9911796707
TMI Blog2022 (10) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... rder restraining from dealing with amount received from Data Access America in bank account maintained by the assessee company with ABN Amro bank, Chennai. Canara Bank has filed Civil Appeal before the Hon'ble Delhi High Court and the Hon'ble High Court has passed order on 18.11.2005 and directed all parties, including income-tax department to remit amount received from M/s. Data Access India Ltd. to Canara Bank account. From the above, it is very clear that amount received by the assessee from M/s. Cheran Holdings Pvt. Ltd. does not belong to the assessee, in view of the specific order of the Hon'ble Delhi High Court and thus, it cannot be said that it is unexplained income of the assessee - source of money has been expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not change only the value of the liability got regrouped under some other heads. (iii) M/s. Kasturi Sons Ltd. has entered the incurred loss in books of account only as a provision for a loss on sale of investments and has not claimed any long term capital loss in its I.T. return for the a-y 2005-06. 2.2. Having regard to the decision of the Hon'ble Supreme Court in the case of Union of India v. J.K. Synthetics Ltd.( 199 ITR 14), wherein the ratio that a cessation of liability for the purposes of Sec. 41(1) would mean irrevocable cessation, so that there is no possibility of the liability being revived in future was upheld, the learned CIT(A) ought to have upheld the action of the assessing officer. In the Instant case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company, the source of the cash credit stood explained. 3.2. The learned CIT(A) failed to appreciate the decision of the Hon'ble Kerala High court in the case of ITO v. Diza Holdings P. Ltd. (225 ITR 573), wherein it had been held that the mere fact that payment was received by way of account payee cheque Is not conclusive for explaining cash credits. 3.3. The learned CIT(A) failed to see that the prime Investor M/s. OARC had allowed M/s. CHPL to retain Its funds for Investment in sectors like telecom, SEZ/I.T.Park, resorts, hotels, etc. The earned CIT(A) failed to appreciate the fact that the assessee company is only engaged in a single project of developing a golf course and related works on the ECR of Chennai, as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . took over the assessee company. In the meanwhile, the assessee company had certain financial commitments on account of borrowings effected by it and demands for repayment thereof and it had sought certain financial assistance and accordingly, the company has received a sum of Rs. 25 crores by way of loan from a company known as M/s. Cheran Holdings Pvt. Ltd. M/s. Cheran Holdings Pvt. Ltd. earlier belonged to one M/s. Data Access India Ltd. M/s. DAIL has received funds from its parent company situated in USA. M/s. DAIL subsequently transferred money to M/s. Cheran Holdings Pvt. Ltd. and immediately M/s. CHPL transferred money to M/s. KCPAHPL, M/s. CEPL the assessee company M/s. SPIL. 3. During the course of assessment proceedings, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see and thus, same cannot be added in the hands of the assessee. The learned CIT(A), after considering relevant facts has rightly deleted additions made by the Assessing Officer and their order should be upheld. 5. The learned DR, on the other hand, submitted that the Assessing Officer has brought out clear facts to the effect that the assessee has derived benefit out of amount received from M/s. Cheran Holdings Pvt. Ltd. upon takeover of assessee company by M/s. KCP group and thus, said benefit has been treated as cessation of liability in terms of section 41(1) of the Income Tax Act, 1961. The learned CIT(A) without appreciating above facts has simply deleted additions made by the Assessing Officer. 6. We have heard both the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m M/s. Cheran Holdings Pvt. Ltd. does not belong to the assessee, in view of the specific order of the Hon'ble Delhi High Court and thus, it cannot be said that it is unexplained income of the assessee. Further, from the above details it is very clear that source of money has been explained by the assessee, including identity of the creditors and further said amount has been transferred through proper banking channel only. The learned CIT(A), after considering relevant facts held that the assessee has identified creditors and hence, deleted additions made by the Assessing Officer towards amount received from M/s. Cheran Holdings Pvt. Ltd. as unexplained income of the assessee. Hence, we are inclined to uphold findings of the learned CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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