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TMI Blog2022 (2) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... MEDABAD] which were restore by Tribunal to the file of AO to verify the issue of capital crated in these cases and in pursuance of direction of the Tribunal, the AO verified the issue of bogus capital formation and completed the assessment without making additions of bogus capital created and accepted the similar version of those assessee. Thus, ground No.1 2 of the revenue is dismissed. Unexplained gifts - assessee has failed to prove with documentary evidence that the alleged gifts were received from the persons who were among the parties owned up by Shri M.D. Patel before the settlement commission - CIT-A deleted the addition - HELD THAT:- CIT(A) while deleting the addition of gifts recorded that before AO the assessee filed affidavit about narrating the similar facts that the amount of Gift is also owned by MD Patel, but he has not accepted it. The ld CIT(A) after considering the report of PCIT dated 04.01.2017, and other order passed by him in similar cases of group deleted the addition of gift . On perusal of various details as recorded in para-17 (supra we find that the either the AO or CIT(A) or ITSC has accepted the fact that entire transaction of capital creation is owned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andi in showing more opening capital than the closing capital of earlier years, by way of gifts, interest income etc.The assessee originally filed his return of income for assessment year 2001-02 on 21.01.2002 declaring income of ₹ 1,30,000/-.The assessment was later on re-opened on the basis of aforesaid survey action on 11.03.2005. The assessment was completed under section 144 r.w.s. 147 of the Act on 26.12.2008 after making addition of capital created in case of assessee. Later on the assessment order dated 26.12.2008 was revised by Ld. Commissioner of Income Tax (CIT) by exercising his power under section 263 vide his order dated 24.03.2011. In pursuance of direction in order dated 24.03.2011the AO passed assessment order under section 143(3) r.ws. 263 was passed on 14.09.2011. The assessing officer (AO) made addition of ₹ 4,82,953/- on account of unexplained investment under section 69 and additions of ₹ 73,182/- by treating the agriculture income as income from 'other sources'. The order dated 14.09.2011 was set aside by Tribunal and matter was restored to the file of AO for de novo assessment vide order dated 07.12.2016 in ITA No.1507/AHD/2013. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) deleted the addition of ₹ 2,02,07,402/-. 5. On the addition of Gift of ₹ 90,000/- the ld CIT(A) held that Mohand Dhanji Patel has given confirmation about the owning of such addition. It was also noted by the ld CIT(A) that in case of other group cases, which were subject matter of before ITSC, the ITSC accepted the contentions of those assessee that the M D Patel has owned the addition of gift. The ld CIT(A) also extracted the relevant part of order of ITSC at page No. 17 to 21 of his order. The ld CIT(A) also referred the report of PCIT dated 04.01.2017, which was filed by CIT-DR before ITSC, wherein it was mentioned that in affidavit M D Patel confirmed the source of gift of ₹ 90,000/- received from HUF in AY 2000-01, which is duly reflected in common cash flow. The ld CIT(A) recorded that before AO the assessee filed affidavit about narrating the similar facts that the amount of Gift is also owned by MD Patel, but it was not accepted by him. The ld CIT(A) after considering the report of PCIT dated 04.01.2017, order passed by him in similar cases of group deleted the addition of gift of ₹ 90,000/-. Further aggrieved, the revenue has filed this appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal, the AO verify the issue of bogus capital formation and completed the assessment without making additions of bogus capital created. 7. To buttress his submissions the ld AR for the assessee relied on the following decision and would submits that the grounds of appeal raised by the assessee is covered in favour of assessee; * ITO Vs Chandulal A Shah ITA No. 332/Ahd/2008 dated 07-09.2018, * Amrutram Guru Vs ITO & Amrut Ram HUF in ITA No. 883 & 884/Ahd/2013 dated 20.01.2017, * Alkaben Amrutlal Guru & Kanchanlal Natwarlal Rana ITA No. 885 & 1306/Ahd/ 2013 dated 01.08.2016, * Copy of submissions filed before AO during the course of assessment proceedings in pursuance of order of Tribunal in case of Alkaben Amrutlal Guru, * Copy of assessment order passed under section 143(3) rws 254 dated 28.03.2018 in case of Alkaben Amrutlal Guru * Copy of submissions filed before AO during the course of assessment proceedings in pursuance of order of Tribunal in case of Alkaben Amrutlal Guru, * Copy of assessment order passed under section 143(3) rws 254 in case of Knachan lal Natwarlal Rana, * Copy of order of ITSC dated 17.07.2018 in case of Lakhani Impex, Samarth India, Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the theory that mere paper creation entry cannot be taxed. The ld CIT(A) relied on the decisions of Tribunal in ACIT Vs Chandulal A. Shah (supra) and in Alkaben Guru and Krihan Lal Rana (supra). We find that coordinate bench of this Tribunal in ACIT Vs Chandulal A. Shah (supra) on similar set of facts passed following order; " 12. We have considered the facts and find that the issue is covered against the revenue by the decision of Tribunal in case of Jagdish T Patel and Smt Rekhaben Nitin Kumar Chabukswar (supra) the finding recorded by the Tribunal in case of Jagdish T Patel has been discussed in ground no.1 above, therefore, following the same we are of theopinion that the AO not proved any actual usage of such bogus capital for the year under consideration in the case of assessee as well as Shri Chandulal Shah(HUF) and there is no actual income earned by the assessee. In view of these facts and placing reliance on the decision of Tribunal as Cited above we do not find any infirmity in the order of the ld CIT(A), accordingly the appeal of the Revenue is dismissed." 12. Further in Leelaben Kantilal Nakrani in ITA No. 2369/Ahd/2008 dated 18.06.2018, on similar facts, similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avit before the Assessing Officer. From the perusal of the same and after considering the totality of the facts and reasoning given by the Learned Commissioner of Income Tax(Appeals), we are convinced that the Assessing Officer made the addition of ₹ 15,00,000/- on the basis of fictitious entries in loose sheets of paper found from the premises of the C.A. Shri Pankaj Danawala, who had admitted to have created such amounts himself. Therefore, the Learned Commissioner of Income Tax(Appeals) is legally and factually correct in deleting the addition of ₹ 15,00,000/-, which was made by the Assessing Officer in the hands of assessee on protective basis. Resultantly, the ground of appeal raised by the Revenue is rejected." 13. We further find that on similar set of fact the Coordinate bench of Tribunal in Amrutram Guru & Amrutram Guru HUF in ITA No.883 & 884/Ahd/20013 dated .07.217 passed the following order; "7. I have heard the rival contentions, perused the material available on record and gone through the orders of the lower authorities. I find merit in the contentions of the ld. Counsel for the assessee that additions have been made only based on the fictitious b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogus capital created and accepted the similar version of those assessee. Thus, ground No.1 & 2 of the revenue is dismissed. 16. In the result, the ground No. 1& 2 of the appeal is dismissed. 17. Ground No. 3 relates to deleting the addition of gift. The ld AR for the assessee submits that M D Patel owned up all the transactions of his group members wherein capital were created in files of 154 parties used by the group members. During the course of assessment proceedings M D Patel has given confirmation in the form of affidavit admitting the said positions, which was accepted by the various authorities. The ld AR for the assessee submits that based on such confirmation, various authorities have deleted / not added the said utilisation in the hand of members of M D Patel Group. The ld AR for the assessee filed list of following such cases wherein no additions are made or deleted; Names of assessee AY Nature of addition Amount Rs. Addition deleted/ not made based on affidavit of M D Patel M D International 2002-03 Partners Capital introduction order passed under section 143(3) rws 147 dated 31.12.2007 11,000/- By AO in assessment order passed u/s 143(3) rws 254 dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submits that since utilisation is not added by any authorities including the AO of various group members, therefore, the same was rightly deleted by ld CIT(A) in the present case on proper appreciation of facts. 19. On the other hand the ld DR for the revenue supported the order of AO. The ld DR for the revenue made similar submissions as made against ground No. 1&2. 20. We have considered the rival submissions of the parties and have gone through the orders of the lower authorities carefully. We have also seen the contents of the various orders placed on record. We find that the AO made addition of Gift of ₹ 90,000/- by taking view that the assessee merely submitted that parties from whom the assessee has received gift are among the 154 parties whose transaction is owned by M D Patel in his settlement petition before ITSC. However, to prove such contention no evidence is filed by the assessee. Thus, the assessee failed to substantiate his claim. And that the assessee has accepted that gifts were received from benamidars in whose name capital was created. The ld CIT(A) deleted the addition by holding that held that M D Patel has given confirmation about the owning of such a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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