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TMI Blog2015 (8) TMI 1457X X X X Extracts X X X X X X X X Extracts X X X X ..... nd carefully after due and proper enquiry carried out by issuance of notices u/s 133(6) to the concerned persons/parties and considering the material comes to the conclusion that he is satisfied by the claim of the assessee on verification, then in such a situation the filing of the present appeals cannot be justified and can only be termed as a farce. - decided against revenue - I.T.A .Nos.-4688-4690/Del/2012 - - - Dated:- 7-8-2015 - Smt Diva Singh And Sh. N.K.Saini, JJ. Appellant by Sh. K.P.Ganguli, Adv. Respondent by Sh.Gunjan Prashad, CIT DR ORDER Diva Singh, These are three appeals filed by the Revenue assailing the correctness of the separate orders dated 29.06.2012 of CIT(A)-XXXI, New Delhi pertaining to 2004-05, 2006-07 2009-10 assessment years on various grounds. All these appeals are being decided by a common order as it was the common stand of the parties before the Bench that the arguments advanced in ITA No.- 4688/Del/2012 due to similarity in facts and law would apply mutatis mutandis to the remaining two appeals also. ITA No.-4688/Del/2012 (A.Y.2004-05) 2. Accordingly in view of the above common stand, we would be referring to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st accommodation entries and addition u/s 68 was made. 2.4. In support of the said conclusion, he relied upon various decisions which laid down the proposition that on the failure of the assessee to explain by way of supporting evidence the introduction of funds in its books of accounts whether by way of unsecured loans or otherwise then addition u/s 68 was maintainable. Reference to these decisions is not being made as the legal position on the said propositions of laws in regard thereto is well-settled and is not under dispute. The Assessing Officer in view of assessee s failure to substantiate its claim in respect to the following persons, held that the assessee had failed to furnish supporting evidence in respect of the genuineness of the transactions and creditworthiness of the lenders from whom unsecured loans were raised during the year:- S.No. Name of Party/Person Opening balance Addition during the year Interest paid on loan taken during the year 1. Neelu Garg 0 500000 0 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d advanced unsecured loans to the assessee:- S.No. Name of Party/Person Opening balance Addition during the year Interest paid on loan taken during the year 1. Sidhi Makhija 0 1000000 24000 2. Meenu Makhija 0 1000000 24000 3. Babul Lal Makhija 0 1500000 36000 4. Vidhi Makhija 0 1500000 36000 Total 5000000 120000 4.1. Herein also, considering an identical explanation and reasoning, addition of ₹ 50,00,000/- was made. Similarly, rejecting assessee s claim of having incurred expenditure on interest paid amounting to ₹ 1,20,000/- addition of the said amount was made holding that the genuineness was not established. ITA No.-4690/Del/2012 (A.Y.-2009-10) 5. Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atedly says that the matters remain unverified . Attention was invited to the fact that the first opportunity provided to the assessee as per the Assessing Officer s own version for producing the documents was vide notice dated 02.12.2011 and as a result thereof the case came up for hearing only on 07.12.2011; 12.12.2011; 16.12.2011; 20.12.2011; 22.12.2011 26.12.2011 and nowhere in the order sheet of the file it was stated had it been mentioned that the assessee did not submit the confirmations of unsecured loans. 7.4. Considering these submission advanced by way of a re-joinder, the CIT(A) again called for a report from the AO requiring the AO to verify the genuineness of the loans. In response to the said directions the AO as per record issued notices u/s 133(6) to the persons/parties wherein considering the reply furnished by the respective parties the AO found that the loans taken by the assessee were found to be verified. 7.5. As a result of this admission of the AO in the second Remand Report, the addition of ₹ 84 lakhs was deleted by the CIT(A) alongwith the interest of ₹ 12,500/- paid to Sh. Vinay Garg disallowed by the AO. 8. The Revenue is aggrieved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posed upon the Assessing Officer for having filed a frivolous appeal in all these three assessment years. The Ld. CIT DR stated that as per the departmental procedures, the Grounds raised by the AO are subjected to checks and balances and the fault cannot be said to lie only at end of the AO. In these circumstances, it was his earnest request that the costs may not be imposed and the department would take adequate care in future to ensure that appeals are not frivolously filed where issues on facts have been given up by the AO in the Remand proceedings. 13. The ld.AR in the face of the stand of the department relied upon the impugned order. It was stated by him that though paper books have been filed by the assessee in each of these appeals however in the face of the arguments of the Ld. CIT DR he would rely for the record on these evidences on record in the Paper Book and not elaborate further but heavy reliance is place upon the findings in the impugned order. 14. We have heard the rival submissions and perused the material available on record. On a careful consideration of the grounds raised, we find that the Ground No.-2 raised by the department on admission of additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) Vide letter dated 02.12.2011, the assessee was asked to furnish the details of unsecured loans appearing in the balance sheet alongwith confirmed copy of account from the books of accounts of the other parties and also prove the identity creditworthiness, PAN, copy of balance sheet, Audit Report, bank statement of the respective lenders. (ii) As submitted earlier, to verify the genuineness of loans (which disallowed in assessment order and are subject matter in appeal), notice u/s 133(6) were issued to the persons/parties. In view of the reply furnished by the respective parties (lenders) in response to notice u/s 133(6) issued during remand proceedings, loans taken by the assessee appear to be verified. (Emphasis provided) 15.1. In these facts, the issue was decided by the CIT(A) in the following manner:- I am of the view that the time period from start of assessment till its completion was short and the appellant was prevented by sufficient and reasonable cause from producing the required details before the AO. Hence in the interest of justice the additional evidence is liable to be admitted. The procedure prescribed in Rule 46A has been followed and the AO w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TA No.1454/Del/2012 in the DCIT, Circle-21(1), New Delhi vs Pawan Kumar Kansal was pleased to hold as under:- 5. In the Remand Report the contentions of the assessee that the AO was not justified in rejecting the books of accounts was accepted by the AO. The AO also accepted the contention that he has not been able to point out any discrepancy in the books of accounts and stock record produced by the assessee before him. Thus, in our view, the First Appellate Authority had no other option but to reject the action of AO in rejecting the books of accounts. Hence ground no.1 of the Revenue is dismissed. (Emphasis provided) 15.2.1.A perusal of the said order infact shows that in each of the grounds raised by the Revenue the issue had been given up by the AO in the remand proceedings, the departmental appeal was dismissed by the Co-ordinate Bench with the following observations:- 11. Before parting, we express our serious concern at the type of appeals being filed by the Revenue. During the remand proceedings the AO accepted each and every contention of the assessee or was unable to dislodge the contentions of the assessee and when the Ld.CIT(A) bases his order on the rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e willfully and deliberately failed to exercise their powers mindfully as required of them as per law and thereby abused government machinery to initiate a litigation which entails financial costs and tarnishes the image of the Department and also strains the government resources. This obduracy and adamancy of the concerned officers in filing a meritless appeal only because officially they are entitled/empowered to do so, strikes a blow to the blind faith reposed in them by the tax administration in always acting fairly as evident from the orders passed in the Remand proceedings and the order of the CIT(A) in the present appeals. However only because of the conduct of few Departmental officers who appear to be unconcerned or rather mock the sincere efforts made by CBDT with impunity unmindful of the consequences to the system by their sense of entitlement the reputation of the tax administration suffers, this needs to be addressed at the earliest. The entitlement of always believed to be acting in good faith cannot be abused by irresponsibly setting in motion the entire justice delivery system where admittedly there was no grievance to the AO. The Assessing Officer including all th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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