Income Tax Appellate Tribunal - Indore
Shri Awadhesh Dixit, Indore vs Acit,Central-1, Indore on 8 April, 2024
1 आयकर अपीलीय अिधकरण, इं दौर ायपीठ, इं दौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER IT(SS)A Nos.154 to 157/Ind/2020 Assessment Years: 2013-14 & 2014-15 and 2016-17 & 2017-18 Shri Awadhesh Dixit, ACIT, 65-66,Balaji Vihar, Central I, Bhakt Prahlad Nagar, बनाम/ Indore.
Near Gangwal Bus Stand, Vs. Indore.
(Assessee / Appellant) (Revenue / Respondent)
PAN: AEDPD91671
IT(SS)A Nos.85 to 89/Ind/2021
Assessment Years: 2013-14 to 2017-18
ACIT, Shri Awadhesh Dixit,
Central I, 65-66,Balaji Vihar,
Indore. बनाम/ Bhakt Prahlad Nagar,
Near Gangwal Bus Stand,
Vs.
Indore.
(Revenue / Appellant) (Assessee / Resondent)
IT(SS)A Nos.153/Ind/2020
Assessment Year: 2016-17
Shri Hradyesh Dixit, ACIT,
65-66,Balaji Vihar, Central I,
Bhakt Prahlad Nagar, बनाम/ Indore.
Near Gangwal Bus Stand,
Vs.
Indore.
(Assessee / Appellant) (Revenue / Respondent)
PAN: AGJPD9390B
IT(SS)A Nos.67/Ind/2021
Assessment Year: 2016-17
2
ACIT, Shri Hardyesh Dixit,
Central I, 65-66,Balaji Vihar,
Indore. Bhakt Prahlad Nagar,
बनाम/ Near Gangwal Bus Stand,
Vs. Indore
(Revenue / Appellant) (Assessee / Respondent)
PAN: AGJPD9390B
IT(SS)A Nos.97/Ind/2021
Assessment Year: 2016-17
ACIT, Smt.Pratiksha Dixit,
Central I, 65-66,Balaji Vihar,
Indore. Bhakt Prahlad Nagar,
बनाम/ Near Gangwal Bus Stand,
Vs. Indore
(Revenue / Appellant) (Assessee / Respondent)
PAN: ACBPD5227D
IT(SS)A Nos.98/Ind/2021
Assessment Year: 2016-17
ACIT, Shri Shantanu Dixit,
Central I, 65-66,Balaji Vihar,
Indore. Bhakt Prahlad Nagar,
बनाम/ Near Gangwal Bus Stand,
Vs. Indore
(Revenue / Appellant) (Assessee / Respondent)
PAN: BDHPD8381A
IT(SS)A Nos.99 & 100/Ind/2021
Assessment Year: 2016-17 & 2017-18
3
ACIT, Smt.Surekha Dixit,
Central I, 65-66,Balaji Vihar,
Indore. बनाम/ Bhakt Prahlad Nagar,
Near Gangwal Bus Stand,
Vs.
Indore
(Revenue / Appellant) (Assessee / Respondent)
PAN: AMLPD6549G
Assessee by Shri Anil Kamal Garg and Shri Arpit Gaur, CAs
Revenue by Shri Ashish Porwal, Sr. DR
Date of Hearing 09.01.2024
Date of Pronouncement 08.04.2024
आदे श/O R D E R
Per Bench:
All these fifteen appeals filed by the assessee and the Department are of different assessees of same group. Total five assessees are involved in the present appeals and details are summarized as under :-
Hardyesh Dixit 2016-17 CIT(A)-3,Bhopal dated ACIT, Central-I, Indore dated 23.09.2020 17.08.2019 Awadhesh Dixit 2013-14 to CIT(A)-3,Bhopal dated ACIT, Central-I, Indore dated 2017-18 23.09.2020 17.08.2019 Smt.Pratiksha 2016-17 CIT(A)-3,Bhopal dated ACIT, Central-I, Indore dated Dixit 23.09.2020 17.08.2019 Shantanu Dixit 2016-17 CIT(A)-3,Bhopal dated ACIT, Central-I, Indore dated 23.09.2020 17.08.2019 Smt. Surekha 2016-17 & CIT(A)-3,Bhopal dated ACIT, Central-I, Indore, dated Dixit 2017-18 23.09.2020 17.08.2019
2. The captioned appeals at the instance of different assessees and Revenue pertaining to assessment years 2013-14 to 2017-18 are against the separate orders Ld. CIT(A)-3, Bhopal evenly dated 23.09.2020 which are arising out of the separate assessment orders framed by ld. ACIT, Central I, Indore, evenly dated 17.08.2019. Since the assessees in appeal pertain to same group and issues are mostly common at the request of both the 4 parties, these appeals were heard together and are being disposed of through this common order for the sake of convenience and brevity.
3. The Registry has informed that Revenue's appeal in I.T.(SS).A.Nos. 85 to 89/Ind/2021 is delayed by 109 days, I.T.(SS).A.Nos. 99 & 100/Ind/2021 is delayed by 113 days and I.T.(SS).A.No. 67/Ind/2021 is delayed by 100 days and I.T.(SS).A.Nos. 97 & 98/Ind/2021 is delayed by 113 days. Though no separate application for condonation of delay has been filed by the Revenue, however, we on observing that the impugned orders are dated 23.09.2020 and at that point of time, country was passing through COVID-19 restrictions. Hon'ble Supreme Court in the suo motu writ petition no. 3/2020, which has been later on amended by Misc. Application No. 21/22 has held that limitation period falling in the period 15.03.2020 to 28.02.2022 shall be excluded for the purposes of period of limitation in respect of judicial or quasi-judicial proceedings under any general or special laws. Further, Hon'ble Court has held that where the period of limitation would have expired between 15th March, 2020, and 28th February, 2022, a period of 90 days from 1st March, 2022, shall be granted to all persons. Considering the said judgement of Hon'ble Apex Court, we find that since the time limit filing the appeal by the Revenue was falling during the COVID-19 pandemic period, the delay in filing the instant appeals, as referred above at the end of Revenue, deserves to be condoned. We, accordingly, condone the delay in the appeals filed by the Revenue and admit the same for adjudication.
4. On perusal of the grounds of appeal, we notice that the major issues have been raised in the case of the assessee, namely, Awadhesh Dixit and 5 in the remaining cases, common issues have been raised, similar to that in the case of Awadhesh Dixit. Therefore, after both the parties having agreed, we take Awadhesh Dixit as a lead case and shall decide the issues raised therein and our decision shall apply mutatis mutandis in the case of remaining assessees on the common issues raised by both the sides.
4.1. Grounds of appeal raised by the Revenue and assessee in case of Awadhesh Dixit , are reproduced below:-
I.T.(SS).A.No. 154/Ind/2020 : A.Y. 2013-14: (Awadhesh Dixit)
1. That, on the facts and in the circumstances of the case , the action of the Ld. CIT(A) in confirming the additions to the extent of Rs. 7,36,656/- made by the AO in the appellant's income is quite unjustified, unwarranted, excessive, arbitrary and bad-in law.
2. That, the Ld. CIT(A) grossly erred, both on facts and in law, in confirming the AO's action of making various additions in the appellant's income for the relevant assessment year without considering the material fact that having already furnished original return of income under s. 139 of the Act, on the date of initiation of the search u/s 132, no assessment proceeding was pending in respect of the assessment year under consideration and, therefore, without having recourse to any seized incriminating document or material, no addition could have been made on any cunt in view of the settled legal position.
3a) That, without prejudice to the above, the Ld. CIT(A) grossly erred, both on facts and in law, in con firming the addition of Rs. 1,20,250/- made by the AO in the appellant's income on account of alleged unexplained unsecured loan from one person namely Shri Danny Hatuniya, by invoking the provisions of S. 68 of the Act, without considering the material fact that having already furnished original return of income u/s 139 of the Act, on the date of initiation of the search u/s 132, no assessment proceedings was pending in respect of the assessment year under consideration and, therefore, without having recourse to any seized incriminating document or material, no addition could have been made.
3b). That, without prejudice to the above, the Ld. CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition of Rs. 1,20,250/-made by the AO in the appellant's income on account of alleged unexplained unsecured loan from one person namely Shri Danny Hatuniya, by invoking the provisions of s. 68 of the Act, without confront the appellant with any information as regard to the loan creditor allegedly gathered behind the back of the appellant either in the case of the appellant himself or in the cases of some other assessees and as also, without giving any opportunity of cross-examination to the appellant.
3c). That, without prejudice to the above, the Ld. CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition to the extent of Rs. 1,20,250/- without considering the material fact that the appellant had duly discharged his initial onus of providing the identity 6 of the loan creditor, the genuineness of the transactions and creditworthiness of loan creditor beyond all doubts by producing all the necessary documentary evidences.
3d) That, without prejudice to the above, the Ld. CIT(A) grossly erred, both on facts and in law, in confronting the impugned addition to the extent of Rs. 1,20,250/- without adhering to the appellant's prayer to issue either summons u/s 131 or letter under s. 133(6) of the Act to the loan creditor.
I.T.(SS).A.Nos. 155/Ind/2020 - A.Y. 2014-15 : (Awadhesh Dixit ):
1. That, on the facts and in the circumstances of the case , the action of the Ld. CIT(A) in confirming the additions to the extent of Rs. 7,36,656/- made by the AO in the appellant's income is quite unjustified, unwarranted, excessive, arbitrary and bad-in law.
2. That, the Ld. CIT(A) grossly erred, both on facts and in law, in confirming the AO's action of making various additions in the appellant's income for the relevant assessment year without considering the material fact that having already furnished original return of income under s. 139 of the Act, on the date of initiation of the search u/s 132, no assessment proceeding was pending in respect of the assessment year under consideration and, therefore, without having recourse to any seized incriminating document or material, no addition could have been made on any cunt in view of the settled legal position.
3a) That, without prejudice to the above, the Ld. CIT(A) grossly erred, both on facts and in law, in con firming the addition of Rs. 7,36,656/- made by the AO in the appellant's income on account of cash paid towards foreclosure of auto loan by treating the same as unexplained money under s. 69A r.w.s. 115BBE of the Act, without considering the material fact that having already furnished original return of income u/s 139 of the Act, on the date of initiation of the search u/s 132, no assessment proceedings was pending in respect of the assessment year under consideration and, therefore, without having recourse to any seized incriminating document or material, no addition could have been made.
3b). That, without prejudice to the above, the Ld. CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition of Rs. 7,36,656 without considering and appreciating the material fact that during the course of the search u/s 132 of the Act or at any time during the relevant financial year, the appellant was found to be in possession of any unexplained money, bullion, jewellery or other valuable article and, therefore, in the case of the appellant, the provisions of s. 60A could not have validly been invoked.
3c). That, without prejudice to the above, the Ld. CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition of Rs. 7,36,656/- without considering and appreciating the explanation of the appellant to the effect that the sources of entire repayment of auto loan had duly been explained by the appellant along with necessary documentary evidences.
I.T.(SS).A.No.156/Ind/2020 - A.Y. 2016-17 : (Awadhesh Dixit ):
71. That, on the facts and in the circumstances of the case, the action of the learned CIT(A) in confirming the additions to the extent of Rs.12,73,000/-
made by the AO in the appellant's income is quite unjustified, unwarranted, excessive, arbitrary and bad-in-law.
2a). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition to the extent of Rs.12,73,000/- made by the AO in the appellant's income on account of alleged unexplained unsecured loan from one person namely Shri Vijendra Sisodiya, by invoking the provisions of s.68 of the Act, without confronting the appellant with any information as regard to the loan creditor allegedly gathered behind the back of the appellant either in the case of the appellant himself or in the cases of some other assessees and as also, without giving any opportunity of cross- examination to the appellant.
2b). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition to the extent of Rs.12,73,000/- without considering the material fact that the appellant had duly discharged his initial onus of proving the identity of the loan creditor, the genuineness of the transactions and creditworthiness of loan creditor beyond all doubts by producing all the necessary documentary evidences.
2c). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition to the extent of Rs.12,73,000/- without adhering to the appellant's prayer to issue either summons under s.131 or letter under s.133(6) of the Act to the loan creditor.
I.T.(SS).A.No.157/Ind/2020 - A.Y. 2017-18 : (Awadhesh Dixit ):
1. That, on the facts and in the circumstances of the case, the action of the learned CIT(A) in confirming the additions to the extent of Rs.44,73,000/- made by the AO in the appellant's income is quite unjustified, unwarranted, excessive, arbitrary and bad-in-law.
2a). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition to the extent of Rs.4,73,000/- made by the AO in the appellant's income on account of alleged unexplained unsecured loan from one person namely Shri Vijendra Sisodiya, by invoking the provisions of s.68 of the Act, without confronting the appellant with any information as regard to the loan creditor allegedly gathered behind the back of the appellant either in the case of the appellant himself or in the cases of some other assessees and as 8 also, without giving any opportunity of cross-examination to the appellant.
2b). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition to the extent of Rs.4,73,000/- without considering the material fact that the appellant had duly discharged his initial onus of proving the identity of the loan creditor, the genuineness of the transactions and creditworthiness of loan creditor beyond all doubts by producing all the necessary documentary evidences.
2c). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition to the extent of Rs.4,73,000/- without adhering to the appellant's prayer to issue either summons under s.131 or letter under s.133(6) of the Act to the loan creditor.
3a). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.40,00,000/- made by the AO, on the allegation of making of cash payment by the appellant to some Ms. Pooja Thakur, merely on guess work and extraneous considerations, by holding the same as unexplained expenditure under s.69C r.w.s. 115BBE of the Act without considering the explanation of the appellant to the effect that he had not made the alleged payment.
3b). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition of Rs.40,00,000/- merely on his guess work, surmises and conjectures, by making baseless allegations upon the appellant without conducting any independent enquiry and without bringing any cogent adverse material on record.
4. That, the learned CIT(A) grossly erred, in law, in confirming the action of the AO in invoking the provisions of section 115BBE of the Act in respect of various additions made without considering the material fact that in the appellant's case, the nature of additions to the income was not falling in any of the deeming provisions of the Act and therefore, the provisions of section 115BBE of the Act could not have been invoked in the appellant's case.
I.T.(SS).A.Nos. 85/Ind/2021 - A.Y. 2013-14 : Department's appeal: (Awadhesh Dixit) 9
1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 1,05,28,750/- made by the AO on account of unexplained cash credit u/s 68 of the Act.
2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 1,53,14,165/- made by the assessee on account of unexplained investment in plots u/s 69 of the Act.
3. On the facts and in the circumstances of the case , the Ld. CIT(A) has erred in deleting the addition of Rs. 11,96,064/- made on account of negative cash balance u/s 69A of the Act.
I.T.(SS).A.Nos. 86/Ind/2021 - A.Y. 2014-15 : Department's appeal: (Awadhesh Dixit)
1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 1,54,90,901/- made by the AO on account of unexplained cash credit u/s 68 of the Act.
2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs.20,09,63,179/- made on account of bogus purchases as un explained expenditure u/s 69C of the Act.
3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs.43,80,461/- made on account of difference between the bogus purchase and bogus sale as unexplained cash credits u/s 68 of the Act.
I.T.(SS).A.Nos. 87/Ind/2021 - A.Y. 2015-16 : Department's appeal: (Awadhesh Dixit)
1. On the facts and in the circumstances of the case, Ld. CIT(A) has erred in law in deleting the addition of Rs. 25,00,000/- made on account of unexplained cash credits u/s 68 of the Act.
2. On the facts and in the circumstances of the case, Ld. CIT(A) has erred in law in deleting the addition of Rs. 52,037/- made on account of negative cash balance u/s 69A of the Act.
3. On the facts and in the circumstances of the case, Ld. CIT(A) has erred in law in deleting the addition of Rs. 22,57,41,647/- made on account of bogus purchases as unexplained expenditure u/s 69C of the Act.
4. On the facts and in the circumstances of the case, Ld. CIT(A) has erred in law in deleting the addition of Rs.51,27,003/-.
I.T.(SS).A.Nos. 88/Ind/2021 - A.Y. 2016-17 : Department's appeal: (Awadhesh Dixit)
1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 1,74,36,700/- made on account of unexplained cash credits u/s 68 of the Act.
102. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs.1,18,35,600/- made on account of unexplained investment in plots u/s 69 of the Act.
3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs 29,09,68,118/-made on account of bogus purchases as unexplained expenditure u/s 69C of the Act.
4. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs 94,69,250/- made on account of difference between purchase and bogus sale as unexplained cash credits u/s 68 of the Act.
5. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 50,75,150/- made on account of marriage anniversary expenses as unexplained expenditure u/s 69C of the Act.
6. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 61,88,526/- made on account of personal expenses and construction expenses as unexplained expenditure u/s 69C of the Act.
7. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 2,00,000/- made on account of unexplained cash payment to some Ravindra Ramchet Yadav as unexplained expenditure u/s 69C of the Act.
I.T.(SS).A.Nos. 89/Ind/2021 - A.Y. 2017-18 : Department's appeal: (Awadhesh Dixit)
1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 1,03,50,000/- made on account of unexplained cash credits u/s 68 of the Act.
2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 34,22,90,320/-made on account of difference b et the bogus purchase and bogus sale as unexplained expenditure u/s 69C of the Act.
3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 1,18,10,820/- made on account of difference bet the bogus purchase and bogus sale as unexplained cash credits u/s 68 of the Act.
4. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs.61,88,526/- made on account of personal expenses and construction expenses as unexplained expenditure u/s 69C of the Act.
5. Brief facts of the case are that the assessee is an individual engaged in the business of trading in pharmaceutical items, government supplies, C&F Agency of pharmaceutical companies, wholesale trading in Soya DOC, 11 grains and pulses. The assessee furnished his original returns of income for the various years u/s. 139 of the I.T. Act, 1961. Search and seizure operations u/s. 132 were carried out at various premises of Global group and the assessee on 12/07/2016. Consequently, notices u/s. 153A were issued to the assessee for A.Y. 2011-12 to A.Y. 2016-17 on 09/10/2017. In response to the above notices, the assessee filed returns of income for A.Y. 2011-12 to A.Y. 2015-16 on 17/02/2018 and for A.Y. 2016-17 on 15/10/2018. Further, the assessee filed his regular return of income for A.Y. 2017-18 on 29/10/2018. The details of returns of income for the years under appeal before us i.e. for A.Y. 2013-14 to 2017-18 are as under:
A.Y. Date of filing Returned Date of filing Income Additional of Return u/s. income of Return in declared Income 139(1) (in Rs.) response to Return 153A officered, if the notice (In Rs.) any (In Rs.) u/s. 153A 2013-14 12/07/2013 17,10,520 17/02/2018 17,10,520 Nil 2014-15 24/09/2014 26,94,740 17/02/2018 26,94,740 Nil 2015-16 18/09/2015 35,12,460 17/02/2018 35,12,460 Nil 2016-17 21/03/2017 35,41,540 15/10/2018 35,41,540 Nil 5.2. In the case of the assessee, a reference was made for special audit u/s. 142(2A) of the Act and accordingly, the special auditors submitted their report on 20.06.2019. The report of the special auditors, as produced by the assessee, was duly perused and considered by the AO and as also, by the CIT(A).
5.3. After considering the submission of the assessee, finally, the AO made additions of Rs.1,05,28,750/- in A.Y. 2013-14, Rs.1,56,11,151/- in A.Y. 2014-15, Rs.25,00,000/- in A.Y. 2015-16, Rs.1,87,09,700/- in A.Y. 2016-17 and Rs.1,08,23,000/- in A.Y. 2017-18 on account of unexplained cash credits 12 u/s. 68 in respect of unsecured loans obtained by the assessee (Para 8) addition of Rs.20,09,63,179/- in A.Y. 2014-15, Rs.22,57,41,647/- in A.Y. 2015-16, Rs.29,09,68,118/- in A.Y. 2016-17 and Rs.34,22,90,320/- in A.Y. 2017-18 on account of bogus purchases as unexplained expenditure u/s.
69C (para 10); addition of Rs.43,80,461/- in A.Y. 2014-15, Rs.51,27,003/- in A.Y. 2015-16, Rs.94,69,250/- in A.Y. 2016-17 and Rs.1,18,10,820/- in A.Y. 2017-18 on account of difference between purchases and sales as unexplained cash credits u/s. 68 (para 10); addition of Rs.50,75,150/- in A.Y. 2016-17 on account of one fifth share in marriage anniversary expenses as unexplained expenditure u/s. 69C (para 11); additions of Rs.61,88,526/- each in A.Y. 2016-17 & A.Y. 2017-18 on account of personal expenses and construction expenses as unexplained expenditure u/s. 69C of the Act (para 12); addition of Rs.2,00,000/- in A.Y. 2016-17 and Rs.40,00,000/- in A.Y. 2017-18 on account of unexplained cash payments as unexplained expenditure u/s. 69C of the Act (para 13); addition of Rs.1,53,14,163/- in A.Y. 2013-14 and Rs.1,18,35,600/- in A.Y. 2016-17 on account of unexplained investment in plots u/s. 69 r.w.s. 115BBE of the Act (para 14); addition of Rs.7,36,656/- in A.Y. 2013-14 on account of unexplained money u/s. 69A of the Act (para 15); addition of Rs.11,96,064/- in A.Y. 2013-14 and Rs.52,037/- in A.Y. 2015-16 on account of negative cash balance considered as unexplained money u/s. 69A (para
17).
6. Aggrieved assessee preferred separate appeals for all the assessment years under consideration before Ld. CIT(A). The ld. CIT(A), vide his common Order dated 23.09.2020 adjudicated the appeals of the assessee thereby giving substantial relief to the assessee.
137. Now, aggrieved by the relief granted by the ld. CIT(A) to the assessee, the revenue is in appeal before this Tribunal for the assessment years 2013-14 to 2017-18.
8. Against the additions confirmed by the ld. CIT(A), the assessee has preferred cross appeals for the A.Y. 2013-14, 2014-15, 2016-17 & 2017-18 before us.
9. Ground No. 1 of the Assessee for A.Ys. 2013-14, 2014-15, 2016-17 & 2017-18:
9.1. This ground being general in nature, requires no adjudication.
10. Ground No. 2 of the Assessee for A.Y. 2013-14 & A.Y. 2014-15:
10.1. Through the Ground No. 2 taken for A.Y. 2013-14 & A.Y. 2014-15, the assessee has challenged the action of the ld. CIT(A) in upholding the additions made by the AO in completed assessment years without having recourse to any incriminating material found during the course of search. 10.2. Before the ld. CIT(A), the assessee furnished the detailed written submissions on the subject ground, which has been reproduced by the ld. CIT(A) at page no. 30 to 39 of his Order. While adjudicating the ground, the ld. CIT(A) himself at para (4.3.1), has given a finding that for A.Y. 2013-14 and A.Y. 2014-15, the assessee had filed his return of income u/s. 139 of the Act much prior to the date of search and seizure operations in his case which were carried out on 12/07/2016. The ld. CIT(A) also gave a finding that as on the date of the search no assessment proceedings were pending for such assessment years and further, the time limit for issuance of any notice u/s. 143(2) had also got expired on 30/09/2015 and no such notice was issued to the assessee prior to the date of the search. Thus, the ld.
14CIT(A) went on holding that for A.Y. 2013-14 and A.Y. 2014-15, the assessment proceedings had got completed and therefore, they did not get abated in accordance with the second proviso to section 153A(1) of the Act. However, the ld. CIT(A) did not find any substance in the contention of the assessee that for the aforesaid assessment years, no incriminating documents or materials were found or seized.
10.3. Before us, Learned Counsel for the assessee has filed written synopsis. The relevant part of the assessee's submission for this contention is being reproduced as under:
"1.01 That, in the instant case, the assessment order has been framed by the learned Assessing Officer in pursuance of the Search Operations carried out under the provisions of s.132 in the business premises of the assessee company as well as in the residential premises of its directors.
1.02 That, on the date of initiation of the search under s.132 of the Act, i.e. on 12-07-2016, no assessment proceedings were pending in respect of the assessment years under consideration. Further, during the course of search operations carried out in the residential and business premises of the assessee along with that of his group concerns, not even a single incriminating material or document or valuable article or thing, pertaining to the assessment year under consideration, was found on the basis of which addition has been made by the learned AO in the returned income of the assessee.
3.00 Your Honours, since the A.Y. 2013-14 and A.Y. 2014-15 were the completed or non-
abated assessment years as per the position of the law, which recently got finally settled by the Order of the Hon'ble Apex Court in the case of Pr. CIT, Central-3 vs. M/s. Abhisar Buildwell P. Ltd. (Civil Appeal No. 6580 of 2021; Order dated 24-04-2023), no addition in an assessment framed u/s. 153A could have been made without having recourse to any incriminating material.
5.00 It is submitted that for making the additions under s.68 of the Act in respect of the unsecured loans, the ld. AO, while delving with the issue at para (8) on page no. 4, at 15 the beginning, has only stated that during search and post-search proceedings, the assessee was found to have accepted unsecured loans from certain dubious/ shell entities/ companies. The ld. AO also referred to some statutory company records of one of the lender companies. The ld. AO also made reliance on the comments given by the Special Auditors. However, nowhere, in the body of the assessment order, while making the addition on account of unexplained unsecured loans, the ld. AO uttered any single word or made reference of any single incriminating document. The entire addition of the unsecured loan has been made by the ld. AO only on the basis of his own notions, presumptions and conjectures. Likewise, the addition on account of unexplained investment in immovable properties (plots), as made by the ld. AO at para (14) on page no. 149, is evidently not based upon any incriminating material. Further, the addition on the allegation of bogus purchases is not based upon any incriminating material but, only upon the post-search statements recorded by the Investigation Wing. It is thus submitted that so far as the assessment years 2013-14 and 2014-15 are concerned, none of the additions is based upon any incriminating material and therefore, the entire additions made by the ld. AO for these two completed assessment years are liable to be struck down. Accordingly, the appeals of the assessee for these two assessment years, are eligible for full allowance on this count alone with the full dismissal of the Departmental Appeals for these two assessment years."
10.4. Per Contra, the learned Sr. DR vehemently argued supporting the observations of the AO and the ld. CIT(A) on this issue. However, during the course of the hearing before us, the ld. Sr. DR failed to bring on record any incriminating material on the basis whereof the subject additions were made in the A.Y. 2013-14 & A.Y. 2014-15.
11. We have heard rival contentions and perused the records placed before us, and carefully gone through the judicial pronouncements cited by both the sides. 11.1. We find that search and seizure operations u/s 132(1) were carried out in the case of assessee on 12/07/2016. We further find that, prior to the date of search, the assessee had already filed his returns of income, u/s. 139 of the Act, for A.Y. 2013-14 and A.Y. 2014-15, on 12/07/2013 and 24/09/2014 respectively.
16We noted that as on the date of search, i.e. 12/07/2016, no assessment proceedings were pending for AYs 2013-14 & 2014-15 and further, time limit for issuance of any notice under s.143(2) had also got expired on 30-09-2015 but, no such notice was issued to the assessee prior to the date of the search. In such circumstances, it can be concluded that for A.Y. 2013-14 & A.Y. 2014-15, the assessment proceedings had got completed and they did not get abated in accordance with the second proviso to the provisions of section 153A(1) of the Act, as also held by the ld. CIT(A).
11.2. We also find that the AO, while making the additions on account of bogus purchases, unsecured loans, investment in immovable properties, negative cash balance and closure of auto loan, in the two assessment years viz. A.Y. 2013-14 & A.Y. 2014-15, has not made any single reference to any incriminating material found during the course of the search. We find that in the instant case, the AO has made the additions in the A.Y. 2013-14 & A.Y. 2014-15 on the sole basis of the audited financial statements furnished by the assessee during the course of the assessment proceedings and the entries found made in the tally data containing the regular books of account of the assessee, without making reference of any seized document or any other evidence gathered during the course of search. We find that the subject legal ground was also raised by the assessee before the ld. CIT(A) and the ld. CIT(A), while giving his findings at para (4.3.2) on page no. 39 & 40 of his Order, has only given observation as regard to finding of certain bills, vouchers/ loose papers, documents, etc. evidencing the unexplained expenditure incurred by the assessee towards marriage celebration expenses, construction expenses and household expenses. We find that all the seized bills, vouchers, loose papers, documents etc., as referred to by the ld. CIT(A), are not pertaining to the assessment year 2013-14 and 2014-15 but, the same were pertaining to another two assessment years viz. A.Y. 2016-17 and A.Y. 2017-18 for which, 17 taking recourse of such seized material, the AO has made separate additions. Thus, from an Order of the AO itself, we could not find that for the purpose of making the addition for A.Y. 2013-14 and A.Y. 2014-15, the AO made any recourse of any seized material.
11.3. Before us, the ld. Sr. DR could not bring on record any incriminating material on the basis whereof the additions have been made by the AO in the assessment order for the aforesaid two assessment years. Thus, in our considered view, the two assessment years viz. A.Y. 2013-14 and A.Y. 2014-15 are non- abated assessment years and therefore, as per the settled position of the law, any addition in such non-abated assessment years could have been made only on the basis of some incriminating material or evidences gathered during the course of the search which is not a case here.
11.4. We find that the issue relating to scope of assessment u/s. 153A is not res integra and the same has now got finally settled by the judgment of the Hon'ble Apex Court in the case of Pr. CIT, Central-2 vs. M/s. Abhisar Buildwell P. Ltd. (2023) 293 Taxman 141 (SC). The relevant paras of the decision of Hon'ble Supreme Court are reproduced as under:
"12. If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under Section 153A of the Act is linked with the search and requisition under Sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated assessment. As per the second proviso to Section 153A, only pending assessment/reassessment shall stand abated and the AO would assume the jurisdiction with respect to such abated assessments. It does not provide that all completed/unabated assessments shall abate. If the submission on behalf of the Revenue is accepted, in that case, second proviso to section 153A and 18 subsection (2) of Section 153A would be redundant and/or rewriting the said provisions, which is not permissible under the law.
13. For the reasons stated 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 assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved."
11.5. Respectfully following the ratio (supra) laid down by the Hon'ble Apex Court which is squarely applicable on the instant issue, we are of the view that while making an assessment under s.153A of the Act in pursuance of a search under s.132, no addition could have been made by the AO in the assessee's income in a completed year of assessment without having recourse to any incriminating material. Accordingly, in our 19 considered view, the action of the ld. CIT(A) in confirming the AO's action of making additions in completed years of assessment i.e. A.Y. 2013-14 and A.Y. 2014-15, without having any recourse to any incriminating material was unjustified and unwarranted. Thus, the Ground No. 2 of the assessee's appeal for A.Y. 2013-14 & A.Y. 2014-15 is allowed and remaining grounds of assessee for AY 2013-14 and AY 2014-15 are rendered infructuous as all the additions made by the Ld.AO for AY 2013-14 and AY 2014-15 stands deleted in view of our decisions for Ground No. 2.
12. Ground No. 1 of the Revenue for A.Y. 2013-14, A.Y. 2014-15, A.Y. 2015-16, A.Y. 2016-17 & A.Y. 2017-18 and, Ground Nos. 2(a) to 2(c) of the Assessee for A.Y. 2016-17 & A.Y. 2017-18: relating to addition made u/s 68 of the Act.
12.1. So far as Revenue's appeal for AY 2013-14 and AY 2014-15 are concerned , the same deserves to be dismissed in view of our finding given in preceding paras where we have held that in absence of any incriminating material found during the course of search at assessee/s premises relevant to AY 2013-14 and AY 2014-15, no additions could be made for completed and unabated assessment year and thus deleted all the additions made by the assessing officer for AY 2013-14 and AY 2014-15. Accordingly all the grounds of appeals raised by the revenue for AY 2013- 14 and AY 2014-15 are dismissed.
12.2. So far as for remaining years ,through the ground no. 1 for AY 2015- 16, AY 2016-17 & AY 2017-18, the Revenue has challenged the action of the ld. CIT(A) in deleting the additions to the extent of Rs. Rs.25,00,000/- in A.Y. 2015-16, Rs.1,74,36,700/- in A.Y. 2016-17, Rs.1,03,50,000/- in A.Y. 2017- 20 18 made by the AO on account of unsecured loans claimed to have been obtained by the assessee from various entities. Further, through the ground nos. ground nos. 2(a) to 2(c) for A.Y. 2016-17 & A.Y. 2017-18, the assessee has challenged the action of the ld. CIT(A) in upholding the additions to the tune of), Rs.12,73,000/- (A.Y. 2016-17) & Rs.4,73,000/- (A.Y. 2017-18), made by the AO on account of unsecured loans. Briefly stated facts of the issue, as culled out from the records, are that during the search and post search proceedings, it was found by the AO that the assessee had accepted unsecured loans from certain dubious/ shell entities/ companies. According to the AO, some of such entities/ companies were found to be managed/ controlled directly/ indirectly by a well-known entry provider of Indore namely Shri Sharad Darak and some of the loan creditor companies were self-managed shell companies of the group itself which were used for routing of unaccounted funds, while some of these loans were shown as accepted from employees/ others. Accordingly, the AO issued show-cause notices dated 31/10/2018 and 19/07/2019 to the assessee before as well as after the receipt of Special Audit Report. In reply, the assessee, vide his letters dated 25.11.2018 and 07.08.2019, furnished his detailed explanation along with documentary evidences in support of establishing the identity & creditworthiness of loan creditors and genuineness of loan transactions. The AO, while framing the assessment order, averted that the assessee had accepted unsecured loans from shell/ paper companies and employees. Finally, the AO made an addition of Rs Rs.25,00,000/- in A.Y. 2015-16, Rs.1,87,09,700/- in A.Y. 2016-17 and Rs.1,08,23,000/- in A.Y. 2017-18 by holding the unsecured loans obtained by the assessee as unexplained cash credits u/s. 68 of the Act.
2112.3 Aggrieved with the order of Assessment, the assessee preferred separate appeals for the subject assessment years before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made detailed written submissions along with the documentary evidences which were also furnished by him before the AO. Before the ld. CIT(A), the assessee also furnished certain additional evidences, under Rule 46A, to substantiate the identity & creditworthiness of the lenders and genuineness of loan transactions which were forwarded to the Assessing Officer for comments. The Ld. CIT(A), after considering the remand report of the AO as well as the rejoinder of the assessee, deleted the substantial additions made by the AO in respect of the unexplained unsecured loans. The ld. CIT(A) has given the relevant findings in respect of the unsecured loans obtained from various entities at para (4.6.8) on page no. 104 to para (4.6.24) on page no. 158 of his order.
12.4. Aggrieved with the Order of the ld. CIT(A), both the assessee as well as the Revenue are in appeal before us.
12.5. Before us, learned Sr. DR vehemently argued supporting the observations of the AO as well as of the ld. CIT(A) on this issue. 12.6. Per Contra, Learned Counsel for the assessee has filed written submission before us. The relevant portion of such written submission is being reproduced as under:
"C. Key Points of Assessee's Submission and Relevant Pages of the Paper Books:
4.01 Your Honours, it is submitted that the assessee by furnishing the necessary documents had duly discharged his initial onus of proving the identity of the loan creditors, the genuineness of the transactions and creditworthiness of loan creditors beyond all doubts and in accordance with the provisions of s.68 of the Act. It is further submitted that during the course of assessment proceedings the assessee, vide his letter dated 25-11-2018 [kindly refer PB Page No. 245], had specifically requested the learned AO that if he wish 22 to make further verification or investigation in the matter,then a summons under s.131 or letters under s.133(6) of the Act to the loan creditors may be issued in order to further substantiate the claim of the assessee. However, despite making such specific request, the learned AO did not carry out any enquiry by himself and proceeded further in regarding the unsecured loan as unexplained credits of the assessee. Such a failure on the part of the learned AO was not permissible and is bad-in-law. For such proposition, reliance is placed on the following judicial pronouncements :
i) CIT vs. Shri Sai Vihar (2016) 28 ITJ 158 (Trib. - Raipur)
ii) CIT V Ramesh Chander Shukla10 ITJ 286 (Madhya Pradesh HC)
iii) Manna Lal Murlidhar79 ITR 540
iv) Radhe Sham Jagdish Prashad117 ITR 186
v) G. Shubha Devi vs. ITO (2019) 307 CTR 0536 (Kar.)
vi) Anil Kumar Midha (HUF) vs. ITO (2006) 100 TTJ 0644
vii) ITO vs. Sanjay Kumar Goel (2007) 108 TTJ 0823 (Del.)
viii) Mass Con (India) Pvt. Ltd. vs. ITO (2013) 37 CCH 0143 (Del.)
ix) CIT vs. Rajeev Shukla (2007) 207 CTR 0253 (MP HC) 4.02 Your Honours, it is a settled law that once the initial onus has been discharged by the assessee, by establishing the identity of the lenders, genuineness of the loan transactions and creditworthiness of the lenders, as contemplated under s.68 of the Act, the burden to prove the credits as unexplained shifts from the shoulder of the assessee to the taxing authorities. It is submitted that, in the instant case, the learned AO has failed to discharge his onus by failing to substantiate his assertion with the aid of corroborative evidences and thus, there was absolutely no justification for the learned AO to make the addition merely on the basis of some hearsay allegations against the loan creditor and information gathered behind the back of the assessee. For such proposition, reliance is placed on the following judicial pronouncements:
i) CIT vs. Metachem Industries (2000) 245 ITR 0160 (MPHC)
ii) Ashok Pal Daga vs. CIT (1996) 220 ITR 0452 (MPHC)
iii) Pr. CIT vs. Chain House International Pvt. Ltd. (2018) 33 ITJ 785 (MPHC)
iv) Pr. CIT vs. Shri Karan Mittal (2019) 35 ITJ 118 (MPHC)
v) CIT vs. Orissa Corporation P. Ltd. (1986) 159 ITR 0078 (SC)
vi) Orient Trading Company Ltd. vs. CIT (1963) 49 ITR 723 (Bom.)
vii) DCIT vs. Rohini Builders (2002) 256 ITR 360 (Guj.)
viii) DCIT vs. Manba Finance Ltd. 2019 (2) TMI 101 (Trib.-Mum.)
ix) Ariba Foods Pvt. Ltd. & Others vs. ACIT (2021) 40 TTJ 101 (Trib.-Indore) 6.02 Your Honours, in the instant case, after considering the facts and circumstances of the case, the ld. CIT(A) categorically vide para (3) on page no. 28 & 29 of his Order, admitted the additional evidences under Rule 46A of the Income-Tax Rules, 1962. It is submitted that after considering the AO's Order, the assessee's oral as well as written submissions, documentary evidences furnished before the AO during the course of the assessment proceedings, AO's Remand Report, Assessee's Rejoinder thereon, Special Audit Report and judicial pronouncements, the ld. CIT(A) at para (4.6.8) on page no.
104 to para (4.6.24) on page no. 158, has given his detailed findings by dealing with each and every item of the unsecured loans which were the subject matter of addition under s.68 of the Act. It is submitted that so far as the findings of the ld. CIT(A) in deleting the 23 additions are concerned, no infirmity can be found and the same deserves to be upheld. However, for the additions confirmed by the ld. CIT(A), the present submission of the assessee along with documentary evidences, which were also placed before the authorities below, be taken into consideration and the entire additions so confirmed by the ld. CIT(A), deserve to be deleted by this Hon'ble Bench. Further reference to detailed written submissions and paper book in reference to each of the alleged cash creditor for which additions have been made by Ld.AO/ 7.03 LOAN FROM M/s. SAVIOUR COMMOTRADE PVT. LTD. [SCPL] -
Rs.99,33,000/- [A.Y. 2016-17] - DEPARTMENTAL APPEALS FOR A.Y. A.Y. 2016-17 7.03.1 Your Honours, the ld. AO has made the subject additions in the returned income of the assessee for the aforesaid three assessment years, under s.68 of the Act in respect of loans taken by the assessee from a company, named and titled, as M/s. Saviour Commotrade Pvt. Ltd. having its registered office at 6, Judges Court Road, Kolkata and PAN:
AAMCS3660D. The learned Assessing Officer, in respect of the aforesaid loan creditor, has given his findings from para (8) at page no.4 to para (8.27) at page no.32 of the assessment order.
7.03.2 Your Honours, for making the impugned additions, in respect of SCPL, the ld. AO has made various findings such as (i) the assessee had taken loans from various entities/companies which were managed/controlled directly/indirectly by an entry provider of Indore, namely, Shri Sharad Darak; (ii) some of the loan creditor companies were self managed shell companies of the group itself, which were used for routing of unaccounted funds; (iii) SCPL is a dummy concern of the assessee with no business activity; (iv) SCPL is involved only in providing bogus entries for routing/layering unaccounted money; (v) filing of statutory documents before various authorities does not establish the genuineness of business transactions of such entities; (vi) the transactions through banking channels also is not a benchmark of genuineness; (vi) no bill or voucher regarding the SCPL was found during the course of the search and only some tally data related to SCPL was seized; (vii) during the course of the search, the details of the companies in which SCPL had made investments were not found; and finally (viii) the SCPL is a paper company with no actual business activity and all amounts received through this company is unaccounted and undisclosed income of Global Group entities.
7.03.9 Your Honours, as discussed in the earlier paras, the ld. AO, while framing simultaneous assessment u/s. 153A r.w.s. 143(3) of the Act in the case of one of the group companies, namely M/s. Global Metal & Energy Pvt. Ltd. [GMEPL], has made an addition of Rs.1,60,25,000/- in the hands of GMEPL for the A.Y. 2013-14 by leveling the same allegations as leveled in the case of the assessee. Being aggrieved with the Order of the ld.
AO, the GMEPL had also preferred an appeal before the ld. CIT(A), who vide his Order dated 23-09-2020, deleted the entire addition of Rs.1,60,25,000/- so made in the income of GMEPL for A.Y. 2013-14. Further, being aggrieved with the Order of the ld. CIT(A) so passed in the case of GMEPL, the Revenue had preferred an appeal before the Note: A copy of the Order of the Hon'ble ITAT, Indore bench in the case of GMEPL is being furnished separately.
7.05 LOAN FROM M/s. SATELLITE INFRA & REAL ESTATE PVT. LTD. -
Rs.25,00,000/- - DEPARTMENTAL APPEAL - A.Y. 2015-16 24
(i) Your Honours, it is submitted that the subject addition of Rs.25,00,000/- has been made by the learned AO by treating the amount of Rs.25,00,000/- received by the assessee, during the relevant previous year, from one company namely 'M/s.ITE Infra Pvt. Ltd. (sic. M/s. Satellite Infra Pvt. Ltd.) as the unexplained credits of the assessee under the provisions of s.68 of the Act.
"xxxi) EXPLANATION REGARDING UNSECURED LOAN OF RS. 25,00,000/-
TAKEN FROM M/S. ITE INFRA PVT. LTD.
1.00 At the outset, it is submitted that I have not obtained any unsecured loan from M/s. ITE Infra Pvt. Ltd.. It is submitted that the company name is M/s. Satellite Infra & Real Estate Pvt. Ltd. which has got inadvertently recorded by me with the name 'Ite Infra Pvt. Ltd.'. It is further submitted that I have not obtained any loan of Rs.25,00,000/- from M/s. Satellite Infra & Real Estate Pvt. Ltd. during the financial year 2015-16 relevant to the assessment year 2016-17.
1.01 Sir, the fact remained that during the previous year relevant to A.Y. 2013-14, I had given an unsecured loan of Rs.75,00,000/- to M/s. Satellite Infra & Real Estate Pvt. Ltd. (PAN-AAKCS0002R) having its registered office at G-2, Jaora Tower, 22/2, Manoramaganj, Indore, through account payee cheque bearing no. 559108 dated 07-02-2013 drawn on my saving bank account bearing no. 60119584268 maintained with Bank of Maharashtra, Godha Colony Branch. It is submitted that out of the aforesaid loan of Rs.75,00,000/- given to such company, a sum of Rs.50,00,000/- was received back by me, through banking channel, during the same previous year i.e. previous year relevant to the A.Y. 2013-14 itself. The remaining balance loan of Rs.25,00,000/- has got refunded by such company to me during the previous year relevant to A.Y. 2015-16 through RTGS on 31-03-2015 in my aforesaid saving bank account. In evidence of the aforesaid assertion, I am submitting herewith a copy of loan confirmation letter duly given by M/s. Satellite Infra & Real Estate Pvt. Ltd. for kind perusal and record of your good self, as Annexure SCN-11.01 [PB Page No. 137] Further, I am also submitting herewith a copy of the relevant abstract of my bank statement showing the receipt of Rs.25,00,000/- from the aforesaid company, as Annexure SCN-11.02 [PB Page No.138]. On a perusal of the aforesaid bank statement, it shall be observed by your good self, the subject amount of Rs.25,00,000/- has been received by me from M/s. Satellite Infra & Real Estate Pvt. Ltd. which is getting reflected in the narration column of the bank statement.
7.06 LOANS FROM SHRI VIJENDRA SINGH SISODIYA-
Rs.75,03,700/- : DEPARTMENTAL APPEAL FOR A.Y. 2016-17; Rs.12,73,000/- : ASSESSEE'S APPEAL FOR A.Y. 2016-17;
Rs.4,73,000/- : ASSESSEE'S APPEAL FOR A.Y. 2017-18;
(ii) Your Honours, the subject unsecured loans of Rs.87,76,700/- [in A.Y. 2016-17] and Rs.4,73,000/- [in A.Y. 2017-18] were obtained by the assessee in his individual capacity. It is submitted that Mr. Vjendra Singh Sisodiya s/o of Shri Dara Singh Sisodiya, resident of A/6, Sadar Bazar, Police Line, Indore (M.P.), aged nearly 42 years, is regularly assessed to Income-Tax, under PAN - BCLPS8668E, for the last many years. It is submitted that Mr. Vjendra Singh Sisodiya is associated with the 25 assessee's group for the last many years. Further, the entire loan has been obtained by the assessee through banking channels only.
(iii) Your Honours, during the course of the assessment proceedings, the assessee, in order to establish the identity of the loan creditor, had furnished copy of his PAN card and copy of letter of confirmation duly given by him, confirming the transactions of loan as claimed by the assessee. Further, the assessee had also furnished the copy of income-tax return of the loan creditor for the assessment year under consideration, a copy of the relevant bank statement of the loan creditor showing the availability of funds with him and as also, a copy of relevant bank statement of the assessee.
(v) Your Honours, as regard the immediate sources of giving loans by Shri Vijendra Singh Sisodiya to the assessee, kind attention of Your Honours is once again invited to the same bank statement. On a perusal of such bank statement for A.Y. 2016-17, it shall be observed by Your Honour that, immediately before issuance of cheques in favour of the assessee, the loan creditor was having sufficient bank balance in his bank account. Such bank balance, in its turn, got accumulated to the loan creditor by way of obtaining funds from one of the group companies of the assessee i.e. M/s. Global Trade Ventures Pvt. Ltd. (PAN -AAECG0048H). The relevant credits in respect of obtaining of such funds by Shri Vijendra Singh Sisodiya are getting reflected in his bank statement.
KEY PAPERS FILED IN THE PAPER BOOKS ON WHICH THE ASSESSEE WISH TO PLACE RELIANCE:
S. Description of the document Page No.
No.
A.Y. A.Y.
2016-17 2017-18
1 PAN Card of Shri Vijendra Singh Sisodiya [lender] 172 88
2 Confirmation letter duly signed by Shri Vijendra Singh Sisodiya. 173 89
3 Acknowledgement of Income-Tax Return of Shri Vijendra Singh 174 90
Sisodiya
4 Relevant Bank Statement of Shri Vijendra Singh Sisodiya 175 & 176 91 & 92
5 Relevant Bank Statement of the assessee. 177 to 179 93
6 Copy of account of Shri Vijendra Singh Sisodiya in the books of 180 -
GTVPL
7 Bank statement of the GTVPL evidencing the loan given to Shri 181 to 184 -
Vijendra Singh Sisodiya
7.07 LOAN FROM SHRI ARUN DAGARIA - Rs.1,03,50,000/- -
DEPARTMENTAL APPEAL FOR A.Y. 2017-18
(iv) Your Honours, it is submitted that the learned AO at para (8.45) on page no.36 of
the assessment Order, had given a patently wrong finding to the effect that the assessee had not furnished the bank statement of the loan creditor before him and 26 therefore, the credibility of the loan creditor was not verifiable. Your Honours, it is submitted that the assessee had duly furnished a copy of the relevant abstract of the bank of the loan creditor Shri Arun Dagaria before the learned AO. It is submitted that such bank statement was submitted in the form of Annexure UL-44.04 as submitted along with all the other documents of the loan creditor in the 'Volume- UL'. Thus, in such circumstances, the finding given by the learned AO, being patently wrong, deserves to be set-aside.
(viii) Your Honours, the Hon'ble Bench of ITAT Mumbai, in the case of M/s. H.K. Pujara Builders vs. Additional CIT 2016 (5) TMI 1426 - ITAT Mumbai, was pleased to hold that the income declared by the creditor shall not be the criteria, but, the source for giving the loans to the assessee is the determinative of the credit worthiness. A copy of the said judgement is placed at PB Page no. 116 to 120 for A.Y. 2017-18.
(ix) Your Honours, the ld. CIT(A), vide para (4.6.23)(B) at page no. 157 & 158 of his Order, after taking due consideration of the facts and circumstances of the case, the explanations along with documentary evidences furnished by the assessee, the remand report and the rejoinder of the assessee, found the unsecured loans from Shri Arun Dagaria as genuine and deleted the entire addition of Rs.1,03,50,000/- so made by the ld. AO in the hands of the assessee for the A.Y. 2017-18. KEY PAPERS FILED IN THE PAPER BOOK FOR A.Y. 2017-18 ON WHICH THE ASSESSEE WISH TO PLACE RELIANCE:
S. Description of the document Page No.
No.
1 PAN Card of Shri Arun Dagaria 94
2 Acknowledgement of Income-Tax Return for A.Y. 2017-18 95
3 Confirmation letter duly signed by the authorized signatory of Shri Arun 96 & 97
Dagaria.
4 Relevant Bank Statement of the loan creditor. 98 to 108
5 Relevant Bank Statement of the assessee. 109 to 115
6 Judgment of the Hon'ble Bench of ITAT Mumbai, in the case of M/s. H.K. 116 to 120
Pujara Builders vs. Additional CIT 2016
13. We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances and, carefully gone through the orders of the authorities below.
Loans taken from Shri Vijendra Sisodiya 13.1. So far as loan taken from Shri Vijendra Sisodiya, we find that during the course of the assessment proceedings, the assessee, in his Paper Book for A.Y. 2016-17 from page no. 172 to 184, had duly furnished a copy of the 27 PAN Card, copy of the loan confirmation letter and Income-Tax Return , copy of the relevant bank statement of Shri Vijendra Sisodiya and of the assessee. We further find that the assessee has also furnished bank statement of one group company namely M/s. Global Tradeventures Pvt. Ltd. [in short, 'GTVPL'] for the F.Y. 2015-16 relevant to A.Y. 2016-17 from which according to the assessee, Shri Vijendra Sisodiya had received funds for providing the same to the assessee along with a letter of confirmation of account of Shri Vijendra Sisodiya in the books of account of the GTVPL for the relevant year. The copies of all such documents were also furnished by the assessee before the authorities below. From the bank statement of Shri Vijendra Sisodiya, we find that in such bank statement, as on four different dates, issuance of four cheques, for a sum of Rs.12,73,000/-, Rs.30,00,000/-, Rs.20,53,700/- and Rs.24,50,000/- respectively on 12/02/2016, 31/03/2016, 31/03/2016 and 31/03/2016 are getting clearly reflected in the name of the assessee. From such bank statement, we also noted that before issuance of the cheque on 12/02/2016 for Rs.12,73,000/-, some deposit through clearing on 10/02/2016 is getting clearly reflected. We further find that before issuance of other three cheques of a sum of Rs.30,00,000/-, Rs.20,53,700/- and Rs.24,50,000/- on 31/03/2016, as per the narrations mentioned in the bank passbook of Shri Vijendra Sisodiya, a sum of Rs.30,00,000/-, Rs.21,18,700/- and Rs.24,50,000/- were received by Shri Vijendra Sisodiya from one of the group companies of the assessee namely M/s. Global Tradeventures Pvt. Ltd. (GTVPL). In respect of the GTVPL, in pursuance of the simultaneous search operations u/s. 132, simultaneous assessments u/s. 153A have also been framed by the same AO. The assessee has furnished a copy of ledger account of Shri Vijendra Sisodiya in 28 the books of account of GTVPL for the F.Y. 2015-16 and in such copy of the ledger account, transfer of funds by the GTVPL in the bank account of Shri Vijendra Sisodiya, for an aggregate sum of Rs.1,89,41,700/- are getting reflected. Further, in the copy of bank statement of GTVPL, all the transactions dated 31/3/2016 with the clear mention of the name of Shri Vijendra Sisodiya showing transfer of funds through banking channels of an aggregate sum of Rs.1,82,21,700/- are getting reflected and out of the funds so received from GTVPL on the very same day, Shri Vijendra Sisodiya has transferred a sum of Rs.75,03,700/- in three trenches in the bank account of the assessee. Thus, in our considered opinion, it is a transfer of accounted funds, through banking channels, in the inter-group entities of the assessee and therefore, by no stretch of imagination, the sources of such loans in the hands of the assessee can be doubted. Further, in respect of the other two items of the loans i.e. of Rs.12,73,000/- for A.Y. 2016-17 and Rs.4,73,000/- for A.Y. 2017-18, the genuineness whereof has been disbelieved by the ld. CIT(A) in his Order on the ground of inability of the assessee to explain the sources of availability of funds and against which the assessee is in appeal before us, we find that even before issuance of these cheques of Rs.12,73,000/- and Rs.4,73,000/- by Shri Vijendra Sisodiya to the assessee, there are equivalent credits through banking channels in the bank account of Shri Vijendra Sisodiya and there is no case of cash deposit in the bank account of such loan creditor. We find that such fact has also been accepted by the ld. CIT(A) himself in his Order. We find sufficient force in the contention of the AR of the assessee that merely for the assessee's inability to explain the source of the source of loan in the hands of the lender, no addition could have been made in the income of the 29 assessee and particularly, in respect of a loan transaction which had taken place prior to the insertion of proviso to section 68 by the Finance Act, 2023 casting an additional onus on the assessee to establish the sources wherefrom the creditor received the funds for making loan to the assessee. Thus, in our considered view, by furnishing all the aforesaid documents, the assessee could be able to discharge his onus proving all the three ingredients as contemplated u/s. 68 of the Act viz. (i) identity of the creditors; (ii) genuineness of the loan transactions; and (iii) creditworthiness of the aforesaid loan creditors Shri Vijendra Sisodiya in respect of the entire loan transactions of Rs.87,76,700/- in A.Y. 2016-17 and Rs.4,73,000/- in A.Y. 2017-18. Accordingly relevant ground of Revenue challenging the additions deleted by Ld.CIT(A) regarding loans taken from Vijendra Sisodiya are dismissed and those taken by assessee are allowed.
13.2 Loan from M/s. Saviour Commotrade Pvt. Ltd.('SCPL') 13.2.1. We find that in respect of the above named loan creditor, the AO has made addition u/s. 68 of the Act at Rs.99,33,000/- for A.Y. 2016-17. Although, in respect of such additions for A.Y. 2013-14 and A.Y. 2014-15, on the legal ground as discussed in para (11.3) supra, we have already held that for such two assessment years, no addition could have been made without having recourse to any incriminating material found during the course of the search. But, even on merits, we find no substance in the additions so made by the AO in respect of the aforesaid loan creditor for all the assessment years.
13.2.2. Before us, the ld. AR of the assessee submitted that the AO, while framing simultaneous assessment u/s. 153A r.w.s. 143(3) of the Act 30 in the case of one of the group companies of the assessee, namely M/s. Global Metal & Energy Pvt. Ltd. [GMEPL], made an addition of Rs.1,60,25,000/- in the hands of GMEPL for the A.Y. 2013-14 by leveling the same allegations as leveled in the case of the assessee. Against such Order of the AO, the GMEPL had preferred an appeal before the ld. CIT(A), who vide his Order dated 23.09.2020, deleted the entire addition of Rs.1,60,25,000/- so made in the income of GMEPL for A.Y. 2013-14. Further, being aggrieved with the Order of the ld. CIT(A) so passed in the case of GMEPL, the Revenue had preferred an appeal before the Coordinate Bench vide Appeal No. IT(SS) A No.81/Ind/2021 for A.Y. 2013-
14. We find that the Coordinate Bench, vide para (11.6.1) on page no. 85 to para (11.6.4) on page no. 90 of its Order dated 26.04.2022, has already upheld the action of the ld. CIT(A) for deleting the addition on the aforesaid count. The relevant findings of the aforesaid Order of the Coordinate Bench are reproduced as under:
"11.6.1 We find that in respect of the above named loan creditor, the AO has made addition u/s. 68 of the Act at Rs. 1,60,25,000/- and Rs.1,23,92,000/- respectively for A.Y. 2013-14 and A.Y. 2016-17. Although, in respect of such addition for A.Y. 2013-14, on the legal ground as discussed in para (11.3) supra, we have already held that for such assessment year, no addition could have been made without having recourse to any incriminating material found during the course of the search. But, even on merits, we find no substance in the addition so made by the AO in respect of the aforesaid loan creditor for both the assessment years.
11.6.2 We find that in respect of the aforesaid loan creditor the AO has only given a short finding at para (9.30) of the Order. At such para, the AO has stated that the discussion made in respect of companies controlled by Shri Sharad Darak also squarely applies to the unsecured loan from SCPL. The AO has further stated that citing of an assessment order for A.Y 2009-10, by identifying the shareholders, in the case of SCPL, was of no relevance at that point of time in light of the findings about SCPL already discussed in paras in the matter of bogus share capital. The AO further stated that the Affidavit filed by a director of SCPL and loan transactions through banking channels also do not prove the genuineness of the loan transaction as discussed by him in earlier paras. We find that the AO, while discussing the issue of bogus share capital at para (8) of the Assessment Order, has given his findings in respect of the transactions entered into by the assessee with SCPL at para (8.3) to para (8.21). At para (8.3), the AO has stated that the SCPL is a dummy concern of the assessee's group itself, which is based at Kolkata, having Shri Shantanu Dixit and Shri Rajeev Dubey as its directors. At the same para, the AO has drawn a chart 31 showing the returned income of the SCPL. At the same para, the AO has also made reference of one excel sheet which was also seized from a hard disk from the premises situated at 178, BhaktPrahlad Nagar, Indore. The AO also reproduced such excel sheets in the body of the assessment order. Such excel sheets are in the nature of register of members at the time of incorporation of the company, at the time of first and second allotment of new shares by such company and as also on the transfer of shares in such company from time to time of the name of shareholders and certificate nos. issued to them have also been given. At para (8.3), the AO has analyzed the transfer of shares of SCPL from time to time. At para (8.5) of the Order, the AO has stated that the companies referred to in the excel sheets reproduced at para (8.4) are involved in giving bogus entries. The group has used such companies, registered with ROC Kolkata, in routing their unaccounted funds. At para (8.6), the AO has made reference of some Statement of Shri Rajeev Kumar Dubey, one of the directors of the SCPL and has also reproduced abstract of his statement in the said para. At para (8.7), the AO has averted that from the statement of Shri Rajeev Dubey, it is clear that the SCPL is not carrying out any business activity. At para (8.7), the AO has pointed out that Rajeev Kumar Dubey, director of SCPL stated in his statement that books of account of SCPL are maintained at 178, Bhakt Prahalad Nagar, Indore but according to the AO, during the course of the search, no single bill voucher regarding this company was found at the given address. Instead, during the course of the search, only tally data related to SCPL was found. At paras (8.8) to (8.13), the AO has given the screenshots of the balance sheets of the SCPL for the F.Y. 2008-09 to F.Y. 2013-14 as were found in the tally books of the SCPL during the course of the search, in the assessee's premises. The AO has also made an analysis of such Balance Sheets. At paras (8.13) to (8.16), the AO has made an analysis of Bank accounts of SCPL. At para (8.17), the AO after reproducing the scanned copy of bank statement of the SCPL for the whole financial year 01/04/2012 to 31/03/2013, at para (8.18), commented that the total amount of Rs.5,94,91,886/- were credited in the account of SCPL during the F.Y. 2012-13 relevant to A.Y. 2013-14, and out of the credits so received, the SCPL had given loans of Rs.1,60,25,000/- to the assessee and the other sum of Rs.4,33,33,000/- to other three entities of the assessee's group, during the year under consideration. At para (8.20) the AO has reproduced the entire findings of Special auditors, given by the auditors in their report u/s. 142(2A) of the Act, commenting upon the transaction of assessee's group with SCPL. At para (8.21), the AO has commented that the SCPL is a paper company and therefore, all the amounts received through this company is unaccounted and undisclosed money of Global Group entities. Finally, at such para, the AO has alleged that the unaccounted funds of the group have been ploughed back in the books of account of the SCPL and accordingly, the loan received from the SCPL have been treated as unexplained cash credits of the assessee u/s. 68 of the Act. We find that the ld. CIT(A) while giving his very detailed finding at para (4.5.5.K) from page no. 276 to 283 found no merit in the very observations and findings given by the AO and accordingly, deleted the additions for both the assessment years.
11.6.3 Upon overall consideration, we find that the above named loan creditor is a private limited company, duly incorporated by the Registrar of Companies, West Bengal, under the Companies Act, 1956, with Company Identification No. U51909WB2008PTC129469 2008-2009 on 19/09/2008. From the abstract of the master data of the company as abstracted from the official website of the Ministry of Corporate Affairs, Government of India, we find that in the ROC records, such company has been shown as an Active company, having its registered office at '408, 4th Floor, Landmark Building, Opp. Raheja Classic Complex, Link Road, Andheri, Mumbai', which is a premises belonging to the assessee's group itself and in respect of such premises too, a simultaneous search operation u/s. 132 was carried out. We also find that as per the master data of the above named company, as per its audited balance sheet, it was having authorized capital and paid up capital of Rs.15,00,000/- and Rs. 14,74,000/- respectively. Further, we found that in 32 such company, there are two directors, belonging to the assessee's group namely Shri Shantanu Dixit and Shri Rajeev Kumar Dubey who have been shown to be holding such position since 04/03/2013 and 14/05/2012 respectively. We find that during the course of the assessment proceedings, the assessee had furnished numerous documentary evidences for establishing the genuineness of the loan transactions carried out by the assessee with such company. We find that the assessee had furnished a copy of certificate of incorporation of the SCPL, its copy of Memorandum and Articles of Association, copy of acknowledgement of its income tax return for A.Y. 2013-14 & A.Y. 2016-17, copy of the master data downloaded from the official website of the MCA, copy of statement showing the details of the directors of the company, copy of the assessment order for A.Y. 2009-10 passed in the case of SCPL, on 23/08/2011, u/s. 143(3)/147 of the Act, copy of the form no. INC-22A along with the relevant annexures filed before the concerning Registrar of Companies for establishing the actual existence and active status of the company along with photographs of the offices of the company, copy of letter of confirmation duly signed by one of the directors of the company, copy of the relevant abstract of the bank account of the SCPL, copy of an Affidavit duly sworn-in before Notary Public by Shri Rajeev Kumar Dubey on 19/11/2018 affirming the loan transactions of the SCPL with the assessee, copy of the audited financial statements of the SCPL showing the net owned funds of the SCPL as on 31/03/2012 at Rs.6,87,86,335/-. We find that copies of all these documents have also been furnished by the assessee before us in its Paper Book for A.Y. 2013-14 from page no. 438 to 517 and again, at page no. 993 to 1043 of the Paper Book for A.Y. 2016-17. From the copy of the assessment order passed for A.Y. 2009-10 in the case of the SCPL, u/s. 143(3)/147 of the Act, on 23/08/2011, as placed at page no. 478 to 480 of the assessee's Paper Book for A.Y. 2013-14,we find that in the body of the assessment order itself of SCPL, the AO framing the assessment, at para (2) of the assessment order, has clearly stated that as per the Balance Sheet of the SCPL as on 31/03/2009, the Authorized Share Capital and Paid-up Capital of the SCPL was of Rs. 15 Lakhs and Rs. 14.74 Lakhs respectively with a Share Premium of Rs. 6.73 Crores. We also find that in the same para, the AO has stated that in support of receipt of such share capital and share premium, the SCPL had furnished relevant papers and notices u/s. 133(6) were issued for verification of the share applicant. Eventually, the AO accepted the genuineness of receipt of share capital and share premium by the SCPL and did not form any adverse opinion. We find that in the body of the assessment order, the AO has made a reference of the income returned by the SCPL but, in our considered view, merely on the basis of the returned income of an entity, its creditworthiness could not have been examined and the creditworthiness was necessarily required to be tested on the touchstone of the availability of funds in the hands of the loan creditors at the time of providing loan to any other person. We find that for the reasons that (i) a simultaneous search u/s. 132 was carried out at the registered office of the company situated at Mumbai and during the course of the search, one of the representatives of the group was duly found; (ii)on the date of the search itself, the SCPL has been found to be one of the companies of the assessee group itself under the control and management of the family members and associates; (iii) during the course of the search, according to the AO, certain tally books of accounts were found; (iv) as per the findings given by the AO himself at para (8.32) of the impugned order, one of the directors of the company namely Shri Rajeev Kumar Dubey had duly given his statement u/s. 131(1A) of the Act on 05.08.2016; (v) as per the ROC records, the SCPL has been shown to be an active company;
(vi) the SCPL is duly assessed to Income-Tax under PAN: AAMCS3660D; (vii) the SCPL is maintaining bank accounts with various banks and (viii) the SCPL has drawn its financial statements and have also got the same duly audited, the leveling of charge of a dummy company or a paper company against the SCPL cannot be accepted under any cannon of law. Thus, in our considered view, by furnishing all the necessary documents, such as the certificate of incorporation of the SCPL, its copy of Memorandum and Articles of Association, copy of acknowledgement of its income tax return for A.Y. 2013-14& A.Y. 2016-17, copy of the master 33 data downloaded from the official website of the MCA, copy of statement showing the details of the directors of the company, copy of the form no. INC-22A along with the relevant annexures filed before the concerning Registrar of Companies, the assessee could be able to establish the statutory as well as the physical identity and existence of the SCPL. We further find that from the copies of letters of confirmation duly signed by one of the directors of the company, copy of the relevant abstracts of the bank account of the SCPL, copy of an Affidavit duly sworn-in before Notary Public by Shri Rajeev Kumar Dubey on 19/11/2018 affirming the loan transactions of the SCPL with the assessee and further, considering that all the loan transactions have been carried out through banking channels which were duly found in the bank statements of the assessee as well as the lender company, in our view, the assessee could be able to establish the genuineness of the loan transactions. We find that the lender company i.e. SCPL, was holding own funds to the extent of Rs. 687.86 Lakhs as on 31/03/2012 as per the assessment order for A.Y. 2009-10 passed in the case of SCPL, on 23/08/2011, u/s. 143(3)/147 of the Act. Thus, in our considered view, the assessee company could also be able to discharge its onus of even proving the creditworthiness of the SCPL. We find that in the instant case, the assessee has not only established the sources of cash credits, but, going one step further, it has also established sources of the sources i.e. the sources of availability of funds in the hands of SCPL and the sources of funds in the hands of the sub-creditors can also not be disbelieved. Further, from the copy of the bank statement of the SCPL with the Axis Bank Limited, placed at page no. 492 of the assessee's Paper Book for A.Y. 2013-14,we find that in such bank statement, for A.Y. 2013-14, making of payments of Rs.20,25,000/-, Rs.22,00,000/-, Rs.25,00,000/-, Rs.50,00,000/-, Rs.25,00,000/-, Rs.8,00,000/-
and Rs.10,00,000/- respectively on 27.09.2012, 27.09.2012, 03.10.2012, 06.10.2012, 08.10.2012, 11.10.2012 & 29.11.2012 through various cheques by clearing mentioning the name of the assessee company are getting clearly reflected. Likewise, for A.Y. 2016-17, from the copy of the bank statement of SCPL maintained with Axis Bank Ltd. as placed at page no. 1028 of paper book for A.Y. 2016-17, we find that making of payments of Rs.1,00,00,000/-, Rs.23,00,000/- and Rs.92,000/- respectively on 08/07/2015, 22/07/2015 & 25/07/2015 with the specific mention of the name of the assessee, through various cheques, are also getting clearly reflected.From such bank statements, we find that before remitting the funds, the SCPL had received funds not by way of any cash deposits but, through banking channels which according to the assessee were received by the SCPL out of the disinvestments/ recovery of the loans already given by it on earlier occasions.
11.6.4 In our considered view, the seized document referred to by the AO at para (8.3) of the Order, is a statutory document containing the details of register of members and register of transfer of shares which are mandatorily required to be maintained by every company in accordance with the Companies Enactments. Thus, on the basis of such documents, no adverse inference can be drawn. We find that one of the directors of the SCPL, namely Shri Rajeev Dubey, had appeared before the Investigation Wing in response to a summons issued u/s. 131(1A) of the Act and his statements were duly recorded on 05/08/2016 and from the relevant abstracts of the statement as reproduced by the AO himself at para (8.6) of the Order, no adverse view can be drawn on the subject issue. We have carefully taken into consideration that the availability of the funds was by way of its share capital and share premium money aggregating to a sum of Rs.6.98 crores and the sources of such receipts have already got verified and assessed by the AO who passed an assessment order for A.Y. 2009-10, dated 23/08/2011, u/s. 143(3)/ 147 of the Act of SCPL, a copy whereof has been filed before us. In our considered view, having assessed the SCPL u/s. 143(3)/147 and having verified the sources of availability of funds, as per the settled law, no adverse view can be drawn in respect of giving of funds by the SCPL out of the aforesaid assessed funds. We further find that various case laws relied upon by the AO are not applicable to the assessee's case. In the preceding paras, we have already cited various judicial authorities for the 34 proposition that once the identity and creditworthiness of the loan creditors and genuineness of loan transactions are established, no addition can be made in the hands of the loan recipient and therefore, in respect of the present lender company, we refrain ourselves to make the same discussions again. Thus, in our considered view, there was absolutely no justification for the AO to make any addition in the income of the assessee, for any of the assessment years, under s. 68 of the Act. Accordingly, we find no infirmity in the action of the ld. CIT(A) in deleting the additions made by the AO in the various assessment years, on account of unsecured loans relating to the above named lender company."
13.2.3. Thus, in view of our observations made hereinabove and as also, following the aforesaid findings given by this Bench in one of the group assessees vide Order dated 26.04.2022 dealing with the issue of addition made u/s.68 of the Act for the cash credit received from the same case creditor namely SCPL and deleting the addition, we considering the similarity of facts and circumstance fail to find any infirmity in the finding of Ld. CIT(A) deleting the addition of Rs.99,33,000/- so made by the Ld.AO for AY 2016-17.
13.3. Loan from Smt. Kshamta Dubey 13.3.1. We find that the above named loan creditor is also one of the employees of the Global Group. She is wife of Shri Rajeev Dubey who is closely associated with the assessee's group and also, a director in some group companies. We find that during the course of the assessment proceedings, the assessee had duly furnished the copy of the Pan Card of the loan creditor, the copy of the loan confirmation letter, the copy of acknowledgement of Income-Tax return of lender for A.Y. 2014-15, copy of the relevant bank statement of the assessee. The assessee has also furnished bank statement of one group company namely M/s. Global Realcon Pvt. Ltd. for A.Y. 2014-15. Further, during the course of the appellate proceedings, the assessee also furnished a copy of relevant bank statement 35 of Smt. Kshamta Dubey, as additional evidence under Rule 46A of the Income-Tax Rules, 1962 which was duly accepted by the ld. CIT(A) and forwarded to AO for his remand report. From the copy of the PAN Card, we find that Smt. Kshamta Dubey is regularly assessed to Income-Tax under PAN: AGOPD0588J. The assessee has also furnished a signed copy of the loan confirmation letter of the loan creditor before us. Further, from the bank statement of Smt. Kshamta Dubey, we find that a cheque bearing 166961 for a sum of Rs.9,77,400/- is getting clearly reflected in the name of the assessee. From such bank statement, we also noted that before issuance of the cheque on 12/03/2014, Smt. Kshamta Dubey had received an equivalent sum of Rs. 9,77,400/- through cheque from a group company Global Realcon Pvt. Ltd. on the same day. M/s Global Realcon Pvt. Ltd. who provided funds to Smt. Kshamta Dubey, is one of the group companies of the assessee in which simultaneous search u/s. 132 and simultaneous assessments u/s. 153A have been completed. Thus, in our considered view, it is a transfer of accounted funds, through banking channels, in the inter-group entities of the assessee and therefore, by no stretch of imagination, the sources of such loans in the hands of the assessee could be doubted. Therefore, in our considered view, by furnishing all the aforesaid documents, the assessee could be able to discharge his onus of establishing the identity of the loan creditor, genuineness of the transaction and the creditworthiness of the loan creditors beyond all doubts. In such circumstances, we do not find any infirmity in the action of the ld. CIT(A) in deleting the addition of Rs.9,77,400/- so made by the AO in respect of the aforesaid loan.
3613.4. Loan from M/s. ITE Infra & Real Estate Pvt. Ltd.
13.4.1. We find that at para no. (8.50) of the impugned order, for the assessment year 2015-16, the AO has made addition u/s. 68 of the Act only in respect of one unsecured loan amounting to Rs.25,00,000/- claimed to have been taken by the assessee from some ITE Infra & Real Pvt. Ltd. The necessary findings regarding loan claimed to have been taken by the assessee from ITE Infra & Real Pvt. Ltd. have been given by the AO at para (8.41) to (8.43) of the impugned order. The AO vide para (8.1) of the Assessment Order, has mentioned issuance of show-cause notices to the assessee on the issue of unsecured loans. At the same para, the AO has given the gist of the show cause notices for various assessment years. From the gist of the notices, we find that for A.Y. 2015-16, the AO has not issued any show-cause notice to the assessee on the subject issue. However, in the show-cause notice, issued for A.Y. 2016-17, there is mention of one unsecured loan of Rs.25,00,000/- taken by the assessee from some ITE Infra Pvt. Ltd. In response to the show-cause notice, the assessee, vide his reply letter dated 07/08/2019, denied to have obtained any loan from M/s. ITE Infra Pvt. Ltd. According to the assessee, in fact, there existed no company with such name. It was submitted that in fact, there was one company named as 'Satellite Infra & Real Estate Pvt. Ltd.' which got inadvertently recorded in the books of the assessee in the name of 'ITE Infra Pvt. Ltd.'. Before the AO, the assessee further submitted that during the previous year relevant to A.Y. 2013-14, he had given a loan of Rs.75,00,000/- to above named Satellite Infra & Real Estate Pvt. Ltd. and out of the loan so given, Satellite Infra & Real Estate Pvt. Ltd. refunded the loan through RTGS on 31/03/2015 to the assessee company. The loan of Rs.50,00,000/- was repaid 37 by the Satellite Infra & Real Estate Pvt. Ltd. during the financial year 2012- 13 itself. Due to clerical error, instead of crediting the loan account of Satellite Infra & Real Estate Pvt. Ltd., by Rs.25,00,000/-, the account with some wrong name of ITE Infra & Real Estate Pvt. Ltd. had got credited with the sum of Rs.25,00,000/- and also got reflected in the financial statements of the assessee wrongly as unsecured loans. However, the AO at para (8.41) of the Order, has stated that in support of his contention, the assessee has only furnished only a ledger account and confirmation letter from Satellite Infra & Real Estate Pvt. Ltd. in the assessee's books and one page bank statement of the assessee's bank account. From the ledger account of Satellite Infra & Real Estate Pvt. Ltd., the AO noted that the assessee had received a sum of Rs.75,00,000/- at the fag end of F.Y. 2012-13 and F.Y. 2014-15. According to the assessee, even if the amount was received from Satellite Infra & Real Estate Pvt. Ltd., then also the assessee was bound to establish the creditability of the said company. According to the AO, the assessee did not file the letter of confirmation from ITE Infra Pvt. Ltd. in whose name the entry had been recorded. Finally, the AO regarded the amount of Rs.25,00,000/- in the books of account of the assessee as unsecured loan from ITE Infra Pvt. Ltd. as unexplained cash credit u/s. 68 r.w.s. 115BBE of the Act and made the impugned addition.
13.4.2. We find that in the instant case, whole controversy started due to a clerical error by reading the word 'Satellite' with nine alphabets with the word 'ITE' with the last three alphabets only. We find that during the course of the assessment proceedings themselves, the assessee had brought such clerical mistake to the knowledge of the AO by which the assessee 38 had clearly stated that there existed no company in the ROC records with the name of ITE Infra & Real Estate Pvt. Ltd.. The assessee had also explained the circumstances under which the subject amount of Rs.25,00,000/- got appeared in his financial statements wrongly in the name of ITE Infra & Real Estate Pvt. Ltd.. The AO has noted receipts of sum of Rs.75,00,000/- by the assessee from M/s. Satellite Infra & Real Estate Pvt. Ltd. in two financial years viz. F.Y. 2012-13 & F.Y. 2014-15. Despite such explanation in the body of the assessment order, the AO has given a finding that the assessee has not furnished any letter of confirmation from ITE Infra, a non-existing entity. Before the ld. CIT(A), the assessee had furnished all the necessary documents such as copy of letter of confirmation duly filled up and signed by one of the directors of the SIREPL. In support of the identity of the SIREPL, the assessee had also furnished a copy of the Memorandum & Articles of Association of SIREPL and as also a copy of the PAN Card of SIREPL. As per the copy of the PAN Card, the above named company has been incorporated on 23/06/2006 with PAN - AAKCS0002R. The assessee furnished the copies of the audited financial statements of SIREPL for the F.Y. 2014-15. All such documentary evidences were also furnished before us in his Paper Book for A.Y. 2015-16 from page no. 101 to 145. From the copy of the Statement of Profit & Loss Account of SIREPL, it was found that the company has shown revenue from sales of properties for the F.Y. 2013-14 and F.Y. 2014-15, respectively at Rs.3,27,13,323/- and Rs.2,25,79,309/-. From the copy of the audited balance sheet of SIREPL, the company was having own funds to the extent of Rs.4,49,96,583/-. Further, on perusal of bank account statement it was found that two RTGS of Rs.15,00,000/- and Rs.10,00,000/- aggregating to a 39 sum of Rs.25,00,000/- are getting clearly reflected in the name of the assessee. Also, before issuance of the RTGS in favour of the assessee, the SIREPL had also received funds through banking channels and no cash deposits against such payments to the assessee have been found made in the bank account of SIREPL. Further, in order to verify the claim of the assessee that the amount of Rs.25,00,000/- received by him from SIREPL was out of the loan of Rs.75,00,000/- given by the assessee himself to SIREPL during the previous year relevant to A.Y. 2013-14, we directed the ld. AR of the assessee to demonstrate by way of furnishing bank statement of assessee for the relevant period. In compliance to the directions issued by this Bench, the ld. AR of the assessee furnished a copy of relevant abstract of bank statement of the assessee. On a perusal of such bank statement of the assessee, we find that an entry of Rs.75,00,000/- is getting clearly reflected on 08.02.2013, as claimed by the assessee. Thus, in our considered view, by furnishing all the necessary documentary evidences, the assessee could be able to establish the identity of the creditor, the genuineness of the transactions and creditworthiness of the SIREPL who had refunded the loan to the assessee. Thus, in such circumstances, no addition under s.68 was warranted on this account. Accordingly, we do not find any infirmity in the action of the ld. CIT(A) in deleting the addition of Rs.25,00,000/- on the aforesaid count.
13.5. Loan from Shri Arun Dagaria 13.5.1. We find that Arun Dagaria had provided interest free loan during December 2016/ January 2017 to the assessee but, the bank statement of the loan creditor was not provided and therefore, the sources of funds in the bank account of the loan creditor could not be verified. That in respect of alleged loan 40 creditor, the ld. CIT(A) found that the assessee could establish the identity of the loan creditor and the genuineness of the transactions beyond all doubts. The ld. CIT(A) observed that before issuance of cheques in favour of the assessee, the loan creditor had received remittance from various entities, again through bank channels and in none of the cases, cash deposits were found made in the bank account of the loan creditor. The CIT(A) also observed that the AO could not found any specific defect or discrepancy in the various documentary evidences furnished by the assessee.
13.5.2. We find that during the course of the assessment proceedings, the assessee had duly furnished the copy of the PAN Card of the loan creditor, the copy of the loan confirmation letter, the copy of acknowledgement his Income- Tax return for A.Y. 2017-18, copy of the relevant bank statement of the assessee and as also, a copy of the relevant bank statement of the loan creditor. The assessee has also furnished a signed copy of the loan confirmation letter of the loan creditor before the ld. CIT(A). Further, from the bank statement of Shri Arun Dagaria, we find that in such bank statement, remittance of funds with the clear mention of the name of the assessee, on as many as thirteen occasions, for a sum of Rs.15,00,000/-, Rs.8,00,000/-, Rs.8,00,000/-, Rs.4,00,000/-, Rs.3,50,000/-, Rs.10,00,000/-, Rs.2,00,000/-, Rs.18,00,000/-, Rs.10,00,000/-, Rs.15,00,000/-, Rs.2,00,000/-, Rs.3,00,000/- and Rs.5,00,000/- respectively on 01/12/2016, 17/12/2016, 20/12/2016, 20/12/2016, 20/12/2016, 21/12/2016, 21/12/2016, 26/12/2016, 26/12/2016, 13/01/2017, 16/01/2017, 17/01/2017 and 10/03/2017 are getting reflected. From such bank statement, we also note that before issuance of the cheques, Shri Arun Dagaria had received remittance from various entities through bank channels only and in none of the cases, cash deposits were made before issuance of the loan. We also find that in the case of the above named person, one search operations under s.153A was also carried out and such 41 person is engaged in the business of real estate. Thus, in our considered view, by furnishing all the aforesaid documents, the assessee could be able to discharge his onus of establishing the identity of the loan creditor, genuineness of the transaction and the creditworthiness of the loan creditor beyond all doubts. Accordingly, in our considered view, the action of the ld. CIT(A) in deleting the addition of Rs.1,03,50,000/- made by the AO in the name of Shri Arun Dagaria is fully justified.
14. In the result, we affirm all the findings of the ld. CIT(A) granting relief to the assessee in respect of various additions made by the AO u/s. 68 of the Act, made at Rs. 25,00,000/- in AY 2015-16, Rs. 75,03,700/- & Rs. 99,33,000/- in AY 2016-17 and Rs. 1,03,50,000/- in AY 2017-18. Consequently, the Assessee's Ground Nos. 2(a) to 2(c) for A.Y. 2016-17 & A.Y. 2017-18 are Allowed whereas the Revenue's Ground No. 1 for A.Y. 2015-16, A.Y. 2016-17 & A.Y. 2017-18 are Dismissed.
15. Ground No. 2 of the Revenue for A.Y. 2016-17 15.1 Through these grounds of appeal, the Revenue has challenged the action of the ld. CIT(A) in deleting the additions Rs.1,18,35,000/- made by the AO for A.Y. 2016-17 on account of unexplained investment in plots.
15.2 Briefly stated facts of the issue, the AO noted that the assessee along with his family members had made huge investment in various plots and the transactions involved were suspicious since no explanations were provided by the assessee during Search as well as post search proceedings. The assessee claimed that the entire investments in immovable properties have been made by him and his family members through explained sources. The AO found that the assessee's group has shown substantial investment in plots under different names but, documents in support of the sources of investments were not produced. Further, according to the AO, in some cases the assessee had got the 42 plots registered in his name and against such plots, the cheques were issued in the name of the sellers, but, the sellers never presented the same to the bank. According to the AO, the amount returned back to the assessee/group members are liable to be treated as unexplained investment u/s. 69 r.w.s. 115BBE at Rs. 1,18,35,600/- for A.Y. 2016-17.
15.3. Aggrieved with the Order of Assessment, the assessee preferred separate appeals for the subject assessment years before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made detailed written submissions along with the documentary evidences which were also furnished by him before the AO. The written submission made by the assessee before the ld. CIT(A) has been reproduced by the ld. CIT(A) in his Order from page no. 160 to 177. The Ld. CIT(A), after taking into consideration the entire facts and circumstances of the assessee's case and various documentary evidences placed on his record, deleted the entire additions made by the AO. The ld. CIT(A) has given the relevant findings at para (4.7.2) at page no. 177 to Para (4.7.7) at page no. 184 of his order.
15.4. Aggrieved with the relief granted by the ld. CIT(A), the revenue is in appeal before us.
15.5 Before us, learned Sr. DR vehemently argued supporting the observations of the AO on this issue.
15.6 Per Contra, Learned Counsel for the assessee has filed a detailed written submission before us. The relevant portion of such written submission is being reproduced as under:
"C. Key Points of Assessee's Submission and Relevant Pages of the Paper Books:43
IV. EXPLANATION ON THE ISSUE OF INVESTMENT IN THE IMMOVABLE PROPERTY BEING RESIDENTIAL HOUSE AT "EMAAR PROPERTIES PJSC, DUBAI'' DURING THE FINANCIAL YEAR RELEVANT TO A.Y. 2016-17 - Rs.86,18,163/-
On this issue, I wish to submit as under:
(i) At the outset, it is submitted that for the purpose of purchase of the subject property, I have entered into an Agreement of Sale, on 08-03-2016, with one Dubai-based entity namely Emmar Dubai, LLC, P.O. Box No. 9440, Dubai (UAE), for a total consideration of AED 34,40,888. A copy of the Agreement of Sale is being submitted herewith for your kind perusal and record of your good self, as Annexure B-4.01.
(iii) On a perusal of the above referred Agreement, it shall be observed by your good self that the property intended to purchase by me is in the nature of one unit bearing No. 608, comprising 1102 Sq. Feets, in a building titled as 'DD Address Opera T1', which was under construction on the date of the Agreement. It shall further be observed by your good self that as per the Agreement the estimated date of completion of the project is 31st July, 2020. It shall further be observed by your good self that under such Agreement, I am required to pay purchase consideration in as many as nine installments, commencing from December'2015 and ending with July'2020, as per the payment schedule annexed to the said Agreement. It shall thus be appreciated by your good self that till date neither I have made the payment of full purchase consideration of the flat nor I have been handed over the possession of the unit so purchased, which is still under construction. It shall further be appreciated by your good self that as per the payment schedule, till the date of the search on 12-07-2016, there had fallen only two installments of AED 344,089 due in respect of the purchase of the subject property.
(iii) Sir, the payment against the first installment of AED 3,44,089, which had fallen due as per the payment schedule on 17-12-2015, has duly been made by me on 21-12-2015, by way of transfer of funds amounting to Rs.62,45,140/- (equivalent to AED 3,44,089), from my saving bank account with Axis Bank Ltd. to the account of the vendor. However, as regard the payment against the second and subsequent installments, which fallen due for payment on 01-06-2016 and subsequently, it is submitted that due to recession in the property market in Dubai, I have chosen not to make subsequent payments till the construction is completed. Accordingly, except making payment towards first installment, for subsequent installment I have not made any payment.
(iv) Sir, over and above, making the payment of the aforesaid sum of Rs.62,45,140/-
towards the first installment, as on 28-12-2015, I have also made payment amounting to Rs.23,73,023/- towards registration cost of Agreement of Sale. Such payment was also made by me by way of transferring funds from my saving bank account maintained with Axis Bank Ltd.. Thus, in sum and substance, till the end of the periods of assessment in my case i.e. up till 31-03-2017, I made payment aggregating to sum of Rs.86,18,163/- only.
44(vii) Sir, as regard to the immediate sources of credits in my saving bank account with Axis Bank, from which the funds got so transferred, it is submitted that out of total remittance of Rs.86,18,163/-, a substantial sum of Rs.60,00,000/- had got transferred from the current account of my own proprietary concern, M/s. Global Marketing, maintained with Bank of Maharashtra. In its turn, the proprietary firm had received the equivalent sum from one of its customers against sale of goods. The complete details of sources of credits in the Axis Bank account are given in a tabular form, as under:
Date of Credit in Amount Source Remarks
the Axis Bank
Account
18-12-2015 5,00,000 Loan from M/s. Symphony By Account Payee Cheque
21-12-2015 60,00,000 Transferred from bank account of The proprietorship concern had
the proprietorship concern i.e. Bank received a sum of Rs.60,00,000/- from
of Maharashtra one of the customers against sale of
goods through a cheque
24-12-2015 10,00,000 Smt. Surekha Dixit (Wife) Transaction can be verified from the
bank statement of Smt. Surekha Dixit
24-12-2015 10,00,000 M/s. Global Metal & Energy Pvt. Transaction can be verified from the
Ltd. bank statement of M/s. Global Metal
& Energy Pvt. Ltd.
28-12-2015 1,18,163 Opening balance as on 01-12-2015 -
in the bank account
Total 86,18,163
(viii) In view of the above facts and explanation, it shall be observed by your good self
that first of all I have not made any investment towards purchase of the subject property in Dubai during the financial year 2012-13 relevant to A.Y. 2013-14 and secondly, the entire payments towards such purchases made in a subsequent year i.e. during the financial year 2015-16 relevant to A.Y. 2016-17 have been made by me out of my explained sources only and therefore, no addition on this count deserves to be made in my income under the provisions of section 69 of the Act.
3.03 Further, the relevant abstract of the submission of the assessee for the A.Y. 2016-17, as made before the ld. AO is also reproduced as under:
Our Submission in respect of addition of Rs.1,18,35,600/- for A.Y. 2016-17:
9.01 Your Honours, the learned AO, at page no.158 of the assessment order has given the break-up of the sum of Rs.1,18,35,600/- [sic. Rs.1,25,83,600/-] in respect whereof the subject addition has been made. For the sake of convenience, the break-up so given, is reproduced as under:
[Amount in Rs.] S. Plot No. Address of the property Seller Name Plot Area Registered/ No. (in sq. ft.) Agreement Value
1. Plot Nos. A-306, A-307, US Gold City, Village M/s. Simran Developers, 8800 59,84,000 A-313, A-314, A-315, Bhatkhedi, Tehsil Mhow, 402, 'The Mark', 20A, Old [1100 sq. ft.
A-316, A-317, A-318 District Indore Palasia, Indore each] [Eight Plots]
2. M-1 Atlanta City, Village M/s. Shankeshwar Devcon 14200 65,99,600 Palakhedi, Tehsil Hatod, Dist. Pvt. Ltd., 20-A, Old Palasia, [50% share] 45 Indore Indore Total 1,25,83,600 9.02 Your Honours, it is submitted that all the aforesaid immovable properties were purchased by the assessee out of his explained and established sources only. It is submitted that no addition was called for in view of the facts and circumstances of the case as discussed in the ensuing paras.
10.00 Your Honours, as regard the various plots serialized at S. No.1 of the table above, it is submitted that during the previous year relevant to A.Y. 2016-17, the assessee had purchased eight plots, total admeasuring 8800 sq. ft. [1100 sq. ft. each], in a township namely 'U.S. Gold City', at Village Bhatkhedi, Tehsil Mhow, District Indore, from seller namely M/s. Simran Developers, having its office at 402, 'The Mark', 20A, Old Palasia, Indore under a common Registered Purchase Deed executed on 17-11-2015. A copy of the Registered Purchase Deed, duly executed in favour of the assessee, is placed at PB Page No. 641 to 660 for A.Y. 2016-17.
10.01 On a perusal of Clause no. (23) of the Purchase Deed [PB Page No. 655], it would be observed by Your Honours that the entire expenses relating to stamp duty and registration, on purchases, were required to be borne by the sellers only. Now, as regard the sources of payment of purchase consideration of Rs.59,84,000/-, it is submitted that the entire payments have been made by the assessee out of his explained sources only. It is submitted that for the purpose of making payment towards the purchase consideration the assessee had availed a loan for Rs.46,46,086/- from M/s. Shreeram City Union Finance Ltd. and has also made withdrawals from his proprietary concern namely M/s. Global Marketing. The details of sources of payments made towards purchase of such plots are given as under:
Description of the Date of Amount Mode of Source of Payment Property Payment Payment Plot Nos. A-306, A-307, 16-11-2015 46,46,086 Ch.No. 901766 of Housing Loan availed from A-313, A-314, A-315, A- Axis Bank Ltd. M/s. Shreeram City Union 316, A-317, A-318 Finance Ltd.
[Eight Plots] RTGS from Bank of 17-11-2015 12,78,074 Maharashtra Out of withdrawals of Rs.35 Lacs from proprietary concern namely M/s. Global Marketing [PAN-AEDPD9167L] TDS
---do---
17-11-2015 59,840
Total 59,84,000
10.02 Your Honours, in evidence of the sources of purchases, as aforesaid, the following documents are placed in our Paper Book for A.Y. 2016-17:
(i) Copy of the Sanction letter and Loan Repayment Schedule issued by the NBFC namely M/s. Shreeram City Union Finance Ltd., placed at PB Page No. 661 to 665;
(ii) Copy of bank statement of saving bank account of the assessee with Bank of Maharastra, for the relevant period, evidencing the receipt of funds of 46 Rs.35,00,000/- by him from M/s. Global Marketing and its immediate utilization amounting to Rs.12,78,074/- towards payment to the sellers M/s. Shankeshwar Devcon Private Limited, placed at PB Page No 666 & 667;
1.
(iii) Copy of relevant abstract of bank statement of M/s. Global Marketing evidencing the transfer of funds of Rs.35,00,000/- to the assessee, placed at PB Page No 668;
2.
(iv) Copy of the challan of Rs.59,840/- evidencing the deposition of TDS to the credit of Government Treasury, placed at PB Page No. 670.
10.03 That, on a perusal of the documentary evidences submitted hereinabove, which were also duly submitted before the learned AO during the course of the assessment proceedings, it would be appreciated by Your Honours that the assessee had satisfactorily explained the entire sources of payment of Rs.59,84,000/- made towards the purchase of plots at U.S. Gold City and thus, there was absolutely no justification for the learned AO to make any addition on this count. However, the learned AO without considering the assessee's explanation and without appreciating the various documentary evidences furnished by the assessee to substantiate the sources of investment made the impugned addition which deserves to be knocked down.
11.00 Your Honours, now, as regard the property serialized at S. No. 2 of the table above, it is submitted that during the relevant previous year, the assessee had purchased the subject plot situated at M-1, Atlanta City, Village Palakhedi, Tehsil Hatod, Dist. Indore, from M/s. Shankeshwar Devcon Pvt. Ltd., 20-A, Old Palasia, Indore, under a Registered Purchase Deed, for a total consideration of Rs.1,31,97,000/-. A copy of the Registered Title Deed, duly executed in favour of the assessee, is placed at PB Page No. 672 to 679 for A.Y. 2016-17.
11.01 Your Honours, it is submitted that although the said property was purchased by the assessee along with the registered ownership of his wife namely Smt. Surekha Dixit, but, the entire payment towards the purchase consideration of the said property was made by the assessee only. Therefore, the assessee being the beneficial owner of the property had recorded the entire investment in the plot in his individual affairs only. 11.02 Your Honours, on a perusal of the clause no. (27) of the Deed [PB Page No. 677], it would be observed that the entire expenses relating to the stamp duty and registration of the plot were required to be borne by the seller only. Now, as regard the sources of purchase, it is submitted that the subject plot was purchased by the assessee out of his explained sources only. It is submitted that for purpose of remitting the purchase consideration of Rs.1,31,97,000/-, the assessee has availed loan of a sum of Rs.92,54,000/- from PNB Housing Finance Ltd.. The balance consideration of Rs.39,43,000/- has been arranged by the assessee from the unsecured loan obtained by him from M/s. Shankeshwar Devcon Pvt. (SDPL) [ the seller itself ]. The details of sources of payments made towards purchase of such plots are given as under:
Sno. Date of Amount paid Mode of Payment Immediate sources Documents enclosed Payment of making payments 47
1. 30-11-2015 92,54,000 Through cheque Hosing Loan Copy of the loan bearing no. 202695 Availed from PNB sanction letter and Housing Finance repayment schedule Ltd. issued by PNB Housing Finance Ltd., at PB Page No. 680
2. 02-12-2015 38,11,030 Through cheque Out of unsecured The relevant bearing no. 087481 loan of documentary evidences drawn on Axis Bank Rs.69,69,130/- for establishing the received from SDPL identity and on 27-11-2015. creditworthiness of SDPL and also the genuineness of the transaction are being placed at page no. 682 to 685 of our Paper Book.
3. 03-12-2015 1,31,970 TDS ---do--- Copy of TDS challan evidencing the deposition of TDS of Rs.1,31,970/-, at PB Page No. 683 11.03 That, on a perusal of the documentary evidences submitted hereinabove, which were also duly submitted before the learned AO during the course of the assessment proceedings, it would be appreciated by Your Honours that the assessee had satisfactorily explained the entire sources of payment of Rs.1,31,97,000/- made towards the purchase of plot at Village Palakhedi, Tehsil Hatod, Distt. Indore and thus, there was absolutely no justification for the learned AO to make any addition on this count. However, the learned AO without considering the assessee's explanation and without appreciating the various documentary evidences furnished by the assessee to substantiate the sources of investment made the impugned addition which deserves to be knocked down.
12.00 Your Honours, as regard the AO's observation contained in para (14.9) at page nos.157 & 158 of the impugned Order, it is submitted that, admittedly, during the relevant previous year, the assessee had received unsecured loan from the seller i.e. Shankeshwar Devcon Pvt. Ltd. [SDPL], but the transaction of purchase of plot and the transaction of receipt of unsecured loan from SDPL both are mutually exclusive and independent of each other. Further, the transaction of receipt of unsecured loan had taken place before remitting the purchase consideration to the seller. Thus, the finding giving by the learned AO has no relevance. Even otherwise, it is submitted that there is no embargo either under the Income Tax Act, 1961 or any other law of the land that a purchaser cannot enter into a transaction of purchase of certain property with a seller who has provided loan to the purchaser or for that matter, there is no restriction that a purchase cannot be made out of the loan obtained from the seller only. It is submitted that merely for the reason that the assessee made purchase of a property by genuinely obtaining the loan from the seller, the entire transaction of purchases cannot be disbelieved. The allegation of the learned AO, on the basis of the comments of the special auditors, has no leg to stand for the reason that there is not a single documentary evidence on record that prior to becoming the registered owner the assessee was already a beneficial owner of the subject property. On the contrary, such finding goes against to the action of the learned AO in making the addition in the hands of the assessee, for the assessment year under consideration, for the reason that according to the AO himself no actual consideration was paid during the year under consideration and therefore the question of invoking the provisions of s.69 for the year under consideration could not have arisen.48
13.00 Your Honours, it shall thus be appreciated that the ground taken by the learned AO for making the impugned addition is not sustainable in the eyes of law. Still, in order to dispel any doubt about the genuineness of the loan taken by the assessee from the sellers of the plot i.e. SDPL it is submitted that SDPL is a company duly registered under the Companies Act, 1956. Further such company is regularly assessed to Income Tax under PAN-AARCS0747A. The entire transactions of the loan had taken place through banking channels only. As regard the sources of payment of loan by SDPL to the assessee, it is submitted that at the first instance the assessee, out of the loan proceeds received from the PNB Housing Finance Ltd., made the part consideration against the purchase of plot to the SDPL and subsequently, out of such part sales proceeds received the SDPL provided loan to the assessee. Once again, out of the loan received from SDPL the assessee made the balance payment of purchase consideration to SDPL. All such facts were duly brought to the notice of the learned AO during the course of the assessment proceedings itself. The assessee had also furnished the necessary documentary evidences in support of his assertion, made as aforesaid and the copies of such documents are placed at PB Page no. 682 to 685 for A.Y. 2016-17, as under:
i) Copy of the loan confirmation letter duly given by the SDPL;
ii) Copy of PAN Card of SDPL;
iii) Copy of Income Tax Return Acknowledgment of SDPL for the assessment
year under consideration i.e. A.Y.2016-17;
iv) Copy of the relevant bank statement of SDPL.
14.00 Your Honours, on a perusal of the documentary evidences furnished hereinabove, it would be appreciated that the assessee had genuinely obtained the unsecured loan from SDPL. It is further submitted that even if for the sake of presumption, it is presumed that both the aforesaid transactions are connected, then too, no addition was permitted to be made on this count as the both the transactions have been carried out by the assessee through banking channels only and the sources of the same are fully established beyond all doubts.
15.00 Your Honours, the ld. CIT(A) has discussed the subject issue at length from page no. 159 to 184 of the impugned appellate order. At para (4.7) on page no. 159, the ld. CIT(A) has narrated the facts of the case whereas, at para (4.7.1) from page no. 160 to 177, the ld.
CIT(A) reproduced the written submission of the assessee made before him. At para (4.7.2) on page no. 177, the ld. CIT(A) has given brief details of the additions made by the ld. AO for the A.Y. 2013-14 and A.Y. 2016-17. Further, at para (4.7.3) on page no. 178 & 179, the ld. CIT(A) has discussed the various documentary evidences furnished by the assessee before him. From para (4.7.4) at page no. 180 to para (4.7.7) at page no. 184, the ld. CIT(A) has given his detailed findings on the subject issue. The ld. CIT(A) has separately dealt with each and every investment in the properties and has deeply considered the explanation of the assessee as regard to the sources thereof. Thus, it is submitted that the ld. CIT(A) has given the findings after an in-depth analysis of the facts and circumstances of the case, assessment order, various documentary evidences furnished by the assessee, remand report of the ld. AO and as also, the explanation of the assessee made before him, no fault deserves to be found in his findings and accordingly, 49 the same deserve to be upheld. Consequently, the grounds raised by the Revenue on this count deserve to be Dismissed.
16. We have duly considered the rival contentions and perused the records placed before us. We find that for the A.Y. 2016-17, the AO has made an addition of Rs. 59,84,000/- on account of making of investment by the assessee for purchase of eight plots bearing nos. A-306, A-307, A-313, A-314, A-315, A-316, A-317 and A-318 at US Gold City, Village Bhatkhedi, Tehsil Mhow, District Indore. We find that in respect of such investments, the assessee has filed necessary documentary evidences such as copy of the relevant registered purchase deeds and as also necessary supporting documents in support of sources of such investments. We find that the necessary explanation as regard to the investment and sources of the investments have been given by the assessee from para (10.00) to para (10.03) of his written submission, extracted hereinabove. From the copies of the registered sale deeds, we find that during the relevant previous year, the assessee had purchased eight number of plots from M/s. Simran Developers through its one partner, Shankeshwar Devcon Pvt. Ltd., through a registered sale deed duly registered on 17/11/2015 for a total consideration of Rs. 59,84,000/-. From the clause (7) of the sale deed, we find that the entire sales consideration was paid either through account payee cheques or by way of TDS. Again, out of the total consideration amounting to Rs. 46,46,086/- was paid by the assessee through a cheque directly issued by one NBFC namely, Shriram City Union Finance Ltd., in favour of the sellers. We find that the assessee had availed such loan facility from the above named financer company vide sanction letter dated 13/11/2015. We find that the remaining cheque of Rs.12,78,074/- was 50 issued by the assessee from his bank account maintained with Bank of Maharashtra. Further, from the copy of the bank statement of the assessee in respect of bank account maintained with Bank of Maharashtra, We find that before issuance of the cheque, the assessee had got received a sum of Rs. 35,00,000/- from the CC Account of his proprietorship concern maintained with Bank of Maharashtra and such fact has been verified from the copy of bank account statement of the proprietorship firm. Thus, we find ourselves in agreement with the finding of the ld. CIT(A) that the assessee could be able to fully explain the sources of making of investment in eight plots and therefore, in our considered view too, the addition of Rs. 59,84,000/- so made by the AO in respect of such investment was not sustainable.
16.1. We further find that during the previous year relevant to A.Y. 2016- 17, the assessee had purchased one more plot bearing no. M-1, situated at Atlanta City, Village Palakhedi, Tehsil-Hatod, Distt.-Indore, under a registered sale deed duly registered on 04/12/2015 from some M/s. Shankeshwar Devcon Pvt. Ltd. for a total consideration of Rs.1,31,97,000/- in joint ownership with his wife, Smt. Surekha Dixit, in whose case too simultaneous assessment u/s. 153A has been framed. A copy of the sale deed has been furnished by the assessee at page no. 671 to 679 of his Paper Book for A.Y. 2016-17. On a perusal of the Clause (11) of the sale deed, we find that the entire payment has been stated to have been made by the assessee through two account payee cheques dated 30.11.2015 and 02.12.2015 respectively amounting to Rs.92,54,000/- and Rs.38,11,030/-. The remaining payment of Rs.1,31,970/- has been stated to have been made by way of TDS. Again, out of the total consideration, consideration 51 amounting to Rs.92,54,000/- was paid by the assessee through a cheque directly issued by one NBFC namely, PNB Housing Finance Ltd., in favour of the seller. We find that the assessee and his wife had jointly availed a term loan of Rs. 1,24,00,000/- from the above named financer company vide sanction letter dated 30/11/2015. We find that the remaining cheque of Rs.38,11,030/- was issued by the assessee from his bank account maintained with Axis Bank Ltd.. Further, from the copy of the bank statement of the assessee in respect of bank account maintained with Axis Bank Ltd, we find that before issuance of the cheque, the assessee had got received a sum of Rs. 69,69,130/- from M/s. ShankewshwarDevcon Pvt. Ltd. (PAN: AARCS0747A). In support of such assertion, the assessee has furnished a copy of relevant bank statement of the above named company and in such bank statement, issuance of cheque of Rs. 69,69,130/- in the name of the assessee is clearly getting reflected. Further, in order to establish the receipt of the loan and creditworthiness of the lender company, the assessee has also furnished a copy of loan confirmation letter and copy of income tax return for A.Y. 2016-17. Thus, in our considered opinion, the assessee could be able to establish the sources in respect of such investment too, with the documentary evidences. We find substance in the contention of the assessee that merely because he had received unsecured loan from the seller of the property, the entire transactions cannot be disbelieved as both the transactions are different and there is no embargo under any of the laws that a person cannot make genuine borrowing from the seller from whom he had purchased any property. In such circumstances, in our considered view, the ld. CIT(A) has committed 52 no error in deleting the addition of Rs.58,51,600/- being the assessee's share in the investment in plot no. M-1, Village Palakhedi, Indore. 16.3 Accordingly, we do not find any infirmity in the action of the ld. CIT(A) in deleting the additions of Rs. 1,18,35,600/- for A.Y. 2016-17, made by the AO vide para (14) of the assessment order, on account of unexplained investment in plots u/s. 69 of the Act. Accordingly, these grounds of the Revenue are Dismissed.
17. Ground No. 2 of the Revenue for A.Y. 2015-16 17.1 Through these grounds of appeal, the Revenue has challenged the action of the ld. CIT(A) in deleting the additions of Rs.52,037/- in A.Y. 2015-16 made by the AO on account of negative cash balance appearing in books of accounts treating it as unexplained money u/s. 69A of the Act. The AO has made the impugned addition vide para (17) of the assessment order.
17.2. Aggrieved with the Order of Assessment, the assessee preferred separate appeals for the subject assessment years before the ld. CIT(A) and succeeded.
17.3 Aggrieved with the relief granted by the ld. CIT(A), the revenue is in appeal before us.
17.4 Before us, learned Sr. DR vehemently argued supporting the observations of the AO on this issue.
17.5 Per Contra, Learned Counsel for the assessee referred and relied on the finding of Ld.CIT(A) and written submissions placed on record.
5318. We have heard rival contentions and perused the records placed before us. We find that the sole basis taken by the AO for making the impugned additions is reflection of negative cash balances on certain dates in the personal books of accounts maintained by the assessee. We find that the AO has solely relied upon the findings of the Special Auditors. We are in agreement with the view taken by the ld. CIT(A) that, merely on the basis of some personal cash books maintained by an assessee for his memorandum purposes, which were not required to be so maintained under the provisions of s. 44AA of the Act, or any other statute, no adverse inference can be drawn only on the basis of imperfect accounting. Before us, the ld. AR of the assessee submitted that in the data so seized, the assessee has not punched the entries on a day to day basis and therefore, there might had resulted negative balance in the seized tally data, however, factually there was no negative cash balance. We find that the assessee has submitted date-wise cash flow statements drawn after rectifying the aforesaid mistakes in the tally data. On a perusal of the cash flow statements, we find that at no point of time during the years under consideration the assessee was having negative cash balance. Accordingly, we do not find any infirmity in the action of the ld. CIT(A) in deleting the additions Rs.52,037/- for A.Y. 2015-16 made by the AO on account of negative cash balance. Therefore, grounds of appeal raised by the Revenue on the issue of addition for negative cash balance is Dismissed.
19. Ground No. 3 of the Revenue for A.Y. 2017-18; Ground No. 3 & 4 of the Revenue for A.Y. 2015-16 & A.Y. 2016-17 54 19.1 Through the Ground No. 2 for A.Y. 2017-18 and Ground No. 3 for A.Y. 2015-16 & A.Y. 2016-17, the revenue has challenged the action of the ld. CIT(A) in deleting the additions made by the AO on account of bogus purchases as unexplained expenditure u/s. 69C of the Act and u/s.68 of the Act for the difference between purchases and sales as unexplained cash credits u/s. 68 of the Act. The AO has made the aforesaid additions vide para 10, from Page No. 46 to 78, of the assessment order. Further, the ld. CIT(A) has given his common findings in respect of both the aforesaid additions from para (4.11) at page no. 199 to Para (4.11.25) at page no. 274 of his Order. Since both the AO as well as the ld. CIT(A) have given common findings in respect of both types of additions, as aforesaid, and further since, the issues are connected to each other, these grounds of appeals of the revenue are adjudicated together.
.
19.2. Briefly stated facts of the issue, as culled out from the records, are that during the search/ post search proceedings as well as Special Audit proceedings, it was noted by the AO that the assessee had shown purchases and sales with paper entities. The AO, further, in the show cause notice, averted that the Auditor had remarked that from overall examination of the books of account, it appears to be that no genuine business activity had been carried out by the assessee. In other words, both purchases as well as sales are bogus and there is no connection between them. Finally, the AO made an addition of Rs.22,57,41,647/- in A.Y. 2015- 16, Rs.29,09,68,118/- in A.Y. 2016-17 and Rs.34,22,90,320/- in A.Y. 2017-18 on account of bogus purchases as unexplained expenditure u/s. 69C of the Act. Further, the AO also made addition of Rs.51,27,003/- in A.Y.2015-16, 55 Rs.94,69,250/- in A.Y. 2016-17 and Rs.1,18,10,820/- in A.Y. 2017-18 on account of difference between purchases and sales as unexplained cash credits u/s. 68 of the Act.
19.3. Aggrieved with the Order of Assessment, the assessee preferred separate appeals for the subject assessment years before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made detailed written submissions along with the documentary evidences which were also furnished by him before the AO. The written submission made by the assessee before the ld. CIT(A) has been reproduced by the ld. CIT(A) in his Order from page no. 204 to 250. During the course of the appellate proceedings, before the ld. CIT(A), the assessee also furnished certain documents, as additional evidences under Rule 46A which were forwarded to the Assessing Officer for comments. The AO submitted his Remand Report vide his letter dated 08/09/2020, a copy whereof is placed at page no. 359 to 379 of the assessee's Paper Book for A.Y. 2013-14. The copy of the Remand Report of the AO was provided by the ld. CIT(A) to the assessee and in response, the assessee filed his rejoinder, which is placed at page no. 380 to 390 of the assessee's Paper Book for A.Y. 2013-14. The Ld. CIT(A), after considering the remand report of the AO as well as the rejoinder of the assessee and as also, by taking into consideration the entire facts and circumstances of the assessee's case, deleted the entire additions made by the AO on these two counts. The ld. CIT(A) has given the relevant findings at paras (4.11.5) at page no. 251 to para (4.11.25) at page no. 274 of his order.
19.4. Aggrieved with the relief granted by the ld. CIT(A), the revenue is in appeal before us.
5619.5. Before us, learned Sr. DR vehemently argued supporting the observations of the AO on this issue. The ld. Sr. DR submitted that during the course of the search and post-search enquiry, it got revealed that the assessee had carried out bogus transactions of purchases as well as sales with many entities. The Sr. DR further argued that all the transactions were carried out only on paper without taking or making delivery of the goods. The Sr. DR strongly supported the findings given by the AO in his Order. However, before us, the ld. Sr. DR could not pin-point any error or discrepancy in the various findings given by the ld. CIT(A) in his Order. We also find that the ld. Sr. DR could also not brought to our notice any specific defect or discrepancy in the various documentary evidences furnished by the assessee, in his support, before us.
19.6. Per Contra, Learned Counsel for the assessee apart from heavily relying on the detailed finding of Ld.CIT(A) also referred to written submissions before us.Your Honours, in the body of the subject assessment order, the ld. AO at various places had made mention of one of the group companies, namely M/s. Global Tradeventures Pvt. Ltd. [GTVPL] in which case too a simultaneous search under s.132 was carried out. It is submitted that the same AO, while framing simultaneous assessment u/s. 153A r.w.s. 143(3) of the Act in the case of the abvoe named company GTVPL, the addition on the similar grounds were made for the A.Y. 2014-15 to A.Y. 2017-18 by leveling the same allegations of bogus purchases and sales, as leveled in the case of the assessee. Being aggrieved with the Order of the ld. AO, the GTVPL had also preferred separate appeals before the ld. CIT(A), who vide his common Order dated 23-09-2020, deleted the entire additions so made in the income of GTVPL for A.Y. 2014-15 to A.Y. 2017-18. Further, 57 being aggrieved with the Order of the ld. CIT(A) so passed in the case of GTVPL, the Revenue had preferred separate appeals before the Hon'ble ITAT, Indore Bench vide Appeal Nos. IT(SS) A No.77 to 80/Ind/2021 for A.Y. 2014-15 to A.Y. 2017-18. It would be noteworthy that the Hon'ble ITAT, vide its Order dated 26-04-2022, has upheld the action of the ld. CIT(A) for deleting the entire additions on the aforesaid count. The Hon'ble ITAT has given its detailed findings on the subject issue at para (10.1) on page no. 61 to para (10.15) on page no. 69 of its Order. KEY PAPERS FILED IN THE PAPER BOOKS ON WHICH THE ASSESSEE WISH TO PLACE RELIANCE:
S. Description of the document Page No.
No. A.Y. A.Y. A.Y.
2015-16 2016-17 2017-
18
1 Purchase register and sales register of the 146 to 187 221 to 121 to
assessee for the relevant previous year 265 173
2 Bank Book of the assessee evidencing 188 to 213 266 to 174 to
receipts/payments against all the transactions 289 205
of sales/purchases for the relevant previous
year
3 Bank Statements of the assessee evidencing 214 to 254 290 to 206 to
receipts/payments against all the transactions 333 246
of sales/purchases for the relevant previous
year
4 Ledger accounts of the sellers/buyers in the 256 to 282 335 to 247 to
books of account of the assessee 359 268
5 Date-wise stock register maintained by the 283 to 296 360 to 269 to
assessee 382 292
58
6 Affidavit of Shri Ashish Kacholia confirming 297 to 299 383 to 293 to
the transaction 385 295
7 Master Data of M/s. Sara Cattle Feeds Pvt. 300 386 296
Ltd. downloaded from the official website of
the MCA
8 Assessment Orders, Registration Certificates 301 to 339 387 to 297 to
under the M.P. VAT Act, 2002 and VAT 446 378
Returns of the suppliers
9 Recasted trading and profit & loss account of 340 447 379
the assessee for the relevant previous year
10 Assessment Orders, Registration Certificates 341 to 384 448 to 442
under the M.P. VAT Act, 2002 and VAT 485
Returns of the customers
20. We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of the authorities below Revenue is aggrieved with the action of the ld. CIT(A) in deleting both the additions made by the AO in the assessee's income for various assessment years, on the ground of bogus purchases u/s. 69C and as also, on the ground of difference between the bogus purchases and bogus sales u/s. 68 of the Act.
20.1. We find that the same AO had also made similar additions in case of one of the group companies of the assessee, namely M/s. Global Tradeventures Pvt. Ltd. [GTVPL], in which case too a simultaneous search under s.132 was carried out and in pursuance thereof, assessments u/s. 153A/143(3) were made for A.Y. 2014-15 to A.Y. 2017-18, by leveling the same allegations of bogus purchases and sales, as leveled in the case of the assessee. We find that the facts and findings of such case of GTVPL are the 59 same with that of the assessee here. We find that in the case of GTVPL, against the Order of the AO, the GTVPL had preferred separate appeals before the ld. CIT(A), who vide his common Order dated 23-09-2020, deleted the entire additions so made in the income of GTVPL for A.Y. 2014- 15 to A.Y. 2017-18. Further, being aggrieved with the Order of the ld. CIT(A) so passed in the case of GTVPL, the Revenue had preferred separate appeals before this Bench vide Appeal Nos. IT(SS) A No.77 to 80/Ind/2021 for A.Y. 2014-15 to A.Y. 2017-18. We find that this Bench, vide its Order dated 26.04.2022, has upheld the action of the ld. CIT(A) for deleting the entire additions on the aforesaid count in the case of the aforesaid group company of the assessee. A copy of the Order of this Bench in the case of GTVPL has been furnished by the assessee before us for our ready reference. We find that in the case of GTVPL, this Bench has given its detailed findings on the subject issue at para (10.1) on page no. 61 to para (10.15) on page no. 69 of its Order. The relevant findings of the Order passed in the case of GTVPL are reproduced as under:
"10.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of the authorities below, Special Auditors Report, written and oral submissions made from both the sides, Remand Report of the AO, Rejoinder of the assessee and also gone through the judgments and decisions referred to and relied upon by both the sides. Revenue is aggrieved with the action of the ld. CIT(A) in deleting both the additions made by the AO in the assessee's income for various assessment years, on the ground of bogus purchases u/s. 69C and as also, on the ground of difference between the bogus purchases and bogus sales u/s. 68 of the Act.
10.2 We find that in the instant case, the AO has made the subject additions in the income of the assessee (i) on the basis of the Report given by the Special Auditors; (ii) on the basis of non-availability of any document or stock-in-trade regarding to the trading business in the premises of the assessee during the course of the search u/s.132 of the Act;
(iii) on the basis of statement of some of the employees of a group company of the assessee;
(iv) on the basis of some field inquiry got conducted by the AO; on the basis of some statement of the proprietor of a concern titled as 'M/s. Sumeet & Sumeet' and also of some Mr. Ashish Kacholiya of M/s. Shanti World Wide. However, we find that in the entire body of the assessment order, for making the subject additions, the ld. AO has not 60 made reference of any single incriminating material or document found or seized during the course of the search u/s. 132 of the Act, in any of the premises of the assessee company or its directors. Thus, as far as the additions amounting to Rs.20,02,67,817/- and Rs.
43,97,536/- respectively made by the AO on the grounds of bogus purchases and difference between the bogus purchases and bogus sales, for A.Y. 2014-15 are concerned, the same are not sustainable in view of the findings given by us while adjudicating the Ground No. 1 of the Assessee for A.Y. 2013-14 and A.Y. 2014-15, supra. We have already held that in the assessment proceedings,carried out u/s. 153A of the Act in pursuance of a search u/s. 132, for a completed and non abated assessment year, no addition can be made without having recourse to any incriminating material found or seized during the course of the search. Thus, for A.Y. 2014-15, in our considered view, the additions so made by the AO are liable to be deleted on this legal count alone.
10.3 Now, coming to the merits of the additions made by the AO for all the relevant assessment years under appeal, we find that in the instant case, the assessee has filed voluminous Paper Book, separately, for various assessment years under appeals containing 242 pages, 488 pages, 557 pages, 477 pages and 467 pages respectively for A.Y. 2013-14, A.Y. 2014-15, A.Y. 2015-16, A.Y. 2016-17 and A.Y. 2017-18. We find that in its Paper Book for A.Y. 2014-15, in support of its contention and written submission on the subject issues, the assessee has furnished the copy of (i) purchase and sales register; (ii) copy of its bank book in support of transactions having been taken place through banking channel; (iii) copies of the bank statements of the assessee for the relevant period in support of the transactions recorded in the bank book maintained by it;
(iv) copies of the ledger accounts of the sellers/buyers in the books of account of the assessee; (v) copy of the assessment order under the M.P. Vat Act, 2002 of the assessee;
(vi) copy of the date wise stock register maintained by the assessee; (vii) copy of the Affidavit of Shri Ashish Kacholiya retracting his earlier statement and confirming the transactions of sales to the assessee; (viii) copy of Master Data downloaded from the Official Webiste of the MCA of Sara Cattle Foods Pvt. Ltd. for establishing its identity;
(ix) copies of the assessment orders and copies of the registration certificates of the suppliers from whom the assessee made purchases of the goods; (x) copies of the assessment orders and copies of the registration certificates of the customers to whom the assessee made sales of the goods; (xi) copy of the recasted trading and the profit and loss account drawn by eliminating both the purchases as well as the sales from the audited trading and profit & loss account; and (xii) copies of certain judicial pronouncements upon which the assessee places reliance. The assessee furnished the similar documents, in its Paper Book for other assessment years too.
10.4 We find that the material facts of the assessee's case for all the assessment years, in respect of which the Revenue has raised the captioned grounds in the appeal memos for the concerning years, are materially same, except with the variation of amount and parties involved. The AO has also given common findings in respect of all such assessment years. Further, the written submissions of the assessee are also almost similar. In such circumstances, we consider it necessary to take the A.Y. 2014-15 as the lead year for giving our findings in the subsequent paras. We find that in the computation of income furnished along with the return of income filed by the assessee for A.Y. 2014-15, u/s. 153A of the Act, the assessee has shown an income of Rs. 12,99,104/-, before claiming set-off of carry forward unabsorbed depreciation of earlier years. We find that in respect of such business, the assessee has maintained the regular books of account and has also got such books of account duly audited under the Companies Act, 1956 as well as 61 u/s. 44AB of the Act. Copies of the Audit Reports obtained by the assessee under the Companies Act, 1956 and u/s. 44AB of the Act, along with copies of the Audited financial statements have been filed by the assessee before us. From the Tax Audit Report for A.Y. 2014-15, as placed at page no. 70 to 88 of the asssesse's Paper Book for A.Y. 2014-15, we find that in such report, at page no. 71, the assessee has been shown to have carried out the business of trading in Soya DOC. The details of books of account maintained by the assessee and as also those examined by the Tax Auditors have been given respectively at clause no. [11(b)] and [11(c)] of the Tax Audit Report. From the clause [11(c)] of the Tax Audit Report, we find that the Tax Auditors have reported that they have examined the cash book, bank book, journal, purchase register, sales register, stock register, ledger, bill, vouchers and bank statements etc. We find that neither the Statutory Auditors appointed uner the Companeis Act,1956 nor the Tax Auditors have reported any discrepancy or defect either in the maintenance of books of account by the assessee or the system of accounting observed by the assessee. We also find that in Schedule 'H' of quantitative details, annexed to and forming part of the Tax Audit Report, the Tax Auditors have duly furnished the quantities of the purchases and sales of the goods and as also purchases and sales of shares. From such quantitative details, we also find that the assessee was not having any stock of Soya DOC, either at the beginning or end of the financial year. Further, from the copy of the Audited Profit and Loss Account of the assessee for the year ended 31/03/2014, we find that the assessee has shown sales and purchases (exluding purchases of shares) amounting to Rs. 20,46,65,353/- and Rs. 20,02,67,817/- respectively.
10.5 We find that during the course of the assessment proceedings, the assessee had furnished complete details of purchases and sales by way of furnishing the copies of its purchase register and sales register for the relevant year. The copy of the complete purchase register and copy of the complete sales register have also been furnished by the assessee before us at page no.123 to 158 of its Paper Book for A.Y. 2014-15. From the purchase register, we find that the assessee has given complete details in respect of each and every purchases comprising of total purchases of Rs.20,02,67,817/-. Likewise, in the sales register also, we find that the assessee has furnished the complete details of sales for the entire sales amount of Rs. 20,46,65,353/-. From the purchase register, we find that in such register, the assessee has maintained all the necessary details such as the date of purchase, name of the supplier, invoice no. and date of the invoice as issued by the supplier, TIN/sales tax no. of supplier, quantity of the goods purchased, rate and purchase amount. In the similar manner, from the sales register we could gather that the assessee has maintained all the necessary details in respect of the sales transactions too, such as sales invoice no. serially issued by the assessee to the customer, date of the sales, name of the customer, TIN/sales tax no. of customer, quantity of goods sold, rate and sales amount. From both the registers, we find that the assessee has shown to have made purchases and sales only from those parties who were having TIN/sales tax no. From a perusal of the copy of the stock register for the whole relevant year and its verification from the purchase register and sales register furnished before us, we find that in respect of each and every purchase and sales transaction, the assessee has made necessary recording in its stock register so maintained. However, from such stock register, we find that the AO has rightly given a finding that the assessee was not having any closing stock and on every occasion, the sales of the goods have been found to have been made on the very same date of the corresponding purchase. We find that the assessee itself, in its submission before the AO had explained that its modus operandi was that first, it used to receive the order of supply of goods from any customer for the required quantity and at 62 the stipulated rate and only after receipt of the sales order from a customer, it used to procure equivalent quantity of goods from the parties known to it, again, at the agreed rate by maintaining some nominal margin of profit. As per the terms of purchase, according to the assessee, the supplier was supposed to deliver the entire quantity of goods to the door step of the customer of the assessee by raising sales invoice in the name of the assessee only and thereafter, the assessee used to raise its own sales invoices upon its customers by adding its own margin of profit. According to the assessee, in such circumstances, it was not required to get involved into logistic of movement of goods and it was therefore, it neither claimed any expenditure under the head transportation/ loading or unloading expenses nor, any vouchers regarding such expenditure were found in its business premises during the course of the search. In our considered view, merely because the assessee was not found to be maintaining any stock-in-trade, it cannot be concluded that the assessee was not carrying out any trading activity.
10.6 We have also carefully perused the copies of the ledger accounts of the sellers/buyers in the audited books of account of the assessee, as placed at page no. 244 to 269 of the assessee's Paper Book for A.Y. 2014-15 and we find that such ledger accounts have duly been signed by the concerning parties. From such ledger accounts, we also find that against all the transactions of sales, the assessee had received consideration through banking channels and likewise, against all the transactions of purchases, the assessee had made payments, again, through banking channels only. For the veracity of the receipts of funds from customers and payments to the suppliers, through banking channels, we have duly perused the relevant bank book maintained by the assessee, for the whole year, a copy whereof has been placed by the assessee at page no. 159 to 184 of its Paper Book for A.Y. 2014-15. Further, for verifying the veracity of the transactions recorded in the bank book, we have also gone through the copies of its bank statements for the relevant year as placed at page no. 185 to 235 of the assessee's Paper Book for A.Y. 2014-15. From a perusal of the bank book and the bank statements of the assessee, we also find merit in the contention of the assessee that it was not required to deploy its substantial capital for its running business for the very reason that on every occasion, the payment against purchase consideration has been made by it after realization of the sales proceeds.
10.7 We also find that the very existence of the various suppliers and various customers of the assessee is evident from the the copies of assessment orders and registration certificates under the M.P. Vat Act, 2002 along with Vat returns of the suppliers and customers, as placed at page no. 287 to 307 of the assessee's Paper Book for A.Y. 2014-15. In our considered view, all these documents establish the claim of the assessee that the transactions of purchases and sales were duly carried out by it only with the registered dealers. On careful perusal and verification of all the aforesaid documentary evidences, as were also filed by the assessee before the AO as well the ld. CIT(A), we are of the considered view that prima facie, the assessee could be able to discharge its onus of proving the genuineness of the transactions of purchases and sales.
10.8 We find that the AO has observed that the assessee is not maintaining any stock on any given date, as per the seized tally data. On this observation, we have already held in the preceding para that since the assessee was operating on the tailor made supply policy, it was not required to maintain any stock in hand. Further, for not finding any transportation bill, truck details also, the contention of the assessee is worth consideration that as the delivery of the goods used to be directly made to the customer of the assessee by the supplier of the assessee, the assessee was neither required to maintain 63 any detail of transportation, nor, was required to incur any expenditure on this behalf. We find that the AO at para (9.10) has further averted that some of the parties from whom the assessee had claimed to have carried out the transactions of purchases and sales, were not found at the address given, upon deputation of the Inspector. However, at para (9.19), the AO has controverted his own findings by stating that the summons issued to the parties remained unattended. Thus, it can be inferred that the summons got duly served upon the parties, but, the parties did not make the compliance. We also find that the AO himself at para (9.22) has admitted that summons issued to M/s. Shanti Worldwide u/s. 131(1A) of the Act, got duly served and in response to such summons, one of the partners made statement before the investigation wing. We find substance in the contention of the assessee that the AO had issued the summons to some of the parties as per the addresses mentioned in the tally data seized, but, subsequently, at the time of framing of the assessment, due to passage of time, addresses of some of the parties had got changed. The assessee has furnished such details of changed addresses at para (12.00) of its written submission for A.Y. 2014-15.We find that in the copies of the purchase and sales register filed before us, the assessee has duly furnished the details of TIN/sales tax number of all the parties. We also find that the assessee has also furnished the copies of assessment orders framed under the commercial tax laws and as also copies of the periodical returns under such enactments furnished by the sellers and purchasers. Further, even the assessee has shown all the transactions of purchases and sales in its periodical returns furnished under the M.P. Vat Act, 2002. We find that all the transactions relating to the receipts and payments have been carried out through banking channels only which are verifiable from the bank statements of the assessee. In our view, the AO could not bring on record any specific instance in which he found that against the cheque issued, for purchases, the assessee had received the equivalent cash from suppliers or for that matter, against the cheques received, for sales, the assessee had passed on the equivalent cash to the customers. For such proposition, we place reliance on the decision of Hon'ble High Court of Gujrat in the case of CIT vs. Kashiram Textiles Mills Pvt. Ltd. (2006) 284 ITR 61 (Guj.). We find merit in the contention of the assessee that the sellers/buyers have also confirmed the transactions by putting their signature on their respective ledger accounts in the books of account of the assessee.
10.9 We find that in the body of the assessment order, the AO has made a reference of three nos. of statements, all recorded only during the course of the search and not by the AO himself. The AO at para (9.8) of the order has reproduced the statement of Shri Vishwajeet Yadav, one of the employees of the group company of the assessee, namely, M/s. Global Metal and Energy Pvt. Ltd.. Such statement was recorded u/s. 132(4) of the Act, in the office premises of M/s. Global Realcon and the assessee. We find substance in the contention of the assessee that since, in the statement no reference of the assessee's business has been made and therefore, such statement cannot be given any credence in the assessee's case. Further, we find that the AO at para (9.20) has made a reference of statement of some Shri Sumit Garg, Proprietor of M/s. Sumeet & Sumeet Sales, but, again, in such statement, the question was asked from Shri Sumeet Garg regarding the business transactions with the assessee. We also find substance in the contention of the assessee that from such M/s. Sumeet and Sumeet Sales, the assessee had not carried out any trading transactions during any of the assessment years under consideration and therefore, for adjudicating the issue in hand, the statement of Shri Sumit Garg has no relevance. We find that the AO himself at page no. 57 to 59 of the assessment order has given the details of purchases and sales effected by the assessee during the A.Y. 2013-14, A.Y.2014-15, A.Y. 2015-16, A.Y. 2016-17 and A.Y. 2017-18 and in none of the years, 64 the name of M/s. Sumeet and Sumeet Sales is getting appeared. Thus, in our view, when the assessee company itself has not claimed to have carried out any transaction with the abovenamed M/s. Sumeet & Sumeet Sales, then, the denial of any transaction by such concern can also not be viewed against the assessee. We further find that at para (9.22), the AO has made reference of statement of Shri Ashish Kacholiya, a partner of M/s. Shanti World Wide from whom the assessee had shown to have made purchases. The AO has also reproduced the copy of such statement in the body of the assessment order. In the said statement, recorded on 08/11/2016, Shri Ashish Kacholiya has denied to have carried out any supply of goods to the assessee. However, we find sufficient force in the contention of the assessee that after the search, during the course of the assessment proceedings itself, Shri Ashish Kacholiya vide his Affdivait dated 24/11/2018, duly sworn before the Notary Public, had retracted his earlier statement given u/s. 131 of the Act on 08/11/2016 and had duly confirmed that during the financial year 2013-14 relevant to A.Y. 2014-15, he had actually effected sales of 997.010 Metric Tone of Soya DOC for an aggregate value of Rs. 3,60,33,530/- and the entire payments against such sales were received by them through account payee cheques. In the retracted statement, Shri Ashish Kacholiya, stated that his statements had been wrongly been typed and his signature on such statement was obtained forcefully. He also denied to have made any statement of denial of transactions before the investigation wing. A copy of Shri Ashish Kacholiya has also been filed by the assessee in its Paper Book for A.Y. 2014-15 at page no. 283 to 285. In our considered view, although, a statement given by a third person is a good piece of evidence, but if subsequently, such statement is retracted by the person making the deposition by way of an Affdiavit and in such retraction, also specify the circumstances in which the earlier statement was given, then, without bringing any other corroborative material on record, solely on the basis of the statement given by such third person, no adverse inference can be drawn against an assessee. For such proposition we find support from the decision of the Hon'ble Gujarat High Court in the case of Kailashben Mnaharlal Chokshi vs. CIT (2008) 220 CTR 138 (GujHC).
10.10 We further find that the AO at para (9.16) averted that a concern named as M/s. Sara Cattle Feeds from whom the assessee had shown to have made sales is also a paper concern. In respect of such observation, first of all, while adjudicating the issue of purchases, the findings given as regard to the sale transactions have no bearing. Even otherwise, we find that in the case of M/s. Sara Cattle Feeds, which is having TIN as 23669092127 one order of assessment for the period from 01/04/2013 to 31/03/2014 has been framed by the Asst. Commisisoner of Commercial Tax, Indore, Division-III on 21/01/2016. We find that during the assessment year under consideration, the assessee has made transactions of purchases and sales from many parties, but, merely on the basis of findings given in respect of some of the parties, which have also not been found sustainable in terms of the discussions made hereinabove, the AO has disregarded all the transactions of purchases and sales of the assessee and that too, for all the years under appeal, under surmises and conjectures. Such an action of the AO cannot be upheld under any cannon of law.
10.11 Thus, in view of the facts and circumstances of the case of the assessee, and in view of our findings given in the above paras, we absolutely find no merit in the action of the AO in holding the entire purchases and sales transactions of the assessee as non-genuine. We find that by furnishing the various documentary evidences, the assessee could conclusively establish the genuineness of all the transactions of purchases and sales and the basis of adverse findings of the AO are based merely on guess work and suspicion. It 65 is a settled law that suspicion, howsoever strong it might be, cannot substitute legal proof or evidences. Since, we have already held that the transactions of purchases and sales shown by the assessee are quite genuine, there does not remain any room for upholding the action of the AO in making the addition u/s. 68 of the Act, in respect of the difference between the Sales Value and Purchase Value as shown in the books of accounts. We are in agreement with the findings given by the ld. CIT(A) that since, against the sales, the assessee had genuinely received funds from its customers and therefore, in respect of entire receipts of funds, the provisions of s. 68 cannot be invoked. Even otherwise, we find that the assessee itself has shown the entire amount of receipts against sales as its revenue in the audited financial statements, and therefore, the question of making any further addition in respect of any component of such sales value does not arise. Further, all the decisions cited by the AO are distinguishable from the facts of the case of the assessee. We find that the judgment in the case of N.K. Proteins referred to by the AO is not applicable in the case of the assessee. First of all, in this case, the assessee could be able to establish the transactions of purchases beyond all doubts and secondly, in the present case, the AO has doubted both the side of the transactions viz. the purchases and as also the sales, whereas, in the case of the N.K. Proteins, only the transactions of purchases were found nongenuine and transactions of sales were found genuine.
10.12 We also find substance in the contention of the assessee that during the course of the assessment proceedings, it has relied upon some statements given by some persons, but, the opportunity of crossexamination of such persons were not afforded to the assessee. In our view, in the light of the decision of the Hon'ble Supreme Court in the case of M/s.KishanchandChelaram vs. CIT (1980)125 ITR 713 (SC) and again in the case of M/s. Andaman Timber Industries vs. Commissioner of Central Excise (2016) 15 SCC 785 (SC) it was incumbent upon the AO to provide such opportunities of cross- examination. We find that on this issue, the assessee has rightly placed reliance upon the various judicial pronouncements as cited in the written submission extracted hereinabove.
10.13 We also find substance in the contention of the assessee that the provisions of s. 69C refers to the source of the expenditure and not to the expenditure itself. In the similar circumstances, the Hon'ble High Court of Delhi in the case of CIT vs. Radhika Creation (2010) 78 CCH0423 (Del. HC) held that as the expenditure was accounted in the regular books, the source is obviously explained. The provisions of s. 69C are not applicable as there was no accounted expenditure. Further, the Hon'ble High Court of Gujrat in the case of SajaniJewellers vs. DCIT (2016) 96 CCH 0240 (Guj.HC) has held that when the purchases were made by the assessee through account payee cheques only and the same were duly recorded in the regular books of account, the provisions of s. 69C could not be invoked.
10.14 We also find full substance in the alternate plea of the assessee that in the instant case, the Special Auditors upon whose report the AO has made complete reliance, and as also the AO himself in the body of the assessment order, at various places, have categorically stated and accepted that the transactions of both the purchases and sales shown by the assessee in its books of accounts are bogus and have conclusively given a finding that in fact, the assessee has not carried out any business activity during the assessment years under consideration. In our considered view, in a case when according to the AO, no actual business activity of purchase and sales were carried out and both the sides of the transactions were alleged to be bogus or on paper only, the question of 66 taxability of any income under any of the provisions does not arise at all. Ultimately, under the scheme of the law, tax is to be levied only on the Real Income and not on the alleged ficticious income emanated allegedly from bogus transactions. In such a situation, the expenditure having been not actually incurred, the question of invoking the provisions of s. 69C does not arise and likewise, when the transactions of receipts by themselves are doubted, the provisions of s. 68 also cannot be applied. For such proposition, we rely on the decision of the Hon'ble High Court of Rajasthan in the case of Malpani House of Stones vs. CIT (2017) 395 ITR 0385 (Raj. HC).
10.15 Accordingly, we find no infirmity in the action of the ld. CIT(A) in deleting the additions of Rs.20,02,67,817/- in A.Y. 2014-15, Rs.21,56,98,886/- in A.Y. 2015-16, Rs.29,15,83,534/- in A.Y. 2016-17 and Rs.33,40,81,325/- in A.Y. 2017-18 on account of bogus purchases as unexplained expenditure u/s. 69C of the Act and as also, in deleting the additions of Rs.43,97,536/- in A.Y. 2014-15, Rs.49,22,364/- in A.Y. 2015-16, Rs.95,07,721/- in A.Y. 2016-17 and Rs.1,14,63,760/- in A.Y. 2017-18 on account of difference between purchases and sales as unexplained cash credits u/s. 68 of the Act.Consequenlty, the Revenue's Ground Nos. 1 & 2 for A.Y. 2014-15 and Ground Nos. 2 & 3 for A.Y. 2015-16, A.Y. 2016-17 & A.Y. 2017-18 are hereby Dismissed."
20.2. Thus, following the aforesaid findings given by us in one of the group assessees vide Order dated 26.04.2022, we find no infirmity in the action of the ld. CIT(A) in deleting the additions made u/s.69C of the Act for bogus and explained expenditure and u/s.68 of the Act for difference in unexplained purchase and sale for A.Y. 2015-16 to AY 2017-18. Consequently, the Revenue's Ground Nos. 3 for A.Y. 2017-18 and Ground Nos. 3 & 4 for A.Y. 2015-16 & A.Y. 2016-17 are hereby Dismissed.
21. Ground No. 5 of the Revenue for A.Y. 2016-17 21.1. Through this ground of appeal, the Revenue has challenged the action of the ld. CIT(A) in deleting the addition of Rs.50,75,150/- made by the AO in the assessee's income for A.Y. 2016-17, being one fifth share of the assessee in celebration of 25th marriage anniversary expenses of one of the family members, as unexplained expenditure u/s. 69C of the Act.
6721.2. Briefly stated facts of the issue, as culled out from the records, are that the AO noted that on 17.02.2016, Dixit family had hosted a grand party to celebrate wedding anniversary of Hradayesh Dixit and Pratiksha Dixit. This grand party was hosted at a farm house situated at Nipania, Indore in which several Bollywood stars and TV serials icons were invited. Thus, the AO noted that huge expenditure was incurred in organizing such a party. In reply, the assessee, vide his letters dated 25.11.2018 and 07.08.2019, furnished his detailed explanation. The AO, while framing the assessment order, averted that the assessee along with his four other family members had jointly incurred a total expenditure of Rs.2,53,75,752/- under the various heads as per the details given at para (11.22) of the order. Finally, the AO, presuming that the assessee must have contributed 1/5th share in such celebration expenditure, determined the assessee's share at Rs.50,75,150/- and further, by presuming that against such expenditure, the assessee and his family members were not having any explained sources of income, made an addition of Rs.50,75,150/- in the assessee's income for A.Y. 2016-17, by holding the same as unexplained expenditure u/s. 69C of the Act. The similar additions were also made by the AO in the hands of four other family members namely, Shri Hradayesh Dixit, Shri Shantanu Dixit, Smt. Surekha Dixit and Smt. Pratiksha Dixit.
21.3. Aggrieved with the Order of Assessment, the assessee preferred an appeal for the subject assessment year before the ld. CIT(A). The written submission made by the assessee before the ld. CIT(A) has been reproduced by the ld. CIT(A) in his Order from page no. 275 to 289. The Ld. CIT(A), after taking into consideration the entire facts and 68 circumstances of the assessee's case, deleted the entire additions made by the AO. The ld. CIT(A) has given the relevant findings at para (4.12.2) at page no. 289 to Para (4.12.8) at page no. 294 of his order.
21.4. Aggrieved with the relief granted by the ld. CIT(A), the revenue is in appeal before us.
21.5. Before us, learned Sr. DR vehemently argued supporting the observations of the AO on this issue. However 21.6. Per Contra, Learned Counsel for the assessee has filed written submissions before us. The relevant portion of such written submission is being reproduced as under:
"C. Key Points of Assessee's Submission and Relevant Pages of the Paper Book:
In this context, it is submitted as under:
1.00 That, the impugned addition of Rs.50,75,150/- has been made by the learned AO in the assessee's income merely on the presumption that the assessee had incurred one fifth of the total expenditure of Rs.2,53,75,752/-, allegedly claimed to have been incurred by the assessee and his four members towards celebration of 25th marriage anniversary of one of the family members namely Shri Hradayesh Dixit.
1.01 After estimating the expenditure to the extent of Rs.2,53,75,752/-, the ld. AO without assigning any reason or basis, further assumed that the assessee along with his wife, his real brother & sister-in-law (bhabhi) whose marriage anniversary celebration was made and his nephew incurred such expenditure equally without considering and appreciating the material fact that the assessee was under no legal or moral obligation to incur any expenditure on marriage anniversary celebrations of his real brother and sister-in-law (bhabhi) who were not dependent for earning on the assessee.
2.00 Your Honours, before delving with the subject issue, it would be apt to note that in the instant case, the ld. AO has made heavy reliance over some excel sheets and whatsapp conversations, alleged to have been recovered during the course of the search proceedings.
However, from the entire body of the assessment order, it is not discernible that whether or not due procedure was observed by the search party in recovering aforesaid electronic datas so as to bring the same within the ambit of credible and reliable evidences in accordance with the prevailing laws of the land.
2.01 Your Honours, it is submitted that in respect of the so-called digital evidences, it is not evident that whether or not all such digital evidences were gathered in accordance with the Information Technology Act, 2000 and that too, after observing the due procedure as contemplated under the provision of the section 65B of the Indian Evidence Act, 1872.
69n my case."
15.00 Your Honours, without prejudice to the above and without in any manner admitting the alleged incurrence of unexplained expenditure of Rs.2,53,75,752/- by the assessee and his family members, it is submitted that the learned AO has grossly erred in not providing the assessee and his group members the due credit in respect of the marriage anniversary expenses of Rs.68,36,000/- admittedly incurred by them from their explained sources, especially, in a circumstance, when the learned AO in the entire assessment order has not doubted the incurrence of marriage anniversary expenses shown by the assessee and his family members at Rs.68,36,000/- from their explained sources.
16.00 Your Honours, the ld. CIT(A) has dealt with the subject issue at para (4.12) on page no.
274 to para (4.12.8) at page no. 294 of the impugned order. The ld. CIT(A) has given a finding that the entire estimation of payment of Rs.2,23,05,000/- by the AO towards marriage anniversary expenditure is without any cogent basis and a result of only guess work and surmises. The ld. CIT(A) further held that the Special Auditors have worked out the expenditure at Rs.65,61,775/- only and as against such sum, the assessee along with his family members have themselves admitted to have incurred a higher expenditure of Rs.68,36,000/- towards marriage anniversary party. Accordingly, the ld. CIT(A) deleted the entire addition of Rs.50,75,150/- so made by the AO on this count being the assessee's 1/5th share in marriage anniversary celebration expenses. It is therefore, submitted that the findings so given by the ld. CIT(A) being squarely in accordance with the Law, deserve to be upheld by this Hon'ble Bench. Consequently, the Revenue's appeal on this ground be Dismissed.
KEY PAPERS FILED IN THE PAPER BOOK FOR A.Y. 2016-17 ON WHICH THE ASSESSEE WISH TO PLACE RELIANCE:
S. Description of the document Page No.
No.
1 Statement showing details of Expenses found noted on LPS Seized during 486
the cource of search proceedings for celebrating 25th marriage anniversary 2 Relevant loose papers supporting for statement showing expenses incurred 487 to 499 on 25th marriage anniversary 3 Relevant abstract of the 'details of the 25th Marriage Anniversary 500 & 501 expenses' as worked out by the special auditors 4 Judgment of the Hon'ble High Court of Delhi in the case of CIT vs. Lutec 502 & 503 India Ltd. (2009) 5 Bank Statement of the assessee evidencing withdrawal of Rs.7,50,000/- 504 6 Relevant bank statement of Shri Shantanu Dixit evidencing the 505 to 510 withdrawal of Rs. 48,00,000/-
7 Relevant bank statement of Shri Hradayesh Dixit evidencing the 511 & 512 withdrawal of Rs. 15,36,000/-
7022. We have heard rival contentions and perused the records place before us. Undisputedly, the assessee and his other family members had celebrated 25th marriage anniversary of Shri Hradayesh Dixit and his wife, Smt. Pratiksha Dixit, at a large scale. We note that for attending such celebrations, several bollywood stars and TV serials icons were invited. We also note that that during the course of the search, some excel sheets were found in which the details of various outstation guests, the schedule of their visit to Indore and the details of hotels reservations have been mentioned. Such excel sheet has been reproduced by the AO at para no. (11.5) of the assessment order. Further during the course of the search, summons were issued to the hotels and traveling booking agencies and the response is made by such hotels, travelling agencies, which have been reproduced in the body of the assessment order. Ld. AO has also made reference of some of the mobile messages. From a message, the AO inferred that the assessee might have made payments to various celebrities for attending their party and thereafter, based upon some information which according to him was in public domain as regard to the rates of the stars for attending parties, the AO estimated that for inviting the celebrities, the assessee and his family members might have incurred total expenditure on marriage anniversary party at Rs. 2,53,75,752/-. After making such estimation, the AO made one more estimation that the assessee and his four other family members might have incurred such expenditure in the equal proportion and accordingly, determined the assessee's 1/5th share at Rs.50,75,150/- and made the addition u/s. 69C of the Act.
7122.1. We find that so far as the payments towards expenditure for hosting the parties are concerned, the AO has determined such expenditure at Rs. 30,70,752/- (excluding payments estimated to have been made to bollywood actors/tv actors/models at Rs. 2,23,05,000/-), which is quite reasonable. However, in respect of the estimation of payments made to the bollywood actors and tv actors, as estimated by the AO at Rs. 2,23,05,000/-, we do not find any substance. We observe that firstly Ld. AO on the basis of some message found in the mobile phone of the assessee, estimated that all the celebrities had attended the party organized by the Dixit family on commercial terms only. After making such guess work, the AO at his own, without any basis, again estimated the amount which the assessee and his family members might have paid to the celebrities for attending the party. We find that in making both the aforesaid guess works, the AO was not having any positive material on record. We find that it is not the case of the AO that during the course of the search, alike finding of the bills, vouchers etc. in respect of the travel and hotel accommodation, some loose papers or documents were also found or seized in respect of the alleged payments to the celebrities. We find that the sole basis taken by the AO for making his estimation was some mobile message sent by a film artist Rajat Rawal to the assessee on 14/02/2016 averting the assessee that he may require 45,45,000/- for making payments to celebs. However, we find that except such message there is no other material on record. We find that the AO has either not made any independent inquiry from Shri Rajat Rawal, who is a famous artist and whose whereabouts could have been traced out by the AO if he so intended and even if such inquiry was so conducted, no adverse finding resulted out.
7222.2. Further, we find that even the Special Auditors in their report with the title 'Common Audit Findings Dixit Group have worked out the total expenditure towards celebration of 25th marriage anniversary at Rs. 65,61,775/- only. For arriving at such figure, the Special Auditors have duly taken into consideration all the seized loose papers and as also the message of Mr. Rajat Rawal to the assessee requiring for a sum of Rs.45.45 Lakhs. The relevant abstract of the Special Auditors' Report have been scanned by the assessee at para (10) of his written submission as extracted hereinabove. In such circumstances, in our considered view, there was absolutely no justification for the AO to completely disregard the findings given by the Special Auditors appointed by the Department itself u/s. 142(2A) of the Act. Accordingly, we do not find any substance in the estimation of total expenditure of Rs. 2,23,05,000/- so made by the AO at para (11.20) of the impugned order.
22.3. We find that as against the total expenditure of Rs. 65,61,775/- as determined by the Special Auditors, the assessee along with his family members has admitted to have incurred a higher sum of Rs. 68,36,000/- towards the marriage anniversary party. According to the assessee, such expenses were jointly incurred by the assessee himself, and his other two family members. According to the assessee, since, his real brother was not dependent upon him and therefore, he was not required to bear the expenditure in the equal proportion as presumed by the AO and instead, he has incurred only a sum of Rs.5,00,000/- towards his share for the marriage anniversary celebration expenses. According to the assessee, the remaining expenditure of Rs. 63,36,000/- were jointly borne by his brother, 73 Shri Hradayesh Dixit (Rs. 15,36,000/-) and his nephew, Shri Shantanu Dixit (Rs. 48,00,000/-). We find that even the Special Auditors in their Report, scanned hereinabove, have reported that towards the marriage anniversary expenses, a sum of Rs. 48,00,000/- was duly found recorded in the individual file of Shri Shantanu Dixit. The Special Auditors have also commented that in the file of Shri Hradayesh Dixit, a sum of Rs. 18,00,000/- was also found recorded by him. However, the Special Auditors have not given any finding as regard to incurrence of expenditure by the assessee towards such anniversary expenses. We find substance in the contention of the assessee that the entire expenditure of Rs.5,00,000/- were incurred by him from his explained sources only. Thus, we find that the assessee along with his brother Shri Hradayesh Dixit and nephew Shri Shantanu Dixit had jointly incurred a sum of Rs.68,36,000/- towards the celebration of 25th marriage anniversary of Shri Hradayesh Dixit and the entire expenditure were incurred by the assessee, Shri Hradayesh Dixit and Shri Shantanu Dixit out of their explained sources of income. 22.4. Thus, we do not find any infirmity in the action of the ld. CIT(A) in deleting the addition amounting to Rs.50,75,150/- so made by the AO in the income of the assessee on the allegation of unexplained expenditure towards marriage anniversary expenses, u/s. 69C of the Act. Therefore, appeal of the Revenue on this ground is dismissed.
23. Ground No. 6 of the Revenue for A.Y. 2016-17 and Ground No. 4 of the Revenue for A.Y. 2017-18 23.1. Through these grounds of appeal, the Revenue has challenged the action of the ld. CIT(A) in deleting the additions of Rs.61,88,526/- made by 74 the AO in the assessee's income for A.Y. 2016-17 & A.Y. 2017-18 on account of personal expenses and construction expenses as unexplained expenditure u/s. 69C of the Act.
23.2. Briefly stated facts of the issue, as culled out from the records, are that according to the AO, during the course of search operations, several incriminating documents were found and seized. As per the AO, the assessee was silent on the sources of these expenses during search as well as post search enquiries. According to the AO, most of the expenses were apparently incurred in cash towards payments of various bills related to shopping, grooming, renovation etc. Accordingly, the AO, vide show-cause notice dated 19-07-2019, required the assessee to furnish his explanation on the said issue. In reply, the assessee, vide his letter dated 07.08.2019 furnished his detailed explanation. The AO, at para (12.10) determined the total amount of personal expenditure for two assessment years viz. A.Y. 2016-17 and A.Y. 2017-18 aggregating to a sum of Rs. 1,80,58,960/- and after working out such expenditure for two years, divided such expenses in each of the A.Y. 2016-17 and A.Y. 2017-18 by determining the total expenditure for each year at Rs. 90,29,480/- and then again after presuming that such expenditure were incurred by the assessee and his four other family members, namely, Shri Hradayesh Dixit, Shri Shantanu Dixit, Smt. Surekha Dixit and Smt. Pratiksha Dixit, determined the unexplained personal expenses of the assessee for the A.Y. 2016-17 and A.Y. 2017-18, at Rs. 18,05,896/- for each of the years. The AO, at the same para (12.10), also determined the total amount of construction expenditure for two assessment years viz. A.Y. 2016-17 and A.Y. 2017-18 aggregating to a sum of Rs. 4,38,26,300/- and after working out such expenditure for two years, 75 divided such expenses in each of the A.Y. 2016-17 and A.Y. 2017-18 by determining the total expenditure for each year at Rs. 2,19,13,150/- and then again after presuming that such expenditure were incurred by the assessee and his four other family members, namely, Shri Hradayesh Dixit, Shri Shantanu Dixit, Smt. Surekha Dixit and Smt. Pratiksha Dixit, determined the unexplained construction expenses of the assessee for the A.Y. 2016-17 and A.Y. 2017-18, at Rs. 43,82,630/- for each of the years. Thus, the additions of Rs.61,88,526/- got to be made by the AO in the assessee's income for the two assessment years 2016-17 & 2017-18, which comprises of two amounts viz. (i) Rs.18,05,896/- on account of unexplained personal/ household expenses; and (ii) Rs.43,82,630/- on account of unexplained construction/renovation expenses of house. 23.3. Aggrieved with the Order of Assessment, the assessee preferred separate appeals for the subject assessment years before the ld. CIT(A). The written submission made by the assessee before the ld. CIT(A) has been reproduced by the ld. CIT(A) in his Order from page no. 296 to 316. The Ld. CIT(A), after taking into consideration the entire facts and circumstances of the assessee's case, deleted the entire additions made by the AO. The ld. CIT(A) has given the relevant findings at para (4.13.3) at page no. 316 to Para (4.13.4) at page no. 322 of his order.
23.4. Aggrieved with the relief granted by the ld. CIT(A), the revenue is in appeal before us.
23.5. Before us, learned Sr. DR vehemently argued supporting the observations of the AO on this issue.
7623.6 Per Contra, Learned Counsel for the assessee has relied on the finding of Ld.CIT(A) and also referred to written submissions placed on record.
24. We have heard rival contentions and perused the records placed before us. We note that during the course of the search u/s. 132, some bills and vouchers evidencing incurrence of expenditure by the assessee and his family members towards household were found and seized. As per such seized papers, assessee and his family members had been found to have incurred household expenditure aggregating to a sum of Rs. 96,52,245/- (total not made by the AO) in various financial years commencing from F.Y. 2009-10 to F.Y. 2016-17. During the course of the assessment proceedings, the assessee had furnished a copy of the statement showing the description of the documents found and seized during the course of the search from the residential premises of the assessee and in such statement, an explanation in respect of each and every document with the reference of the financial year to which such documents pertain have been given. A copy of such statement has also been furnished by the assessee before us which is placed at page no. 513 to 536 of his Paper Book for A.Y. 2016-17. As per such statement, the total amount of bills, vouchers and loose papers, as seized, works out to be Rs.22,84,977/- and out of which, only a sum of Rs.11,56,673/- and Rs. 1,35,204/- pertain to the A.Y. 2016-17 and A.Y. 2017- 18 and all other expenditure pertain to earlier years for which the AO has not drawn any adverse inference. In the same statement, the assessee has furnished the assessment year wise and family member wise details of household expenditure shown by various family members of the assessee 77 out of their explained sources of income. As per such details, during the A.Y. 2016-17 and A.Y. 2017-18, the assessee along with his family members have jointly shown to have incurred a sum of Rs. 16,27,047/- and Rs. 29,00,782/-, excluding marriage anniversary celebration expenses. Such statement has been furnished by the assessee which is placed at page no. 537 to 540 of his Paper Book for A.Y. 2016-17. In support of his assertion as regard to the household expenses shown by various family members in their memorandum capital account, the assessee has also furnished copy of memorandum capital account and statement of affairs of each of the family members for the F.Y. 2015-16 and F.Y. 2016-17 which are placed at page no. 544 to 579 of his Paper Book for A.Y. 2016-17. We find that the AO has worked out the total household expenses by the assessee and his family members in two assessment years at a huge sum of Rs.1,80,58,960/- but, the basis of arriving at such figure has not been given by the AO in the entire body of the assessment order. We also find that while determining the amount of unexplained expenditure towards household expenses, the AO has not granted any credit in respect of such expenses incurred by the assessee and his family members out of their explained sources of income and which are also duly supported by the memorandum capital account and statement of affairs drawn by the assessee and his family members from year to year. A mistake of considering entry of Rs. 4,41,147/- twice is also brought to our noticd. The assessee has also pointed out that in a single day i.e. on 22/05/2014, the AO has estimated to have incurred household expenses of Rs. 57,41,500/- merely on the basis of some noting of figures without any description whatsoever, found made in a loose paper inventorized at page no. 10 of LPS-02. A copy of such loose paper 78 has been filed by the assessee before us at page no. 542 of his Paper Book for A.Y. 2016-17. We find that such loose paper can only be regarded as a dumb document containing some figures without any irrelevance. Thus, in our view, such jottings cannot be presumed to be household expenditure incurred by the assessee. In our view, if both the aforesaid items of Rs. 4,41,147/- and Rs. 57,41,500/- are deleted, then the total would work out to be at Rs. 34,69,598/- only in seven assessment years. We also find that the same AO, vide the common impugned order, has framed the assessment for seven assessment years from A.Y. 2011-12 to A.Y. 2017-18, but, for A.Y. 2011-12 to A.Y. 2015-16, the AO has not made any addition on account of low household withdrawals, which have been shown despite the fact that for the earlier assessment years viz. A.Y. 2011-12 to A.Y. 2015-16, the assessee and his family members had shown lower amount of withdrawals at Rs. 9,76,492/- for A.Y. 2011-12, Rs. 11,02,894/- for A.Y. 2012-13, Rs. 19,54,443/- for A.Y. 2013-14, Rs. 19,11,499/- for A.Y. 2014-15 and Rs. 14,49,184/- for A.Y. 2015-16, in comparison to withdrawals shown for A.Y. 2016-17 at Rs. 16,27,047/- and for A.Y. 2017-18 at Rs. 29,00,782/-, out of the explained sources. Thus, in our considered view, an arbitrary estimation of expenditure in A.Y. 2016-17 and A.Y. 2017-18, without any cogent basis and merely on estimation, was not warranted. Accordingly, we do not find any infirmity in the action of the ld. CIT(A) in deleting the additions amounting to Rs.18,05,896/- in A.Y. 2016-17 and Rs.18,05,896/- in A.Y. 2017-18 so made by the AO on account of unexplained personal and household expenses.
24.1. Now, we will be dealing with the issue regarding unexplained investment in construction of house jointly made by the assessee and his 79 four other family members namely, Shri Hradhyesh Dixit, Shri Shantanu Dixit, Smt. Surekha Dixit and Smt. Pratiksha Dixit, and in respect whereof the AO has made an addition of Rs.43,82,630/- in A.Y. 2016-17 & A.Y. 2017- 18 vide para (12) of his Order. We find that during the course of the search u/s. 132, some bills and vouchers evidencing incurrence of expenditure on renovation by the assessee and his family members towards renovation of their family house situated at 66/67, Bhakt Prahlad Nagar, Indore were found and seized. The loose papers seized relating to the renovation expenses have been compiled by the AO at para (12.7) of the assessment order and as per such compilation, the assessee and his family members had been found to have incurred renovation expenditure aggregating to a sum of Rs. 77,85,000/- (total not made by the AO) in two financial years viz. F.Y. 2015-16 & F.Y. 2016-17. We find that in the body of the assessment order, the AO has also reproduced scanned copies of some bills and vouchers. We find that in the order of the assessment, after giving the details of renovation expenses at para (12.7), the AO has produced the scanned copies of some of the bills, vouchers and other loose papers relating to the construction expenses. We find that from none of the findings of the AO, or the copies of the loose papers furnished, the amount of the total construction expense as worked out by the AO at Rs. 4,38,26,300/- for two assessment years viz. A.Y. 2016-17 and A.Y. 2017-18 is discernible. Thus, in the entire body of the assessment order, the AO has not given any working, although we find that after receipt of the show cause notice, a specific request was made by the assessee to this effect vide his letter dated 25/11/2018. We find substance in the contention of the assessee that the house for which the construction expenditure have been 80 found to have been incurred by the assessee were years back and during two assessment years, the assessee had incurred only expenses towards renovation/beautification of such house. We find that the assessee at para (19.00) of his written submission before us, has furnished the details of family member wise and assessment year wise expenses incurred jointly by them, out of their explained sources of income and as per such details, during the A.Y. 2016-17 and A.Y. 2017-18, the assessee and his family members had jointly incurred expenses to the extent of Rs. 97,71,500/- and Rs. 71,07,840/- respectively. In support of his assertion as regard to the renovation expenses shown by various family members in their memorandum capital account, the assessee has also furnished copy of memorandum capital account and statement of affairs of each of the family members for the F.Y. 2015-16 and F.Y. 2016-17. In our considered view, from such statement of affairs, the sources of renovation expenses incurred by various family members in two years get fully substantiated. Thus, it has to be necessarily held that the assessee and his three other family members have duly shown and explained the sources of renovation expenses in two years at Rs.1,68,79,340/-. As we have found in the preceding para that the AO has not given any findings regarding the determination of such expenses and further, as per the own working of the AO, as given at para (12.7) of the Order, the total amount of expenditure as the seized material in two years works out to be only at Rs. 77,85,000 In such circumstances, when the total amount of renovation expenses worked out by the AO on the basis of loose papers works out to be only Rs. 77,85,000/- as against which, the assessee and his family members have duly shown a sum of Rs. 1,68,79,340/- in two assessment years, we find 81 absolutely no justification in the action of the AO in making any further addition in the hands of the assessee or any of his family members on account of unexplained expenditure towards renovation expenses of house. Thus, we are in full agreement with the findings so given by the ld. CIT(A) for deleting the additions amounting to Rs. 43,82,630/- in A.Y. 2016-17 and Rs. 43,82,630/- A.Y. 2017-18 so made by the AO on account of unexplained renovation expenses and therefore, the additions have been rightly deleted by the ld. CIT(A). Resultantly, the Revenue's Ground No. 6 for A.Y. 2016-17 and Ground No. 4 for A.Y. 2017-18 are hereby Dismissed.
25. Ground No. 7 of the Revenue for A.Y. 2016-17 25.1. Through this ground of appeal, the Revenue has challenged the action of the ld. CIT(A) in deleting the addition of Rs.2,00,000/- made by the AO in the assessee's income for A.Y. 2016-17 on account of unexplained cash payments as unexplained expenditure u/s. 69C of the Act.
25.2. Aggrieved with the Order of Assessment, the assessee preferred an appeal for the subject assessment year before the ld. CIT(A) and got success.
25.3. Aggrieved with the relief granted by the ld. CIT(A), the revenue is in appeal before us.
25.4 Before us, learned Sr. DR vehemently argued supporting the observations of the AO on this issue.
26. We have heard rival contentions and perused the records placed before us. We observe that based on the message recovered from the mobile of the assessee, the AO reached to the conclusion that the assessee 82 had made payment in cash amounting to Rs.2,00,000/- to some Ravindra Ramchet Yadav. We find substance in the contention of the assessee that the aforesaid payment was made by the assessee to the above named person for the purpose of some shopping and the necessary expenditure have been included in the marriage anniversary expenses, shown by the assessee and his family members. We find that in respect of marriage anniversary expenses, the AO has given separate findings and therefore, no adverse cognizance in respect of such payment could have been drawn by the AO against the assessee. Accordingly, there is no infirmity in the action of the ld. CIT(A) in deleting the addition of Rs.2,00,000/- made by the AO at para (13) of the Order for A.Y. 2016-17. Therefore, ground raised by the Revenue on this issue is Dismissed.
27. Ground Nos. 3(a) & 3(b) of the Assessee for A.Y. 2017-18 27.1 Through these grounds of appeal, the assessee has challenged the action of the ld. CIT(A) in upholding the addition of Rs.40,00,000/- made by the AO in the assessee's income for A.Y. 2017-18 on account of unexplained cash payments to Ms. Pooja Thakur as unexplained expenditure u/s. 69C of the Act. At the outset Ld.Counsel for the assessee requested for not pressing these grounds. Accordingly Ground no.3(a) and 3(b) raised by the assessee are dismissed as not pressed.
28. Now we take up the cross appeals for AY 2016-17 in the case of the assessee namely Hardyesh Dixit 28.1. The Grounds of appeal raised in the cross appeal for Assessment Year 2016-17, are reproduced below:-
83I.T.(SS).A.No.153/Ind/2020 - A.Y. 2016-17 : (Hradayesh Dixit):
1. That, on the facts and in the circumstances of the case, the action of the learned CIT(A) in confirming the additions to the extent of Rs.1,50,000/-
made by the AO in the appellant's income is quite unjustified, unwarranted, excessive, arbitrary and bad-in-law.
2a). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.1,50,000/- made by the AO in the appellant's income on account of alleged unexplained unsecured loan from one person namely Shri Jharneshwar, by invoking the provisions of s.68 of the Act, without confronting the appellant with any information as regard to the loan creditor allegedly gathered behind the back of the appellant either in the case of the appellant himself or in the cases of some other assessees and as also, without giving any opportunity of cross- examination to the appellant.
2b). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition of Rs.1,50,000/- without considering the material fact that the appellant had duly discharged his initial onus of proving the identity of the loan creditor, the genuineness of the transactions and creditworthiness of loan creditor beyond all doubts by producing all the necessary documentary evidences.
2c). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition to the extent of Rs.1,50,000/- without adhering to the appellant's prayer to issue either summons under s.131 or letter under s.133(6) of the Act to the loan creditor.
I.T.(SS).A.No. 67/Ind/2021 - A.Y. 2016-17 : (Departmental Appeal ( Hardyesh Dixit):
1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 3,77,26,125/- made by the AO on account of unexplained investment in plots u/s 69 of the Income-tax Act, 1961.
2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs.61,88,526/- made by the AO on account of personal expenses and construction expenses as unexplained expenditure u/s 69C of the Income-tax Act, 1961.
3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 50,75,150/- made by the AO on account of marriage anniversary expenses as unexplained expenditure u/s 69C of the Income-tax Act, 1961.84
4. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 20,13,000/- made by the AO on account of unexplained cash credits u/s 689 of the Income-tax Act, 1961.
29. Ground No. 1 of the Revenue :
29.1. Through this ground of appeal, the revenue has challenged the action of the ld. CIT(A) in deleting the addition of Rs.3,77,26,125/- made by the AO for A.Y. 2016-17 on account of unexplained investment in plots. 29.2. Briefly stated facts of the issue, as culled out from the records, are that during the course of the assessment proceedings, the AO noted that the assessee along with his family members had made huge investment in various plots and the transactions involved were suspicious since no explanations were provided by the assessee during Search as well as post search proceedings. Accordingly, the AO, vide show-cause notices dated 31/10/2018 and 19/07/2019, required the assessee to furnish his explanation on the said issue. In reply, the assessee, vide his letter dated 03.08.2019, furnished his detailed explanation. Before the AO, the assessee had claimed that the entire investments in immovable properties had been made by him and his family members through explained sources. The AO found that the assessee's group has shown substantial investment in plots under different names but, documents in support of the sources of investments were not produced. Further, according to the AO, in some cases the assessee had got the plots registered in his name and against such plots, the cheques were issued in the name of the sellers, but, the sellers never presented the same to the bank. According to the AO, the Special Auditors have noticed unusual parallel transactions of payments to sellers and sellers' company or its directors and such sellers giving interest free 85 unsecured loans to the group entities. According to the AO, the investment made by the assessee was liable to be treated as unexplained investment u/s. 69 r.w.s. 115BBE at Rs.3,77,26,125/- and accordingly made the addition in the assessee's income for the assessment year under consideration. When the matter travelled before Ld. CIT(A) the assessee made detailed written submissions along with the documentary evidences reproduced by the ld. CIT(A) in the impugned order from page no. 39 to
50. The Ld. CIT(A), after taking into consideration the entire facts and circumstances of the assessee's case, deleted the entire addition made by the AO. The ld. CIT(A) has given the relevant findings at Para (4.5.2) on page no. 50 to Para (4.5.6) on page no. 55 of his order.
29.3. Before us, learned Sr. DR vehemently argued supporting the observations of the AO on this issue.
29.4. Per Contra, Learned Counsel for the assessee vehemently argued referring to the written submissions place on record. He submitted that during the financial year 2015-16 relevant to the A.Y. 2016-17, assessee purchased as many as seven plots admeasuring 1100 sq. ft. each bearing number A-192 to A-196 and A-241 to A-242, situated in the aforesaid township i.e. 'U.S. Gold City', at village Bhatkhedi, Tehsil Mhow, District Indore, from M/s. Simran Developers, 402, "The Mark", 20-A, Old Palasia, Saket Square, Indore, under two registered purchase deeds for a total consideration of Rs.52,36,000/- (Rs.37,40,000/- Rs.14,96,000/-). Copies of purchase deed and details of payments have been furnished which are either out of home loan borrowed from M/s. Shreeram City Union Finance Ltd. or by way of borrowing loan from M/s. Shankeshwar Devcon Pvt Ltd.
He further added that during FY 2012-13 assesses has purchased seven 86 plots bearing no.M-11 and Plot no.231- 236 at Sai Royal Palm from S.S.Infra & Real Estate Pvt. Ltd. for a total consideration of Rs.89,14,835/-. All these transaction are duly recorded in the regular books of account and from declared sources and therefore no addition u/s.69 of the Act was called for. He further submitted that the learned AO, at page nos. 59 & 60 of the assessment order has given the break-up of the sum of Rs.3,77,26,125/- in respect whereof the subject addition has been made. Out of the alleged sum Rs.52,36,000/- which the assessee has invested during FY 15-16 has already been shown by the assessee in its regular tax returns and source is duly explained. Rs. 41,50,125/- shown in the alleged details of Ld.AO is towards the purchase made by the assessee during FY 2012-13 and is duly explained. The remaining alleged amount of Rs.2,83,40,000/-is not at all related to the assessee and no such investment has been made by the assessee. He further submitted that the ld. CIT(A) has discussed the subject issue at length from page no. 31 to 55 of the impugned appellate order. At para (4.5) on page no. 31, the ld. CIT(A) has narrated the facts of the case whereas, at para (4.5.1) from page no. 32 to 50, the ld. CIT(A) reproduced the written submission of the assessee made before him. At para (4.5.2) on page no. 50, the ld. CIT(A) has given brief details of the additions made by the ld. AO for the A.Y. 2016-17. Further, at para (4.5.3) on page no. 51 & 52, the ld. CIT(A) has discussed the addition of Rs.41,29,200/- made by the ld. AO in the hands of the assessee for A.Y. 2013-14 in respect of some other property. From para (4.5.4) at page no. 52 to para (4.5.5) at page no. 54 & 55, the ld. CIT(A) has given his detailed findings on the addition of Rs.3,77,26,125/- made by the ld. AO for A.Y. 2016-17. The ld. CIT(A) has separately dealt with each and every investment in the properties and has 87 deeply considered the explanation of the assessee as regard to the sources thereof. Thus, it is submitted that the ld. CIT(A) has given the findings after an in-depth analysis of the facts and circumstances of the case, assessment order, various documentary evidences furnished by the assessee, remand report of the ld. AO and as also, the explanation of the assessee made before him, no fault deserves to be found in his findings and accordingly, the same deserve to be upheld. Consequently, the grounds raised by the Revenue on this count deserve to be dismissed.
KEY PAPERS FILED IN THE PAPER BOOK ON WHICH THE ASSESSEE WISH TO PLACE RELIANCE:
S. Description of the document Page No.
No. A.Y.
2013-14
1 Evidences for the source of purchase of seven plots in a
township namely 'U.S. Gold City', at Village Bhatkhedi, Tehsil Mhow, District Indore :
(i) Registered Purchase Deeds in a township namely 'U.S. 78 to 100 Gold City', at Village Bhatkhedi, Tehsil Mhow, District Indore.
(ii) Sanction letter and Loan Repayment Schedule 101 to 105
(iii) Bank statement evidencing the receipt of funds from M/s. 106 & 107 Madhya Pradesh Today Media Ltd.
2 Evidences for the source of purchase of Plot situated at 231 to 237 in a township namely 'Sai Royal Palm', at Village Rangwasa, Dist. Indore
(i) Registered Purchase Deeds in a township namely 'Sai 108 to 195 Royal Palm', at Village Rangwasa, Dist. Indore
(ii) Copy of account of assessee in the books of Madhya 196 & 197 Pradesh Today Media Pvt. Ltd.
(iii) Relevant bank statement of the assessee. 198 to 201
(iv) Copy of account of stamp vendor shri Vishnu kala 202
(v) Confirmation letter duly signed by the of the loan 203 & 204 88 creditor.
(vi) Salary Certificate of the assessee in Form no.16 issued by 205 & 206 Madhya Pradesh Today Media Pvt. Ltd.
(vii) Copy of account of assessee in the books of GTVPL 207 & 208
(vii) Copy of account of assessee in the books of Shri Shantanu 209 Dixit
30. We have heard rival contentions and perused the records placed before us. Revenue has challenged the deletion of addition by Ld.CIT(A), made by Ld.AO u/s 69 of the Act at Rs. 3,77,26,125/- towards alleged purchase of: (i) fourteen plots bearing various numbers situated at US Gold City, Village Bhatkhedi, Tehsil Mhow, District Indore for an aggregate consideration of Rs. 3,35,76,000/-; and (ii) plot nos. 231 to 236, situated at 'Sai Royal Palm, Village Rangwsa, Indore, for a total consideration of Rs.41,50,125/-. During the course of the assessment proceedings, the assessee had furnished the various documents in support of his contentions and the same has also been filed before the ld. CIT(A) as well as before us. 30.1. We find that in respect of the property at S. No. (i) of the para (8.1) supra, the AO has made an addition of Rs.3,35,76,000/- on account of making of investment by the assessee for purchase of fourteen plots bearing nos. Plot No. 192A, 193A, 194A, 195A, 196A, 241A, 242A, A-293, A- 294, A-295, A-261, B-257, B-258 and B-259 at US Gold City, Village Bhatkhedi, Tehsil Mhow, District Indore, the ld. Counsel for the assessee has demonstrated that out of the aforesaid fourteen plots alleged to have been purchased by the assessee plots bearing no.A-293, A-294, A-295, A- 261, B-257, B-258 and B-259 at US Gold City, Village Bhatkhedi, Tehsil Mhow, District Indore, were never purchased by him or his family 89 members or his group concerns. The ld. Counsel for the assessee further demonstrated that the similar claim was made by assessee before AO vide his letter dated 25-11-2018 placed at page no. 261 of his Paper Book for the relevant assessment year filed before us. We find that despite making such a specific denial, the AO neither made any inquiry from the registrar of properties, nor brought on record the copies of the registered sale deeds in respect of the aforesaid plots, both during the course of the assessment proceedings as well as remand proceedings. Ld. AO also did not make any finding to this effect in the body of the assessment order and instead, regarded the ownership of the aforesaid plots of that of the assessee only. In our considered view, the assessee could not have been burdened to prove negative fact or the fact which was not in existence. In such circumstances, no adverse view can be drawn against the assessee in respect of the above stated seven plots. However, for the remaining plots bearing nos. 192A, 193A, 194A, 195A, 196A, 241A, 242A, the assessee has filed documentary evidences such as copy of the relevant registered purchase deeds and as also necessary supporting documents in support of sources of such investments, which are placed at page no. 78 to 209 of his Paper Book filed before us. On perusal of the copies of the registered sale deeds, it is observed that the assessee had purchased seven number of plots from M/s. Simran Developers through its one partner, Shankeshwar Devcon Pvt. Ltd., through a registered sale deed, duly registered on 23/11/2015, for a total consideration of Rs. 37,40,000/- paid through banking channels. Again, out of the total sales consideration, an amount of Rs.29,03,804/- was paid by the assessee through a cheque directly issued by one NBFC namely, Shriram City Union Finance Ltd., in favour of the 90 sellers. The assessee had availed such loan facility from the above named financer company vide sanction letter dated 13/11/2015. The remaining amount of Rs. 8,36,196/- was paid by the assessee from his bank account maintained with Bank of Maharashtra. The assessee before issuing cheque had received a sum of Rs. 12,00,000/- from the Group company of the assessee, namely, M/s. M.P. Today Media Pvt. Ltd., through its undertaking M/s. Pradesh Today and such fact has been verified from the copy of bank account statement of the assessee placed on record. Thus, in our considered view, the assessee could be able to fully explain the sources of making of investment in five plots and therefore, the addition of Rs.37,40,000/- so made by the AO in respect of such investment was not sustainable.
30.2. Likewise, on perusal of copies of the registered sale deeds, it was observed that the assessee had also purchased two number of plots from M/s. Simran Developers through its one partner, Shankeshwar Devcon Pvt. Ltd., through a registered sale deed, also duly registered on 23/11/2015, for a total consideration of Rs.14,96,000/-. From the clause (7) of the sale deed executed for purchase of two plots bearing nos. A-241 & A- 242 it is evident that the entire sales consideration of Rs.14,96,000/- was paid through account payee cheques only. Again, out of the total sales consideration, an amount of Rs.11,61,522/- was paid by the assessee through a cheque directly issued by one NBFC namely, Shriram City Union Finance Ltd., in favour of the sellers. The assessee had availed such loan facility from the above named financer company vide sanction letter dated 13/11/2015 and the remaining amount was of Rs. 3,34,478/- was paid by the assessee from his bank account maintained with Bank of 91 Maharashtra. Further, the assessee had received a sum of Rs. 12,00,000/- from the Group company of the assessee, namely, M/s. M.P. Today Media Pvt. Ltd., through its undertaking M/s. Pradesh Today and such fact has been verified from the copy of bank account statement of the assessee placed on record. Thus, in our considered view, the assessee has fully explained the sources of making of investment in five plots and therefore, the addition of Rs.14,96,000/- so made by the AO in respect of such investment was also not sustainable.
30.3. Again, for six plots in Sai Royal Palm, Village Rangwasa, Dist. Indore., bearing nos. 231 to 236, we find that investment in such plots was not made by the assessee during the previous year relevant to A.Y. 2016-17, for which the additions have been made by the AO in A.Y. 2016-17, but, factually, on perusal of the copies of sale deeds it was found that all these six number of plots were duly purchased by the assessee from M/s. S.S. Infra and Real Estate Pvt. Ltd. under six separate registered sale deeds, all executed on 31/03/2013, for a total consideration of Rs.41,50,125/-. Thus, since in respect of the aforesaid plots, the assessee had not made any investment, the question of making any addition in the income of the assessee for the A.Y. 2016-17 on account of unexplained investment in such plots, does not arise at all.
30.4. Thus, in view of the above facts and circumstances as well as the documentary evidences placed on record, we do not find any infirmity in the action of the ld. CIT(A) in deleting the addition of Rs.3,77,26,125/- made by the AO in the assessee's income for the assessment year under 92 consideration. Accordingly, the Ground No. 1 of the Revenue is hereby dismissed.
31. Ground No. 2 of the Revenue :
31.1. Through this ground of appeal, the revenue has challenged the action of the ld. CIT(A) in deleting the addition of Rs.61,88,526/- made by the AO for A.Y. 2016-17 on account of personal expenses and construction expenses as unexplained expenditure u/s. 69C of the Act. The AO has made the impugned addition at para 8 of the assessment order. We find that similar issue has been raised by the Revenue in Ground no.6 in the appeal for AY 2016-17 in the case of Awadhesh Dixit in IT(SS).A.No.88/Ind/2021 and after dealing the facts in detail we have dismissed the Revenue/s ground dealt in Para 22 (supra). Since Ld. D/R failed to controvert that issue and facts are identical , we applying our decision mutatis mutandis fail to find any infirmity in the finding of Ld. CIT(A) and thus dismiss ground no.2 raised by Revenue for AY 2016-17 in the case of the assessee namely Hardyesh Dixit.
32. Ground No. 3 of the Revenue :
32.1. Through this ground of appeal, the revenue has challenged the action of the ld. CIT(A) in deleting the addition of Rs.50,75,150/- made by the AO for A.Y. 2016-17 on account of one fifth share of the assessee in celebration of 25th marriage anniversary expenses of the assessee himself and his wife, as unexplained expenditure u/s. 69C of the Act. The AO has made the subject addition at para 9 of the assessment order. We find that similar issue has been raised by the Revenue in Ground no.5 in the appeal for AY 2016-17 in the case of Awadhesh Dixit in IT(SS).A.No.88/Ind/2021 and 93 after dealing the facts in detail we have dismissed the Revenue/s ground dealt in Para 24 (supra). Since Ld.D/R failed to controvert that issue and facts are identical , we applying our decision mutatis mutandis fail to find any infirmity in the finding of Ld.CIT(A) and thus dismiss ground no.3 raised by Revenue for AY 2016-17 in the case of the assessee namely Hardyesh Dixit.
33. Ground No. 4 of the Revenue and Ground Nos. 2(a) to 2(c) of the Assessee :
33.1 Through the ground no. 4, the Revenue has challenged the action of the ld. CIT(A) in deleting the addition to the extent of Rs.20,13,000/- made by the AO on account of unsecured loans obtained by the assessee during the year under consideration from one person namely, Shri Vijendra Singh Sisodiya. Further, through the ground nos. 2(a) to 2(c), the assessee has challenged the action of the ld. CIT(A) in upholding the addition to the tune of Rs.1,50,000/- made by the AO on account of unsecured loan obtained by the assessee from Shri Jharneshwar. Since the issues in respect of the aforesaid grounds are inter-connected to each other, these grounds of appeals of the assessee and the revenue are adjudicated together.
34. We have heard rival contentions and perused the records placed before us. Before us, the ld. Counsel for the assessee did not press the grounds taken by the assessee in respect of addition of Rs.1,50,000/- made u/s 68 of the Act and, therefore, no adjudication is warranted in respect of the grounds of the assessee. Accordingly, all the grounds of appeal raised by the assessee in case of Hardyesh Dixit for Assessment Year 2016- 17 are dismissed as not pressed.94
34.1. Now, we shall deal with the addition of Rs.20,13,000/- which has been deleted by the ld. CIT(A) against which the Revenue is in appeal before us. We note that while dealing with the cross appeals for AY 2016- 17 in case of the assessee Awadesh Dixit in IT(SS).A.No.156/Ind/2020 and No.88/Ind/2021 issues were raised regarding addition made for unexplained cash credit u/s.68 of the Act. While dealing with this issue, we have examined the unsecured loan received from Vijendra Sisodiya and on considering the facts and on being satisfied with the identity and creditworthiness of alleged cash creditor namely Vijendra Sisodiya and also satisfied with the genuineness of the transaction, we have deleted the addition made u/s.68 of the Act for the loan received from Vijendra Sisodiya. Our finding is in preceding para 13.1 (supra) . Since issue raised in the case of instant assessee namely Hardyesh Dixit is similar i.e. unexplained cash credit from Vijendra Sisodiay and Ld. D/R failed to controvert this fact we applying our decision mutatis mutandis fail to find any infirmity in the finding of Ld. CIT(A) and dismiss ground no. 2(a) & 2(c) raised by Revenue for AY 2016-17 in the case of the assessee namely Hardyesh Dixit.
35. In the result, cross appeals for AY 2016-17 in the case of the assessee Hardyesh Dixit are dismissed.
36. Now we take up appeal filed by the Revenue for AY 2016-17 in the case of Smt.Pratiksha Dixit in IT(SS)A No. 97/Ind/2021:
37. The revenue has raised the following grounds of appeal:-
I.T.(SS).A.No. 97/Ind/2021 - A.Y. 2016-17 : (Departmental Appeal) ( Smt. Pratiksha Dixit, Indore.):95
1. On the facts and in the circumstances of the case , the Ld. CIT(A) has erred in law in deleting the addition of Rs. 53,75,000/- made by the AO on account of unexplained investment in plots u/s 69 of the Income-tax Act, 1961.
2. On the facts and in the circumstances of the case , the Ld. CIT(A) has erred in law in deleting the addition of Rs. 3,40,000/-made by the AO on account of negative cash balance u/s 69A of the Income-
tax Act, 1961.
3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs.50,75,150/- made by the AO on account of marriage anniversary expenses as unexplained expenditure u/s 69C of the Income-tax Act, 1961.
4. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of 61,88,526/- made by the AO on account of personal expenses and construction expenses as unexplained expenditure u/s 69C of the Income-tax Act, 1961.
37.1. From perusal of the grounds we note that issues raised in Ground no.2, 3 and 4 has already been dealt by us while adjudicating Revenue's appeals for in case of Awadhesh Dixit in IT(SS).A.No.87-88/Ind/2021. We find that similar to the issues raised by Revenue in the case of the assessee namely Awadhesh Dixit in ground no.2 of Revenue's appeals for AY 2015- 16 relating to negative cash balance and ground no. 5 & 6 for AY 2016-17 relating to marriage anniversary and personal and construction expenses, in the present appeal grounds no.2-4 have been raised by Revenue in the case of Pratiksha Dixit and there is no change except the figures. We have adjudicated the said issues in the case of Awadhesh Dixit in preceding paras no. 24 (supra) and after dealing the facts in detail we have dismissed the Revenue's grounds on the said issues. Since Ld.DR failed to controvert that issue and facts are identical , we applying our decision mutatis mutandis fail to find any infirmity in the finding of Ld.CIT(A) and thus 96 dismiss ground no.2, 3 and 4 raised by Revenue for AY 2016-17 in the case of the assessee namely Smt.Pratiksha Dixit.
38. Now we take up the remaining Ground no.1 raised by Revenue challenging the finding of Ld. CIT(A) deleting the addition of Rs.53,75,000/- made by the AO for A.Y. 2016-17 on account of unexplained investment in plots.
38.1. During the course of the first appellate proceedings, the assessee made detailed written submissions along with the documentary evidences which were also furnished by him before the AO. The written submission made by the assessee before the ld. CIT(A) has been reproduced by the ld. CIT(A) in his Order from page no. 45 to 49. The Ld. CIT(A), after taking into consideration the entire facts and circumstances of the assessee's case, deleted the entire addition made by the AO. The ld. CIT(A) has given the relevant findings at Para (3.9.2) on page no. 49 & 50 of his order. 38.2. Before us, ld. CIT(D/R) vehemently argued supporting the observations of the AO on this issue.
38.3. Per Contra, Learned Counsel for the assessee has filed written submissions before us. On the basis of the same as well as the paper book it is submitted that during the previous year relevant to A.Y. 2016-17, assessee purchased seven plots, admeasuring 1100 sq. ft. each, situated in the aforesaid township i.e. 'U.S. Gold City', at village Bhatkhedi, tehsil Mhow, District Indore, from M/s. Simran Developers, 402, 'The Mark', 20A, Old Palasia, Indore, under a registered purchase deed, duly registered on 29-01-2016, for a total consideration of Rs.53,75,000/-. The plots so purchased by me, in the U.S. Gold City township, are bearing Plot Nos.A-
97146, A-148, A-207 to A-211 . He submitted that the substantial payments for purchase of these plots have been made by out of a loan of the equivalent amount borrowed from LIC Housing Finance Limited. Out of the total investment of Rs.53,75,000/-, a sum of Rs.12,56,640/- has been paid to the seller of the plots namely M/s. Simran Developers through RTGS from her saving bank account maintained with HDFC Bank Ltd. Further, a sum of Rs.1,37,610/- has been paid through another SB a/c. maintained with Bank of Maharashtra Ltd. It is further submitted that a sum of Rs.39,27,000/- has been paid by me out of the loan of Rs.52,00,000/- obtained by me from LICHFL.
39. We have heard rival contentions and perused the records placed before us. We observe that Ld. AO has made the subject addition of Rs. 53,75,000/- towards the purchase of seven plots bearing nos. A-207 to A- 211, A-146 & A-148 at US Gold City, Village Bhatkhedi, Tehsil Mhow, District Indore which were purchased by the assessee from M/s. Simran Developers, for a total consideration of Rs. 53,75,000/. During the course of the assessment proceedings, the assessee had duly furnished the necessary documents such as copy of the relevant registered purchase deeds and as also necessary supporting documents in support of sources of such investments, in support of her contentions extracted hereinabove. The copies of such documents have also been furnished by the assessee before us at page nos. 56 to 86 of her paper book. The assessee has filed details of investment and sources of the investments before the authorities below as well as before us. On perusal of the copies of registered sale deeds, it has been observed that the assessee had purchased seven number of plots from M/s. Simran Developers through its one partner, Shankeshwar Devcon 98 Pvt. Ltd., through a registered sale deed duly registered on 19/01/2016 for a total consideration of Rs. 53,75,000/-. From the clause (7) of the sale deed, it is observed that the entire sales consideration was paid either through account payee cheques or by way of TDS. Again, out of the total consideration, a sum aggregating to Rs. 52,00,000/- was paid by the assessee, in two trenches, through two cheques, amounting to Rs. 39,27,000/- and Rs. 12,73,000/-, both dated 23/01/2016, directly issued by LIC Housing Finance Ltd., in favour of the sellers. The assessee had availed such loan facility from the above named NBFC company vide sanction letter dated 23/01/2016. We find that the remaining cheque of Rs. 1,21,250/- was issued by the assessee from her bank account maintained with HDFC Bank Ltd Thus, in our considered view, the assessee could be able to fully explain the sources of making of investment in seven plots and therefore, the addition made by the AO amounting to Rs. 53,75,000/- is liable to be deleted. Accordingly, we do not find any infirmity in the action of the ld. CIT(A) in deleting the addition so made by the AO in the assessee's income. Ground no.1 raised the Revenue is dismissed. Consequently, the appeal of the Revenue for AY 2016-17 in the case of Pratiksha Dixit is dismissed.
40. Now we take Revenue's Appeal in I.T.(SS).A.No. 98/Ind/2021 - A.Y. 2016-17: (Departmental Appeal) ( Shri Shantanu Dixit, Indore.):
The revenue has raised the following grounds of appeal:-
I.T.(SS).A.No. 98/Ind/2021 - A.Y. 2016-17 : (Departmental Appeal) ( Shri Shantanu Dixit, Indore.):
1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 94,25,000/- made by the AO on 99 account of unexplained cash credits u/s 68 of the Income-tax Act, 1961.
2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 1,51,812/- by the AO on account of negative cash balance u/s 69A ,of the Income-tax Act, 1961.
3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 50,75,150/- made by the AO on account of marriage anniversary expenses as unexplained expenditure u/s 69C of the Income-tax Act, 1961.
4. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 61,88,526/- made by the AO on account of personal expenses and construction expenses as unexplained expenditure u/s 69C of the Income-tax Act, 1961.
40.1. From perusal of the grounds we note that issues raised in Ground No. 2, 3 and 4 has already been dealt by us while adjudicating Revenue's appeals for in case of Awadhesh Dixit in IT(SS).A.No.87-88/Ind/2021. We find that similar to the issues raised by Revenue in the case of the assessee namely Awadhesh Dixit in ground no.2 of Revenue's appeals for AY 2015- 16 relating to negative cash balance and ground no. 5 & 6 for AY 2016-17 relating to marriage anniversary and personal and construction expenses, in the present appeal grounds no.2-4 have been raised by Revenue in the case of Smt. Shantanu Dixit and there is no change except the figures. We have adjudicated the said issues in the case of Awadhesh Dixit in preceding paras no. 18, 22 and 24 (supra) and after dealing the facts in detail we have dismissed the Revenue's grounds on the said issues. Since Ld.DR failed to controvert that issue and facts are identical , we applying our decision mutatis mutandis fail to find any infirmity in the finding of 100 Ld.CIT(A) and thus dismiss ground no.2, 3 and 4 raised by Revenue for AY 2016-17 in the case of the assessee namely Smt. Shantanu Dixit.
41. Now we take up Ground No. 1 of the Revenue :
41.1 Through this ground of appeal, the Revenue has challenged the action of the ld. CIT(A) in deleting the addition of Rs.94,25,000/- made by the AO on account of unsecured loans obtained by the assessee during the year under consideration from one person namely, Shri Vijendra Singh Sisodiya.
41.2. We note that while dealing with the cross appeals for AY 2016-17 in case of the assessee Awadesh Dixit in IT(SS).A.No.156/Ind/2020 and No.88/Ind/2021 issues were raised regarding addition made for unexplained cash credit u/s.68 of the Act. While dealing with this issue, we have examined the unsecured loan received from Vijendra Sisodiya and on considering the facts and on being satisfied with the identity and creditworthiness of alleged cash creditor namely Vijendra Sisodiya and also satisfied with the genuineness of the transaction, we have deleted the addition made u/s.68 of the Act for the loan received from Vijendra Sisodiya. Our finding is in preceding para 13.1 (supra) . Since issue raised in the case of instant assessee namely Shantanu Dixit is similar i.e. unexplained cash credit from Vijendra Sisodiay and Ld.DR failed to controvert this fact we applying our decision mutatis mutandis fail to find any infirmity in the finding of Ld. CIT(A) and dismiss ground no.1 raised by Revenue for AY 2016-17 in the case of the assessee namely Smt.Shantanu Dixit.101
42. In the result all the ground of appeal raised by the Revenue in IT(SS).A.98/Ind/2021 for AY 2016-17 stands dismissed.
43. Now we take up Revenue's appeal for A.Y. 2016-17 and AY 2017-18 in the case of Smt. Surekha Dixit
44. Grounds of appeal raised by Revenue in IT.(SS).A.No. 99/Ind/2021 for A.Y. 2016-17 reads as follows:-
1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 6,55,500/-
made by the AO on account of unexplained investment u/s 69 of the Income-tax Act, 1961.
2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 1,19,83,600/- made by the AO on account of unexplained investment in plots u/s 69 of the Income-tax Act, 1961.
3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 50,75,150/- made by the AO on account of marriage anniversary expenses as unexplained expenditure u/s 69C of the Income-tax Act, 1961.
4. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 61,88,526/- made by the AO on account of personal expenses and construction expenses as unexplained expenditure u/s 69C of the Income-tax Act, 1961.
44.1. Grounds of appeal raised by Revenue in IT.(SS).A.No. 100/Ind/2021 for A.Y. 2017-18 reads as follows:-
1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 11,24,600/-
made by the AO on account of unexplained investment u/s 69 of the Income-tax Act, 1961.
1022. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 61,88,526/- made by the AO on account of personal expenses and construction expenses as unexplained expenditure u/s 69C of the Income-tax Act, 1961.
44.2. From perusal of the grounds we note that issues raised in Ground no.3 and 4 for AY 2016-17 and Ground no.2 for AY 2017-18 has already been dealt by us in detail while adjudicating Revenue's appeals for AY 2016-17in the case of Awadhesh Dixit in IT(SS).A.No.88/Ind/2021. We find that similar to the issues raised by Revenue in the case of the assessee namely Awadhesh Dixit in ground no. 5 & 6 for AY 2016-17 relating to marriage anniversary expenses and personal and construction expenses, in the present appeals also grounds no.3 and 4 for AY 2016-17 respectively have been raised. Issue of personal and construction expenses have again been raised in ground no.2 for AY 2017-18 in the case of Smt.Surekha Dixit. There is no change of facts except the figures. We have adjudicated the said issues in the case of Awadhesh Dixit in preceding paras no. 22 & 24 (supra) and after dealing the facts in detail have dismissed the Revenue's grounds on the said issues. Since Ld.DR failed to controvert that issue and facts are identical , we applying our decision mutatis mutandis fail to find any infirmity in the finding of Ld.CIT(A) and thus dismiss ground no. 3 and 4 raised by Revenue for AY 2016-17 and ground no.2 for AY 2017-18 in the case of the assessee namely Smt.Surekha Dixit.
45. Now we take up the remaining grounds:-
46. Ground No. 1 of the Revenue for A.Y. 2016-17 & A.Y. 2017-18:
10346.1. Through this ground of appeal, the revenue has challenged the action of the ld. CIT(A) in deleting the additions of Rs.6,55,500/- and Rs.11,24,600/- made by the AO respectively for A.Y. 2016-17 & A.Y. 2017- 18 on account of unexplained cash deposits in bank accounts u/s. 69 of the Act. It was observed by the AO that huge cash deposits were made in bank by the assessee. Though assessee furnished the details claiming that the entire cash deposits were made out of her explained sources of income. The AO, while framing the assessment order, averted that the assessee had not furnished supporting documents of cash receipts from her business of salon/spa. Finally, the AO (inter alia) made addition of Rs.6,55,500/- in A.Y. 2016-17 and Rs.11,24,600/- in A.Y. 2017-18 on account of cash deposits in banks by treating the same as unexplained investment u/s. 69 of the Act.
Thereafter, the assessee preferred separate appeals for the subject assessment years before the ld. CIT(A) and succeeded. The ld. CIT(A) has given the relevant findings at Para (4.7.2) on page no. 118 to Para (4.7.7) on page no. 122 of his order. Now revenue has challenged the finding of Ld. CIT(A).
47. Before us, learned Sr. DR vehemently argued supporting the observations of the AO on this issue.
48. Per Contra, Learned Counsel for the assessee relied on the finding of Ld. CIT(A) and also referred to paper book and written submissions placed before us.
49. We have heard rival contentions and perused the records placed before us. We noted that it has been duly submitted by the assessee before the AO that assessee has maintained a separate current account with HDFC 104 Bank Branch at Annapurna, Indore in the name of her proprietary concern M/s. Azalea Spa & Salon and entire transactions relating to business were carried out from the aforesaid bank account only. We further find that the AO has not doubted the cash deposits made by the assessee in the aforesaid current account out of the beauty parlour/ saloon receipt shown by the assessee. However, the AO made the impugned additions of Rs. 6,55,500/- in A.Y. 2016-17 and Rs. 11,24,600/- in A.Y. 2017-18 in respect of cash deposited by the assessee in her saving bank accounts. We also find that similar additions in respect of A.Y. 2014-15 and A.Y. 2015-16 have also been made by the AO in the assessee's income but, since in respect of these years, the Revenue has not filed any appeal before us due to low tax effect, the same are not being taken into consideration by us.
50. We observe that for the previous year relevant to the A.Y. 2016-17, the AO has averted that the assessee had deposited a sum of Rs. 6,55,500/- in her three saving bank accounts, maintained with Bank of Maharasthra, State Bank of Bikaner and Jaipur, and Axis Bank Ltd,. We find that as regard the sources of the cash deposits, the same is out of her regular source of income declared in the IT Return. Further, the assessee has furnished a date-wise cash flow statement which is placed at page no. 132 & 133 of her common Paper Book for A.Y. 2016-17 & A.Y. 2017-18. On a perusal of such statement, we find that the assessee was having sufficient cash available with her, which had got generated out of her explained sources of income only, to explain the cash deposits of Rs.6,55,500/-. Thus, in our considered opinion, Ld.CIT(A) was justified in deleting the addition of Rs.6,55,500/- made by the AO for A.Y. 2016-17.
10550.1. As regards A.Y. 2017-18, we find that that the source of alleged cash deposits of Rs.11,24,600/-, the assessee has submitted bank account wherein sale proceeds of the assessee's one of the old car bearing registration no. MP-09-QA-0077 made to Mr. Mohit Sachdeva resident of 24-A, Prem Nagar, Indore, for a consideration of Rs.13,00,000/- is deposited. The aforesaid car was purchased by her during the previous year relevant to A.Y. 2014-15 for a consideration of Rs.27,05,431/- and for purchasing such car the assessee had availed a car loan of Rs.19,00,000/- from State Bank of Bikaner & Jaipur, and at the time of sale of the car, there was an outstanding balance in the assessee car loan account of Rs.11,22,558/- and since, the buyer had to purchase the car free from all encumbrance, out of the agreed amount of sale price of Rs.13,00,000/- the buyer had directly made a cash deposit of Rs.11,24,600/- in the assessee's saving bank account as aforesaid and subsequently, on the very same day, the loan account has got squared-off by way of issuance of a cheque of Rs.11,22,558/- from the aforesaid saving bank account to the vehicle loan account. In contention of the aforesaid facts, the assessee has furnished a copy of Motor Vehicle Sale Agreement dated 05-07-2016, a copy of Delivery Note of the Vehicle, a copy of the relevant abstract of saving bank account statement of the assessee and a copy of the Vehicle Loan Account statement of the assessee which are placed at page no. 137 to 145 of her common Paper Book. Thus no infirmity is called for in the finding of Ld.CIT(A) deleting the alleged addition. Therefore, the ground of appeal no. 1 raised by the Revenue for AY 2016-17 and AY 2017-18 are dismissed.
51. Ground No. 2 of the Revenue for A.Y. 2016-17:
10651.1. Through this ground of appeal, the revenue has challenged the action of the ld. CIT(A) in deleting the addition of Rs.1,19,83,600/- made by the AO for A.Y. 2016-17 on account of unexplained investment in plots. 51.2. Before us, learned Sr. DR vehemently argued supporting the observations of the AO on this issue.
51.3. Per Contra, Learned Counsel for the assessee has filed written submissions before us. It is submitted that during the relevant previous year the assessee had actually made investments in immovable properties aggregating to a sum of Rs.1,33,31,600/- and not of Rs.1,19,83,600/- as worked out by the learned AO in the table given at page nos.92 & 93 of the impugned order. The details are as follows:-
Sno. Description of the Date of Amount Mode of Payment Source of Payment Property Payment 1 Plot Nos. A-201, A- 16-11-2015 29,03,804 Ch.No.901762 of Housing Loan availed 203, A-204, A-205 & Axis Bank Ltd. from M/s. Shreeram A-206 City Union Finance [Five Plots] Ltd.
18-11-2015 8,36,196
RTGS from Bank of Out of Unsecured
Maharashtra loan received husband
Shri Awadhesh Dixit
37,40,000 [PAN-
AEDPD9167L]
2 Plot Nos. A-255, A- 16-11-2015 23,23,044 Ch.No. 901765 of Housing Loan availed
256, A-259 & A-260 Axis Bank Ltd. from M/s. Shreeram
[Four Plots] City Union Finance
Ltd.
18-11-2015 6,68,956 RTGS from Bank of
Maharashtra Out of Unsecured
loan received husband
29,92,000 Shri Awadhesh Dixit
[PAN-
AEDPD9167L]
107
3 Plot Nos. A-212, A- 30-03-2016 39,27,000 Ch.No. 856911 of Housing Loan availed
213, A-243, A-247, A- Axis Bank Ltd. from M/s. LIC
272, A-273 & A-274 Housing Finance Ltd.
[Seven Plots] RTGS from Bank of
04-04-2016 12,44,737 Maharashtra Out of Unsecured
loan received husband
Shri Awadhesh Dixit
[PAN-
04-04-2016 52,240 TDS AEDPD9167L]
-
52,23,977
Total (1 to 3) 1,19,55,977
52. We have heard rival contentions and perused the records placed before us. We observe that, the assessee had purchased nine plots bearing nos. A-201, A-203, A-204, A-205, A-206, A-255, A-256, A-259 and A-260, at US Gold City, Village Bhatkhedi, Tehsil Mhow, District Indore, under two separate registered sale deeds during the previous year relevant to A.Y. 2016-17. The assessee has filed necessary documentary evidences such as copies of registered purchase deeds and proof of sources of such investments From the copy of the registered sale deeds, we find that during the relevant previous year, the assessee had purchased nine number of plots from M/s. Simran Developers (through its one partner, Shankeshwar Devcon Pvt. Ltd.), through two registered sale deeds, both duly registered on 18/04/2016 for a consideration of Rs. 37,40,000/- and Rs. 29,92,000/-
respectively. From the clause (7) of the sale deed for purchase of five number of plots, we find that the entire sales consideration of Rs. 37,40,000/- was paid through account payee cheques only. Again, out of the total consideration, an amount of Rs. 29,03,804/- was paid by the assessee through a cheque directly issued by one NBFC namely, Shriram City Union Finance Limited in favour of the sellers . The assessee has availed loan facility from the above named financer company vide sanction 108 letter dated 13/05/2015. We find that the remaining cheque of Rs. 8,36,196/- was issued by the assessee from her bank account maintained with Bank of Maharashtra on 18/11/2015. Further the assessee had received a sum of Rs. 15,05,000/- from her husband, namely Shri Awadhesh Dixit, through a cheque bearing no. 55679 on 18/11/2015. Likewise, from the clause (7) of the sale deed for purchase of four number of plots, we find that the entire sales consideration of Rs. 29,92,000/- was paid through account payee cheques only. Again, out of the total consideration, an amount of Rs. 23,23,044/- was paid by the assessee through a cheque directly issued by one NBFC namely, Shriram City Union Finance Limited in favour of the sellers under a loan facility from the above named financer company vide sanction letter dated 13/05/2015. We find that the remaining cheque of Rs. 6,68,956/- was issued by the assessee from her bank account maintained with Bank of Maharashtra on 18/11/2015. Thus, in our considered view, the assessee has fully explained the sources of making of investment in nine plots too and therefore, the addition of Rs. 67,32,000/- so made by the AO in respect of such investment was not sustainable.
52.1. We further find that during the previous year relevant to A.Y. 2016- 17, the assessee had purchased one more plot bearing no. M-1, situated at Atlanta City, Village Palakhedi, Tehsil-Hatod, Distt.-Indore, under a registered sale deed duly registered on 04/12/2015 from some M/s. Shankeshwar Devcon Pvt. Ltd. for a total consideration of Rs. 1,31,97,000/- in joint ownership with her husband, Shri Awadhesh Dixit, in whose case too simultaneous assessment u/s. 153A has been framed. We find that the assessee has contended that in respect of the aforesaid plot, the entire 109 consideration for the purchase was paid by the husband of the assessee and the joint owner of the plot, Shri Awadhesh Dixit. We find that the similar addition of exactly the same amount was also made by the AO in his common assessment order for A.Y. 2011-12 to A.Y. 2017-18 in the case of Shri Awadhesh Dixit, the husband of the assessee and while adjudicating the appeal of Shri Awadhesh Dixit, we have found that the source of entire investment of Rs.1,31,97,000/- in purchase of the subject plot has been satisfactorily explained by Shri Awadhesh Dixit with documentary evidences and consequently, we have affirmed the findings given by the ld. CIT(A) in the case of Shri Awadhesh Dixit deleting the additions on this count. Having given a detailed finding in the case of Shri Awadhesh Dixit, as aforesaid, we do not consider it necessary to separately discuss the present matter in the case of the assessee. Accordingly, following our own findings given while adjudicating Ground No. 2 of the Revenue for A.Y. 2016-17 in Appeal No. IT(SS)A No. 88/Ind//2021, in the case of Shri Awadhesh Dixit, we uphold the action of the ld. CIT(A) in deleting the addition of Rs.65,99,600/- made by the AO in respect of alleged unexplained investment in such plot for A.Y. 2016-17.
52.2. Accordingly, in terms of findings given in the above paras, we do not find any infirmity in the action of the ld. CIT(A) deleting the addition of Rs.1,19,83,600/- for A.Y. 2016-17 made by the Ld.AO on account of alleged unexplained investment in plots of land u/s. 69 of the Act. Accordingly, the Ground No. 2 of appeal of the Revenue is dismissed.
53. In the result, the appeal of the Revenue is dismissed.
54. In the result:-
Appeal No/s. Appeal by Assessee's Name Result
110
IT(SS)A Nos.154 to Assessee Shri Awadhesh Dixit 2013-14, 2014-15
157/Ind/2020 and 2016-17 are
Assessment Years: 2013-14 & allowed.
2014-15 and 2016-17 & 2017-18
2017-18 is partly
allowed.
IT(SS)A Nos.85 to 89/Ind/2021 Department Shri Awadhesh Dixit Dismissed
Assessment Years: 2013-14 to
2017-18
IT(SS)A Nos.153/Ind/2020 Assessee Shri Hardyesh Dixit Dismissed
Assessment Year: 2016-17
IT(SS)A Nos.67/Ind/2021 Department Shri Hardyesh Dixit Dismissed
Assessment Year: 2016-17
IT(SS)A Nos.97/Ind/2021 Department Smt. Pratiksha Dixit Dismissed
Assessment Year: 2016-17
IT(SS)A Nos.98/Ind/2021 Department Shri Shantanu Dixit Dismissed
Assessment Year: 2016-17
IT(SS)A Nos.99 & 100/Ind/2021 Department Smt. Surekha Dixit Dismissed
Assessment Year: 2016-17 &
2017-18
Order pronounced on 08 .04.2024 in accordance with
Rule 34(4) of the Income tax (Appellate Tribunal) Rules, 1963.
Sd/- Sd/-
(VIJAY PAL RAO) (DR. MANISH BORAD)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Indore, Dated 08/04/2024
*SC SrPs
111
आदे श की ितिलिप अ ेिषत/Copy of the Order forwarded to :
1. अपीलाथ / The Assessee
2. थ / The Respondent
3. संबंिधत आयकर आयु" / Concerned Pr. CIT
4.
आयकर आयु" (अपील)/ The CIT(A)-
5. िवभागीय ितिनिध ,आयकर अपीलीय अिधकरण/DR,ITAT, Indore,
6.
गाड' फाई/ Guard file.
आदे शानुसार/ BY ORDER,
TRUE COPY
Assistant Registrar
आयकर अपीलीय अिधकरण
ITAT, Indore
1. Draft prepared by Hon'ble A.M.:- 04/04/2024
2. Date on which the draft order is corrected and placed before the dictating Member:- 05/04/2024
3. Date of which the order came back to Sr. PS..........................................
4. Date of which the file goes to the Bench Clerk...............................
5. Date of which the file goes to the O.S.......................................
6. Date of dispatch of the order.............................................