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2015 (6) TMI 205 - ITAT DELHI

2015 (6) TMI 205 - ITAT DELHI - TMI - Reopening of assessment - addition made on account of unsecured loan taken - addition u/s 2(22)(e) - Held that:- There was no obligation on the part of the Assessing Officer to furnish the reasons recorded along with the issuance of notice under Section 148 of the Act. The assessee himself could request for the reasons after the expiry of the said period of six year and the reasons were furnished within a period of less than 4 months. This cannot be treated .....

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lid in law.

Addition on account unsecured loans - Held that:- It is noticed by the Assessing Officer that the transactions in question are merely book entries and the allegation made against the assessee company is that the assessee had provided cash to M/s Nishant Finvest P. Ltd. and M/s Performance Trading & Investment, who after depositing the cash in the bank account had issued cheques in favour of the assessee company which means that the cash deposited in the bank account of tho .....

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indulged in providing book entires. It is settled proposition of law that just because credits were accepted by account payee cheques and confirmation letters were filed, the transactions cannot be called sacrosanct. In our considered view, the assessee had failed to discharge his onus that was lying upon it in proving the credits under the provisions of Section 68 of the Act and therefore, we hereby confirm the addition of ₹ 4 lakhs.

Addition under Section 2(22)(e) - Held that .....

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05/Del/2012 - Dated:- 6-5-2015 - G C Gupta, VP And Inturi Rama Rao, AM,JJ. For the Appellant : Shri A K Srivastava, FCA For the Respondent : Shri Vikram Sahay, Sr.DR ORDER Per Shri Inturi Rama Rao,AM. This is an appeal filed by the assessee company for the assessment year 2003-04 raising the following grounds of appeal: i. Lower Authorities have passed the orders which are against provision of Income Tax Act, are against facts and circumstances of the case, are based upon conjectures and surmise .....

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y adverse material on record against the appellant, therefore addition made is illegal, against provisions of Income Tax Act, against facts & circumstances and is bad in law. iv. Ld. CIT(A) has grossly erred in confirming addition made by Assessing Officer of ₹ 27,00,000/- u/s 2(22)(e) on basis of conjectures & surmises. v. Ld. CIT(A) has grossly erred in treating outstanding liability on account of construction bill of M/s Seth Kishan Chand & Association for ₹ 27,00,000/ .....

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laring income of ₹ 3,36,246/-. This return has been accepted under Section 143(1) of the Income-tax Act, 1961 (for short "the Act") on 5th March, 2004 and there was no scrutiny assessment. Subsequently, on the receipt of information from DIT(Investigation) that the assessee company is the beneficiary of book entry provider from M/s Mukesh Gupta Group, the case was reopened by issuing notice under Section 148 of the Act on 26th March, 2010. In response to the said notice, the asse .....

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Act. Being aggrieved by this order of assessment, the assessee filed an appeal before the learned CIT(A), who vide order dated 17.10.2011 dismissed the appeal both on the preliminary ground challenging in the reassessment proceedings and as well as on the merits of additions. Aggrieved, the assessee has come up before us with the present appeal. 3. The learned Authorized Representative argued that the reasons recorded under Section 148 were furnished to the assessee after the lapse of six years .....

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2 lakhs each, the assessee discharged onus that was lying upon it by filling the confirmation letters from the respective creditors as well as by establishing their identity and genuineness of the transactions. In support of this, the assessee had filed balance sheet which is at page nos. 21 to 31 of paper book. It was further pleaded that the loans were repaid by account payee cheques and the evidence in the form of certificate from the banker is filed vide page no. 45 of the paper book.In res .....

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t the unsecured loans are genuine. He submitted that the unsecured loans cannot be accepted in the light of the material on record that M/s Nishant Finvest P. Ltd. and M/s Performance Trading & Investment are only entry providers which means that the money in cash was provided to them by the assessee. The assessee is supposed to prove the source for this cash. He further argued that the loans were accepted by way of cheque are not sacrosanct. In respect of deemed dividend, it is submitted th .....

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that the reasons recorded are supplied after the expiry of six years from the end of the relevant assessment year, cannot be accepted. The Hon'ble Supreme Court in the case of G.K.N. Drive Shafts India Ltd. Vs. ITO, 259 ITR 19, held that after filing the return of income, the Assessing Officer is duty bound to furnish the reasons recorded within the reasonable time, if there is any such request from the assessee. In this case, the notice was issued under Section 148 of the Act on 26th March .....

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the issuance of notice under Section 148 of the Act. The assessee himself could request for the reasons after the expiry of the said period of six year and the reasons were furnished within a period of less than 4 months. This cannot be treated as unreasonable time and the ratio laid down by the Hon'ble Delhi High Court in the case of Haryana Acrylic Manufacturing Co. (supra) is not applicable to the facts of the present case. In that case, the reasons were asked within the period of six ye .....

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eived, ₹ 2 lakhs each from M/s Nishant Finvest P. Ltd. and M/s Performance Trading & Investment by account payee cheques and the confirmation letters had been filed. But it does not mean that the Assessing Officer is prevented from probing the matter further based on the information filed by the assessee. It is noticed by the Assessing Officer that the transactions in question are merely book entries and the allegation made against the assessee company is that the assessee had provided .....

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The appellant also failed to produce the Directors of those concerns before the Assessing Officer. In other words, the appellant also failed to prove the genuineness of the transactions in the light of the fact that those concerns are alleged to be indulged in providing book entires. It is settled proposition of law that just because credits were accepted by account payee cheques and confirmation letters were filed, the transactions cannot be called sacrosanct. In our considered view, the assess .....

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ted for construction of industrial building. In terms of this contract, the said concern M/s Seth Kishan Chand and Associates had raised a bill for sum of ₹ 27 lakhs on 15th March, 2003 for the work done. This is shown as payable in the books of the appellant for the relevant assessment year. This, according to the Assessing Officer, constituted a payment within the purview of provisions of Section 2(22)(e) of the Act which was upheld by the learned CIT(A). As stated earlier, it only repre .....

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