9911796707
TMI Blog2017 (12) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... lement on such difference because the amount aggregating to 5,10,30,357/- is on account of payment given to the suppliers for purchase/expenses incurred through account payee cheques from the bank account and such payments have been shown as amount recoverable and no expenses including purchase have been debited to the profit genuineness and creditworthiness. Simply because Directors or the authorized persons from the said company could not be produced, no adverse inference could have been drawn. Looking to the entire fats and circumstances of the case and on the basis of the plea taken by the ld. counsel for the assessee and in the interest of substantial justice, we feel that the issue of share application money of 90 lakhs should be set aside to the file of the Assessing Officer and assessee will try to produce the concerned from the said entities to confirm the said transaction. Addition on basis of documents found in search - Held that:- A document was seized from the premises of the assessee which mentioned sale transaction of land which reflected that property was registered for a consideration of 21.25 lakhs and other expenses like stamp duty of 1,64,300/-. In the said seiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 148. The background and the 'reasons' for reopening the case was that a search and seizure operation under section 132(1) was carried out on 8/11/2008 in the case of Nimitaya Group in which Ashwani Mahajan Group was also covered. The assesseecompany was also subjected to survey under section 133A, wherein it was revealed that the assessee-company has taken huge share application money. Based on this information, assessee's case has been reopened. During the course of reassessment proceedings and on perusal of the audit report, the Assessing Officer noted that the closing stock of the company as on 31/3/2007 had been shown at ₹ 4.98 crores, whereas the value of stock statement as on 27/3/2007 furnished to the City Bank had been shown at ₹ 10,08,30,357/-. The Assessing Officer further observed that from the computer printout, it was seen that as per machine-wise stock valuation, the value of 163 machines had been shown at ₹ 9,21,94,750/- and thus, came to the conclusion that there is a difference between the value shown to the City Bank and the value disclosed in the tax audit report. In response to show cause notice, assessee had stated as under:- "The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) Plants and machinery Rs.3,64,66,010 Schedule VIII of Balance sheet (b) Advances to suppliers Rs.1,45,64,347 Schedule XI of balance sheet Rs.5,10,30,357 7. Ld. CIT(A) further noted that assessee has disclosed to the banking authorities stock of ₹ 10,08,30,357/- comprising of three items; firstly, plant & machinery (Rs.3,64,66,010/-); secondly, advances to suppliers (Rs.1,45,64,347/-); and lastly, stock in hand (Rs.4,98,00,000/-). All these three items are duly accounted for in the assessee's books of account. He further observed that the value of stock statement, which were called for by the Assessing Officer during the assessment proceedings, if compared with the value of stock as per books of account, it can be seen stock figure given to the bank does not contain qualitywise and quantum-wise description of each stock item and its value thereof and the assessee is not maintaining any day-to-day stock register looking to the nature of business activity carried out by it. Thus, he held that addition could not be made merely on the basis of difference in the closing stock based on stock statement furnished to the bankers which does not give any discrepancy of quantit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suppliers for purchase/expenses incurred through account payee cheques from the bank account and such payments have been shown as amount recoverable and no expenses including purchase have been debited to the profit & loss account, therefore, there is no effect on the profit of the assessee-company for assessment year 2007-08 qua this amount. Otherwise also, it is quite standard practice that the stock statement given to the bank is to enjoy higher credit limit and if stock statement does not give quantity and item-wise details and simply value has been enhanced (though it is not the case here), then no adverse inference can be drawn so as to hold that higher value of stock shown to the bank is to be reckoned as unexplained investment in the hands of the assessee. The ld. CIT (A), after proper appreciation of facts and taking note of the details, has given a categorical finding which is not only in accordance to law but is also based on correct appreciation of facts. Thus, we uphold the order of the ld. CIT (Appeals) in deleting the addition of ₹ 5,10,30,357/-. 11. Now we will take up assessee's appeal. In the original grounds of appeal, assessee had challenged the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower of the authority for sanctioning notices under section 148 in terms of provisions of section 151(1). All these facts as raised in the legal grounds though does not need any investigation of new facts, but definitely it needs verification from records which before are us are not completely available. Therefore, in the interest of justice, we feel that legal issues, which have been raised before us, should be sent back to the file of the Assessing Officer to be adjudicated in accordance to law after giving due opportunity to the assessee of being heard. 13. Besides this, the ld. counsel for the assessee has also raised another legal issue before us that, no notice under section 143(2) has been served upon the assessee after assessee has filed the return of income in compliance to the notice under section 148. This issue too has not been raised either before the Assessing Officer or before the ld. CIT (A), therefore, being a legal issue, we are remanding back the matter to the file of the Assessing Officer to verify from records as to whether any notice under section 143(2) has been served to the assessee in accordance to law. Needless to say that if on all the legal issues, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicants. Now before us, the ld. counsel for the assessee submitted that assessee would be in a position to produce these persons and in the interest of justice the matter should be restored back to the file of the Assessing Officer, because assessee has given all the relevant documents to prove all the three limbs of proving the nature and source of credit, i.e., identity; genuineness and creditworthiness. Simply because Directors or the authorized persons from the said company could not be produced, no adverse inference could have been drawn. Looking to the entire fats and circumstances of the case and on the basis of the plea taken by the ld. counsel for the assessee and in the interest of substantial justice, we feel that the issue of share application money of ₹ 90 lakhs should be set aside to the file of the Assessing Officer and assessee will try to produce the concerned from the said entities to confirm the said transaction. Assessing officer shall give due and effective opportunity to the assessee to substantiate its case. Accordingly, appeal of the assessee is allowed for statistical purposes. 17. Now we will take up the cross-appeals for assessment year 2009-10. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,95,422/- as on 31/10/2008 and has added these amounts also, without even considering the fact that difference as on 31/3/2008 at ₹ 4,13,83,468/- was not for this financial year and no addition could have been made in the assessment year 2009-10. 20. Before the ld. CIT (A), assessee gave detailed submissions which have been dealt and incorporated by the ld. CIT (A) from pages 12 to 15 of the appellate order which by and large on the same lines as given before the ld. CIT (A) in the appeal for assessment year 2007-08, which has been dealt by us in the aforesaid appeal for assessment year 2007-08. The ld. CIT (A) deleted the addition on the ground that the amount of ₹ 4,13,83,468/- could not have been added in this year and for the balance amount, he gave same reasoning as given in appeal for assessment year 2007-08. 21. We have heard the rival submissions and perused the relevant finding given in the impugned order as well as the material referred to before us at the time of hearing. As apparent from the records, out of aggregate addition of ₹ 9,15,99,354/- made by the AO on account of difference in value of stock as per books of account and as per stock statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... photocopy of return of income. 3. Punita Bharadwaj Filed the confirmed copy of account, with PAN details and photocopy of return of income. 4. North South Enterprise (P) Ltd. Filed the confirmed copy of account, with PAN details. 24. Again when comment was sought from the Assessing Officer by the ld. CIT (A) post assessee's filing of documents, the Assessing Officer said that either party was not available at the address or have refused to have any dealing with the assessee. The ld. CIT (A) held that the person (Punita Bharadwaj) about whom Assessing Officer had said that she refused to have any dealing, had given her confirmation letter that she had dealt with the company and the ld. CIT (A) asked the Assessing Officer to send enquiry folder containing the statement of Punita Bhardwaj about whom Assessing Officer has stated that she has refused. Even for the other two parties also for whom AO has said their addresses not available, he asked for Assessing Officer's enquiry report but till passing of the order by the ld. CIT (A) enquiry folder was not made available to him by the Assessing Officer. 25. The ld. Sr. D.R. before us submitted that the ld. CIT (A) should have giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has stated that he has not done any dealing with the assessee, the Ld. CIT(A) has duly considered the entire facts and material on record while giving his finding and also noted that factum of report and enquiry file was not submitted by the AO before the ld. CIT(A), despite his requisition. 29. So far as in the case of Punita Bhardwaj where she has refused having any dealing with the assessee, we feel that the matter should be restored back to the file of the Assessing Officer to confront to the assessee as to what was her statement given in the enquiry when she herself has given confirmation letter that she has dealt with the assessee and has received amount through account payee cheques. Only for this limited purpose, the matter is remanded back to the Assessing Officer with regard to the advances given to Punita Bhardwaj. 30. So far as advances given to other three parties, we do not find any reason to tinker with the finding of the ld. CIT(A) for the reason that assessee has not only filed confirmation, copy of account, but also their returns of income and given correct addresses shown by these parties in their returns of income which was made available to the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed as per his Survey Report that Shri Ashwani Kumar Mahajan is also proprietor of Gurulal Enterprises and e rectors in the following companies: 1. Sadashiv Marketing Pvt. Ltd. 2. North South Enterprises Pvt. Ltd. The other directors of the above two companies are also director in A One Machinery Components Pvt. Ltd was also functioning from the portion of the premises with the same main entrance. Shri Pradeep Nagdev and Shri Gopal Nagdev are the directors of the company residing at A-3/50, Janak Puri, New Delhi. Shri Pradeep and Shri Gopal Nagdev are also director of North South Enterprises Pvt. Ltd along with Shri Ashwani Kumar Mahajan. Both the companies' i.e., A One Machined Components Pvt. Ltd and M/s North South Enterprises Pvt. Ltd are having similar nature of business. The seized documents show credit balance of ₹ 1,26.49,249.80 standing in the name of A-One Machined Components Pvt. Ltd as on 31-10-2008, The assessee was asked as to why this amount of ₹ 1,26,49,249 80 be not added to the total income." 32. Assessee in response to show cause notice, submitted that the amount standing in the name of A-One Machine Components (P.) Ltd. as on 31/10/2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has challenged the addition of ₹ 62 lakhs on account of undisclosed investment in the property on the alleged payment of cash. 36. During the course of search, a document was found marked as Page 6 of Annexure A1 and also certain pages of Annexure A2 showing that assessee had purchased a land measuring 6 Kanal 16 marlas at Village Jakhoda, Haryana. This land was registered for a sale consideration of ₹ 21.25 lakhs and ₹ 1,64,300/- was paid towards stamp duty. However, as per record a figure of "62" was mentioned which was treated as ₹ 62 lakhs by the Department and it was concluded that, this was the amount which might have been paid in cash outside the books of account. In the absence of any proper explanation and documentary evidence, the Assessing Officer treated the entire cash amount as income from undisclosed sources. While making this addition, he held that this addition would be made in the hands of the company on substantive basis and on protective basis in the case of the Director, Shri. Ashwani Kumar Mahajan. The ld. CIT(A) has confirmed the said addition on the ground that assessee could not rebut the document found from his place and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d upon the orders of the Assessing Officer and the ld. CIT (A) and submitted that the onus, which was cast upon the assessee, has not been discharged and, therefore, the transaction mentioned in the said document is to be added in the hands of the assessee only. 39. After hearing both the parties and on a perusal of the impugned order, we find that a document was seized from the premises of the assessee which mentioned sale transaction of land which reflected that property was registered for a consideration of ₹ 21.25 lakhs and other expenses like stamp duty of ₹ 1,64,300/-. In the said seized document, there is a figure of "62" which has been read as ₹ 62 lakhs which has been presumed to be made in cash. We at the outset agree that the presumption is raised against the assessee in terms of section 132(4A) and 292C that documents belongs to the assessee and onus is upon the assessee to rebut such presumption, however such a presumption is a rebuttal presumption which assessee has to explain with cogent evidence that it belongs to someone else, but here assessee has only denied the transaction without rebutting it by way of proper evidence. However, in the interes ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
