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2015 (7) TMI 171 - ITAT HYDERABAD

2015 (7) TMI 171 - ITAT HYDERABAD - TMI - Unexplained investment - blank cheques found during the search - AO had concluded that the appellant is engaged in money lending business - Held that:- All the persons have confirmed that cheques have been handed over to the appellant only as a measure of security for supply of scrap or for the purpose of obtaining the loan, but all of them have denied having obtained any loan from the appellant. The statements given by those people remains uncontroverte .....

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e the AO and therefore, the CIT(A) is perfectly justified in rejecting the claim of the appellant. Hence, this ground of appeal is dismissed.- Decided against assessee. - I.T.A. No. 1392/HYD/2010 - Dated:- 17-6-2015 - Smt. Asha Vijayaraghavan And Shri Inturi Rama Rao, JJ. For the Petitioner : Shri P. Murali Mohan Rao, AR For the Respondent : Shri D. Sudhakar Rao, CIT-DR ORDER PER INTURI RAMA RAO, A.M. : This is an appeal filed by the assessee against the order of the CIT(Appeals)-IV, Hyderabad, .....

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. SI No Name Of The PersonIssued Cheque Amount 1 Sri Ram Pratap Agarwal 7,00,000 2 Sri Raja Rajeswari Steel Traders 54,00,000 3 Agarwal Enterprises 3,57,000 4 Sri Manish Agarwal 4,00,000 2) The CIT Appeals - IV, Hyderabad erred while confirming the order passed by Assessing officer by making the addition of ₹ 44 lakhs to the returned income relating to the advances received by the assessee towards sale of scrap without considering the explanation offered by the assessee which is not correc .....

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The CIT(A)-IV has erred while confirming the Order of the Assessing Officer wherein the A.O. has failed to appreciate that the amount received as commission on sale transaction but considered the same as sale transaction of assessee which is not correct and not justified. We, hereby, submit you to kindly consider the commission income only and calculate tax on such Income. 5) The assessee has claimed the deduction under section 80U of ₹ 50,000/- for physical disability and submitted a cert .....

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IT Appeals - IV, Hyderabad erred while confirming the order passed by Assessing officer while not considering the explanation given by the Assessee Company and initiated penalty proceedings under section 271 (1)( c) which is not correct, not justified and bad in law. 8) The Order of the CIT Appeals may be set aside and sent back to Assessing officer for redoing the same. 9) We would like to submit that the Assessee has not concealed any income or not furnished inaccurate particulars to the A.O. .....

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loose sheets and dumb materials which has no evidential value. 3. The learned CIT (A) ought to have applied the principle of Telescoping of the income determined in the earlier years against the expenditure of subsequent years. 4. The learned CIT (A) ought to have applied the principle of Telescoping of unexplained expenditure against the income of the appellant. 5. The CIT (A) erred in sustaining the addition of ₹ 1,12,57,000/- made towards unaccounted loan. 6. The CIT (A) erred confirmi .....

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usiness of trading in scrap. Search and seizure operations u/s. 132 of the Act were conducted on 07-11-2007. Subsequently, notice u/s. 153A was issued calling upon the appellant to file the return of income. In response to which, the appellant filed return of income on 25-09-2009 disclosing income of ₹ 4,11,320/-. Against the said return of income, assessment came to be completed u/s. 143(3) r.w.s 153A of the Act vide order dt. 30-11-2009 at a total income of ₹ 1,17,18,320/-. While d .....

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00 8. M/s. Sri Padmavati Motors 50,000 9. Sri Virenderkumar Panday 15,00,000 10. Smt. Sheela Agarwal 2,50,000 11. M/s. Venkateswara Scrap Merchants 5,00,000 12. Sri Manish Agarwal 4,00,000 Total: 1,12,57,000 The addition is made based on the blank cheques and promissory notices obtained from the above persons seized vide Annexure A/LNA/RES/01. The AO had concluded that the appellant is engaged in money lending business and advanced a sum of ₹ 1,12,57,000/- and made addition of amount as un .....

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loans against security of promissory notice and cheques and therefore, upheld the addition. 4. It was contended before us that the documents seized are only dumb documents and therefore, no addition can be made. On the other hand, Ld.CIT(A) had placed reliance on the lower authorities and submitted that the seized documents cannot be called dumb documents since the documents are duly signed and filled up. Since the assessee had failed to explain satisfactorily under what circumstances, the blank .....

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erox copies of the above two cheques were seized by the AO vide Annexure No. A/LNA/Res/01 dt. 07-11-2007. On query to the assessee as to how the above cheques came into possession of the appellant. He submitted that the cheques were obtained as security for supply of steel scrap but the supply never took place. Even the AO examined the proprietor of M/s. Sree Ganesh Trading Co. i.e., Shri Ashok Kumar Jainwal, who confirmed having issued those two cheques in favour of the appellant as a security .....

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nt is engaged in money lending business and the cheques and promissory notes were obtained only as a security for advancing the money. On perusal of the seized material, it is clear that promissory note though singed by Mr. Ashok Kumar Jainwal, which do not contain the amount, date, rate of interest or other particulars. The statement given by Mr. Ashok Kumar Jainwal that the cheques were issued only as a security for supply of the iron scrap which in fact did not materialize remain uncontrovert .....

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heque that the details of payee and date were not mentioned. Apart from the cheque, a promissory note for equivalent amount of ₹ 7 Lakhs dt. 11th July, 2007 was found executed by Sri Ram Pratap Agarwal. He stated that he issued the said cheques and executed the promissory notes with an intention to obtain a loan. However, the loan was never granted by the appellant and he denied having received any loan from the assessee. However, the AO had not believed the statement by holding that the s .....

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e addition is hereby deleted. iii. M/s. Sangeetha Engineering Works: Vide page No. 29 of annexure A/LNA/Res/01 dt. 07-11-2007, signed cheque bearing No. 375994 dt. NIL for ₹ 3 Lakhs drawn in favour of the appellant and vide page No. 46 & 47, two promissory notes were executed by one Mr. Dinesh Gupta for ₹ 3 Lakhs each was found. The promissory note seized vide page No. 46 does not contain date or other particulars whereas the other promissory note seized vide page No. 47 dt. 26th .....

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n amount of ₹ 6 Lakhs the CIT(A) confirmed it. After perusal of material on record, we are of the opinion that the material relied upon by the AO does not conclusively prove that the appellant advanced the sum of ₹ 6 Lakhs to Mr. Dinesh Gupta. Though a presumption can be probably raised that the appellant would have advanced money to the appellant but in the absence of any clinching evidence, the addition can't be upheld. More particularly, when Mr. Dinesh Gupta's statement t .....

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at those cheques were obtained by him as security for the amount to be advanced. However, the amounts were never advanced. In response to summons u/s. 131 issued by the AO to Shri G. Rajeswara Rao, proprietor of M/s. Sri Raja Rajeswari Steel Traders, one Mr. G. Ram Mohan appeared and stated that where abouts of Mr. G. Rajeswara Rao were not known as he ran away from Hyderabad due to pressures from the debtors and he stated confirmed that the signatures that were found on cheques seized were that .....

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department has seized Cheque No. 171531 dt. NIL drawn in favour of the appellant for a sum of ₹ 4 Lakhs vide page No. 3 of Annexure A/LNA/Res/01. During the course of assessment proceedings, the AO examined Mr. Rajesh Gupta, Proprietor, M/s. Krishna Metal who had confirmed having issued the blank promissory note for ₹ 4 Lakhs along with the above cheque and he further stated that these two instruments were handed over as a security for the purpose of obtaining the scrap material from .....

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ion is deleted. vi. M/s. Agarwal Enterprises: The department seized Cheque No. 302280 dt. 06-11-2007 drawn on Indian Overseas Bank, MG Road, Secunderabad for ₹ 3,57,000/- drawn by M/s. Agarwal Enterprises. During the course of assessment proceedings, Mr. Satish Agarwal, Proprietor of M/s. Agarwal Enterprises was examined, wherein he has stated that the said cheque for ₹ 3,57,000/- and promissory note was handed over to the appellant as a security for the purpose of obtaining loan. Ho .....

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