TMI Blog2014 (9) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... e had received unsecured loans but Assesse had not discharged the onus by proving the identity, capacity and genuineness of the transaction - CIT(A) has not given any finding with respect to the deposits received by the Assessee and further the depositers are different in both the AYs i.e. A.Y. 2000-01 and A.Y. 97-98 - one more opportunity be granted to Assessee to furnish all the required details called for by the AO so as to discharge the onus as required u/s. 68 of the Act – the matter is to be remitted back to the AO for fresh adjudication – Decided in favour of revenue. Bogus and unexplained liability – Held that:- AO while disallowing the liability for expenses has noted that Assessee did not furnish the necessary evidence while CIT(A) deleted the addition has noted that AO has not disproved the claim of Assessee that each liability was supported by evidences and the reply was furnished before AO - CIT(A) has not called any remand report from AO - no details of the liability for expenses, except as shown in the Balance sheet was placed on record - the issue needs re-examination at the end of CIT(A) – thus, the matter is to be remitted back to the CIT(A) for adjudication – ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e total income was determined at ₹ 53,00,095/-. Aggrieved by the order of A.O, Assessee carried the matter before CIT(A). CIT(A) vide order dated 31.03.2009 partly allowed the appeal of the Assessee. Aggrieved by the order of CIT(A), Revenue is now in appeal before us and Assessee has also filed C.O. The grounds raised by the Revenue reads as under:- 1. The Ld.CIT(A) has erred in law and on facts in deleting the addition of ₹ 14,95,000/- made u/s.68 of the I.T. Act, without considering the fact that the assessee has failed to discharge the onus cast upon it u/s.68 of the I.T. Act. 2. The Ld.CIT(A) has erred in law and on facts in deleting the addition as mentioned in Ground No.l, without considering the fact that the assessee itself has admitted vide reply dated 26.12.2007 that it was not possible to collect details within short period and hence there was no question of furnishing all details as relied in the appellate order. The Ld.CIT(A) has further erred in observing that some of the credits were transferred from other concerns ignoring that the addition of 9 fresh credits was made as against 58 credits in all amounting to Rs.l .78 crores. 3. The Ld.CIT(A) h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having any new material on the basis of which he had proceeded for re-assessment. He further submitted that A.O had examined the material and therefore re-opening was on account of change of opinion and it was not permissible in law. He placed reliance on the decision of Bombay Tribunal in the case of H.V Transmission Ltd. vs. ITO ITA NO. 2230/Mum/2010 order dated 07.10.2011, Signature Hotels P. Ltd vs. ITO (2011) 338 ITR 51 (Del) decision of Delhi High Court in the case of CIT vs. Atul Jain Others (2008) 299 ITR 383, and also the decision in the case of CIT vs. Kelvinator of India Ltd (2010) 320 ITR 561 (SC). 6. The ld. D.R. on the other hand submitted that the original return of income in the case of Assessee was processed u/s. 143(1) and there was no assessment u/s. 143(3). He further submitted that ADIT on examining the modus operandi of Assessee s business found that Assessee was the real owner of various projects carried out in the name of co-operative housing societies and the Managing Director of Assessee had admitted undisclosed profit and also offered the same to tax and thus the Assessing Officer had proceeded to reopen the assessment. He further submitted that sinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he requirement of noticing is of understatement of income. We are of view that such noticing as may be from the material already on record or some new material coming to his knowledge. So long as noticing of understatement of income is true, the source of such noticing as emanating from some new material or an existing material is wholly irrelevant in the context of Expln. (b). In the present case, on examination of the material found during the course of search and seizure operation, ADIT noticed that Assessee was the real owner of various projects and the Managing Director of the Assessee had also admitted to undisclosed profit from Kalhar Bunglow Project, the main project being developed by Assessee and offered the same to tax. We are of the view that the aforesaid material was sufficient to the Assessing Officer to proceed with the proceedings of reopening of the assessment more so in view of the settled law that at the stage of issue of notice, the only question is whether there was relevant material on which reasonable person could have formed the requisite belief. Whether material would conclusively prove escapement of income is not the concern at that stage. We further fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the succeeding entity. Thus certain loans (listed at S. No. 1 to 3 and 5 to 7) were raised by M/s. Navratana Kausambi Association (NKA) and were transferred to the successor appellant. It is seen that the facts/details furnished by the appellant in respect of creditors were similar in A.Y. 97-98 as well. In similar facts of the appellant, the then CIT(A)-XI, in appellant s appeal for A.Y. 97- 98 had held in his order, dated 3.01.2005 in appeal No. CIT(A)-XI/112/01-02 that the addition made u/s. 68 was not sustainable. Considering the explanation/details furnished and following the order of CIT(A) in appellant s own appeal for A.Y. 97-98, the addition of ₹ 14.95 lakh u/s. 68 of the Act are deleted. The related ground of appeal is allowed. 11. Aggrieved by the order of CIT(A), Revenue is now in appeal before us. 12. Before us, ld. D.R. submitted that ld. CIT(A) has noted that Assessee had filed copies of the account of the creditors and furnished the names and addresses and confirmation and also the PAN of the same of the creditors against which he pointed to the findings of A.O where A.O has noted that Assessee had not filed the details called for by the A.O. He further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee and also address of that party. At page No.77 of the paper-book shows the account of Nilay Yogesh Shah on the letter-head of the assessee with the address of the party. The copies of account: show that money was transferred through cheque, i.e. though banking channels. It is not a case where no data is available for verification. The assertion of the Learned Authorised Representative of the assessee is that these documents were submitted to the Assessing Officer. In any case, we restore the matter to the file of Assessing Officer. The assessee will submit these documents before the Assessing Officer with complete details of the creditors, name of the bank through which money was transferred to the assessee and paid back by the assessee. The assessee will furnish these information so as to enable the Assessing Officer to carry out independent investigation. Initially, documents for establishing identity of the creditors, their creditworthiness and genuineness of the transactions will be submitted by the assessee for further verification by the Assessing Officer. 14. In the present case we find that Ld. CIT(A) has not given any finding with respect to the deposits received b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grieved by the order of Assessing Officer, Assessee carried the matter before Ld. CIT(A). Ld. CIT(A) after considering the submission, deleted the addition by holding as under:- 12. In respect of the disallowance for unexplained liability, it has been pointed out that the name/break up of liabilities as on 31/3/1999 and 31/03/2000 had been furnished along with details of transactions. The liabilities arising out of purchases/expenses were vouched and books were audited. The expenses considered directly related to projects and debited to project account while expenses incurred in relation to business operations was debited to P L Account. The Assessing Officer has not disproved the claim of the appellant that each liability was supported by documentary evidence as invoices, receipts of goods notes, freight bills, name/address/PAN of party and that it was business related and accounted for in books. The reasons for increase in liabilities and break up liabilities arising on account of sundry creditors, expenses and goods were furnished along with reply dated 26/02/2007, to the Assessing Officer. Thus the disallowance of ₹ 34,79,726/- made by the Assessing Officer is not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Assessee. He therefore by applying the provisions of s. 44AD of the Act, estimated the profit @ 8% and worked out the net profit at ₹ 3,11,094 and made the addition. Aggrieved by the order of Assessing Officer, Assessee carried the matter before Ld. CIT(A). Ld. CIT(A) deleted the addition by holding as under:- 13. In para 4 of this order the AO has noted that the construction receipts have been shown at ₹ 33.47 lakhs. While work-in-progress has increased by ₹ 38,88,672/- and so felt that receipts of ₹ 5,41,672/- were apparently suppressed further expenses of ₹ 30.75 lakhs, being general and administration in nature, have been debited to P L Account. The Assessing Officer felt that reply of the assessee was the actual owner of the projects and so profit therefrom was attributable to it alone and sought explanation vide letter dated 23/11/2007. The Assessing Officer felt that reply of the assessee dated 30/10/2007 was contradictory and so books were unreliable. The Assessing Officer therefore invoked provisions of section 44AD and estimated net profit at ₹ 3,11,094/- i.e. @ 8% on receipts of ₹ 38.88 lakhs. The Assessing Officer has ho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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