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2015 (5) TMI 676

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..... in other group companies would not empower the AO to make additions u/s. 68 of the Act in the hands of the present assessee. Thus keeping in mind the ratio laid down in the case of CIT Vs Orissa Corporation Pvt. Ltd. [1986 (3) TMI 3 - SUPREME Court], we have no hesitation to hold that the assessee has successfully discharged the onus cast upon him by virtue of Sec. 68 of the Act. No addition is therefore called for. We set aside the findings of the Ld. CIT(A) and direct the AO to delete the addition made u/s. 68 of the Act. - Decided in favour of assesse. Addition u/s. 69 - Held that:- AO has simply disbelieved the explanation of the assessee but at the same time has not brought any demonstrative material evidence on record to prove that there is an unexplained investment made by the assessee. The AO did not even care to verify from the said builder. The additions have been made purely on the strength of a piece of paper without any corroborative/demonstrative evidence therefore in our considered view, such additions cannot be sustained - Decided in favour of assesse. Addition holding that the transactions pertain to A.Y. 2007-08 - Held that:- We failed to persuade ourselves .....

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..... nue against the very same order of the Ld. CIT(A) for assessment year 2007-08 and ITA No. 4322 /M/13 is the appeal by the assessee for A.Y.2008-09. As common issues are involved in all these appeals, they were heard together and disposed of by this common order for the sake of convenience and brevity. ITA No. 3890/Mum/2013-2006-07 2. The assessee has raised as many as 8 grounds. By ground No. 1 to 5, the assessee has challenged the jurisdiction of the Assessing Officer for making assessment u/s. 143(3) r.w. Sec. 153A of the Act. The Ld. Counsel for the assessee stated that he is not pressing these grounds. Ground No. 1 to 5 are accordingly dismissed. The Ld. Counsel for the assessee stated that he is also not pressing ground No. 6, the same is also dismissed as not pressed. 3. Ground No. 7 relates to the addition of ₹ 2,70,88,882/- made u/s. 68 of the Act. 3.1. While scrutinizing the return of income, the AO noticed that the assessee has received unsecured credit from various parties. The details of which reads as under: S. No. Creditor Addition during A.Y. 2006-07 Addition during A.Y. 2007-08 1. .....

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..... nies of the assessee and confirmed the additions made by the AO. 5. Aggrieved by this, the assessee is before us. The Ld. Counsel for the assessee vehemently submitted that the assessee has successfully discharged the onus therefore the order of the Ld. CIT(A) is erroneous on facts. The Ld. Counsel for the assessee drew our attention to the documents filed in support of the genuineness of the credit entries. It is the say of the Ld. Counsel that in various judicial decisions, it has been held that once the assessee has established the identity of the creditors and the genuiness of the transaction, then the assessee cannot be expected to prove the source of the source. In support of his contention, the Ld. Counsel placed reliance on various judicial decisions placed before us in the form of paper book. 6. Per contra, the Ld. Departmental Representative strongly supported the orders of the Revenue authorities. 7. We have carefully perused the orders of the authorities below and the relevant documentary evidences brought on record. We have also gone through various judicial decisions placed before us. There is no dispute that the assessee has submitted following documents: .....

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..... because the creditors could not be found at the address given, it would not give the revenue the right to invoke Section 68 of the Act. A similar view was taken by the Hon ble High Court of Rajasthan in the case of Aravali Trading Co. Vs ITO 220 CTR 622 8.2. Considering the facts in totality, in the light of the judicial decisions referred to hereinabove, keeping in mind the ratio laid down by the Hon ble Supreme Court in the case of CIT Vs Orissa Corporation Pvt. Ltd. 159 ITR 78, we have no hesitation to hold that the assessee has successfully discharged the onus cast upon him by virtue of Sec. 68 of the Act. No addition is therefore called for. We set aside the findings of the Ld. CIT(A) and direct the AO to delete the addition made u/s. 68 of the Act. This ground of the assessee is allowed. 9. Ground No. 8 relates to the levy of interest u/s. 234A. 234B and 234C of the Act. Levy of interest is mandatory though consequential, the AO is directed to charge interest as per provisions of law. 10. In the result, the appeal filed by the assessee is partly allowed. ITA No. 4171/M/13- Assessee s appeal A.Y, 2007-08 11. Ground No. 1 to 5 relate to the jurisdiction of the .....

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..... at the AO has drawn out of this document that it is an unexplained investment made by the assessee. We also find that 5 flats purchased by the assessee for an agreed cost of ₹ 244 lakhs, the stamp duty value of which is at ₹ 218 lakhs. Thus, it can be seen that the agreement value is in far excess of the stamp duty value therefore it cannot be said that some cash was paid over and above the agreed value. We also find that the AO has simply disbelieved the explanation of the assessee but at the same time has not brought any demonstrative material evidence on record to prove that there is an unexplained investment made by the assessee. The AO did not even care to verify from the said builder. The additions have been made purely on the strength of a piece of paper without any corroborative/demonstrative evidence therefore in our considered view, such additions cannot be sustained. We set aside the findings of the Ld. CIT(A) and direct the AO to delete the addition of ₹ 25 lakhs. Ground No. 7 is accordingly allowed. 21. Ground No. 8 relates to the levy of interest u/s. 234A. 234B and 234C of the Act. Levy of interest is mandatory though it is consequential, the AO .....

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..... AO. 28. The Ld. Counsel for the assessee reiterated what has been stated before the lower authorities. It is the say of the Ld. Counsel that merely on the basis of these two documents, no addition can be made be it A.Y. 2007-08 or 2008-09 or any other assessment year. The Ld. Counsel vehemently submitted that the entire additions have been made at the whims and surmises and without any corroborative evidences therefore the entire addition need to be deleted not only from A.Y. 2007-08 but also in A.Y. 2008-09 or any other assessment years. 29. Having heard the rival submissions, we have carefully perused the orders of the authorities below and have given a thoughtful consideration to the impugned seized material exhibited at page-15 of the assessment order. Document at page-15 of the assessment order there is reference to Shri Vikramji Chennai. Some of the notings are as under: Cash 25/6 50.00 08/07 50.00 23/09 200.00 4/12 180.00 .....

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..... e AO further observed that the paper contains certain expense details together with the source thereof. The AO summarized the expenses as under: a) Bungalow - ₹ 4,85,10,347/- b) Others - ₹ 6,54,16,175/- c) Punjab Biomass - ₹ 5,35,94,360/- Total -Rs.16,75,20,882/- 33.1. The AO further observed that the source for these expenditures is at ₹ 12 crores from ILFS and Spice. There is a reference of ₹ 5 crores from P. Anandam which according to the AO was not reflected in the books. The AO further observed that expense of ₹ 4,85,10,347/- under the head Bungaloiw is also not explained. The AO preceded by treating ₹ 5 crores as unexplained income of the assessee. 34. The assessee carried the matter before the Ld. CIT(A) but without any success. 35. Before us, the Ld. Counsel for the assessee stated that the entire addition has been made on the basis of a loose paper found at the time of search and the AO has simply surmised that the amount referred after the name of Shri P. Anandam amounting to ₹ 5 crores is assessee s unexplained income. The Ld. Counsel pleaded for the deletion of this amount. 36. Per contra, the Ld. D .....

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