex transactions. The principle of telescoping was accepted, and the Tribunal emphasized the need for corroborative evidence before making additions based on rough notings and presumptions.
|
