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TMI Blog2024 (9) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... above the investment shown by the assessee in its audited books. As relying on Narula Educational Trust [ 2021 (2) TMI 459 - ITAT KOLKATA] as following judgement of Abhisar Buildwell P. Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT] we hold that the additions based on DVO report cannot survive. Accordingly the ground of revenue for these two assessment years is dismissed. For assessment years 2013-14, 2014-15 and 2015-16 are concerned, which are abated assessment years, we find that the matter was in the case of B.G.Shirke Construction Technology Pvt Ltd. [ 2018 (8) TMI 1207 - BOMBAY HIGH COURT] wherein held question as proposed is academic, unless the Revenue first challenges finding of fact arrived at by the Tribunal. The finding of fact is that, there is no excess work in progress than that declared by the Respondent-Assessee as on 31.3.2009 and the valuation done of the work-in- progress as on 31.11.2008 was only on provisional basis. Moreover, even if assume that the closing stock i.e. work-in- progress is in excess of that recorded/disclosed by the Respondent, the same has to be added to the income only under Section 69A of the Act as held by this Court in Dialust [ 2002 (1) TMI 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011-12 5] 48/NAG/2021 (By Revenue) 6] CO No.4/NAG/2021 (by Assessee) M/s. Radha Madhav Developers 23/03/2021 2012-13 7] 49/NAG/2021 (By Revenue) 8] CO No.5/NAG/2023 (by Revenue) M/s. Radha Madhav Developers 23/03/2021 2013-14 9] 140/NAG/2021 M/s. Radha Madhav Developers 06/09/2021 2018-19 2. The department has raised following grounds of appeal: [1] ITA No. 26/NAG/2020 (A.Y. 2014-15) Tax Effect 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 6,38,21,488/- made by the AO towards difference in cost of investment in the property based on Department Valuer's Report. Rs. 4,21,21,617/- 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 6,38,21,488/- made by the AO as there had been no rejection of books of account u/s 145 failing to appreciate that by the Finance (No.2) Act, 2014 w.e.f 01.10.2014 the amendment in section 142A enunciates that the AO may make a reference to the valuation Officer whether or not he is satisfied about the correctness or completeness of the account of the assessee 3. On the facts and circumstances of the case and in law, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ope of section 153A is limited to assessing only search related income, thereby denying Revenue the opportunity of taxing other escaped income that comes to the notice of the AO? 12. On the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that assessing officer while computing income u/s 153A is well within his powers to compute taxable income on the basis of material on record even though such material was not found during the course of search operation in view of section 15881 w.e.f.01/06/2003. 13. On the facts and the circumstances of the case and in law, the Ld. CITIA) failed to appreciate that the AO while computing income u/s 153A is well within his powers to compute taxable income on the basis of material/information received on record even though such material or information received is not reliable to the material found during the course of search in view of section 158BI w.e.f. 01/06/2003. 14. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in relying on section 158BB failing to appreciate that the impugned section is not in operation in view of insertion of section 158BI w.e.f.01/06/2003. 15. On the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of financial manoeuvring to legitimise illicit money and evade taxes and lack of genuineness in actual operations of shell companies. 21. On the facts and circumstances of the case and in law, the Ld. CITIA) has deleted the addition by superficially assessing the genuineness of transactions by accepting the documents sighted before him on face value ignoring the surrounding circumstances, preponderance of human probabilities and ground realities? 22. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 6,00,00,000/- holding that the amount is received through banking channel by incorrectly distinguishing the ratio of decision of Hon'ble Supreme Court in the case of P. Mohan Kala and Ors. 23 On the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the true nature of transactions have to be ascertained in the light of surrounding circumstances as held by Hon'ble Supreme Court in the case of Sumati Dayal Vs. CIT(214 ITR 801). 24 On the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the transaction through banking channel is not always ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds difference in cost of investment in the property based on Department Valuer's Report. Rs. 3,65,17,247/- Total Tax Effect Rs. 3,65,17,247 /- (6) ITA NO. 140/NAG/2021 (A.Y. 2018-19) Tax Effect 1. Addition u/s 68 for Rs.1.65 crores Rs. 55,00,000/- Total Tax Effect Rs. 55,00,000/- 2. The order u/s 263 of the Income Tax Act, 1961, PCIT(C), dated 8/10/2018 for the Assessment Years 2011-12, 2012-13 2013-14 is reproduced below: ORDER U/S 263 OF INCOME TAX ACT, 1961 Original return of income for A.Y. 2011-12, 2012-13 2013-14 was filed on 20.09.2011, 30.07.2012, 11,09.2014 showing total income of Rs 4,64,83,340/-, 'Nil', Rs 27,95,19,170/- respectively. The assessment under Section 143(3) r.w.s. 153C for A.Y. 2011-12 u/s 143(3) for A.Y. 2012-13 was completed on 30.09.2013 at assessed Income of Rs 4,64,83,340/- 'Nil' income respectively. Thereafter, search was conducted on 02.12.2014 on Bajoria Agrawal group of which assessee was a partner. In response to notice u/s 153A, the return was filed for A.Y. 2011-12, 2012-13 2013- 14 on 29.07.2016. The order u/s 143(3) r.w.s. 153A was passed on 30.12.2016 on assessed income of Rs. 4,64,83,340/-, 'Nil', 27,95,19, 170/-, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-12 2012-13 7,75,80,000/- 9,14,28,953/- 1,38,48,953/- 2-12-13 2013-14 45,94,90,000/- 54,15,14,434/- 8,20,24,434/- 4. The summery of the cases before the ITAT is as under: S. No ITA AY Appeal by Asst. Order Abated/ Unabated Additions CIT (A) Orde 1. 47/NAG/2021 2011-12 Department 143(3) r.w.s. 263 (153A Assessment) Unabated 1.Sec.69C Investment based on DVO Report Amount Rs. 75,59,132/- Common CIT (A) Order 23.3.2021 2. 48/NAG/2021 2012-13 Department 143(3) r.w.s. 263 (153A Assessment) Unabated 1.Sec.69C Investment based on DVO Report Amount Rs. 1,38,48,953/- 3. 49/NAG/2021 2013-14 Department 143(3) r.w.s. 263 (153A Assessment) Abated 1.Sec.69C Investment based on DVO Report Amount Rs. 8,20,24,434/- 4. 26/NAG/2020 2014-15 Department 143(3) r.w.s. 153A Dt. 22.12.2017 Abated 1.Sec.69C Investment based on DVO Report Amount Rs. 6,38,21,488/- 2. Section 68 Rs. 6 crores total Unsecured loans from (i) Anubhav Vinimay Rs.2,00,00,000/- (ii) Blue View Trade Comm. Pvt Ltd. Rs.3 Crores (iii) Raj Laxmi Decision Pvt. Ltd Rs.1 crore 5. 27/Nag/2020 2018-19 Department 143(3) r.w.s. 153A Dt. 22.12.2017 Abated 1.Sec.69C Investment based on DVO Report Amount Rs. 12,88,55,570/- 2. Section 68 Rs. 4 cror ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh the amended provisions allow the AO to make a reference to the DVO without rejection of the books of account, this power cannot be used arbitrarily and indiscriminately. Before the AQ makes a reference to the DVO, he must have a reason to believe based on some credible evidence that the actual investment made by the assessee is in excess of what is shown in the books of accounts. 6. As regards the assessment year 2011-12 and 2012-13 are concerned, it is clear from the chart presented above that this is an unabated assessment, because no assessment proceedings were pending as on the date of search on 2nd December, 2014. In view of above, let us now proceed to examine whether the additions which the AO made the order impugned in these appeals for assessment years 2011-12 and 2012-13 was based on or made with reference to any incriminating material or documents found in the course of search. There is no whisper/mention of any material leave alone any incriminating material seized during search to justify the addition in these unabated assessments other than the invalid valuation report as discussed supra. The valuation report of DVO in the facts discussed cannot be held to be incr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la (supra), the Delhi High Court, while considering the very issue and on interpretation of Section 153A of the Act, 1961, has summarised the legal position as under: Summary of the legal position 38. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words, there will be only one assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ast upon the Assessing Officer to issue notice under section 153A of the Act to the person requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Since the assessment under section 153A of the Act is linked with search and requisition under sections 132 and 132A of the Act, it is evident that the object of the section is to bring to tax the undisclosed income which is found during the course of or pursuant to the search or requisition. However, instead of the earlier regime of block assessment whereby; it was only the undisclosed income of the block period that was assessed, section 153A of the Act seeks to assess the total income for the assessment year, which is clear from the first proviso thereto which provides that the Assessing Officer shall assess or reassess the total income in respect of each assessment year, falling within such six assessment years. The second proviso makes the intention of the Legislature clear as the same provides that assessment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisition. In case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) v. Asst. CIT (supra), the earlier assessment would have to be reiterated. In case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act. 8. For the reasons stated hereinbelow, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra), taking the view that no addition can be m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each assessment, year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Section 153A of the Act reads as under: 153A. Assessment in case of search or requisition (1) Notwithstanding anything contained in Section 139, Section 147, Section 148, Section 149, Section 151 and Section 153, in the case of a person where a search is initiated under Section 132 or books of account, other documents or any assets are requisitioned under Section 132-A after the 31st day of May, 2003, the Assessing Officer shall- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139: (b) assess or reassess the total income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub- section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner. Therefore, the intention of the legislation seems to be that in case of search only the pending assessment/reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the total income for the entire six years period/block assessment period. The intention does not seem to be to re-open the completed/unabated assessments, unless any Incriminating material is found with respect to concerned assessment year falling within last six years preceding the search. Therefore, on true interpretation of Section 153A of the Act, 1961, in case of a search under Section 132 or requisition under Section 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, the AO would have the jurisdiction to assess or reassess the total income taking into consideration the incriminatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 14. In view of the above and for the reasons stated above, it is concluded as under: i) that in case of search under Section 132 or requisition under Section 132A, the AO assumes the jurisdiction for block assessment under section 153A; ii) all pending assessments/reassessments shall stand abated; iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the total income taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss, which was financed out of unexplained source of income. Thus, attracting Section 69C of the Act. Resultantly, the Assessing Officer by order dated 31.12.2010 passed under Section 143(3) of the Act made an addition of Rs.10 Crores under Section 69C of the Act. 4. Being aggrieved, the Respondent preferred an appeal to the Commissioner of Income Tax (Appeals) [CIT(A)]. By an order dated 26.3.2012, the CIT (A) deleted the addition of Rs.10 Crores this by inter-alia holding on facts that the Assessing Officer did not controvert statement of the Appellant that he had correctly taken value of work-in- progress. Further, it held the Assessing Officer had not brought on record any evidence to show that the appellant had not recorded sales, purchase, other expenses properly in its books of accounts. Under the circumstances, the CIT(A) Inter-alia record in its order as under: The primary requirement for application of section 69C is that assessee should incur expenses out of unexplained source of income. The section cannot apply if the source of income for making expenses is explained. This section refers to the source of expenditure and not to the expenditure itself. No evidence of any u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act would not be applicable to the facts of the present case as there is no evidence of any record or reference and the difference was only on account of estimation of the value of Work in Progress by the site engineers in November, 2008 and actually arriving at the value on physical verification which is reflected in the return of income as on 31.3.2009. In the above circumstances, no occasion to apply Section 69C of the Act would arise. 6. Mr. Tejveer Singh the learned counsel appearing for the Appellant-Revenue states that the Respondent- Assessee has itself offered Rs.10 Crores as additional income consequent to the search on 18.12.2008, This by letter dated 16.2.2009 on account of work-in- progress. It is submitted that the source of the above expenditure on account of work-in-progress has not been explained. Therefore, Section 69C of the Act would be applicable. 7. We find that both the CIT (A) as well as the Tribunal have rendered a finding that Work in Progress as indicated in its return of income for the year ending 31.3.2009 correctly reflects the closing Work in Progress determined on physical verification. On facts both the CIT (A) as well as the Tribunal have rend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and glaring facts to be considered which will shake the very foundation of the addition on account of so called difference in valuation of the construction carried away as per the valuation report. [i] It is an established fact that the appellant is acting only as the developer and the entire construction was subcontracted on back to back basis with Sufalam Infra Projects Ltd., an associate concern under the same management. Since the payments were made to an associated concern, the transactions were subject to verification by the Transfer Pricing Officer (TPO) as it was a specified domestic construction. No variation in the armed length price was proposed by the TOP after considering the transfer price audit report and other relevant evidence also. Further, after delivery, there is an unexplained expenditure in the hands of the appellant. This must be to suppress the turnover in the hands of Sufalam Infra Projects Pvt. Ltd. Sufalam Infra Projects Pvt. Ltd., was also subject to search proceeding u/s 132 of the IT Act, 1961 and assessment orders under Section 153A were also passed simultaneously by the same Assessing Officer. It is surprising to note that no addition was made in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant has made such huge unexplained expenditure, he must have recovered the same by taking on money from the purchasers of the flats so that the entire transaction is outside the regular books of accounts. It is a matter of fact that no such evidences were unearthed by the department in the course of search and seizure proceeding. It cannot be a case of the assessee that by making additional expenditure on construction outside the book, he is not going to recover the same from the purchasers of the flats. It is beyond the concept of preponderance and human probabilities that a businessman has ventured into a commercial venture only to make loos. [iv] Although such amended provision from 01.10.2014 with reference to Valuation Officer does not require rejection of books of accounts, but there must be some compelling circumstances to refer the valuation particularly when the regular books of accounts are maintained and no discrepancy is found in the same. It cannot be the case that the AO shall make a reference in each and every proceedings otherwise it shall be a travesty of justice that the entries in the regular books of accounts are considered with the grain of salt without any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take effect from 1st day of April, 1999, and will, accordingly, apply in relation to the assessment year 1999-2000 and subsequent years. 4. Unexplained expenditure. It has been held that it is a normal rule of presumption and evidence that where an assessee has in fact incurred certain expenditure and is not able to account satisfactorily for the same, an inference can be drawn that the expenditure or the unaccounted part thereof must have been made out of the undisclosed income of the previous year. The case of an item of such expenditure is, in principle, no different from that of a cash credit. In both cases, the assessee is in possession of certain funds during the previous year the source of which he is unable or unwilling to explain satisfactorily. It is a matter entirely within the assessee's knowledge as to how the cash credits came to be introduced or the items of wealth came to be acquired or the expenditure was incurred and once it is postulated that such cash credit or investment or expenditure belongs to the assessee then his failure to explain the same or to explain it satisfactorily can constitute a reasonable ground for an inference that the source thereof must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t with the matter as follows. 8. Ground no 5-6: Additions U/s 68: The AO has made additions u/s 68 in respect of unsecured loans taken by the appellant as under: . . 2014-15 . . 2014-15 M/s Anubhav Vinimay Pvt. Ltd. Rs. 2,00,00,000/- M/s Blue View Trade com Pvt. Ltd. Rs. 3,00,00,000/- M/s Raj Laxmi Deal com Pvt. Ltd. Rs. 1,00,00,000/- Total Rs. 6,00,00,000/- . . 2015-16 M/s Umang Trading Pvt. Ltd. Rs. 1,00,00,000/- M/s Surendra Fiscal Services Pvt. Ltd. Rs. 3,00,00,000/- Total Rs. 4,00,00,000/- The above lending companies are hereinafter jointly referred to as Lenders for the sake of convenience. 8.1 The appellant has argued that the appellant during the course of assessment proceedings submitted the loan confirmations from the Lenders confirming the grant of loan to the appellant. The loans have been received through banking channels. The Lenders are duly incorporated Private Limited Companies and are duly assessed to tax. The loan confirmations also contained the PAN of the Lenders. The Lenders further confirmed the grant of loans in the independent inquiry conducted by the AO u/s 133(6) and the Lenders duly submitted the copies of the bank statements, copies of Income Tax Return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess and genuineness of the Lenders. The Lenders being private limited companies, the identity stands established. The appellant having filed the audited statement of accounts of the Lenders wherein more than sufficient reserves and surplus are shown has proved without any doubt the creditworthiness of the Lenders. And finally, the transaction of loan duly reflected in the bank statements and also independently confirmed by the Lenders, the genuineness of the transaction also stood established. The appellant thus having duly discharged the onus cast upon it u/s 68 of the Act, no addition was warranted as has been wrongly done by the AO. 8.5 The appellant further argued that the proviso to section 68 creates the obligation on the issuing company to explain the source when the amount credited pertains to share application money, share capital, share premium or any such amount by whatever name called. The proviso does not apply to unsecured loans as in the present case. It appears that the AO grossly erred in applying the proviso to section 68 to the unsecured loans and seeking justification of the source of the Lenders which is beyond the scope of section 68 and is thus untenable. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Lenders, it was free to proceed against the Lenders rather than making additions in the hands of the Appellant. 8.10 The appellant has rightly placed reliance on CIT Vs. Dwarkadhish Investment Pvt. Ltd. (2011) 37 (I) ITCL 456 (Del HC) wherein it has been as under: 8. In any matter, the onus of proof is not a static one. Though in section 68 proceedings, the initial burden of proof lies on the assessee yet once he proves the identity of the creditors/share applicants by either furnishing their PAN or income-tax assessment number and shows the genuineness of transaction by showing money in his books either by account payee cheque or by draft or by any other mode, then the onus of proof would shift to the revenue, Just because the creditors/share applicants could not be found at the address given, it would not give the revenue the right to invoke section 68. One must not lose sight of the fact that it is the revenue which has all the power and wherewithal to trace any person. Moreover, it is settled law that the assessee need not to prove the source of source. 8.11 In the case of CIT Vs. Vrindavan Farms Pvt. Ltd (Delhi HC) wherein albeit in relation to share application money, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit entry cannot be treated to be income of the firm for the purposes of income-tax. It is open for the assessing officer to take appropriate action under section 69 of the Act against the person who has not been able to explain the investment. In the present case, there is the concurrent finding of both the Commissioner (Appeals) as well as of the Tribunal that the firm has satisfactorily explained the aforesaid entries. 6. We are, therefore, of the opinion that the view taken by the Tribunal is correct and the aforesaid question is answered against the revenue and in favour of the assessee. 8.14 In the case of M/s Sunshine Metals and Alloys Pvt. Ltd. Vs. ITO ITA No. 3212/Mum/2014 the Hon'ble ITAT, albeit w.r.t share application money but in relation to section 68 has held that if (a) the assessee has furnished the Name, Address, PAN no and Share Application Form to prove that the shares were allotted to the applicants and (b) the bank statement show that money was received through banking channels and there were no immediate withdrawals to suggest that the share application amounts have been returned back to these parties in cash, it means the assessee has discharged the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus does not justify as AO making independent enquiries and in absence of the same the addition so made is unsustainable under law. 8.17 The appellant further brought attention to the appellant order passed in the appeal of Shri Sanjay Gaurishankar Agrawal by the undersigned for AY 2014-15 vide Order No. CIT(A) - 3/280/2016-17 dt. 30.3.2019 wherein the similar addition in relation to loan taken from Anubhav Vinimay Pvt. Ltd. was made and which was deleted. The appellant has also taken loan from Anubhav Vinimay Pvt. Ltd) during AY 2014-15 and similar addition has been made. The addition was deleted in the appeal of Shri Sanjay Gauri Shankar Agrawal on the following reasoning: 5.4 I have gone through the assessment order, and the appellant's submission. The AO had made similar addition in this case for A.Y. 2014-15 by relying on the assessment order for A.Y. 2013-14, and made addition at Rs. 3,30,00,000/-. Similar made in case of the appellant for A.Y. 2013-14 was dealt by the Hon'ble CIT(A)-II vide Appeal No. CIT(A)- 3/279/2016-17 order dated 29/01/2018. The relevant portion of order of Hon'ble CIT(A) is reproduced hereunder: 6. I find that the appellant has made detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment order. A search and seizure action was conducted at appellants premise on 02/12/2014. During the course of search, as it appears from the assessment order, no evidence was found to show that the loan taken by the appellant was a sham transaction. The AO has also asserted that the appellant has not been able to prove the credit wordiness of the company, advancing the loan and the genuineness of transaction. However I find that in the assessment order its self, The AO has stated that the source of loan advance is from the share premium (which has been shown as reserves and surplus) raised by the creditor company in earlier years. The assessment order does not speck of any amount of money that was deposited in cash in the bank account of creditor company and the same was transformed to the appellant company as loan. Therefore, in absence of any positive evidence on record showing that the transaction was non genuine and also in the light of the facts stated above, I am not in agreement with the view taken by the AO that the appellant was not able to prove the nature and source of the unsecured loan. 6.2 The AO in the assessment order on page 5 has referred to the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee offered a detailed explanation. However, according to the Assessing Officer, the assessee failed to explain the addition of share application money from five of its subscribers. Accordingly, the Assessing Officer made an addition of Rs. 35,50,000/- with the aid of section 68 of the Act, 1961 on account of unexplained cash credits appearing in the books of the assessee. However, in appeal, the Commissioner of Income-tax (Appeals) deleted the addition on the ground that assessee had proved the existence of the shareholders and the genuineness of the transaction. The Income-tax Appellate Tribunal confirmed the order of the Commissioner of Income-tax (Appeals) as it was also of the opinion that the assessee had been able to prove the identity of the share applicants and the share application money had been received by way of account payee cheques. On appeal to the High Court: Hel, dismissing the appeals, that the deletion of addition was justified. 5.5 The facts and circumstances in the case of appellant are identical to that in the case of appellant for A.Y. 2013-14. No independent reason other than the reasons given in A.Y. 2013-14 are given for making addition at the hand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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