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2016 (8) TMI 219 - PUNJAB AND HARYANA HIGH COURT

2016 (8) TMI 219 - PUNJAB AND HARYANA HIGH COURT - TMI - Addition under section 68 - source of amount deposited into the bank account - whether the Tribunal was justified in invoking the provisions of section 68 of the Act, although the assessment order and the order of CIT(A) were based on section 69-A? - applicability of section 292-B - Held that:- As rightly held by the CIT(A) the fact that there were several other transactions in Dhruv Parti’s account does not carry the assessee’s case any f .....

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vanced to him by said Dhruv Parti. On facts, therefore, the inference drawn by the authorities under the Act cannot be faulted. In these circumstances, the direction issued by the CIT(A) for the addition of ₹ 30 lacs to be made to the assessee’s return is well founded. - The Tribunal upheld the findings of the CIT(A) on facts. For the reasons already stated these findings cannot be held to be absurd or perverse. - The assessee has not been prejudiced in any manner whatsoever on ac .....

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hat ground. It is open in such circumstances to the Appellate Authority or to CIT(A) or the Tribunal to uphold the addition under the correct section. This ofcourse would be in circumstances where the error has not prejudiced the assessee in any manner whatsoever. At the cost of repetition it is not even the assessee’s case that during the assessment proceedings he was given to understand that the queries were raised by the Assessing Officer and/or that he responded to the same only on the basis .....

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ys in re-filing the appeal is condoned. Application stands disposed of. Income Tax Appeal No. 159 of 2016 (O&M) This is an appeal against the order of the Income Tax Appellate Tribunal confirming an addition by the Assessing Officer under section 69- A of the Income Tax Act, 1961 (for short the Act ) and the enhancement of the appellant s income by the Commissioner of Income Tax (Appeals). The matter pertains to the assessment year 2008-09. 2. The appeal is admitted on the following substant .....

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ut even going into the relevant facts of the case and the nature of addition/disallowance made? c) Without prejudice whether on the facts and in the circumstances of the case, the Tribunal erred in law and on facts in not considering the relevant fact that the AO and CIT(A) has never examined the applicability of Section 68 of the Act on the facts and circumstances of the case? d) Whether on the facts and in the circumstances of the case, the Tribunal erred in law and on facts in upholding the o .....

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e assessment order and the order of CIT(A) were based on section 69-A of the Act. 4. Sections 68 and 69-A of the Act read as under:- 68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous y .....

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d source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: Provided further that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10. Unexplained money, etc. 69A. Where in any financial year the assessee is found to be the owner of any money, bu .....

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ticle may be deemed to be the income of the assessee for such financial year. 5. The appellant filed a return declaring an income of ₹ 4,23,889/- which was processed under section 143(1) of the Act. A questionnaire was issued alongwith a notice under sections 142(1) and 143(2) of the Act. 6. The assessee derives income on account of his share as a partner in two firms and interest from two other firms. During the relevant corresponding financial year, the assessee deposited an aggregate su .....

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in the firm as also copies of sale-deeds of purchase of the lands. It is important to note, however, that he did not furnish a confirmation of the said Dhruv Parti. Nor did he produce Dhruv Parti for examination stating that he was a non-resident and therefore, was not available for examination. The assessee failed to comply with the subsequent requisitions to this effect on the same ground. The Assessing Officer, therefore, requisitioned under section 133(6) of the Act said Dhruv Parti s non-re .....

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ng to ₹ 30 lacs. 7. The Assessing Officer held a sum of ₹ 19.30 lacs to be unexplained money and added the same to the assessee s income under section 69-A of the Act. 8. The CIT(A) noted that the assessee even after more than 4½ years of the receipt of the alleged loan had failed to submit any confirmation from Dhruv Parti that the amounts were advanced to the assessee as a loan. It was held that unless it was otherwise proved the assessee in possession of the money would be .....

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re entirely in agreement with the conclusion of the CIT(A) on facts. The contention on behalf of the assessee that sufficient efforts were not made by the Assessing Officer to trace out Dhruv Parti and to examine his affairs was unwarranted. The contentions on behalf of the appellant are contrary to the normal course of human conduct. It is impossible to believe that an amount of ₹ 30 lacs was lent and advanced by Dhruv Parti to the appellant. There are several facts and circumstances that .....

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er. The assessee has not even established that he tried to trace said Dhruv Parti during all these years. He does not contend that Dhruv Parti never visited India during all these years. Nor does he contend that he ever tried to contact him in relation to the loan. It is equally important to note that it is not even the assessee s case that Dhruv Parti demanded interest on the loans during all these years. 10. As rightly held by the CIT(A) the fact that there were several other transactions in D .....

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ainst the assessee s case that the amounts were lent and advanced to him by said Dhruv Parti. On facts, therefore, the inference drawn by the authorities under the Act cannot be faulted. In these circumstances, the direction issued by the CIT(A) for the addition of ₹ 30 lacs to be made to the assessee s return is well founded. 12. The Tribunal upheld the findings of the CIT(A) on facts. For the reasons already stated these findings cannot be held to be absurd or perverse. In fact a view to .....

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-A of the Act applies only where the amount sought to be added is not recorded in the books of accounts, if any, maintained by an assessee for any source of income and the assessee offers no explanation about the nature and source of acquisition of the money. Both the conditions must exist for the applicability of section 69-A of the Act. Section 69-A is inapplicable as the amounts received by the assesssee were entered in his books of account. The Tribunal, however, justified the addition not u .....

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n being mentioned in the assessment order and in the order of CIT(A). All the jurisdictional facts for invoking section 68 existed. More importantly, the enquiries made by the Assessing Officer in the assessment proceedings were not stated to be under any particular provisions of the Act. The enquiries were merely factual relating to the source of acquisition of the money. Had the Assessing Officer on the very same facts mentioned section 68 instead of section 69-A it would not have been open to .....

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instance it had been found in the assessment proceedings that the amounts received by the assessee had not been recorded in his books of accounts, the additions could have been made under section 69-A of the Act. Merely because it was found on such facts that the money was recorded in the assessee s books of accounts it would not exclude the operation of section 68 of the Act. That is an independent ground/provision open to be invoked by the authorities. 16. The assessee has not been prejudiced .....

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