9911796707
TMI Blog2024 (1) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... out any material or evidence to reflect any unaccounted commission income of the assessee for these years. As it is manifest from the assessment order that the AO has not referred to any incriminating material disclosing any undisclosed income of commission for these assessment year either found during the search and seizure action or even during the assessment proceedings. AO has not brought any material on record to show higher commission income earned by the assessee. The commission income duly recorded in the books of account and declared in the return of income cannot be disturbed in absence of any material. Accordingly we do not find any error or illegality in the impugned order of the CIT(A) qua this issue. Unexplained unsecured loan - Addition deleted by CIT(A) - HELD THAT:- There is no dispute that the loans were received by the assessee through banking channels as evident from the bank account statement of the assessee as well as the loan creditors. Further, it is also evident that most of the loans were repaid by the assessee in the very next year as reflected in the bank account statement and ledger accounts produced by the assesse. Accordingly in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by the AO of search person as well as by the AO of the assessee. Accordingly we do not find any reason to interfere with the impugned order of the CIT(A) qua this issue. Unexplained expenditure on foreign trips - HELD THAT:- The assessee has produced the certificate of M/s Grand Agencies, Indore who has confirmed the fact of sponsoring foreign trip of the assessee and bearing expenses. Once the assessee has produced the certificate of M/s. Grand Agencies Indore claiming and confirming the expenditure incurred on foreign trips of the assessee then the AO ought to have conducted further inquiry to ascertain the correctness of said claim of the assesse. Even otherwise the AO has only estimated the expenditure and not even referred any basis for such estimation of the expenditure. Accordingly, in the facts and circumstances of the case and when the assessee has explained source of the expenditure and also produced confirmation/certification of sponsoring entity then the addition made by AO without conducting further inquiry is not justified. Hence, in the interest of justice this issue is set aside to the record of the AO for fresh adjudication. - SHRI VIJAY PAL RAO, JUDICI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year 1998 undisclosed income of Rs. 5,00,000/- was detected. Further in the year 2008 the Police also seized Rs. 12,00,000/- as unaccounted cash which was later requisitioned by Income Tax Department. Thus, Ld. DR has submitted that as per the past history, the assessee indulged in unaccounted transaction and non-submissions of the supporting details and documents regarding commission income, the AO has estimated the commission income by increasing 20%. He has relied upon the order of the Assessing officer. 4. On the other hand, Ld. AR has submitted that the AO has made adhoc addition on account of estimation of the commission income by increasing 20% of the commission income already declared by the assesse. There was no incriminating material found during the course of search therefore, the addition made by the AO without any incriminating material is beyond the scope of proceedings u/s 153C. He has relied upon the various decisions as under: 1.CIT vs Continental Warehousing Corporation 58 taxmann.com 78 (Bom.) 2.CIT vs Kabul Chawla 380 ITR 573 (Del.) 3.CIT vs Lata Jain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2012-13, A.Y. 2014-15 and A.Y. 2015-16. No other supporting details are submitted by the assessee in respect of these years. As regards the details of commission for remaining years, the assessee has not submitted any details. (ii) As regards the commission income received for A.Y. 2009-10 to A.Y. 2011- 12, the assessee has failed to produce any details or supporting evidences. The assessee has also failed to produce the books of accounts for A.Y. 2009-10 10 2011-12. (iii) In absence of any supporting documents, the correctness of commission income could not be verified. (iv) The addition of Rs 6,50,000/- has been made for A.Y. 2013-14, on account of suppression of commission receipts, on the basis of statement recorded of the assessee, as discussed in para 10 of this assessment order. (v) It has also been found that the assessee group had been engaged in unaccounted transactions for a long time. Shri Vishan Das Tharani, the assessee and partner of M/s Kalyan Grain Merchant during his statement recorded on 03/04/2014 has stated on oath that business premise 72, Hanumanganj, Bhopal of M/s Kalyan Grain Merchant was earlier searched by the Income Tax Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come earned by way of commission has been shown in books of accounts. The AO after considering reply of the assessee did not find the same acceptable and made addition in AYS 2010-11 to 2015-16. On perusal of assessment order passed by the AO, the AO has not brought on record any incriminating material showing suppression of commission income or showing unaccounted commission income earned by appellant. It is now settled legal principle that no addition can be made to the income of the appellant in absence of any incriminating material on record, which is completely missing in the instant case. Thus, the AO has made addition on sheer assumption and presumption basis. Thus, addition made by the AO amounting to Rs. 80,000/- in AY 2010-11, Rs. 1,29,000/- in AY 2011-12, Rs. 4,00,000/- in AY 2012-13, Rs. 1,85,000/- in AY 2014-15 and Rs. 1,87,906/- in AY 2015-16 are Deleted. Therefore, appeal on this ground is Allowed. 5.2. As it is manifest from the assessment order that the AO has not referred to any incriminating material disclosing any undisclosed income of commission for these assessment year either found during the search and seizure action or even during the assessment proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e considered to be correct and genuine. After considering the documentary evidence and remand report of the AO the CIT(A) has deleted the addition. He has further submitted that the onus cast upon the assessee was properly discharged by establishing identity, creditworthiness of the creditors and genuineness of the transactions. The loan was received by the assessee through banking channels and the same was also repaid with interest through banking channels therefore, the assessee proved with the relevant evidence that the said amount did not represent the unaccounted money. He has referred to loan creditor wise details of the documents/evidence produced by the assessee as under: For A.Y.2014-15 Name of Party Amount Identity Genuineness Creditworthiness Remarks Gopichand Moolchandani Rs. 3,55,500/- PAN: ACVPM0229L Confirmation letter, (PB 130) Ledger (PB 131-132). ITR, Computation The advance commission was received in A.Y. 2014-15 in relation to a property deal. This was rectified and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Murlidhar Kaluram 25,00,000 PAN: AAYPH2251C Confirmation letter (PB 187) Ledger (PB 188) Bank statement (PB 189-190) Loan raised and repaid through Banking channel. Bank statement of assessee on PB 189-190 Namanincy (Naman Ink) 35,00,000 PAN: AFYPG1644R PB 196-197 Loan Confirmation Letter (PB 191) Bank statement (PB 195) and ITR (PB 192- 194) Loan raised and repaid through Banking channel. Bank statement of assessee on (PB 198) Amit Tharani 10,00,000 PAN ACBPT1991J PB 208 Confirmation letter (PB 199) Ledger (PB 204- 206) Bank statement (PB 207) ITR (PB 200-203) Loan raised and repaid through Banking channel. Bank statement of assessee on PB209-210 Chirag Tharani 12,00,000 PAN: BSXPT1292D Loan Confirmation Letter (PB 211) Bank statement (PB 217-218) Loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,00,000 KavitaTharani 50,000 Ravi Wadhwani 10,00,000 Grand PahupatiInfratech 5,00,000 Total 1,39,50,000 10. The AO made additions on account of unsecured loan by giving reasons that the assessee has not produced the copies of ITR, balance sheet and past bank account statements of the loan creditors. This shows that the AO was not satisfied with the evidence filed by the assessee and held that mere confirmation would not discharge the assessee from the onus of proving identity, creditworthiness of the creditors and genuineness of the transactions. Thus, in absence of ITR, balance sheet, bank account statements of the loan creditors the AO held that the assessee failed to prove creditworthiness of the lenders and genuineness of the transactions. It is pertinent to note that if the AO was not satisfied with the supporting evidence filed by the assessee he ought to have called for other supporting evidence from the assesse. But instead of confronting the assessee of insufficient evidence the AO has made the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of deal as an advance. However, the same has been shown in return for AY 2014-15. On perusal of ITR for AY 2014-15 appellant has shown the said commission income. Further, in AY 2014-15, appellant has received advance commission from Shri Gopichand Moolchandani Family against real estate transaction and has been offered for taxation in AY 2015-16. Further, sum of Rs. 43,260/- was excess commission received against real estate transaction from Shri Ajeet Chhabra which was returned vide cheque no 00003 of HDFC bank dated 26.05.2014. Further, appellant has received sum of Rs. 6,50,000/- from Smt Lajwanti Devi Tharani, Rs. 10,000/- from Mrs Yashasvi Tharani, Rs. 5,00,000/- from Shri Kamlesh Motwani and Rs. 13,00,000/- from Shri Naresh Tharani (HUF) as unsecured loans. The appellant has filed copies of loan confirmation, ITR, bank account statements and copies of ledger accounts of lender. On perusal of evidences on record it is seen that the appellant has taken loan from Smt Lajwanti Devi Tharani on 04.07.2013 and the same was repaid on 31.07.2014. Similarly loan taken from Mrs Yashasvi Tharani on 08.05.2013 was repaid on 01.11.2013. Also loan taken from Mr Kamlesh Motwani on 03.07. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spicion how so strong the reasons of suspicion may be. Also, the appellant has repaid the loan. Hon'ble Gujarat High Court in the case of Ayachi Chandrashekhar Narsangji (2014) 42 Taxmann.com 251 (Guj HC) has held that It has also come on record that the said loan amount has been repaid by the assessee to Shri Ishwar Adwaniin the immediate next FY and the Deptt has accepted the repayment of loan without probing into it. In the aforesaid facts and circumstances of the case, when the Tribunal has held that the matter is not required to be remanded as no other view would be possible we see no reason to interfere with the impugned order passed by ITAT . Similar view was taken by Hon'ble ITAT Mumbai I the case of HK Pujara Builders (2019) 33 NYPTTJ186 (Mumbai Trib.). Similar view was taken by Hon'ble Delhi ITAT in the case of Supreme Buildcap Pvt Ltd(2020) 34 NYPTTJ 418 (Del Trib.). The amount of loan has been squared up before the date of search, therefore, the addition made by the AO is devoid of merit as held by Hon'ble Mumbai ITAT in the case of Vashu Bhagnani (2018) 32 NYPTTJ 599 (Mumbai Trib.) 4.6.3 The lenders has furnished the loan confirmation, copy of ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired details in order to prove identity of lenders, genuineness of the transaction and creditworthiness of the lenders. 4.6.5 Therefore, in view of the above discussion, the AO was not justified in making addition on account of unsecured loan received from various individuals and firms. Thus, addition made by the AO amounting to Rs. 5,00,000/- in AY 2010-11, Rs. 43,200/- in AY 2012-13, Rs. 5,75,000/- in AY 2013-14, Rs. 28,58,760/- in AY 2014- 15 and Rs. 1,39,50,000/- in AY 2015-16 is Deleted. Therefore, the appeal on these grounds is Allowed. 11. There is no dispute that the loans were received by the assessee through banking channels as evident from the bank account statement of the assessee as well as the loan creditors. Further, it is also evident that most of the loans were repaid by the assessee in the very next year as reflected in the bank account statement and ledger accounts produced by the assesse. Accordingly in view of the documentary evidence produced by the assessee showing the transactions through banking channel and subsequent repayment of loan amounts through banking channel and in the absence of any defect pointed out by the AO in the evidence produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nya Jeweller Pvt. Ltd. as the assessee never communicated with him either through Sms or call or any other mode. Without prejudice the Ld. AR has submitted that even if it is accepted that the assessee was involved in the transactions alleged in the massages only the commission income on such transactions can be assessed to tax and not the quantum of the transactions which is assumed by the AO. He has relied upon the order of the CIT(A) as well as the order of this Tribunal dated 1.12.2022 in case of ACIT vs. Narendra Kumar Gupta, Guwalior in ITANo.795/Ind/2018. 14. We have considered the rival submissions as well as relevant material on record. The AO has made the addition on account of undisclosed investment in the Hawala transactions on the basis of the text massages found in the mobile number of Narendra Kumar Gupta director of M/s Tanya Jeweller Pvt. Ltd. The AO has reproduced the details of the massages at page no. 17 of the assessment order. These massages were in coded form and translated into amounts in Rs. by the AO as under: Ram Bpl 8821000413 18.2.2014 Amit 2371037963 45kg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy notes found during the course of search in case of M/s Tanya Jewellers Pvt. Ltd. So far as the currency notes numbers found at the place of M/s Tanya Jewellers Pvt. Ltd. is concerned the same can be regarded as a relevant document to the extent of involvement of such party in the Hawala transactions. But those details of the currency notes cannot be related to the assessee in absence of any material evidence or statement in this regard. Even otherwise this tribunal in case of Shri Narendra Kumar Gupta in ITANo.795/Ind/2018 has upheld the order of the CIT(A) accepting the involvement of the said party in the Hawala transactions but the addition has been restricted only to the commission income of the Hawala transactions in para 8 as under: 8. We have considered rival submissions of both sides and also perused the material held on record. Regarding first tranche of addition on account of unexplained-transactions of Rs. 8,25,03,772/-, the crux of assessee s submission is that those transactions are at par with the explained- transactions of Rs. 7,04,89,360/- in every respect and there is no difference whatsoever. Firstly, the revenue-authorities have loudly and unambiguous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney on behalf of clients with an objective to earn commission. Therefore, there is no reason to distinguish the two categories of transactions merely on the basis of responsive/non-responsive attitude of those persons. We feel that the taxation-authorities must assess the income of assessee in a proper and judicious manner so as to charge a proper amount of tax, neither a penny less nor a penny more. We also observe that there is no evidence on record brought by revenue, despite search-proceeding, that the impugned unexplained transactions of 43 persons were different in any manner or structure than the explained transactions of 36 persons. We observe that the various reasons cited in the beginning of this paragraph clearly reveal that all transactions were at par. Being so, we do not find any merit in the claim of revenue that the so-called unexplained transactions should be accorded a different treatment than the explained transactions . We observe that the Ld. CIT(A) has given a careful thought to the facts of case and validly held that the assessee must have earned only commission of Rs. 36,71,832/- on all transactions of Rs. 15,29,93,132/-. Having said so, Ld. CIT(A) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds and therefore, concluded that the sum belongs to the assessee. I have given my thoughtful consideration to the facts and findings of the AO inter alia material brought on record. At the outset there is no denying of the fact that on retrieval of data/information from the mobiles (hand-sets) used by the Shri Narendra Gupta was for hawala business . Hence, it can be said that appellant was involved in hawala transaction. However, law does not empowers AO to made addition of whole amount rather addition ought to have been made for commission income earned for doing hawala transaction. Onus is on the department to prove that amount which is being added is assessee's income. Interestingly, even after search seizure operation, department could not find the assets/investments having worth of such huge amount to justify the rationality of this addition. I find a considerable force in the argument of the Id. AR that if the appellant has earned such huge income then it would have been found during search in some or other form. Appellant has also contended that the AO neither provided the copies of the statements of Shri Narendra Gupta nor any opportunity of cross-examination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is sustained. CO No.18 19/Ind/2022 The assessee has raised common grounds of appeal as under: 1. That the ld CIT(A), NFAC was not justified in confirming the assessment order, which is bad-in-law, void ab initio, barred by limitation, illegal, contrary to the facts and circumstances of the case, liable to be annulled. 2. The Id CIT(A), NFAC erred in confirming the assessment order when it was evident from satisfaction note that the documents found during search and seizure operations, pertains to assessee and do not belong to assessee. 3. The Id CIT(A), NFAC was not justified in confirming the assessment order and notice u/s. 153C when no proper reasons were recorded. 4. The ld CIT(A), NFAC was not justified in confirming the assessment order and notice u/s. 153C when the requirement of issuing two satisfaction note was not fulfilled as the AO of the searched person M/s. Tanya Jewellers Pvt. Ltd, Gwallior and assessee are different. 18. We have heard Ld. AR as well as Ld. DR and considered the relevant material on record. Ground no.1 of the CO is general in nature and assessee has not pointed out any specific infirmity and illegality in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson. In the case of appellant, the AO of the appellant and the AO of the searched person are common and has recorded satisfaction note and therefore, the light of recent judgment of Super Malls (supra), plea raised by appellant has no merit and is therefore, rejected. Therefore, appeal on these grounds is Dismissed. 23. Thus, when the satisfaction was recorded by the AO who is having jurisdiction over the assessee as well as search person then there is no infirmity in the recording of satisfaction for want of separate satisfaction by the AO of search person as well as by the AO of the assessee. Accordingly we do not find any reason to interfere with the impugned order of the CIT(A) qua this issue. Additional Ground 24. Ld. Sr. counsel has submitted that the additional ground raised by the assessee for both years is purely legal ground and was also raised before the Ld. CIT(A) and also decided against the assessee but due to inadvertence the same was not raised in the original grounds of CO filed by the assesse. Thus, Ld. AR has submitted that the additional ground raises by the assessee regarding disallowance of foreign travel expenses may be admitted and decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of search. Therefore, the addition made by the AO on the basis of the passport details is not justified and liable to be deleted. Ld. AR has referred to the certificate of M/s. Grand Agencies who has confirmed the sponsoring of foreign trips of the assessee and bearing the expenditure. Thus, ld. AR has submitted that when the assessee has not incurred any expenditure on the foreign trips then the addition made by the AO on the basis of assumption is not justified. 29. On the other hand, Ld. DR has relied upon the order of the authorities below and submitted that the assessee has failed to explain the source of the expenditure incurred on foreign trips. 30. We have considered the rival submissions as well as relevant material on record. There is no dispute that the assessee undertook the foreign trips during the two assessment years i.e. 2014-15 2015-16. The assessee has also not claimed any expenditure incurred on these foreign trips and therefore, the AO has made addition for expenditure of Rs. 2 lac for each year. The assessee has produced the certificate of M/s Grand Agencies, Indore who has confirmed the fact of sponsoring foreign trip of the assessee and bearing expen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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