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2015 (11) TMI 542 - ITAT DELHI

2015 (11) TMI 542 - ITAT DELHI - TMI - Protective assessment - Addition on investment in land from undisclosed income - CIT(A) deleted the addition - Held that:- CIT(A) noted that the appellant/assessee was able to convince the AO that it had only made cheque payments to M/s Om Metal and no cash payment has been made by the assessee company. The CIT(A) also noted that the cash payment has been made by M/s Om Metal and the property was not purchased in the name of present assessee and as such the .....

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AO accepts that the cash payment has been made by M/s Om Metal then protective addition in the hands of assessee is not sustainable and the same was correctly deleted by the first appellate authority i.e. CIT(A). We are unable to see any valid reason to interfere with the impugned order and we uphold the same on this ground. - Decided against revenue.

Addition u/s 68 - CIT(A) deleted the addition - Held that:- While we analyse last operative paras of CIT(A), it is amply clear that the .....

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the case of NKPH, the AO has not disturbed the returned amount and the same has been accepted. In view of above noted facts, the CIT(A) rightly concluded that the amount added by the AO was received by the assessee from NKPH and when there is no adverse inference in the case of NKPH, the same cannot be held as unexplained in the case of assessee. Hence, we are in agreement with the conclusion of the CIT(A) that the protective addition in the hands of assessee is not sustainable and he rightly d .....

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se of the assessee. Hence, CIT(A) was correct in deleting the protective addition in the case of the assessee and we are unable to see any valid reason to interfere with the same and we uphold the conclusion of the CIT(A) on this sole issue. - I.T.A. No. 6455/Del/2013, I.T.A. No. 6456/Del/2013 - Dated:- 14-10-2015 - Shri N. K. Saini, Accountant Member And Shri Chandra Mohan Garg, Judicial Member For the Appellant : Shri Atiq Ahmad, Sr. DR, Gajanand Meena CIT DR For the Respondent : None ORDER Pe .....

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dition of ₹ 2,26,00,000/- made by AO on account of investment in land from undisclosed income. (3) On the facts and in the circumstances of the case, the Commissioner of Income Tax (A) has erred in law and on facts in deleting the addition of ₹ 63,00,000/- made by AO Under Section.68 of the I T Act on protective basis. 3. At the outset, it is relevant to mention that when the appeals were called for hearing, neither the assessee nor his representative appeared before us nor any adjou .....

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cash payment of 34.70 crores for purchase of land is taken at ₹ 2.26 crores which was consideration as investment in land from undisclosed income. Hence, to protect the interest of the revenue, a protective addition was made in the hands of the assessee and substantive addition was made in the hands of M/s Om Metal Developers Private Limited. Ld. DR vehemently contended that the CIT(A) deleted the addition without any justified reason, hence, the same may be set aside by restoring that of .....

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12006 was found & seized from office premises of Shiv-Vani Group at F-315, Ground Floor, Lado Sarai, New Delhi vide page 135 to 146 of annexure A -5 of party B-l4, Page 4 of annexure A-I seized from residence of R.K. Somani from his Malviya Nagar residence confirms that 10 acre of land was purchased by the Om Metal Group & Metro Management Services Private Limited (of Shiv Vani Group) at the rate of 5 crore per acres. However, only 10 acres was purchased for a consideration of ₹ 20 .....

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70 crores comes to 2.26 crores approx. 4.2.2 The AR had submitted before the AO that the actual purchase of the land was not done by the appellant. The purchaser was OM Metal Developers Pvt. Ltd. The amount paid by the appellant was all in cheque and that the same has been duly accounted in its books. It was submitted before the AO that the appellant had only paid ₹ 5.10 crores as loans to the said OM Management Services Pvt. Ltd. towards its share in the property. The appellant also submi .....

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assessee company is having only 6.5% share for which it had paid the amount of ₹ 5.10 crores through banking channel for its share. The 6.5% share of ₹ 55 crore works out to ₹ 3.58 crore (Approx) and even if the amount paid of ₹ 55 crores & advance of another 10 acre of land for ₹ 20 crores (Approx) is considered the total works out to ₹ 75 crores and the of land for ₹ 20 crores (Approx) is considered the total works out to ₹ 75 crores and the .....

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ough cheque and the balance amount of ₹ 34.70 crores (i.e. 55 crores - 20.30 crores has been paid in cash by the purchaser (Mls. Om Metal Developers Private Limited). The assessee company M/s. Metro Management Services Private Limited has 6.5% shares in M/s. Om Metal Developers Private Limited. The share of the assessee company in cash payment comes to ₹ 2.26 crores approximately. 4.2.4 The AO has however, made an addition of ₹ 2.26 crores on protective basis in order to protec .....

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h payment" to the appellant company. Further the AO also does not say that the cash payment was made by the appellant company. The AO merely says that the appellant's shares in the cash payment comes to ₹ 2.26 crores. 4.2.6 It is also noted that even if the amount paid, including the cash portion, on the above transaction is taken at ₹ 75 crores which includes ₹ 20 crore advance, for another 10 acre of land, the appellant's share in the said amount works out to muc .....

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AO that it had only made cheque payments to M/s Om Metal and no cash payment has been made by the assessee company. The CIT(A) also noted that the cash payment has been made by M/s Om Metal and the property was not purchased in the name of present assessee and as such there is not enough evidence to allege cash payment to the assessee and the AO also does not say that cash payment was made by the assessee. Furthermore, the CIT(A) also concluded that even if the amount paid, including cash porti .....

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see any valid reason to interfere with the impugned order and we uphold the same on this ground. Accordingly, ground no. 1 of the Revenue being devoid of merits is dismissed. Ground No. 2 of the Revenue 7. Apropos ground no.2 of the Revenue, we have heard arguments of ld. DR and also carefully perused the relevant material placed on record before us. Ld. DR submitted that the AO noticed that as per facts brought on record by the AO, Shri N.K. Jain was an entry operator who was involved in givin .....

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ay kindly be set aside by restoring that of the AO. 8. On careful perusal of the impugned order, we noted that the CIT(A) granted relief to the assessee by observing as under:- 4.3.4 It is noticed that the amount mentioned in the said page of the annexure against the appellant's name is very much supported by credit entries III the appellant's bank account. At page 21 of their paper book the appellant has enclosed bank statement of the appellant maintained with ABN Ambro Bank (produced b .....

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14 are not having any cash element not accounted in the assessee's books. It has been further submitted that since Mr. Jain was maintaining the bank accounts at Kolkota, his name appears at the top of the page. However the amounts written against various names of the companies are not cash transactions but bank transactions duly reflected in the books and explained to the AO with all supporting documents during the assessment proceedings. 4.3.6 I find that none of the credit entries relate t .....

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when he states that "unexplained transaction materialized through banking channel". However he holds that the source is not explained. 4.3.7 It is observed that in the assessment proceedings the complete books of accounts, bank statements & transactions were explained to the AO and no adverse inference was drawn by the AO on the books of accounts & transactions mentioned therein. 4.3.8 The AO has added ₹ 63 Lakhs. The AR has submitted that the same represents share appli .....

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also submitted before the AO confirmation from NKP holding Pvt. Ltd., the copy of which has also been submitted in the paper book at Page No. 39. The AR has also enclosed copy of assessment order of NKP holding Pvt. Ltd. for A.Y. 2007-08 passed by the same assessing officer on 28.03.2013 and submitted that in the said order, the AO has not disturbed the total income returned by the AO. 4.3.9 Thus it is clear that the amount added by the AO was received from NKP Holdings Pvt. Ltd. a group concern .....

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he same in the surrendered income. However, the details found at page 56 of B-14/A-14 (being seized material) were not having any cash element not accounted in the assessee s books. The CIT(A) has further observed that during the assessment proceedings, the complete books of accounts, bank statement and transactions were explained to the AO and no adverse inference was drawn by the AO therein. The CIT(A) explicitly held that none of the credit entries relate to any cash deposit and they are eith .....

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. (NKPH) on three different dates and source of the same was fully explained as the bank account was maintained by Shri N.K. Jain in his name which appeared in the copy of the bank statement. These entries were very well reflected in the bank statement of account with Punjab National Bank. The CIT(A) also noted that confirmation from NKPH was submitted before the AO during assessment proceedings and from the assessment order for AY 2007-08 passed in the case of NKPH, the AO has not disturbed the .....

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ground no. 2 of the revenue being devoid of merits is also dismissed. ITA No. 6456/Del/2013 of the Revenue 11. The sole ground raised by the Revenue in this appeal reads as follows:- (4) The order of ld. CIT(A) is not correct in law and facts. (5) On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition of ₹ 5,00,00,000/- made by the AO u/s 68 of the I.T. Act. 12. Ld. DR submitted that the AO noticed that transactions at page 56 .....

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in making protective addition in the hands of the assessee as it was a beneficial owner of these transactions. Ld. DR vehemently contended that the AO was quite justified in making impugned addition pertaining to the alleged transaction related to the assessee pertaining to assessment year under consideration and rightly treated the same as unexplained transaction materialised through banking channel wherein source was not properly explained. Ld. DR lastly submitted that the impugned order may .....

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nking channel wherein source was not properly explained. Ld. DR lastly submitted that the impugned order may be set aside by restoring that of the AO. 15. On careful consideration of above submissions of the Revenue, at the outset, from bare reading of the impugned order, we noted that the CIT(A) granted relief to the assessee by observing as under:- 4.2.4 It is noticed that the amount mentioned in the said page of the annexure against the appellant's .name is very much supported by credit e .....

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(BRABDURKE ROAD) 50,00,000.00 05-09-2007 By CLEARING - 454962 (BRABDURKE ROAD) 50,00,000.00 06-09-2007 By CLEARING - 454966 (BRABDURKE ROAD) 50,00,000.00 06-09-2007 By CLEARING - 454967 (BRABDURKE ROAD) 50,00,000.00 06-09-2007 By CLEARING - 454968 (BRABDURKE ROAD) 50,00,000.00 06-09-2007 By CLEARING - 454969 (BRABDURKE ROAD) 50,00,000.00 07-09-2007 By CLEARING - 454970 (BRABDURKE ROAD) 40,00,000.00 4.2.5 It has been explained that wherever there was cash element in the transaction with Mr. lain, .....

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upporting documents during the assessment proceedings. 4.2.6 I find that none of the credit entries relate to any cash deposits. They are all either bank-to-bank transfers or cheque deposits. The narrations in the bank account give the details of the account nos from where the amount has been received or the cheque numbers. I. also observe that there appears to be no dispute about amounts having been received in the appellant's bank account through banking channels. The AO also admits in the .....

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d therein. 4.2.8 The AO has added ₹ 5,00,00,000/-. The AR has submitted that the same represents share application amount received from group concern which is very much assessed by the same AO. The amount of ₹ 5,00,00,000/- was received from the Macro Leafin Pvt. Ltd. on 10 different dates. Since the bank account was maintained by Mr. N. K. Jain his name appears at the top of the page. The source of the amount is thus explained fully. Further the entries to this effect are also avail .....

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d by the AO. 4.2.9 Thus it is clear that the amount added by the AO was received from Macro Leafin Pvt. Ltd. a group concern which is also assessed to tax by the same Assessing Officer. In the assessment order of Macro Leafin Pvt. Ltd. there is no adverse finding of the AO. Considering these facts, there is no ground for holding the amount as unexplained. Thus ₹ 5,00,00,000/- added on protective basis is hereby deleted. 16. In the light of conclusion of the AO and observations of the first .....

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