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TMI Blog2024 (12) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... to take into consideration the corresponding amount outstanding on the same date in the loan creditors account. The source of investment in money lending business was duly enquired into by Ld. AO during the course of assessment proceeding. The assessee had furnished the replies to the satisfaction of Ld.AO. It was duly explained that out of total amount in circulation in money lending, almost 98% represent borrowed funds. It was also explained that the quantification of debits / credits as shown in the notices was not a true reflection of either the gross amount lent or borrowed and therefore, these amounts could not be considered as income of the assessee. The assessee also explained that the amount outstanding as debtors on the date of search was Rs. 35 Crores and the source for this could only be out of the income generated from money-lending business over the period. Thus, the issue of investment in money lending business was duly examined and verified by Ld. AO. The assessee furnished plausible explanation for the same. Having satisfied with assessee s replies, AO framed assessment for this year as well as for preceding years. AO accepted the claim of the assessee with due ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom. the unaccounted finance mediation business having been added as unexplained money of the appellant, the order of assessment can by no stretch be stated to be prejudicial to the interest of the revenue. 7. The PCIT has grossly erred in stating that the issue of debtor balance was not considered in the appeal before the CIT(A) when cash of Rs. 33,48,921/- found during the search of the partnership firm, added as appellant's unexplained money was disputed in appeal before the CIT(A). 8. The CIT(A) having confirmed the addition of unexplained money by rendering a finding that the appellant was a mediator, arranging loans and the cash found during the search was nothing but the income earned from the same, the entire issue of finance mediation business including the debtor balance was very much considered by the CIT(A). 9. The CIT(A) having concluded that appellant was a mediator for arranging loans and having confirmed income from the same, the PCIT has grossly erred in considering the same issue in the impugned order, without considering the findings of the CIT(A). 1.3 The Ld. AR advanced arguments and drew our attention to the queries raised by Ld. AO during the course of as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash generated out of his commission business. The assessee thus stated that this issue was already considered in the assessment proceedings and therefore, revision was not justified. 2.4 The Ld. Pr. CIT noted that an appeal was filed by M/s Sriram Studios against the assessment order passed in their own case. The assessment and appeal proceedings in the case of M/s Sri Ram Studios were entirely independent of any revisionary proceedings u/s 263. In the case of the assessee, the Ld. AO only disputed addition of cash seized and jewellery found. The decision made in the case of M/s Sri Ram Studios will not impact or come in the way of Sec. 263 proceedings in the case of the assessee. Therefore, assessee s objection was rejected. The issue of debtors balance added in the case of the firm was never a subject matter of appeal in the assessee's own case. In fact, the deletion of the addition in the firm's case clearly reflects and strengthens the fact of non-application of mind by Ld. AO in not assessing the same in the hands of the assessee. 2.5 During the case of search at the premises of M/s Sri Ram Studios, incriminating material evidencing carrying out of unaccounted financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dger. On the basis of the same, it was noted that the assessee was in the habit of sourcing funds by way of cash loan from the persons who are involved in money lending business un-officially and advancing them to various entities including Vellammal Group. In Point No.13, the summary of debit and credit balances as found in SRS day-book from FYs 2011-12 till 2019-20 was tabulated. The assessee was directed to explain the same and these amounts were proposed to be added as undisclosed income of relevant assessment years. In point nos.15 16, the assessee was asked to explain as under: - 15. In addition to the above as per the outstanding balance as per the seized tally data is Rs. 35 crore on the date of search. It proves to show that the cash funds given to the third parties namely to Vellammal group as loans by Shri Muthukrishnan as on 21.01.2020 is Rs. 35 Crores and the source of such fund is from the income earned by way of unaccounted commission and interest earned over the period of years and the amounts received from M/s Vellammal Group 16. Shri Muthukrishnan has submitted a letter to the investigation wing requesting time to go through the seized materials books of accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debtors on the date of search was Rs. 35 Crores and the source for this could only be out of the income generated from money-lending business over the period. The Ld. AO also failed to take into consideration the corresponding amount outstanding on the same date in the loan creditors account. The detail of creditors and debtors as on 21-01-2021 was duly furnished as Annexure-1 and Annexure-2 of the reply. Thus, the issue of investment in money lending business was duly examined and verified by Ld. AO. The assessee furnished plausible explanation for the same. Having satisfied with assessee s replies, Ld. AO framed assessment for this year as well as for preceding years. The Ld. AO accepted the claim of the assessee with due application of mind. The view of Ld. AO, in our considered opinion, was one of the plausible views and the same is not opposed to facts to record. This being the case, Ld. Pr. CIT, in our considered opinion, could not have substituted the opinion of Ld. AO with that of his own view unless the view of Ld. AO was shown to be perverse. We find that the view of Ld. AO was a plausible view. 6. The Hon ble Supreme Court in Malabar Industrial Co. Ltd. vs. CIT (supra) h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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