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2015 (7) TMI 446 - ITAT HYDERABAD

2015 (7) TMI 446 - ITAT HYDERABAD - TMI - Unexplained investment made in the capital and un-proved sundry creditors - CIT(A) deleted addition in assessment completed under section 143(3) read with section 263 - Held that:- On account of unexplained investment in the capital, it is observed that although, source of the said capital was claimed by the assessee to be the funds received from HUF, the same was not substantiated by the assessee before the A.O. by furnishing relevant documentary eviden .....

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ted in the accounts of HUF. As rightly contended by the learned D.R., the HUF is a separate entity, different from the assessee and therefore, the onus is on the assessee to explain the source of capital claimed to be funds received from the HUF on evidence. The Ld. Counsel for the assessee at the time of hearing before us has not disputed this position. He, however, has contended that one more opportunity may be given to the assessee to establish the receipt of funds from HUF on evidence. Thus .....

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re him showing that the balances outstanding as on 31st March, 2007 against the concerned creditors were paid in the subsequent years through cheques or DDs. As rightly pointed out by the learned D.R. from the relevant portion of the impugned order of the Ld. CIT(A), finding in this regard was given by the Ld. CIT(A) only in respect of 5 creditors out of the 13 creditors and that too without giving any opportunity to the A.O. to verify the claim of the assessee made before him for the first time .....

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re amount in question payable to the 13 creditors was actually paid by the assessee in the subsequent years showing the existence of the said creditors on 31st March, 2007. - Decided in favour of revenue for statistical purposes. - ITA.No.224/Hyd/2013 - Dated:- 13-3-2015 - Shri P. M. Jagtap And Smt. Asha Vijayaraghavan JJ. For the Appellant : Mr. Rajat Mitra For the Respondent : Mr. S. Rama Rao ORDER Per P.M. Jagtap, A.M. This appeal is filed by the Revenue against the Order of the Ld. CIT(A .....

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ai Granites. The return of income for the year under consideration was filed by him on 31.10.2007 declaring loss of ₹ 4,27,117. In the assessment originally completed under section 143(3) of the Act vide order dated 30.10.2009, the total income of the assessee was computed by the A.O. at ₹ 7,35,600. The record of the said assessment came to be subsequently examined by the Ld.CIT and on such examination, he found that the assessment order passed by the A.O. under section 143(3) was er .....

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nd after giving the assessee an opportunity of being heard. Accordingly, fresh assessment proceedings were initiated by the A.O. and the assessee was called upon by him to furnish all the relevant details such as full names and postal addresses of the concerned 13 creditors aggregating to ₹ 40,95,286. As noted by the A.O. in the assessment order passed under section 143(3) read with section 263, the assessee however, did not furnish the postal addresses of the concerned creditors despite h .....

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O. to the total income of the assessee in the assessment completed under section 143(3) read with section 263 vide order dated 21.03.2012. 3. Against the order passed by the A.O. under section 143(3) read with section 263, an appeal was preferred by the assessee before the Ld. CIT(A) and after considering the submissions made by the assessee as well as the material placed on record before him, the Ld. CIT(A) deleted both the additions of ₹ 5,23,930 on account of unexplained investment made .....

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ed or gift made the A.O. has subjected such investment to tax, which is contested. In course of the appellate proceedings, it is explained by the AR that, the amount was not shown as loan or gift but shown in the appellant s capital account as capital obtained and it was further explained that the assessee HUF is assessed to tax regularly from year after year and suggested that the same may be accepted. The explanation being in order, the same is accepted and accordingly the A.O. is directed to .....

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ding as on 31st March, 2007, were paid in the subsequent years. some payments were made through cheques or DDs and some are through cash. Thus, it is explained with facts and figures that the impugned sundry credit balances of 5 parties have been cleared in the subsequent years. In the circumstances, the addition made by the A.O. is ill founded and accordingly, the A.O. is directed to delete the same. 4. Aggrieved by the order of the Ld. CIT(A) giving relief to the assessee as above, the Revenue .....

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is no evidence to that extent in accounts maintained with respect to investment from HUF status. c. Whether the Ld. CIT(A) is correct in giving relief of ₹ 40,95,286/- based on the fresh material evidence produced before the Ld. CIT(A), stating that the credits were cleared in the subsequent years through cheques/DDs and cash without verification whether these payments were genuinely received by sundry creditors. d. The Ld. CIT(A) failed to note that some creditors have denied the transact .....

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of scrutiny, even though several opportunities were given ? g. Whether the Ld. CIT(A) is correct in adjudicating the matter based on the fresh material evidence produced for the first time before the CIT(A) without giving an opportunity to the A.O. as per Rule 46A of the I.T. Rules. h. Any other ground that may be urged at the time of hearing. 5. We have heard the arguments of both the sides and also perused the relevant material on record. As regards the first issue involved in ground No. a an .....

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s the source of capital being the funds received from HUF was accepted by him merely on the basis of the submission of the assessee that the HUF is regularly assessed to tax without there being any documentary evidence to support and substantiate the claim of the assessee that the amount of ₹ 5,32,930 was actually received from the HUF and that the same was duly reflected in the accounts of HUF. As rightly contended by the learned D.R., the HUF is a separate entity, different from the asse .....

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to the assessee and since the learned D.R. has also not raised any objection in this regard, we restore this issue to the file of the A.O. for deciding the same afresh, after giving the assessee an opportunity to establish the source of capital claimed to be funds received from HUF on evidence. Ground Nos. a and b of Revenue appeal are accordingly treated as allowed for statistical purposes. 6. As regards the common issue involved in ground Nos. c to g relating to deletion by the Ld. CIT(A) of t .....

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