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TMI Blog2023 (9) TMI 1150X X X X Extracts X X X X X X X X Extracts X X X X ..... CMHPL by the assessee remains unexplained when no payments have been made to the stated 71 sundry creditors and, therefore the relief granted by Ld. CIT(A) on the basis of considering sundry creditors as of earlier years would not hold field to bring the assessee out of the burden casted on him to explain the source and nature of investment made by him in the share capital of CMHPL. Accordingly, we allow the grounds taken by the Revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal can be dismissed for want of prosecution without deciding on merit. We direct the ld. CIT (DR) to bring this order-sheet to the notice of ld. CIT (Admin) having administrative control over the ld. Assessing ·Officer for compliance of this order. Copy of this order-sheet be supplied to the Department." 3. Pursuant to this direction, Ld. CIT, DR placed on record the details of legal heir of the assessee vide letter dated 14.01.2023. Against this submission, the case was adjourned to 27.02.2023 since revised Form No. 36 was required to be placed on record by including the details of legal heir of the assessee. Revised Form 36 incorporating necessary modifications relating to the legal heir of the assessee was placed on record vide letter dated 23.02.2023 from the office of CIT, DR (ITAT)-I, Kolkata. The details of legal heir brought on record as contained in revised Form 36 are as under: A. Name : Smt. Subbulakshmi Devadoss B. Relationship : Wife C. Address : B-204, Sarvam Apartment, Palilikaranai, Chennai-600100 D. e-mail ID : [email protected] E. Mobile No. : 9176863779 4. Notice of hearing was sent to the legal heir of the assessee on the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Act, be deemed to be an assessee. (4) Every legal representative shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with. (5) The provisions of sub-section (2) of section-161, section-162 and section- 167, shall, so far as may be and to the extent to which they are not inconsistent with the provisions of this section, apply in relation to a legal representative. (6) The liability of a legal representative under this section shall, subject to the provisions of sub-section (4) and sub-section (5), be limited to the extent to which the estate is capable of meeting the liability." 5.1. From the above section, it is noted that section 159(2)(a) provides that any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the details despite several reminders from the Ld. AO, who then finally issued a show cause notice dated 03.10.2016, wherein Ld. AO stated that - "As per audited accounts for the financial year relevant to A. Y. 2014-15, you have shown huge sundry creditors amounting to Rs. 8,29,63,210/- On perusal of earlier return for A. Y. 2013-14, there appeared no sundry creditors. So, it is apparent that all those sundry creditors relates to the F. Y. 2013-14 (i.e A. Y. 2014-15). Further, in this regard as per questionnaire issued to you along with notice 142(1) dated 02/05/2016, you were asked, inter alia, to furnish details of the sundry creditors, i.e. complete name and postal address of all the sundry creditors etc. to verify the genuineness of the transactions. But, you have failed to furnish the information without showing any reasons. Subsequently, while hearing your case, dated 26.08.2016 and again on 05.09.2016, your A/R failed to furnish the details of the so called sundry creditors. However, during the course of hearing dated 05.09.2016, you're A/R sought time to furnish the details of sundry creditors and accordingly the case was adjourned to 13.09.2016. But, this time also ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity shares of CMHPL as appearing in the Balance Sheet to explain the source of the said investment, failing which it will be treated as unexplained investment. In respect of sundry creditors also, Ld. AO provided one more opportunity to the assessee to prove the identity of the creditors, their creditworthiness and the genuineness of the transactions, failing which they will be treated as bogus liability. 7.4. In response to this letter, assessee filed written submission, which is reproduced in the impugned assessment order. Assessee claimed that he has been allotted shares in CMHPL against the payments made by him to the suppliers of building material for the construction of nursing home of CMHPL. Assessee thus, claimed that investment in share capital of CMHPL has been made against the liability owned by the assessee towards sundry creditors belonging to CMHPL. 7.5. On the submissions made by the assessee, ld. AO made detailed examination and enquiry and arrived at certain observations which are noted as under: (i) During the year under consideration, assessee claimed to have purchased materials from 71 creditors totalling to Rs. 7,74,32,498/-, all of them being individual su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing construction. Ld. CIT(A) also observed that adverse view taken by the Ld. AO as to fictitious sundry creditors against the bogus supply of building material of nursing home has no basis. 9. With the able assistance of Ld. CIT, DR, we have gone through the observations and findings of the authorities below in their respective orders placed on record. We have also taken note of the statement of fact filed before the Ld. CIT(A) along with Form 35. From the details captured in the order of Ld. CIT(A) containing summary from FYs 2009-10 to 2012-13, which are years preceding to the year under consideration, wherein details in respect of share application money pending allotment, sundry creditors, civil construction, secured loan and unsecured loan, we note that assessee recognised the sundry creditors in his Balance Sheet as on 31.03.2014 amounting to Rs. 8,29,54,210/-. Against this credit appearing in the Balance Sheet of the assessee in the year under consideration, on the asset side an investment in the share capital of CMHPL has been reported, amounting to Rs. 8,64,12,000/-. We also take note of the fact that Ld. AO made enquiry and called for the explanation from the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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