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TMI Blog2024 (3) TMI 822X X X X Extracts X X X X X X X X Extracts X X X X ..... l means and hence there cannot be any addition u/s 69 towards unexplained investment in the hands of the assessee company requires to be accepted. We hold that when assessee states that it had not made any investment by sending monies abroad in illegal means, it cannot be asked to prove the negative. The onus shifts on the revenue to prove the fact with cogent materials that statement of assessee is incorrect. Without doing so, the revenue cannot directly proceed to make an addition u/s 69 of the Act by entertaining a huge suspicion. We find that from perusal of the records, there is no evidence to prove that the amounts sent shown in the hard disk is actually amounts sent by assessee company in hawala route which had ultimately found its way in the form of share capital and share premium under FDI route. The revenue had completely addressed this issue and made an addition purely on suspicion and surmise without any basis thereby making the addition totally unsustainable in the eyes of law. It is trite law that suspicion howsoever strong would not partake the character of legal evidence and hence a greater onus is casted on the revenue to bring on record cogent evidences to justify ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w, facts and circumstances of the case, the Worthy CIT(A) has erred in upholding the action of the Ld. AO by making additions/disallowances in the impugned assessment order framed u/s 153A of the Act on the issues which have no nexus with the material unearthed during the course of search operations and thereby making a de-novo assessment, which needs to be deleted. 4. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in upholding the action of the Ld. AO, as the impugned assessment order is devoid of principles of natural justice and the Ld. AO was unable to demonstrate the alleged seized document based on which an exorbitant addition has been made and thus void-ab-initio. 5. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of the Ld. AO, by making ad-hoc additions of Rs. 119,88,60,000/- u/s 69 of the Act as unexplained investments on mere surmises, conjectures and without first pointing out to the appellant company. 6. That on law, facts and circumstances of the case, the impugned order passed by the Worthy CIT(A) deserves to be quashed since the same has been passed against the principles of natura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Investment (FDI) received by the assessee company. A hard disk -2 was seized from the office premises of Alchemist group at SCO 12-13, Sector- 9D, Chandigarh which contained certain data pertaining to money to be sent and amount received in India through FDI route. A show cause notice dated 6.11.2018 was issued to the assessee and following information was asked from the assessee to explain and substantiate with respect to seized material:- On analysis of data located in G:\DATA OF SERVER 3 FILE SERVER PRESENT DATA\XLS\Trade Transaction 2013-14- Final-Ravi Singapure-Finalin hard disk-2 seized from SCO 12-13, Sector-9 D, Chandigarh. Details related to Foreign Direct Investment (FDI) received in Alchemist group entities are found maintained. The scanned copy of details in the document located at the above path in the hard disk is reproduced below: FDI Details Particulars Send Total Amount Received In India Diff AFL 13000000.00 11897090.17 1102909.83 ATI 19500000.00 18621973.931 878026.07 AHL 19000000.00 18009117.72 990882.28 Total USD 51500000.00 48528181.82 2971818.18 51500000.00 48528181.82 1000000 51.50 48.53 From the analysis of the above document, it is clear that Alchemist Foo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. The ld. AO also observed that the transaction of the assessee is nothing but a camouflage to roundtrip their own money via FDI route. Accordingly, the ld. AO concluded that the figure of 19500000 USD shown as amounts sent is undisclosed investment made by the assessee sent for the purpose of obtaining funds through FDI route to avoid tax incidence which have been introduced in its books. Such unexplained money introduced in its books through FDI route is liable for addition u/s 68 of the Act since the money has been sent to secure such funds through FDI route, the same has to be considered as unexplained investment in terms of provisions contained in section 69 of the Act. The ld. AO accordingly made an addition of Rs 119,88,60,000/- (19500000 USD * Rs 61.48 per USD) u/s 69 of the Act. 6. The ld. CIT(A) upheld the action of the ld. AO by observing as under:- 5.3.1 I have carefully considered all the facts on record and find that the explanation given by the appellant to explain the difference between the amount shown as sent in the seized data and the amount actually received as investment, is quite untenable since the appellant has not given any details and particul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of FC-GPR Part A to RBI-Foreign Direct Investment mentioning the details of amounts received under FDI route duly mentioning the name of LGF with its address in the prescribed form. f) Certificate from a independent company secretary dated 7.3.2013 certifying that with regard to the subject mentioned receipt of monies under FDI route and consequential allotment of shares to LGF , the requirements of relevant provisions of the Companies Act, 1956 and Foreign Exchange Management Act (FEMA) had been complied with. g) Letter issued by LGF dated 12.3.2013 to Punjab National Bank confirming the fact of they investing Rs 100 crores towards shares in assessee company and also confirming the fact of receipt of share certificate from the assessee company. 8. We find that the assessee had been asking for a cloned copy of the hard disk before the ld. AO right from the assessment proceedings. Infact even during the pendency of the appeal before this Tribunal, the assessee had issued a reminder request to the ld. AO vide letter dated 05.01.2023 and 20.10.2023 to provide the cloned copy of the hard disk-2 seized from the office premises of Alchemist group at SCO 12-13, Sector -9D, Chandigarh. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Circle-20, New Delhi 9. The assessee had replied that since this letter was received only on 6.2.2019, it could not attend the hearing on 5.2.2019. This was intimated to the ld. AO on 06.02.2019 itself both by way of letter sent to him physically as well as in official Email ID of the ld. AO. The ld. DR vehemently submitted that the seized documents were indeed already handed over to the assessee on 4.12.2018 itself much before the completion of assessment proceedings on 7.2.2019. We are in agreement with the argument advanced by the ld. AR that if the seized documents were already provided to the assessee on 04.12.2018 itself, then what is the need for the ld. AO to grant an opportunity to the assessee to be present for receiving the cloned copy of the hard disk on 05.02.2019. Hence the version of the assessee that the cloned copy of the hard disk-2 which allegedly contained the material for making the impugned addition was never handed over to the assessee requires to be accepted. In this background, the stand taken by the assessee that it had not sent any monies abroad through illegal means and hence there cannot be any addition u/s 69 of the Act towards unexplained inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brushed aside that the said presumption is a rebuttable presumption and assessee had duly discharged its onus on the same. Moreover, the present assessee herein is an assessee proceeded u/s 153C of the Act and hence it is all the more necessary for the revenue to arrive at the satisfaction that income or materials or documents does not belong or pertain to the searched person and indeed belongs to third person (i.e 153C assessee). Viewed from this angle, it could be safely concluded that presumption u/s 292C of the Act would apply only to the person proceeded u/s 153A of the Act and not for the assessee u/s 153C of the Act. 11. Further this case was even subjected to examination by CBDT Foreign Tax Division wherein FT TR reference was also made to Cyprus tax authorities. FT TR had submitted its report duly confirming the fact that LGF had raised monies through issue of shares and those monies had been utilized by them for making investment in shares of Assessee Company under FDI route. No adverse comments were indeed given by FT TR of CBDT with regard to these transactions. Hence the source of source is also duly established and proved by the assessee company herein. Hence the all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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