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TMI Blog2017 (8) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... pted that there are unaccounted income which covers any specified entries which may open up Pandora’s box and then it cannot be contended that no incriminating material was found during the course of search. Further the order u/s 153A has also been correctly made by ld AO in view of finding of CIT (A) that search was conducted on premises of the assessee. - Decided against assessee. Unexplained cash credit out of the above 13 parties which are located at Kolkata that enquiry letter were issued u/s 133 (6) of the Act to six person only and all of them on 11.02.2013 and 18.03.2013 submitted the information about their annual returns filed with the tax authorities, their bank statement and their annual accounts. The ld first appellate authority also noted that this information received by the AO remained uncontroverted as well as note investigated. The ld CIT(A) further correctly also noted that the flow of funds from the investor companies to the assessee. There is no report available pertaining to the other assessee on whom the Assessing Officer relied very heavily.- Decided against revenue. Unsecured loan from Index Securities without bringing an adverse material on record, the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and on facts. (b) The appellant craves leave to add, alter or amend any/ all of the grounds of appeal before or during the course of the hearing of the appeal." 3. The ground of cross objection are as under:- "1. That it be held that the ld Commissioner of Income Tax (appeals) is justified in deleting the addition of ₹ 106800000/- made by the ITO on account of un explained cash deposits. 2. That it be held that the ld Commissioner of Income Tax (appeals) is justified in deleting the addition of ₹ 15000000/- made on account of unsecured loans from M/s Index Securities & Research Pvt. Ltd., 3. That it be held that the order of the ld CIT(A) is tenable in law and on facts of the case for the reasons that the respondent has furnished all basic information to prove nature of transaction, genuineness of transaction and credit worthiness of subscribers of share application and lenders." 4. Assessee has raised the following additional grounds of appeal:- "1. The appellant has filed cross objection in the appeal filed by the ACIT, Central Circle 9, New Delhi in 7/Del/ 2015 for the assessment year 2008-09. 2. In the said cross objection the assessee has taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the AO. 8. The briefly stated the facts of the case is that the assessee company is engaged in the business of real estate and filed its return of income on 30th September 2008 declared total income of ₹ 233330/-. On 14.09.2010 search and seizure operation was taken in case of the assessee and group concerns and notice u/s 153A was issued on 18.01.2012. In response to that notice the assessee submitted that return of income filed originally may be treated as return of income in pursuance to notice u/s 153A of the Act. During the course of assessment proceedings it was noted by the AO that statement of Shri Jagmohan was taken during the course of search. Sh. Jagmohan surrendered a sum of ₹ 15 crore out of which ₹ 1 crore was covered under the head of jewellery and ₹ 14 crores was on account of other infirmities. Pre search enquiries resulted that companies from whom the loans were taken by the assessee were Kolkata Based company and whose existence was in question, therefore, the ld AO made addition ₹ 10.68 crore as unexplained cash credit u/s 68 of the Act. Further the ground raised by the assessee is that no addition can be made u/s 153A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement of the director and from the submission of the assessee during assessment proceedings, it is apparent that disclosure was also made on account of these loans. In the present case t firstly there was difference in the balance sheet filed by the assessee with The Registrar of Companies and filed with the return of income. Secondly sums were found credited in the bank account of assessee with Axis bank from all these investor companies, which were not explained by the assessee, and subsequently the surrender was made in assessment proceedings, which were confirmed by the assessee during the assessment proceedings. In the present case Sh. Jagmohan Gupta has made a categorical statement for surrendering a sum of ₹ 15 crores during the course of search on Jagat Group of companies where the assessee is also one of the members. Furthermore, the surrender is also corroborated by the statement of Shri Jagmohan Gupta on 19.03.2013 was confronted with itself in balance sheet of the appellant company which is submitted by the assessee along with the return of income and downloaded from the ROC site. The ld AO confronted about the share application money of this company with Axis ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be contended that no incriminating material was found during the course of search. Further the order u/s 153A has also been correctly made by ld AO in view of finding of CIT (A) that search was conducted on premises of the assessee. In views of this we dismiss the cross objection of the assessee. 13. Now we come to the appeal of the revenue in ITA No. 2472/Del/2014, wherein in the first ground addition of deletion of ₹ 10.68 crores on account of unexplained cash credit is challenged. The assessee has received the above amount from 13 companies, which was deposited in Axis Bank Account of the assessee. The ld Assessing Officer made the above addition with respect to all the companies as according to him the assessee did not disclose the above amount and according to him the above companies are based out of Kolkata and their existence are in question. He was further of the view that in case of some other concerns these companies were the investor and summons issued to them were not complied as they were not found existing at their given address. Therefore based on the report of investigation wing in some other concern, he made the addition. ld CIT(A) deleted the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above amounts were found credited in the Axis Bank, Daryaganj, Delhi in the account no. 279010200005890 pertaining to the appellant during the period 14.11.2007 to 31,03.2008. A statement on oath was recorded on 19.3.2013 of Sh, Jagmohan Gupta. In the statement, Sh, Jagmohan Gupta admitted that the amounts were received from M/s. Bharat Buildwell Pvt. Ltd. and that he would furnish the details the next day. Besides, this, Sh. Jagmohan Gupta also filed a letter dated 25.03.2013, where it was re-iterated, that in the statement recorded u/s 132(4) at the time of search, that he surrendered an amount of ₹ 15,00,00,000/-, out of which ₹ 1 cr. was under the head jewellery for the year 2010-11 and the balance ₹ 14 cr. was surrendered for the financial year 2010-11 in his individual hands. However out of ₹ 14 cr. no surrender was made with year wise breakup. As such there was no specific surrender made for the year under consideration on behalf of any related persons or companies. 13.1.2. On perusal of the assessment record, I find that in the course of the assessment proceedings, the Assessing Officer issued summons to 22 parties u/s 133(6) which are based in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he copy of the ledger account and copy of balance sheet for assessment year 2008-09 is enclosed." However on perusal of the bank statements, of the above 6 Kolkata parties submitted in the course of the assessment proceedings, I find that money was transferred through their respective accounts in Kolkata directly to the appellant based in Delhi on 27.12.2007 and 31.12.2007. Therefore the submission made by the appellant as well as the above various parties that money was given to the appellant through M/s. Buildwell Pvt. Ltd. is incorrect and is not supported by any corroborative evidence. 13.1.6. In order to substantiate my view point, the following facts are brought on record in a tabular form to show the flow of money directly from the Kolkata based companies to the appellant and not through M/s. Bharat Buildwell Pvt. Ltd. as claimed by the appellant. S, No. Name of the Company Name of the Bank Date of Withdraw al Amount To Whom 1. M/s. Taral Vincom Pvt. Ltd. 31.12.200 7 75,00,000/ - M/s. Tirupati Infra Projects Pvt. Ltd. Delhi 2. Kanupriya Commercial Pvt. Ltd. Bank of Rajasthan Kolkata Strand Road Kolkata 31.12.200 7 - do - 21,00,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... common with that of the ones in the appellant's case. The Assessing Officer stated that summons were issued to these companies and they remained unanswered and were found to be non-existent at their given address and therefore treated the amounts received by the appellant as bogus and made an addition in the hands of the appellant. Even without bringing any evidence on record for making such addition- 1) There is no report pertaining to M/s. Divine Infracon on record on the basis of which the Assessing Officer inferred a warranty for addition. 2) The AO did not bring on record the names of those companies which were found by him to be common in the case of the appellant as well as in the case of M/s Divine Infracon. 3) Other than the names of the companies being common, no specific findings were given by the AO pertaining to these companies which led him make an addition, despite of sufficient material on record. 4) The AO did not bring on record as to which company's existence was in question as few companies which are based in Kolkata responded to his summons issued u/s 133(6) and furnished details as called for by the AO. In such cases, It was the duty of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant to explain the adversity found against if any. Such an exercise by the AO would have enabled him to bring out the correct and clear picture pertaining to the existence of the companies based in Kolkata, from where the appellant sought unsecured loans. 6) Out of the 13 Companies based in Kolkata and referred by the AO, details like ITRs, audit report, balance sheet profit & loss account pertaining to 6 companies are on record which were called for by the AO u/s 133(6) of the I T Act 1961. These are M/s A K P Tie up Pvt. Ltd., M/s. Taral Vinvom Pvt. Ltd., M/s. Kanupriya Commercial Pvt. Ltd., M/s. Jagran Merchants Pvt. Ltd., M/s. Dressier Commodities Pvt. Ltd., M/s. Khusaboo Pvt. Ltd. From the details on record, it is seen that summons u/s 133(6) were not issued to the other parties which are also based in Kolkata as no details pertaining to them are placed on record. These are- 1) M/s. Chandimata Management Pvt. Ltd. 2) M/s. Columbia Granities Pvt. Ltd. 3) M/s. Galaxy Tie up Pvt. Ltd. 4) M/s. Iskon Impex Pvt. Ltd. 5) M/s. Paridhi Finvest Pvt. Ltd. 6) M/s. Three C Universal Developers Pvt. Ltd. 7) M/s. Rasika Garments Pvt. Ltd. 7) In the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nctive features of the entire journey of the money from the bank account of the respective entity in Kolkata to the bank account of the appellant in Delhi has been discussed by the Assessing Officer with supporting documentary evidence. 13.1.8. On the basis of the above discussion it seen that as per the provisions of section 68 of the I T Act 1961, the appellant complied to the extent of establishing the identity of 6 companies by issuing summons u/s 133(6) which were responded by them by confirmations supported with (i) Copy of the acknowledgment of ITRs showing PAN, address, status, date of filing, income returned. (ii) Copy of the bank statement from where the amounts were transferred to the appellant company. Transfer of the money was not through disputed channels. (iii) Income returned, supported with audit report, balance sheet and profit and loss a/c to show the creditworthiness of these companies. 13.1.9 However, the Assessing Officer did not carry out any further enquiries pertaining to these 6 companies to lift the veil and to establish the actual and true color of the transactions lying beneath the superficial layer. The Assessing Officer did not confront ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord by the Assessing officer from the details submitted by them. b) In case of few other companies based in u/s 133(6) but addition was made without bringing any material on record to support such addition. c) Addition of ₹ 10.80 cr. was made on the basis of the report sent by the DDIT (Inv.) Unit-ll(4), Kolkata, pertaining to another case on the belief that the name of the companies are placed on record. This information was not confronted with the appellant to know or to ascertain the truth of this report and to what extent the contents of the report are applicable to the appellant. d) As per section 68 of the IT Act, 1961 the primary onus cast on the appellant was discharged by it where as the secondary onus to be discharged by the Assessing Officer is inconclusive. Even though there is abundant merit in having doubts pertaining to these transactions by the Assessing Officer, yet the same cannot be sustained due to the reasons given above and discussion made on this issue as there is no definite, conclusive finding given by the Assessing Officer with independent, supporting evidence. Therefore, the addition of ₹ 10.80 cr. is deleted. 13.1.13 The AR of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d M/s Index Securities and Research Pvt. Ltd. but not a word was mentioned in the assessment order regarding such enquiry made u/s 133(6). In response to the same vide letter received on 25.02.2013, the said company confirmed the amount given to the appellant company and also furnished the following: 1. Confirmed copy of the account of the appellant from its books of account. 2. Copy of the PAN Card issued on 24.02.1995 showing the PAN. 3. Copy of the acknowledgment of ITR filed for the assessment year 2008-09 showing the income of the company at ₹ 2,74,509/- and TDS paid at ₹ 38,03,578/-. 4. Copy of the bank statement. 17.1. From the above submissions it is evident that the appellant discharged the primary onus cast upon it where as no conclusive evidence brought on record by the Assessing Officer that led him to make an addition of ₹ 1.5 cr. The Assessing Officer did not reject the submissions made by the appellant nor conducted further related enquiry to establish nexus between the appellant and M/s Index Securities & Research Pvt. Ltd., which was stated by him as controlled and managed by Jain Brothers, alleged to be entry operator. Only a refer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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