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2023 (9) TMI 251 - AT - Income TaxValidity of reopening of assessment - assessee contention that AO has not disposed of the objection filed during the course of reassessment proceedings by passing a speaking order as mandated - bogus loan transaction of the assessee - reasons to believe recorded by the Ld. AO are based on reproduction of the survey report submitted by DDIT (Inv.), Guwahati and the statements recorded of Shri Ram Lal Gulgulia and Bijoy Singh Lodha in the case of survey of Gulgulia Trade Pvt. Ltd., Silchar - HELD THAT:- CIT(A) had called for clarification from the AO in respect of disposal of objections to the reopening, raised by the assessee. To this effect, AO had replied vide letter, scanned copy of which is reproduced in the order of Ld. CIT(A). From its perusal it is noted that Ld. AO has admitted that objections to the reopening of the assessment as raised by the assessee were not disposed of by him by way of any written/speaking order. Thus non-disposal of the objections of the assessee by the Ld. AO without passing a written/speaking order renders the assessment order and the consequential additions as bad in law. AO has not provided the copy of statements of all the three persons which formed the basis of arriving at the reasons to believe - no opportunity has been given to the assessee to cross examine these three persons though specific request had been made in the course of assessment proceeding - From the perusal of the impugned order and the reasons to believe, it is seen that Ld. AO has not applied his mind to the purported information received from the Investigation Wing. The approach adopted is a mechanical approach and falls in the category of borrowed satisfaction. It is important to note that survey was conducted in the case of GTPL wherein assessee is not a director. Statements of directors of TSPL i.e. Shri Ramlal Gulgulia and Shri Bijoy Singh Lodha were recorded in the course of survey of GTPL on 06.01.2017 which were relied upon by the Ld. AO. These had also been retracted. Another important fact which is borne in mind is that statement of Shri Akash Agrawal, erstwhile director of TSPL was recorded in the course of survey of TSPL on 10.02.2015 which is much prior to the conduct of survey in the case of GTPL (Ram Lal Gulgulia Group). Material on the basis of which reasons to believe were recorded have not been confronted to the assessee, thus, the impugned order suffers from noncompliance with the principles of natural justice and thus, deserves to be quashed. Accordingly, grounds taken by the revenue in this respect are dismissed. Addition of opening balance in the creditors’ account is not permissible u/s. 68 since it does not represent a credit in the books of account during the year - To substantiate its claim, copy of loan confirmation, balance sheet, bank statement and affidavit of TSPL were placed on record. On perusal of the confirmation, statement and the other documents, it is evident that amount of Rs. 1.75 Cr. was received by the assessee during the preceding years and not in the year under consideration. AO has disregarded the submissions made by the assessee by observing that amount appearing as opening balance is also a credit and the explanation offered by the assessee for its nature of sources is not satisfactory in the opinion of the AO CIT(A) has dealt with this issue after corroborating the same with the documentary evidence placed on record. We do not find any reason to interfere with the finding given by the Ld. CIT(A) in this respect. It is trite law that in case the liabilities are old and no credit has been made in respect of those liabilities in the books of account in the year under consideration, no addition can be made u/s. 68 - Decided against revenue.
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