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2016 (5) TMI 852 - ITAT JAIPUR

2016 (5) TMI 852 - ITAT JAIPUR - TMI - Addition on account of undisclosed income u/s 69 - CIT(A) has not provided any opportunity to the assessee before using coterminous power given under the law to him - Held that:- Recently, the Hon'ble Supreme Court in the case of Andaman Timber Industry Vs. Commissioner of Central Excise [2015 (10) TMI 442 - SUPREME COURT] has held that not allowing the assessee to cross examine the witnesses by adjudicating the authority, though the statement of those witn .....

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tal (CA) For The Revenue : Smt. Neena Jeph (JCIT) ORDER PER T.R. MEENA, A.M. This is an appeal filed by the assessee against the order dated 25/01/2012 of the learned CIT(A), Kota for A.Y. 2004-05. The effective grounds of appeal are as under:- 1. On the facts and in the circumstances of the case the Ld. CIT(A) has grossly erred in upholding the action of Ld. AO in initiating the action u/s 147 of the Income Tax Act, 1961, without making any enquiries/ investigation upon alleged facts/material r .....

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rred in confirming the addition of ₹ 76,00,000/- made on account of undisclosed income u/s 69 in arbitrary manner without properly considering the submission made and evidence adduced and has further ignored the effective compliance made by the assessee by submitting the all possible details, thus the addition of ₹ 76,00,000/- uphold by the Ld. CIT(A) deserves to be deleted. 2.1 That the Ld. CIT(A) has further erred in not appreciating the fact that Ld. AO has not allowed the opportu .....

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76.00 lacs arbitrarily. 2. Ground Nos. 1 and 3 of the appeal are not pressed by the ld AR, therefore, we dismiss the same as not pressed. Accordingly, ground Nos. 1 and 3 of the appeal are dismissed. 3. The 2nd ground of appeal is against confirming the addition of ₹ 76.00 lacs made on account of undisclosed income u/s 69 of the Income Tax Act, 1961 (in short the Act). The assessee is in toll collection business. The firm has filed its return on 31/03/2005 for A.Y. 2003-04 at ₹ 16,50 .....

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U/s 148 of the Act was issued on 02/4/2008. The assessee raised objection, which has been addressed by the Assessing Officer as per Hon'ble Supreme Court direction in the case of G.N.K. Driveshafts (India). Thereafter the case was scrutinized U/s 143(3) of the Act by the Assessing Officer. The ld Assessing Officer observed that on verification of this bank account, it is found that the assessee had deposited ₹ 50 lacs on 28/6/2003 and on 01/7/2003 ₹ 26.00 lacs. Thereafter the sam .....

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the copy of seized material. He was directed to complete the formality for granting of the copy of the seized material. The ld Assessing Officer provided copy of seized material on 24/12/2009. It was submitted by the assessee before the ld Assessing Officer that the assessee took the loan from M/s Abhaya Investment Pvt. Ltd. at ₹ 76.00 lacs, which was repaid on 09/09/2003 through 8 demand drafts of 9.5 lacs each, which was prepared from the PNB, Hindaun City. After maturing the FDR, which .....

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had been provided by the Assessing Officer after repeated requests and copy provided of the statement of Shri Gajendra Porwal was also not legible. There also copy of account of Shri Gajendra Porwal has not been provided and no inspection was allowed to the assessee. He was also not allowed cross examination of Shri Gajendra Porwal including bank manager of Karnataka Bank, which is not as per law. After considering the assessee s reply, the ld Assessing Officer held that whatever objection raise .....

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ded accommodation entry to various parties. He collected the cash from these parties and deposited in the bank account, charged commission on it and issue cheque to desire parties. The ld Assessing Officer further referred how this operation is carried out between the entry provider and entry seeker. It is further observed that the assessee did not want to complete the assessment by the ITO Ward 3, Sawai Madhopur, therefore, he made request U/s 127 to the ld CIT(A), Kota to transfer the file to .....

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69 of the Act. 4. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had confirmed the addition by observing that there was a search seizure operation in the case of Shri Gajendra Porwal and others. I was noticed that this was an entry provided by M/s Abhaya Investment Pvt. Ltd. after receiving equal amount of cash from assessee. An affidavit, of Shri Gajendra Porwal stating the above facts, was obtained by ADIT(Investigation), which .....

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he burden to prove the genuineness of the cash creditor was on the assessee and as it failed to discharge even its initial onus. Thus, he confirmed the addition. 5. Now the assessee is in appeal before us. The ld AR of the assessee has submitted that third party statement and material gathered during the search had been used in making addition by the Assessing Officer and confirming addition by the ld CIT(A). The assessee had taken loan of ₹ 76.00 lacs from M/s Abhaya Investment Pvt. Ltd. .....

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B bank of ₹ 80.25 lacs in the name of Resident Engineer Rajasthan State Road Development Corporation matured in the month of July, 2003. Thus, once the assessee had repaid the loan, the account of the aforementioned company i.e. M/s Abhaya Investment Pvt. Ltd. got squared up in the books of account of assessee. It has been alleged by the Assessing Officer that an amount of ₹ 26.00 lacs has been withdrawn on 12/09/2003 through cheque and on 13/09/2003, an amount of ₹ 50.00 lacs .....

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e Hon ble ITAT Jaipur Bench decision in various cases i.e. ITA Nos. 1351 to 1356/JP/2008 order dated 31/03/2010 and ITA No. 885 and 1013/JP/2008 order dated 28/11/2008. The appeals filed before the Hon ble Rajasthan High Court against the order of the Hon ble ITAT has been held that no substantial question of law arises in case of appeal filed in the case of CIT Vs A. Lalpuria Constructions Pvt. Ltd., Jaipur (total three appeals) vide order dated 25/2/2013. He has further drawn our attention on .....

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Abhaya Investment Pvt. Ltd.. Thereafter, he got accommodation entry. The ld CIT(A) had discussed situation-1 in his order and held this addition is not justified but he having coterminous power and confirmed the addition by treating this loan as cash creditor, which has not been proved by the assessee as onus cast on him. It is also not as per law as the ld CIT(A) has not provided any opportunity to the assessee before using coterminous power given under the law to him. The identical case has a .....

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ansaction in question was managed by him for beneficiaries on charging of commission are not worth relying in absence of his being cross examined by the assesses and in absence of any supporting evidence especially when those admissions by Shri Porwal were suitable to his own interest. It is also surprising that no incriminating document was found during the course of search at the premises of Shri Gajendra Porwal to corroborate his statements about indulging in arranging accommodating entries w .....

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The contention of the A/R is considered. It appears that the sole basis for the addition is statement of Sh. Gajenmdra Porwal recorded u/s 132(4) during the course of search in his own case and his affidavit dated 1.11.2006. Based on the statement of sh. Gajendra Porwal the AO inferred that as Sh. Gajendra Porwal was a entry provider and the company M/s. JTFSPL was also floated by him had not worth at all, transfer of share of M/s. Gorbandh Marbles Pvt. Ltd. and M/s. Kamod Commercial Services P .....

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cash was deposited in its bank account. That credit worthiness of M/s. JTFSPL and genuineness of the transaction could not be proved. The receipts of ₹ 41,50,000/- was therefore added as unexplained credit u/s 68 of IT Act. From the observation of the AO it is clear that he had no other material or evidence except the statement of Sh. Gajendra Porwal. For considering the credit entries as unexplained, the AO was supposed to prove that the amount credited is the appellant s own money. Also .....

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nt or its beneficiaries. In fact the AO has not quoted any specific question and its answer given by Sh. Porwal with reference to the transaction under reference. Sh. Porwal in his statement also admitted that he provided entry for a commission received in cash but in the present case the AO has not given any finding, how much commission was received by Sh. Porwal from the appellant for this transaction. No such entry for receipt of commission was found in the case of Sh. Gajendra Porwal nor any .....

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much after the search action has confirmed his earlier statement recorded u/s 132(4). Thus the entire addition is based on the statement of Sh. Porwal recorded u/s 132(4). Not providing the opportunity of cross examination of Sh. Porwal is not justified. No material was borne out from the statement of Sh. Gajendra Porwal which justifies the additions. /Except statement there is no other material to support that the transaction was an accommodation entry. The possession of shares in the hands of .....

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concerned the AO has not established that the money paid by JTFSPL to the appellant was the appellant s money. Copies of the share certificates were also filed along with the written submission which proves that the appellant had 415000 shares of M/s. Gorbandh Marbles Pvt. Ltd. and M/s. Kamod Commercial Services Pvt. Ltd. and on sale the assesses were also transferred in the name of JTFSPL and the amount was received by account payee cheque. Thus the genuineness of the transaction is also prove .....

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