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2022 (1) TMI 476 - AT - Income Tax
Validity of Reopening of assessment u/s 147 - Reopening on direction/suggestion of the Investigation Wing of the Department - demonstration of link between the tangible material and formation of reason to belief that income had escaped assessment - Addition u/s 68 - HELD THAT:- Since the A.O. in the instant case has reopened the assessment mechanically without independent application of mind and has not considered the assessments completed under sections 153A/153C of the I.T. Act, 1961, prior to the date of recording reasons under section 147 of the I.T. Act, 1961 and since the assessments of the applicant companies were the out-come of the search and seizure operation carried out in the premises of Shri S.K. Jain and Shri Virender Kumar Jain group of cases which is also the basis for reopening of the assessment in the instant case, therefore, we are of the considered opinion that such reopening of the assessment is not in accordance with law. We, therefore, quash the re-assessment proceedings.
Addition u/s 68 - assessee has filed the copies of the returns of income for A.Y. 2010-11 of all the applicants, copies of their audited balance-sheets as on 31.03.2010 containing the names of the assessees in the Schedule to the audited balance-sheets, confirmation of transactions by the share applicants, copies of their bank statements, copies of their assessment order for the impugned assessment year passed under sections 143(3) / 153A/153C of the I.T. Act, 1961 by their jurisdictional Assessing Officers etc. Further Shri Deepak Tyagi, Director of 06 Companies had appeared before the A.O. on 30.03.2014 in response to the summons issued by the A.O. under section 131 of the I.T. Act, 1961 and had confirmed to have made investments by his companies in the shares of the assessee-company in the statement recorded on oath. In view of the above and in view of the detailed reasoning given by the Ld. CIT(A) on this issue, we do not find any infirmity in his order in deleting the addition made by the A.O. under section 68.
Addition u/s 69C - expenditure incurred for arranging the bogus accommodation entry - HELD THAT:- Since in the preceding paragraph we have already deleted the addition by quashing the re-assessment proceedings as well as the addition on merit, the order of the A.O. on this issue cannot be sustained.
Disallowance u/s 14A r.w.r.8D - CIT-A deleted the addition - HELD THAT:- we find the Ld. CIT(A) had given a finding that the amount of ₹ 3,47,17,000/- invested by the assessee is towards advance against property and not towards shares. The Ld. D.R. also could not controvert the above factual finding given by the Ld. CIT(A). Therefore, although we have quashed the re-assessment proceedings, even on merit also the addition is not sustainable.
Disallowance of salary expenses - CIT-A deleted the addition - HELD THAT:- CIT(A) while deleting the addition has given a finding that the assessee being a registered NBFC Company registered with Reserve Bank of India has to comply with the legal requirements and under these circumstances, the disallowance of entire salary expenses without any cogent reasons is un-called for. Although we have quashed the reassessment proceedings, even otherwise on merit also this addition is un-called for in view of the findings of the Ld. CIT(A) and in absence of any contrary material brought to our notice by the Ld. D.R.
Addition of salary expenses - CIT(A) has sustained an amount of ₹ 4,03,400/- being 10% of such unpaid amount and deleted the balance amount.- HELD THAT:- Before deleting the addition the Ld. CIT(A) had directed the assessee to furnish the date wise payments which was filed before him. Further, he has given a finding that assessee is a registered NBFC Company with RBI and has to comply with all the legal requirements on this account over and above all the other non-NBFC companies - all the outstanding salaries were paid by the assessee during the month of April-May of subsequent financial year and the D.R. also could not controvert the factual findings given by the Ld. CIT(A) on this issue. In view of the detailed reasoning given by the Ld. CIT(A) on this issue while sustaining the addition of ₹ 4,03,400/- and deleting the balance amount out of the addition made by the A.O, we do not find any infirmity in the order of the Ld. CIT(A). Accordingly the same is upheld and the grounds of appeal number.4 of the Revenue is dismissed.
Addition on account of other expenses - HELD THAT:- We find the A.O. made addition being other expenses on the ground that assessee could not furnish the bills and vouchers to the satisfaction of the A.O. and amount of ₹ 7,60,000/- was payable as on 31.03.2011, out of ₹ 11,05,000/-. We find the Ld. CIT(A) deleted 80% of the addition and sustained being 20% of such expenses, which, in our opinion, is just and proper under the facts and circumstances of the case. We, therefore, uphold the order of the Ld. CIT(A) on this issue and the ground of appeal is dismissed.