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2015 (5) TMI 676 - ITAT MUMBAI

2015 (5) TMI 676 - ITAT MUMBAI - TMI - Addition u/s. 68 - Held that:- There is no dispute that the assessee has submitted Memorandum/Articles of Association of Companies, Board Resolution of the companies, Loan confirmations, Balance sheet, PAN details & Copies of I.T. returns.A perusal of these documents go to establish that the assessee has prima facie discharged the onus cast upon him by virtue of provisions of Sec. 68 of the Act.The AO drew support from the observations made in other group c .....

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idence to show that the AO has made enquiries from the lender companies. Merely because the lender companies were found to be name lenders 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 o .....

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aid 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 to give any logical conclusion/finding in respect of these documents on the basis of which the AO has made the addition. There is not even an iot .....

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e, therefore, do not find any merit in the additions made by the AO on the basis of these documents. We direct the AO to delete the entire additions made on the basis of these two documents - Decided in favour of assesse.

Addition made u/s. 68 - Held that:- The AO has simply mentioned that ₹ 5 crores in the name of Shri P. Anandam is not found reflected in the books. However, in respect of other entries relating to ₹ 16.75 crores, the AO has not pointed out in whose books .....

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n without there being any corroborative evidence brought on record. We set aside the finding of the Ld. CIT(A) and direct the AO to delete the addition of ₹ 5 crores - Decided in favour of assesse. - I.T.A. No. 3890/Mum/2013, I.T.A. No. 4171/Mum/2013, I.T.A. No. 4708/Mum/2013, I.T.A. No. 4322/Mum/2013 - Dated:- 29-4-2015 - Shri I. P. Bansal And Shri N. K. Billaiya,JJ. For the Appellant : Shri J.P. Bairagra For the Respondent : Shri R.R. Prasad Shri 2 Viren Ahuja ORDER Per N. K. Billaiya, A .....

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ke 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 .....

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kar Fund 28,57,782/- 0 5. Pansoft Technologies 21,42,520/- 0 Total 2,70,88,882/- 1,50,00,000/- 3.2. The assessee was asked to explain the aforementioned credits. The assessee was specifically required to prove the identity of the creditors, genuineness of the transaction and credit worthiness of the creditors. The AO observed that the assessee has only submitted the Memorandum of Association and Articles of association of the companies, their Board Resolutions, loan confirmations and in few case .....

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concerns of the assessee and finally concluded by treating the loan received from these companies at ₹ 2,70,88,882/- as undisclosed income of the assessee u/s. 68 of the Act. 4. The assessee carried the matter before the Ld. CIT(A) and strongly contended that the assessee has discharged the onus cast upon him by virtue of the provisions of Sec. 68 of the Act. It was strongly contended that the assessee has successfully established the identity of the creditors, genuiness of the transaction .....

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s on the various group companies 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 de .....

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horities 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: 1) Memorandum/Articles of Association of Companies 2) Board Resolution of the companies 3) Loan confirmations 4) Balance sheet 5) PAN details 6) Copies of I.T. returns. 8. A perusal of these documents go to establish that the assessee has prima facie discharged the onus cast upon hi .....

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is no direct evidence brought on record in the case of the assessee to show that the transaction is not genuine as no verification has been made in the case of the assessee from the related banks. We also find that all the lender companies are taxpayers and their PAN details are on record alongwith the copies of their income tax return. There is no evidence to show that the AO has made enquiries from the lender companies. Merely because the lender companies were found to be name lenders in othe .....

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le High Court of Rajasthan in the case of Labh Chand Bohra Vs ITO219 CTR 571. The Hon ble High Court of Bombay in the case of CIT Vs Dwarkadish Investment Pvt. Ltd. 330 ITR 298 has held that though in Sec. 68 proceedings, the initial burden of proof lies on the assessee yet once he proves the identity of the creditors/share applicants by either furnishing their PAN or income-tax assessment number and shows the genuineness of transaction by showing money in his books either by account payee chequ .....

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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 i .....

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und No. 6 relates to the addition of ₹ 1.50 crores made by the AO u/s. 68 of the Act. 14. The assessee has borrowed money from two parties from whom the monies were borrowed in A.Y. 2006-07 also. We have deleted the addition made in A.Y. 2006-07 in ITA No. 3890/M/13 qua ground No. 7 of that appeal. Following our own finding /detailed discussions therein, we direct the AO to delete the addition of ₹ 1.50 croes. Ground No. 6 is accordingly allowed. 15. Ground No. 7 relates to the addit .....

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assessee will pay additional ₹ 25 lakhs for some extra expenses. However, finally these expenses did not materialize and no cash was finally paid. This explanation of the assessee did not find any favour with the AO who proceeded by treating 25 lakhs as unexplained investment u/s. 69 of the Act and added the same to the income of the assessee. 17. The assessee carried the matter before the Ld. CIT(A) but without any success. 18. Before us, the Ld. Counsel for the assessee vehemently submit .....

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that at the centre on the top side, there is a reference to cash ₹ 25 lakhs and 50% 12,50,000-/. Except for this, there is nothing to suggest what 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 ca .....

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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 is directed to charge interest as per provisions of law. 22. In the result, the appeal filed by the assessee is partly allowed. ITA No. 4708/M/13 - A.Y. .....

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see for A.Y. 2008-09. 24. This issue has been discussed by the AO at para-10 of his order wherein he has made reference to certain incriminating papers found and seized at the time of search. Scanned copies of the impugned documents are exhibited at pages 15 and 16 of the assessment order. The assessee was confronted with these documents and was also asked to explain the nature. The assessee vide his submission dt. 5.12.2011 stated that this page contains some rough noting with respect to certai .....

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sessee carried the matter before the Ld. CIT(A). It was strongly contended before the Ld. CIT(A) that the impugned document is nothing but a dumb document on the basis of which no addition can be made. Strong reliance was placed on the decision of the Tribunal in the case of Pratima Educational Society 561 (AT) 20 (Hyd). After considering the facts and the submissions, the Ld. CIT(A) observed that the dates of the transaction reflected in the seized document do not pertain to A.Y. 2007-08. The L .....

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ounsel 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 .....

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ts on the basis of which the AO has made the addition. There is not even an iota of evidence to show that the AO has made an enquiry from the said Shri Vikramjee Agarwal. Merely because some figures were found to be written in some document, The AO cannot extrapolate 50 and interpret 50 as 50,00,000, 575 as 575 lakhs without any corroborative/demonstrative evidence. Without there being any corroborative evidence additions made merely on the basis of some illogical and irrelevant entry/jotting on .....

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sions of the law. 32. Before closing, in A.Y. 2008-09, the assessee has raised ground No. 1 to 5 challenging the jurisdiction of the AO in respect of the assessment made u/s. 143(3) r.w. Section 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 as not pressed. 33. Ground No. 6 relates to the addition of ₹ 5 crores made u/s. 68 of the Act. This issue has been considered by the AO at para-8 of his asses .....

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- ₹ 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 ₹ .....

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