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2013 (7) TMI 762 - AT - Income TaxAddition under section 69A of the Income Tax Act, 1961 - Assessing Officer made the additions for the three years under consideration on account of transactions made by the assessee with one Shri Brij Mohan Gupta and his associates - As per the scheme of Section 69A, the onus to prove the ownership of the assessee over money etc, is on the assessing officer Held that - So far as regards the allegation that the assessee failed to prove that Shri B.M. Gupta was not known to it, the assessee s affidavit in this regard, filed before the Assessing Officer in the first round, is at APB 82-83. Therein, Shri Virender Kumar, partner of the assessee firm, has categorically stated on solemn affirmation and oath, inter alia, that the firm had never advanced any sums to, or taken loan from, anybody, which was not disclosed in its books of account; that neither the assessee firm, nor its partners ever had any financial or business relation with Shri Brij Mohan Gupta or his family members or any concern belonging to them; that neither the assessee firm, nor Shri Virender Kumar, its partner, had advanced/taken any sum to Shri Brij Mohan Gupta or his family or their concerns, if any, in Assessment Year 2001-02, as stated by the Assessing Officer. As against this affidavit, no other evidence was brought by the Assessing Officer against the assessee - The case of the department, has been built on a non-existent edifice. There is not even an iota of evidence which may lead to a conclusion embroiling the assessee in the alleged hundi transactions and, in the absence of evidence, there was no scope for slapping the additions on the assessee for all these three years. There is no corroborative evidence regarding the alleged cash loans or hundis Decided against the Revenue.
Issues Involved:
1. Deletion of additions made under Section 69A of the IT Act. 2. Conclusion by CIT (A) that the assessee received loans from a specific group. 3. Confirmation of reassessment proceedings by the Assessing Officer under Section 147. Issue-Wise Detailed Analysis: 1. Deletion of Additions under Section 69A of the IT Act: The primary issue was the deletion of additions made by the Assessing Officer (AO) under Section 69A of the IT Act for the assessment years 2001-02, 2002-03, and 2005-06. The AO had made these additions based on transactions involving the assessee and Shri Brij Mohan Gupta and his associates. The CIT (A) deleted these additions, stating that the AO did not provide the assessee with the statements of third parties or the opportunity to cross-examine them, thus violating the principle of natural justice. The Tribunal observed that the AO failed to establish a case against the assessee, as no corroborative evidence was gathered, and the assessee was not given a fair opportunity to rebut the claims. The Tribunal restored the issue to the AO for fresh consideration, emphasizing the need for the AO to provide the assessee with the opportunity to cross-examine the concerned persons and to conduct further necessary inquiries. 2. Conclusion by CIT (A) on Loan Transactions: The department contended that the CIT (A) erred in concluding that the assessee received loans from Shri Brij Mohan Gupta's group, whereas the incriminating documents suggested that the assessee was a loan provider. The Tribunal noted that the AO's reliance on statements made during the search was not substantiated by corroborative evidence. The statements of Shri Rajiv Gupta and Shri Ram Avtar Singhal, recorded in the second round of assessment, denied any knowledge of transactions with the assessee. The Tribunal found that the AO's conclusion was based on assumptions and lacked concrete evidence. The Tribunal upheld the CIT (A)'s decision to delete the additions, as the department failed to provide substantial proof of the assessee's involvement in the alleged transactions. 3. Confirmation of Reassessment Proceedings under Section 147: The assessee's cross-objections challenged the initiation of reassessment proceedings under Section 147, arguing that it was based on a mere change of opinion, as the AO had previously initiated and dropped proceedings under Section 153C on the same set of facts. The Tribunal did not specifically address this issue in detail, as the primary focus was on the deletion of additions under Section 69A. However, the Tribunal's decision to dismiss the department's appeals and uphold the CIT (A)'s orders indirectly supported the assessee's contention that the reassessment proceedings were not justified. Separate Judgments: There were no separate judgments delivered by different judges in this case. The order was pronounced collectively by the bench. Conclusion: The Tribunal confirmed the CIT (A)'s orders deleting the additions made under Section 69A for the assessment years in question, as the department failed to provide substantial evidence against the assessee. The reassessment proceedings under Section 147 were indirectly deemed unjustified, as the primary issue of additions under Section 69A was resolved in favor of the assessee. The appeals filed by the department were dismissed, and the cross-objections filed by the assessee were dismissed as infructuous.
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