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2015 (5) TMI 579 - ITAT LUCKNOW

2015 (5) TMI 579 - ITAT LUCKNOW - TMI - Unexplained loans - non production of creditors after lapse of more than 10 years - Held that:- Despite opportunities afforded to the assessee, no evidence was placed. Initially, the assessee sought adjournment before the Assessing Officer on the ground that the two persons have gone out of station and they would be back in the first week of November. The request for adjournment was acceded to by the Assessing Officer, but despite affording opportunities, .....

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reated the deposit as unexplained and made addition of the same.

Also before the ld. CIT(A), the assessee could not improve his case and for want of creditworthiness of the depositors, the addition was confirmed by the ld. CIT(A). - Decided against assessee. - ITA No.524/LKW/2013 - Dated:- 16-4-2015 - Shri Sunil Kumar Yadav And Shri. A. K. Garodia JJ. For the Appellant : Shri. S. K. Jain, FCA For the Respondent : Shri. Anupam Gupta, D.R. ORDER Per Sunil Kumar Yadav: This appeal is pre .....

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led an affidavit of both the creditors to the effect that they had given these amounts towards booking of flat in YOG TOWER, Residential Complex built by the appellant firm, but after some time these persons got the booking cancelled and the amounts were refunded back, therefore, the provisions of Section 68 of the Income Tax Act, 1961, were not applicable in the case of trading receipts and the addition was wholly unwarranted and unsustainable in law and on facts. 3. That the Order of the Ld. C .....

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n for admission of the following additional ground for the reason that since the ground goes to the root of the case, the same may be admitted and be disposed of:- 6. That the Ld. A.O. and Appellate Authority who have dealt with the assessment under appeal have failed to consider and appreciate that the provision of the section 153C of the Income Tax Act, 1961, could not have been taken without first recording reasons in some case pending before the same or any other Assessing Officer under sect .....

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ITAT & Others (writ petition (c) No.4684/2010). 5. P.V. Doshi vs. CIT, 113 ITR 22. 4. The ld. D.R., on the other hand, has strongly objected to the admission of the additional ground for the reason that in the first round of appeal, the Tribunal has set aside the order of the ld. CIT(A) and restored the matter to the file of the Assessing Officer with a direction to readjudicate the issue of unexplained deposit of ₹ 10 lakhs by making certain observations as to what is required to be .....

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the names of Shri. Rajeev Shukla and Shri. Ashish Pandey. The assessee has not raised any ground before the ld. CIT(A) relating to the validity of the assessment framed under section 153C of the Act in the hands of the assessee. Therefore, the appeal has arisen out of the order of the ld. CIT(A), in which the issue of addition on account of unexplained deposit is involved. In the first round of appeal, no ground relating to validity of the assessment framed under section 153C of the Act was ever .....

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o adjudicate a particular issue by virtue of the order of the appellate authorities. Therefore, the additional ground cannot be admitted at this stage. The ld. D.R. has further invited our attention to the judgment of the jurisdictional High Court in the case of Digvijay Chemicals Ltd. vs. ACIT, 248 ITR 381, in which their Lordships of the jurisdictional High Court has held that there is no requirement to afford opportunity of hearing to a party before recording satisfaction under section 158BD .....

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faction must be recorded in writing. This judgment was rendered on 8th December, 2000 and the Assessing Officer has issued notice under section 153C of the Act on 16.10.2006. The judgment of the Hon'ble Apex Court in the case of Manish Maheshwary vs. ACIT [2007] 289 ITR 341 (SC) mandating recording of satisfaction before issuing notice under section 158BD of the Act was passed on 23.2.2007. Therefore, at the relevant point of time when notice under section 153C of the Act was issued, the leg .....

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appeal where it goes to the root of the case and no investigation or enquiry is called for 7. Having given a thoughtful consideration to the rival submissions and from a careful perusal of the orders of the authorities below and the documents placed on record and the judgments referred to by the parties, we find that undisputedly in the first round of appeal, the Tribunal has remanded the matter to the Assessing Officer for adjudication of the solitary issue of addition of ₹ 10 lakhs made .....

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enuineness of the transaction. After the assessee has adduced evidence to establish prima facie the aforesaid, the onus shifts to the department. In our considered opinion, the mere furnishing of particulars, or the mere fact of payment by an account payee cheque or the mere submission of a confirmatory letter by the creditor is, by itself, not enough to shift the onus onto the department although these facts may, along with other facts, be relevant in establishing the genuineness of the transac .....

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issue and remand the matter to the file of the AO with a direction to decide the issue afresh in accordance with law after examining the creditors. It is made clear that the assessee is free to adduce evidence before the Assessing Officer in support of its case. It is needless to say that the Assessing Officer will given an opportunity of being heard to the assessee. 8. Pursuant to the directions of the Tribunal, the Assessing Officer has examined the issue of addition of ₹ 10 lakhs after .....

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lakhs in the names of Shri. Rajeev Shukla and Shri. Ashish Pandey, from whom the amount of ₹ 5 lakhs each was claimed to have been received as deposit. Beside this issue, no other issue was either referred by the Tribunal to Assessing Officer for examination or examined by the Assessing Officer and the ld. CIT(A) in the second round. Now the assessee has raised the aforesaid additional ground with the submission that before issuing notice under section 153C of the Act, the Assessing Offic .....

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of notice under section 153C of the Act deserves to be annulled. There is no quarrel on this legal preposition, but the issue raised before us is whether this legal ground can be raised by way of additional ground in second round of appeal where the Assessing Officer has a limited scope of jurisdiction to examine a particular issue by virtue of the order of the Tribunal. In this regard, we are of the view that when the Assessing Officer has assumed jurisdiction to examine a particular issue from .....

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n of the additional ground, but in most of the judgments, we find that additional ground was raised before the first or second appellate authorities and being legal in nature, additional ground was directed to be admitted by the first or second appellate authorities. In this regard, there is no quarrel. The issue before us is only whether such type of additional ground can be raised in the second round of appeal where the scope of lower authorities are very limited. Reliance was placed upon the .....

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retion, but in the second round of appeal, where the Assessing Officer and the first appellate authorities has limited jurisdiction to adjudicate any those issues which were directed to be examined by the appellate authorities because the Assessing Officer assumes jurisdiction to adjudicate those issue from the orders of the appellate authorities, the additional ground other than the grounds, on which directions are issued, cannot be raised and adjudicated by the appellate authorities. In the in .....

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