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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 ..... oan was genuine - this would not affect and should not be construed as a positive finding by the High Court on question of telescoping surrender and the impact or effect. Notice u/s 153A – Held that:- The AO 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 respect of other amounts/transactions, not accepted by the AO in the remand report, Revenue was aggrieved by the order passed by the CIT(A) and was the appellant before the Tribunal – thus, the order fo the Tribunal is upheld – Decided against revenue. - Income Tax Appeal 455/2014, Income Tax Appeal 456/2014, Income Tax Appeal 457/2014, Income Tax Appeal 458/2014, Income Tax Appeal 459/2014, Income Tax Appeal 460/2014 - - - Dated:- 26-9-2014 - Sanjiv Khanna And Rajiv Sahai Endlaw,JJ. For the Appellant : Mr. N.P. Sahni, Sr. Standing Counsel with Mr. Nitin Gulati, Jr. Standing Counsel. For the Respondent : Dr. Rakesh Gupta, Advocate. ORDER Sanjiv Khanna, J. This common decision will dispose of the aforestated income tax appeals filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re as under:- Assessment Year ITA No. Total Payments made to Karigars (as claimed) (Rs.) Ad hoc disallowance made by AO (50% of charges claimed) (Rs.) 2000-01 457/14 3,26,439/- 1,63,220/- 2001-02 456/14 4,88,831/- 2,44,415/- 2002-03 459/14 6,87,174/- 3,43,587/- 2003-04 455/14 6,79,915/- 3,39,957/- 2004-05 460/14 7,56,881/- 3,78,440/- 2006-07 458/14 11,57,837/- 5,78,918/- 5. The Assessing Officer held that the assessee had not furnished details of expenses towards making charges inspite of letter dated 6th December, 2007. It was observed that the said making charges were partly paid in cash and vouchers with complete address of the Karigars to whom payments were made, were not furnished. Accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 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 appropriate and proper to deal with the figures and the details involved separately for each assessment year. We shall also examine other additions made and subject matter of each appeal. ITA No. 457/2014 - Assessment year 2000-01 8. The Assessing Officer made an addition of ₹ 26,67,188/- under Section 68 of the Act. The Commissioner of Income Tax (Appeals) deleted the addition of ₹ 24,84,868/-, received from M/s Sheenu Finance Company, while addition of ₹ 1,82,320/- made on account of credit received from Rekha Goyal was upheld. The assessee, before the Commissioner of Income Tax (Appeals), had filed several details and pointed out that one Kewal Garg was proprietor of both M/s Sheenu Finance Company as well as M/s Gold Craft. They filed copy of the ledger of M/s Sheenu Finance Company for the relevant period. The additional evidence was accepted on record as it was submitted that the confirmations were asked by a questionnaire date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment 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 return, etc., were filed. Confirmation of M/s Ashish Impex, PAN, bank statement and income tax returns were also filed. The Assessing Officer, in the remand report accepted that the aforesaid loans were genuine. In these circumstances, addition of ₹ 10,14,947/- was deleted and the said order has been affirmed by the Tribunal. ITA 455/2014 (Assessment Year 2003-04) 11. In this year, addition of ₹ 10,00,000/- was made on account of unverified, undisclosed and unsecured loan from Renu Pruthi as this could not be substantiated by producing confirmation, etc. before the Assessing Officer. However, the Commissioner of Income Tax (Appeals) accepted the application for taking on record the additional evidence after recording the reasons set out and noticed earlier. The respondent assessee had placed on record, copy of PAN card and confirmation from Renu Pruthi. She was an income tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and accounted for the investment in the capital account of the assessee firm. She had received another gift of ₹ 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 ₹ 2,00,000/- and ₹ 5,00,000/-, and she had established that ₹ 5,00,000/- was gifted to her by her father but in respect of ₹ 2,00,000/- confirmation and details were not filed and the said amount remained unexplained. Accordingly, the Commissioner of Income Tax (Appeals) deleted addition of ₹ 5,00,000/-, and confirmed addition of ₹ 2,00,000/-. The said decision has been affirmed by the Tribunal. ITA No. 460/2014 (Assessment Year 2004-05) 13. Assessing Officer made an addition of ₹ 2,62,292/- as representing unexplained and unsecured credit of ₹ 1,07,200/- given by Anita Saini and ₹ 1,55,092/- given by Naresh Girdhar for failure to file confirmation, bank account statement, etc. The assessee had submitted that ₹ 40,000/- was received from Naresh Girdhar during the year and ₹ 1,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 ₹ 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 Year 2006-07) 15. As noticed above, the assessee for this year had filed income tax return of ₹ 2,26,15,330/- in response to notice under Section 153A. 16. The Assessing Officer made an addition of ₹ 32,34,250/- under Section 68 of the Act as confirmations, bank accounts statements, income tax returns of the persons who had given unsecured loans were not brought on record. The Assessing Officer noticed that as per the balance sheet, the respondent assessee had shown unsecured loans and was asked to furnish confirmation, copy of bank statement and returns of the said creditors. Some details were furnished but copy of income tax returns and bank statements in respect of Ruma Bhutani (Rs.2,00,000/-), Karuna Nagpal (Rs.5,00,000/-) and S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing balance of the earlier year. Thus, in all addition of ₹ 1,17,838/- was confirmed and the balance addition of ₹ 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 Officer, the addition was deleted. It is noteworthy that Sneh Arora had been identified and had duly confirmed having given the loan. We notice that a part payment had also been made to her. 20. In the grounds of appeal raised by the Revenue in the Assessment Year 2006-07, another issue raised relates to the bills for exhibition expenses of ₹ 1,23,225/-. It is stated that the bills by themselves would not establish that the expenses were incurred wholly and exclusively for business. Confirmation from Sercon India Pvt. Ltd. for payment of ₹ 1,23,225/- for participating in the Delhi Gold Festival exhibition was filed. However, no evidence had been furnished in respect of balance amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 Commissioner of Income Tax (Appeals) and was the appellant before the Tribunal. They should have highlighted and pointed out the factual inaccuracies and the incorrect findings recorded by the first appellate authority. Even before us, except for the remand reports, which have been filed in some appeals, no other details and particulars have been filed to challenge the factual findings recorded as perverse. 24. Given the facts of the present case, we are of the opinion that the decision of the Commissioner of Income Tax (Appeals), upheld by the Tribunal, cannot be termed as being perverse and accordingly we find no reason to interfere with the same. 25. The appeals are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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