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TMI Blog2014 (9) TMI 888X X X X Extracts X X X X X X X X Extracts X X X X ..... rched. Assessment proceedings under Section 153A of the Act were initiated followed by issuance of notice by the Assessing Officer for filing true and correct return of total income. The assessee vide his letter dated 22nd March, 2007 stated that the returns as filed according to the following table be treated as filed in response to notice under Section 153A of the Act:- Assessment Year Return filed Date Amount (Rs.) 2000-01 31/10/2000 32,030/- 2001-02 31/10/2001 52,560/- 2002-03 31/10/2002 69,225/- 2003-04 28/11/2003 68,258/- 2004-05 01/11/2004 1,79,879/- 2005-06 31/10/2005 1,82,762/- 2006-07 31/10/2006 2,26,15,330/- 3. For the purpose of record, we note that the assessment year 2005-06 is not subject matter of the present appeals and is a subject matter of ITA 461/2014. In ITA 461/2014 relating to assessment year 2005-06, we have issued notice on the addition made by the Assessing Officer of Rs. 1,74,17,828/- for unaccounted sales and Rs. 99,88,104/- on account of unaccounted purchases. Disallowance of 50% expenditure/payments to contractors 4. The first issue raised in the present appeals relates to disallowance of 50% of expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion of law. The Commissioner of Income Tax (Appeals), after applying his mind and after perusal of the remand report, both before and after admitting the evidence, had decided the issue in favour of the respondent-assessee. The Assessing Officer in the remand report could not point out and controvert the documents and details provided. Genuineness of the documents was not doubted. The similar expenditure had been allowed in the earlier years also. The finding being factual, we do not find any reason to interfere with the order passed by the Tribunal. The submission that the Tribunal has not gone into specific details and, therefore, the impugned order requires interference, is without merit. The Revenue was appellant before the Tribunal and should have pointed out the defects in the reasoning given by the Commissioner of Income Tax (Appeals) with reference to specific documents and papers or the inquiries made by them. No such attempt, it is apparent, was made by the Revenue. Additions under Section 68 of the Act and other additions 7. The second addition made by the Assessing Officer was under Section 68 of the Act on account of unexplained cash credits. It would be appropriat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar Khanna appeared to be genuine. Thus this addition was deleted. It is noticeable that in respect of cash credit of Rs. 1,00,000/- from Raju Bhutani, the addition made by the Assessing Officer has not been deleted. The appeal filed by the Revenue on the assumption that the addition made in the case of Raju Bhutani is deleted, is factually wrong and incorrect. ITA 459/2014 (Assessment Year 2002-03) 10. Addition of Rs. 10,14,947/- was made under Section 68 of the Act on account of failure to substantiate and file confirmation of loans from Shyam Arora of Rs. 3,00,000/-, Suman Girdhar of Rs. 2,64,947/- and M/s Ashish Impex of Rs. 4,50,000/-. For the reasons noted earlier, the Commissioner of Income Tax (Appeals) took on record the additional evidence after calling for remand report, in respect of credit from Shyam Arora, Suman Girdhar and M/s Ashish Impex. Shyam Arora had sent a copy of statement of accounts including his income tax return which was accepted by his Assessing Officer. Similarly, in case of Suman Girdhar, the loan was taken on interest and tax was deducted at source on the interest paid. Bank statement of Suman Girdhar establishing availability of funds, income tax r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ta Chaudhary, i.e. R.C. Dandona had made a gift of Rs. 25,00,000/- and she had received another gift of Rs. 40,000/- from her uncle H.C. Dandona., but the total amount of credit to her capital account was Rs. 32,40,000/-, and, therefore addition of Rs. 7,00,000/- was made. The Commissioner of Income Tax (Appeals) has deleted addition of Rs. 5,00,000/-, and not the entire addition of Rs. 7,00,000/- as has been wrongly stated in the grounds of appeal filed before us. Several contentions were raised before the Commissioner of Income Tax (Appeals) including the legal submission that the addition should not be made in the hands of the assessee firm but in the hands of the individual partner. Mukta Chaudhary had enclosed and filed evidence/material in the form of bank statement, acknowledgment of income tax return in which she had declared and accounted for the investment in the capital account of the assessee firm. She had received another gift of Rs. 5,00,000/- from her father and evidence in that regard was enclosed. In the second remand report, the Assessing Officer accepted that, Mukta Chaudhary had made payments towards capital account by way of two cheques of Rs. 2,00,000/- and Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,50,00,000/- and as corollary, addition on account of undisclosed sale should not be made. The Commissioner of Income Tax (Appeals) observed that the Assessing Officer in the remand report had not made any adverse comments on the arguments put forth and, therefore, he accepted the statement of the assessee and hence addition of Rs. 5,26,446/- was deleted. The Commissioner of Income Tax (Appeals) has also observed that this addition has to be considered along with surrender of Rs. 2,50,00,000/- made in the subsequent year on account of excess gold found during the search. The aforesaid finding has been affirmed by the Tribunal. Looking at the amount involved and the remand report which was submitted, we are not inclined to interfere with the finding recorded by the Tribunal. It is factual. However, we record that this would not affect and should not be construed as a positive finding by the High Court on question of telescoping surrender of Rs. 2,50,00,000/- and the impact or effect thereof. We have issued notice in ITA No. 461/2014 relating to the Assessment Year 2005-06 and this order will not be considered as final and binding on the said question. ITA No. 458/2014 (Assessment Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - may be undisclosed income of the assessee. It was noticed that during the year in consideration, only Rs. 1,00,000/- had been received from Anita Saini. It was also observed that confirmation of Anita Saini had not been brought on record. The Commissioner of Income Tax (Appeals) deleted the addition in the case of Sneh Arora after noticing the facts observing that confirmation had been filed, bank statement and copy of her income tax return had also been filed. She had accepted the factum that she had given the loan. However, the Commissioner of Income Tax (Appeals), had confirmed addition of Rs. 1,00,000/-, as no confirmation had been filed in the case of Anita Saini. The balance amount represented the opening balance of the earlier year. Thus, in all addition of Rs. 1,17,838/- was confirmed and the balance addition of Rs. 31,16,412/- was deleted. 19. The Commissioner of Income Tax (Appeals) observed that the Assessing Officer in the remand report had not given any adverse comments on the evidence produced. Non-declaration or failure of Sneh Arora to show that interest would not prove that the loan was not genuine. In the absence of any other reason mentioned by the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material, which would not have been accepted or relied upon by a reasonable person conversant with the law. If the finding is based upon surmises, conjectures or suspicion and is not rationally possible. A factual conclusion is regarded as perverse when no person duly instructed or acting judicially could act upon the record before him, have reached the conclusion arrived at by the tribunal/authority" 23. In the present case the Assessing Officer in the second remand report on several accounts/additions accepted that the additional evidence placed on record was sufficient to show that the transactions were genuine and addition could not be sustained. In spite of second remand report, Revenue has preferred appeals on even issues or amounts, which were accepted as genuine. In respect of other amounts/transactions, not accepted by the Assessing Officer in the remand report, we have referred to the findings recorded by Commissioner of Income Tax (Appeals) in favour of the respondent-assessee and observed why and for what reason we do not think the said findings can be treated as perverse or based upon no material or evidence. Further, Revenue was aggrieved by the order passed by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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