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2016 (7) TMI 4 - ITAT DELHI

2016 (7) TMI 4 - ITAT DELHI - TMI - Addition u/s 69A - Held that:- Once the assessee had offered an explanation fortified with documentary evidences and further corroborated by a third party, the onus reverted to the Revenue to prove that the facts were not correct. The Department was patently wrong in drawing an adverse inference based upon suspicion or perception of culpability and hence the addition cannot be sustained. The addition is accordingly deleted. - Decided in favour of assessee. - I .....

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alled the Act ). 2. The facts, in brief, are that the assessee had filed his return of income for the impugned assessment year declaring a total income of ₹ 5,38,177/-. The return was initially processed u/s 143(1) of the Act and was later picked up for scrutiny as an outcome of a search action carried out in the case of MDH group on 22.11.2006. The assessee was an Executive Director of the company M/s Mahashian Di Hatti (P) Ltd. (for short MDH) and he was also subjected to the search moun .....

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₹ 1,10,000/- and LIC policy payment receipts amounting to ₹ 5,40,000/- were found and seized. It is seen from the records that all other items recovered from the locker barring cash of ₹ 8,50,000/- have already been offered to taxation during assessment year 2001-02 to assessment year 2007-08 i.e. in the return of income in respect of each assessment year falling under the provisions of section 153A(a) of the Act. 2.1 Regarding cash of ₹ 8.50 lacs, it has been the assess .....

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ound at the time of the search. Accordingly, the Assessing Officer made an addition of ₹ 8.50 lakhs u/s 69A of the Act as unexplained cash. The matter travelled up to the ITAT and the F Bench of ITAT, New Delhi vide order dated 27.04.2012 set aside the issue of ₹ 8.50 lakhs to the file of the Assessing Officer with the direction to examine the assessee s claim by summoning the Director of M/s PCSL and investigate the matter in detail and decide the issue after affording the assessee .....

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said company had entered into an agreement to purchase a flat for which ₹ 11,00,000/- in cash were paid to the assessee by it. (b) That due to the following reasons it is unbelievable that M/s Patliputra Credit & Securities Ltd. did not have a bank account of its own: i. that it was a public limited company which had already gone public with a public issue of ₹ 10,07,30,000/-; and ii. that it held shares worth ₹ 51,79,705/- most of which are quoted on stock exchange, which .....

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38,789/- it is unacceptable that the company should make advance payment of ₹ 11,00,000/- in cash and not through cheque. iii. That the said company did not enter into any formal agreement to sell or did not obtain any authentic cash receipt while advancing the sum of ₹ 11,00,000/- to the assessee. Had there been any such agreement, the relevant document would have been found during the search operation. 2.3 In second round of appeal before the Ld. CIT (A) also, the assessee failed a .....

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by raising doubts on the statement of its director, Mr. Anil Sanghi, recorded by him and ignoring the documents furnished by Mr. Sanghi in support thereto before the AO. It was submitted that consequent to the search and seizure proceedings undertaken on M/s Patliputra Credit & Securities Ltd. in November, 1996, it has been regularly assessed to income-tax in Central Circle-23, New Delhi till date and the returns of income of the assessee for AYs 2007-08 and 2008-09 as well as those filed by .....

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Mr. Rakesh Kumar Gupta (the appellant) in October, 2006. (b) Return of income filed by M/s Patliputra Credit & Securities Ltd. for the A Y 2007-08. (c) Assessment Order dated 31/08/09 of M/s Patliputra Credit & Securities Ltd. passed u/s 143(3) by the DC1T, Central Circle-23, New Delhi. The Ld. AR submitted that during the assessment proceedings of M/s Patliputra Credit & Securities Ltd. for the AY 2007-08, a specific query was raised by the AO regarding advance of ₹ 11,00,000 .....

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curities Ltd. passed u/s 143(3) by the AC1T, Central Circle-23, New Delhi. 3.2 The Ld. AR submitted that, the factum of advancing ₹ 11,00,000/- in cash to the appellant by M/s Patliputra Credit & Securities Ltd. in October, 2006 was duly scrutinized by the AO of that company in the assessment proceedings undertaken u/s 143(3) of the Act for AY 2007-08 and it stood accepted by him. Therefore, it cannot be doubted now merely on preponderance of probabilities by the assessee s AO. It was .....

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rred to a figure of ₹ 8,91,38,789/- in the balance sheet of M/s Patliputra Credit & Securities Ltd. and stated that the same represented the closing balance of Cash and Bank as on 31/03/06, thus, challenging the veracity of the statement given by Mr. Anil Sanghi that the company did not have any bank account as on that date. Whereas it can be verified from the said balance sheet that this figure of ₹ 8,91,38,789/- was the amount of Income Tax Deposit under Appeal and not cash and .....

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sh to close the deal. Placing heavy reliance on the orders of the authorities below, the Ld. DR submitted that on facts, the addition deserved to be upheld. 5. We have heard the rival submissions and have also perused the records. It is seen from the impugned order that the Ld. CIT (A) has upheld the addition on mere suspicion. The Ld. CIT (A) has observed on page 10 that the entire case appears to have been manipulated in such a fashion as to make the entire sequence of events look genuine and .....

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d both by the assessee as well as M/s PCSL were not reliable. The Ld. AR has submitted a paper book which contains 39 pages of documents/evidences submitted by the assessee before the lower authorities. However, there is no specific finding given by the Ld. CIT (A) on these documents. It is seen from the records that Mr. Anil Sanghi, Director of M/s PCSL, has accepted in his statement recorded on oath by the Assessing Officer on 12.11.2012 that the company had given an advance of ₹ 11,00,0 .....

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t flat are also on record and they support the contention of the assessee and it is indeed surprising that in the face of such huge amount of evidence, the Ld. CIT (A) chose to adjudicate the issue on a fictional preponderance of probabilities without bringing any cogent material on record to contradict the claim of the assessee. Even in the appeal before us, the Department could not point out any defect in the evidences/documents but simply relied on the orders of the authorities below. The Hon .....

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provision is that the initial onus lies upon the revenue to raise a prima facie doubt on the basis of credible material. The onus, thereafter, shifts to the assessee to prove that the gift is genuine and if the assessee is unable to proffer a credible explanation, the Assessing Officer may legitimately raise an inference against the assessee. If, however, the assessee furnishes all relevant facts within his knowledge and offers a credible explanation, the onus reverts to the revenue to prove th .....

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