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TMI Blog2020 (12) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... , namely, ITA No 6085/DEL/2019 for AY 2013-14 and 4880/DEL/2019 for A.Y 2015-16 deserve to be dismissed, as both the appeals are hit by the CBDT Circular No. 17/2019 dated 08.08.2019. 4. A perusal of the grievance of the revenue shows that the tax effect would be less than Rs. 50 lakhs, therefore, these appealsare not maintainable and dismissed in light of the CBDT Circular [supra]. 5. In the result, both the appeals of the Revenue in ITA No. 6085/DEL/2019 for AY 2013-14 and 4880/DEL/2019 stand dismissed. 6. The common grievance in all the appeals filed by the revenue relates to the admission of additional evidences. 7. Before us, the ld. DR vehemently stated that the ld. CIT(A) has admitted the additional evidences without following Rule 46A of the Income tax Rules 1962, and therefore, the order of the CIT(A) deserves to be quashed, since it is in violation of principles of natural justice. 8. On the other hand, the ld. counsel for the assessee stated that the proceedings u/s 153A of the Act started on 16.09.2016 and the first questionnaire dated 27.10.2016 and assessment orders have been framed in the month of December, 2016. It is the say ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ails. The Assessing Officer further observed that the assessee has only furnished details of advances received through RTGS/cheque payments but no explanation was given in so far as cash receipts found in the loose sheets and proceeded to make addition of Rs. 43,39,80,220/-. 16. As mentioned elsewhere, the assessee filed some new evidences before the ld. CIT(A). The fresh evidences were transmitted to the Assessing Officer and the Assessing Officer submitted his enquiry report vide letter dated 09.01.2019. The enquiry report reads as under: "Addition on account of cash received - During the course of assessment proceedings it was noticed from the incriminating documents seized from the premise of assessee that a details oj cash receipts were given on page no. 15 of Annexure LP-J. The some was scanned in the assessment order passed on 30/]2/20!6. During the course oj assessment proceedings the, assessee was required to explain the total cash receipt of Rs. 43,39,30,220/- mentions.: in the said paper along 'with supporting documents and to reconcile the same regular books of account and has also required to explain why amount of Rs may not be upheld as unexplained cash r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments and no one has own up the pap. r and on the other hand the company has tallied the amount mentioned in the paper to the Ins: penny. Therefore, it is obvious that the company has prepared the documents according to the amount mentioned in the said paper and got tallied to the last penny otherwise the payments received in different period and different mode may not tally with a paper whose authenticity was also challenged by the assessee company. Therefore, in view of the above discussion and submission filed Iv the assessee the consent ion of the assessee is not acceptable as the paper which was found from she premises of the assessee pertains to assessee and details of cash received as and money mentioned on if paper which the then A.0. has rightly disallowed and added to the income of - assessee. 17. After considering the detailed submissions made by the assessee and the enquiry report submitted by the Assessing Officer, the ld CIT(A) observed that the Assessing Officer has simply treated the figures mentioned in the alleged seized documents as cash received by the appellant company, which is not accounted for in the regular books of accounts, whereas the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as under: 25. On perusal of the aforementioned seized documents, the Assessing Officer formed a belief that the assessee has made payments amounting to Rs. 7,08,23,250/- for the purchase of land. The assessee was asked to explain the transactions along with supporting documents. 26. In its reply, the assessee stated that the impugned document is a handwritten page having some calculations under the heading Krishna developers and promoters andsome other calculation related to New net worth of KPD Infrastructure Pvt. Ltd where the amount of Rs. 7,08,23,250/- is related to Khasara Nos. 915, 945 and 946, being some properties purchase at Haridwar. 27. The reply of the assessee did not find any favour with the Assessing Officer who was of the opinion that the assessee has not furnished any supporting evidences and proceeded to make addition of Rs. 7,08,23,250/- as unexplained investment. 28. Before the ld. CIT(A), the assessee furnished some evidences which were sent to the Assessing Officer and Assessing Officer has submitted his enquiry report dated 09.0.2019 which reads as under: 29. After considering the detailed submissions made by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has made total investment of Rs. 8.36 crores, out of which Rs. 7.02 crores was made in cash. The assessee was asked to explain the investment made in cash with supporting documents and reconcile the same in the regular books of account. 38. On receiving no plausible reply, the Assessing Officer made addition of Rs. 7,02,38,672/- u/s 69 of the Act. 39. Before the ld. CIT(A), the assessee filed detailed reply along with evidences which were sent to the Assessing Officer and the Assessing Officer submitted enquiry report vide letter dated 09.01.2019 which is as under: 40. After considering the detailed submissions made by the assessee and enquiry report submitted by the Assessing Officer, the ld. CIT(A) found that the bone of contention is the payment of Rs. 7,02,38,672/- in cash for Haridwar account. The ld. CIT(A) further found that the appellant has contended that the transaction in the seized documents related to F.Y 2005-06, which is beyond the block period under consideration. 41. On perusal of the documents filed by the assessee, the ld. CIT(A) found that the appellant company has entered into purchase of agricultural land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exure LP 05 which is as under: 51. On perusal of the above document, the Assessing Officer found that the assessee has made expenditure totalling Rs. 3,28,27,680/- out of which Rs. 1,54,09,440/- pertains to the year under consideration. Accordingly, the assessee was asked to explain the transaction and reconcile the same with its books of account. 52. In its reply, the assessee explained that the seized documents referred to contain figures of comparison for expenditure made on maintenance charges, in the month of June 2012, 2013 and 2014 in respect of KDP Project. It was explained that Greenwell Mark Buildwell Pvt Ltd takes maintenance charges from residents but in actual, the appellant provides maintenance charges and, therefore, the amount is transferred from Greenwell Mark Buildwell Pvt Ltd for which the appellant raises bill. 53. Reply of the assessee was rubbished by the Assessing Officer. According to the Assessing Officer, the assessee has made the expenditure outside the books of account and the same are not recorded in the books of account and accordingly made addition of Rs. 1,54,09,440/-. 54. Before the ld. CIT(A), detailed submissions were f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer has merely on the basis of suspicions raised from the entries in the document seized in the search action has made addition. 60. Before us, the ld .DR strongly supported the findings of the Assessing Officer and the ld. counsel for the assessee reiterated what has been stated before the lower authorities. 61. We have carefully perused the factual findings given by the first appellate authority and no factual error has been pointed out before us by the ld.DR in the findings of the ld. CIT(A). Whereas the findings of the ld. CIT(A) clearly show that he has examined all the entries in the books of account of the appellant as well as Greenwell Mark Buildwell Pvt Ltd. Since the entries are duly recorded in the regular books of account, we do not find any reason to interfere with the findings of the ld. CIT(A). Ground No. 1 is dismissed. GROUND NO. 2 62. Ground No. 2 relates to the deletion of addition of Rs. 89 lakhs. 63. During search proceedings, one of the incriminating documents was page 14 of Annexure LP01 which is as under: 64. On perusing the aforementioned document, the Assessing Officer came to the conclusion that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth the trial balances were examined by the ld. CIT(A) and he found that one of the trial balances is incomplete and further found that in one of the trial balances, last six pages were missing. The CIT(A) further rubbished the contention of the Assessing Officer that the assessee is maintaining two parallel sets of books of account. Convinced with the reply of the assessee, the ld.CIT(A) deleted the impugned addition. 76. Before us, the ld. DR strongly supported the Assessing Officer and the ld. counsel for the assessee reiterated what has been stated before the ld. CIT(A). 77. We have carefully perused the orders of the authorities below qua the issue. It is true that the only basis for making addition was the difference in figures in two trial balances found at the time of search proceedings. The Assessing Officer has alleged that the assessee is maintaining two parallel set of books of accounts. But the entire assessment order is silent about any such parallel set of books of account found and seized during the course of search proceedings. 78. Further, trial balance is prepared from the books of account and it is always that the trial balance figures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd registry of land. 85. The Assessing Officer dismissed the submissions of the assessee stating that the assessee has not explained the source of the above payments and has not filed any satisfactory reply regarding these payments and accordingly, made an addition of Rs. 1.75 crores which was paid in cash. 86. Before the ld. CIT(A), the assessee vehemently stated that the seized documents were copy of ledger accounts of five parties. It was strongly contended that all the transactions were duly recorded in the regular books of accounts which were also placed before the AO. 87. After considering the submissions made by the assessee and the remand report of the Assessing Officer, the CIT(A) observed that the seized documents related to transactions of purchase of land at Noor Nagar, District Ghaziabad from the aforementioned parties to whom the consideration was paid by cheque and also by cash. The CIT(A) further examined the registered deed of agricultural land and found that the purchase of agricultural land was for Rs. 4 crores which includes Rs. 1.75 crores paid by cash. 88. The ld.CIT(A) further found that total consideration paid i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 100000000 100000000 3 Enhancement made by the CIT(A) on the basis of statement u/s 132(4) 150000000 150000000 Total 21135000 1346000 5490000 250000000 601440000 93. At the very outset, the ld. counsel for the assessee stated that he is not pressing the legal grounds challenging the validity of assessment framed u/s 153A of the Act. On such concession, all the legal grounds raised by the assessee are dismissed. ITA No. 4687/DEL/2019 [Assessee's appeal for A.Y 2012-13] 94. In F.Y 2011-12 pertaining to A.Y 2012-13, the assessee has received share application money from the following two persons: (i) Optimum Iron Works Pvt Ltd - Rs. 16,13,50,000/-. (ii) Nivedan Agencies Private Ltd - Rs. 5,00,00,000/- 95. During the course of scrutiny assessment proceedings, the assessee was asked to explain the share application money along with share premium received from the aforementioned two parties in light of section 68 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly supported the findings of the CIT(A)/Assessing Officer and drew our attention to the judicial decisions relied upon in his written submissions. 102. We have given thoughtful consideration to the orders of the authorities below. We have also considered the relevant documentary evidences brought to our notice. There is no quarrel that the directors of the investorcompanies are related to the directors of the appellant and in fact, in the case of Nivedan Agencies, the directors are the same. 103. In so far as Optimum Iron Private Limited is concerned, we find that the same was assessed in the same circle for A.Y 2012-13 and the assessment has been framed u/s 143 (3) of the Act vide order dated 30.03.2015 which is placed at page 196 of the paper book No. 2. We further find that both the companies have duly complied with the details sought by the Assessing Officer through summons issued u/s 131 of the Act. The compliance can be found at page 177 of paper book No. 2 and 310 of paper book Part III. 104. It seems that the Assessing Officer was carried away with the returned income of these two companies whereas he ignored the net worth of these two compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge the burden cast upon it by provisions of Section 68 of the Act and the ld. CIT(A) concurred with findings of the Assessing Officer. 111. Before us, the ld. counsel for the assessee, at the very outset, stated that the share application money received from the three companies were earlier in the books of account of the assessee as loans from these companies and the loans have been repaid during the year and the same amount has been ploughed back in the form of share application and share premium, therefore, technically these are not fresh cash credits. The ld. counsel for the assessee further pointed out that the directors of the appellant company are also directors of the three applicant companies. Therefore, it cannot be said that the share applicant companies are strangers of the appellant. 112. The ld. counsel further drew our attention to the response given by the three share applicant companies to the summons served upon them u/s 131 of the Act. The ld. counsel vehemently stated that the assessee has completely discharged the onus and the additions deserve to be deleted. 113. On the hand, the ld. DR strongly supported the findings of the CIT(A) / ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of share application money received along with share premium from Shanti Gopal Vanijya Pvt Ltd amounting to Rs. 54.90 lakhs. The sole basis of making the addition is that the assessee has grossly failed to comply with the provisions of section 68 of the Act. The CIT(A) confirmed the findings of the assessee holding the same in appeal for A.Y 2013-14 [supra]. 120. We have explained the source of money invested by Shanti Gopal Vanijya Pvt Ltd. We have also mentioned that the directors of the appellant company are directors of the share applicant companies. Therefore, the share applicant companyis no stranger to the appellant company. We further find that the share applicant company duly complied with the summons served upon it u/s 131 of the Act and furnished necessary details called for by the Assessing Officer and the same can be seen at page 189 of Paper Book II. 121. Exhibits 136 and 137 of the Paper Book No. 1 clearly show the source of Shanti Gopal Vanijya Pvt Ltd for making investment in the appellant company. The Assessing Officer is found to be carried away by the returned income of the share applicant companies and seems to have completely ignored th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed over and above Rs. 10 crores. This can be understood from the following finding of the ld. CIT(A): "In view of the above detail discussions of factual matrix of the case end judicial pronouncements cited here-in- above addition made by the AO amounting to Rs. 10,00,00,000/- has not only confirmed but also enhanced by Rs. 15,00,00,000/- on the basis on seized documents LP-3 and LP-12 respectively and considering the confess made by the director of appellant company u/s 132(4) of IT Act" 127. Before us, the ld. counsel for the assessee drew our attention to the relevant statement of the director Shri Tanuj Goel and vehemently stated that the question put at the time of search had no reference to any entry not recorded in the books of account and therefore, the same cannot be considered as valid surrender in the light of CBDT Circular. 128. The ld. counsel further stated that the same is the fate of enhancement made by the ld. CIT(A). The ld. counsel further pointed out that in A.Y 2015-16, no share application money was received by the appellant. Therefore, there was no question of any undisclosed income which needed to be surrendered. The ld. counsel strong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the facts and circumstances clearly show that that was no undisclosed income which needed to be surrendered. Considering the facts of the case in totality in the light of the factsas discussed in the appeals of the A.Ys [supra] we do not find any merit in both the additions. We, accordingly, delete the addition of Rs. 10 crores and Rs. 15 crores and allow the appeal of the assessee. 134. Before parting, the judicial decisions relied upon by both the sides,though considered by us, but we found that the facts of the case in hand do not need any reference to any judicial decisions relied upon by both the sides. 135. In the result appeal of the assessee is allowed 136. To sum up, in the result, Revenue's appeals: ITA No. 6085/DEL/2019 for A.Y 2013-14 Dismissed ITA No. 4880/DEL/2019 for A.Y 2015-16 Dismissed ITA No. 6083/DEL/2019 for A.Y 2010-11 Dismissed ITA No. 4881/D/2019 for A.Y 2014-15 Dismissed ITA No. 6084/Dell/2019 A.Y 2012-13 Dismissed Assessee's Appeals ITA No. 4687/DEL/2019 [A.Y 2012-13] Allowed ITA No. 4688/DEL/2019 [A.Y 2013-14] Allowed ITA No. 4311/DEL/2019 [A.Y 2014-15] Allowed ITA No. 4312/DEL/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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