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Gautambhai A. Parmar, 6, Pooja Versus Jt. CIT (OSD) , Circle-5, Ahmedabad and ACIT, Circle-5, Ahmedabad Versus Gautambhai A. Parmar

2016 (9) TMI 1043 - ITAT AHMEDABAD

Validity of the initiation of the proceedings under Section 158BD - Held that:- Taking recourse with the block assessment u/s 158BD/158BG of the Act the preceding conditions are that firstly satisfaction must be recorded by the Assessing Officer of the searched person that any undisclosed income belongs to any person other than the person who has been searched u/s 132 of the Act and secondly documents or assets or books of accounts seized in relation to such other persons have been handed over t .....

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ent of a person other than the searched person, Assessing Officer completely failed to satisfy the provisions of section 158BD of the Act. We are, therefore, of the view that the impugned assessment order for the block period passed under section 143(3),r.w.s. 254 r.w.s. 158BD of the Act needs to be quashed in the given facts and circumstances of the case wherein no satisfaction has been recorded as per the provisions of section 158BD of the Act before framing the block assessment. We quash the .....

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ctices of fabricating books of accounts and depicting unrealistic financial data with a view to cheat the public and, therefore, deserves no mercy. We find no reason to interfere with the order of ld. CIT(A). The appeal of the assessee is dismissed on this issue. - Unaccounted investment in shares - Held that:- Addition has been made in the block assessment of the assessee as well as on protective basis in the case of Renco Gears Ltd. Further Assessee has failed to substantiate with any mate .....

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d Mrudula Shah. Surprisingly these two persons have denied the ownership of the shares. In such situation complete transaction looks doubtful. From going through the facts we are of the view that addition was rightly made for unaccounted investment - Decided in favour of revenue - Investment in machinery - Held that:- Assessing Officer has completely ignored the facts so much so that all necessary details including purchase bills containing invoice no., date and amount, details of payment, w .....

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/2013 - Dated:- 8-8-2016 - Shri S. S. Godara, JM, & Shri Manish Borad, AM. For The Appellant : Shri G. C. Pipara, AR For The Respondent : Shri Jagdish, CIT, DR ORDER PER BENCH Out of the five appeals, four appeals have been filed by the assessee, one appeal by the Revenue and one Cross Objection by the assessee. 1. Appeal of assessee in IT(SS)A No.15/Ahd/2012 for block assessment period 01.04.1985 to 23.11.1995 is directed against assessment order u/s 143(3) r.w.s. 254 r.w.s.158BD of the IT .....

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TA No.1601/Ahd/2013 and Cross Objection of assessee are filed against order of ld. CIT(A)-XI, Ahmedabad, dated 15.03.2013 in appeal no.CIT(A)-XI/425/JCIT, Cir- 5/11-12 passed against order u/s 143(3) r.w.s. 254 of the Act framed on 27.12.2011 by Jt. CIT, Circle-5, Ahmedabad. 4. Since the assessee in all these appeals and Cross Objection is the same and issues are similar these were heard together and are being disposed of by this common order for the sake of convenience. 5. First we take up appe .....

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quashed. 3. The Id. A.O. has erred in considering an amount of ₹ 10,29,001/- as unexplained credit/loan. There being no unexplained credit, addition is based on surmises and conjectured and same has been made by the A.O. without verifying facts and therefore, entire addition of ₹ 10,29,001/- is required to be deleted. 4. The Id. A.O. has also erred in considering an amount of ₹ 3,00,000/- as unexplained deposit in bank. Since the source of the same was explained and found appea .....

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unexplained deposits in regular bank account. In view of the source as explained and the same being regular transaction in regular bank account, addition in the Block Assessment requires to be deleted. 7. The Id. A.O. has also erred in considering an amount of ₹ 1,85,00,000/- as deposit in Canara Bank. There being no such deposit and further addition has been made on basis of seized paper, copy of which having not been provided, the addition is bad in law and thus required to be deleted. .....

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n considering an amount of ₹ 1,87,59,170/- being deposit in the bank as unexplained. In view of explanation furnished the addition of ₹ 1,87,59,170/- is required to be deleted from Block Assessment. 11. The Id. A.O. has also erred in considering ₹ 24,45,500/- as deposits in bank as unexplained and undisclosed. In view of explanation furnished, there being no undisclosed deposits, addition of ₹ 24,45,500/- requires to be deleted. 12. The Id. A.O. has also erred in consider .....

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and details furnished, the addition of ₹ 23,22,000/- is bad in law and required to be deleted. 15. The Id. A.O. has also erred in considering an amount of ₹ 25,00,000/- being amount withdrawn from Renco Finance Ltd. as unexplained. In view of the facts and details furnished, the addition of ₹ 25,00,000/- is bad in law and thus required to be deleted 16. The Id. AO. has erred in considering ₹ 6,20,000/- for the purpose of addition without explaining the nature of transacti .....

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from the facts and thus required to be deleted. 18. The Id. A.O. has also erred in considering an amount of ₹ 9,00,000/- as unexplained investment in purchase of a car. There being no such investment, the addition of ₹ 9,00,000/- is required to be deleted. 19. The Id. A.O. has also erred in considering an amount of ₹ 28,75,000/- on adhoc basis as unexplained investment in two vehicles. There being no such investment made by the appellant, the entire addition based on surmises a .....

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ng total income at ₹ 46,67,787/-. Notice u/s 158BD of the Act was issued on 4/7/1997 and duly served on the assessee on 2/9/1997. Assessment u/s 143(3) r.w.s 254 r.w.s.158BD/158BG of the Act was completed on 27/12/2011 at total income of ₹ 7,32,05,849/- for the block period. As it was an ex parte order framed u/s 158BD r.w.s. 144 of the Act, the Tribunal vide its order in IT(SS)A No.266/Ahd/2002 dated 31.01.2011 set aside the same and restored the issue back to the Assessing Officer. .....

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r.w.s. 254, r.w.s. 158BD dated 27/12/2011 is bad in law as the same has been passed without prior approval of the C.I.T. and thus required to be quashed. 2. The impugned order of assessment is also bad in law, as there being no satisfaction recorded as required under section 158BD, the present assessment proceedings are bad in law and thus entire assessment required to be quashed. 9. Ld. AR submitted that the order passed under section 143(3) r.w.s. 254 r.w.s. 158BD/158BG of the Act on 27/12/201 .....

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d. AR submitted that during the course of assessment proceedings request was made by assessee to provide him with the copy of the satisfaction note recorded by the Assessing Officer having jurisdiction over the search person mentioning therein the details of assets/documents pertaining to the assessee handing over the same to the Assessing Officer having jurisdiction over the assessee. However, no such copy of satisfaction for the initiation of proceedings u/s 158BD/158BG of the Act was provided .....

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as to be completed within a period of one year from the end of the month in which the notice under this Chapter is served. Ld. AR referred and relied on the judgment of Hon. Supreme Court in the case of Manish Maheshwari vs. ACIT 289 ITR 341 (SC), judgment of Hon. Jurisdictional High Court in the case DCIT vs. Lalitkumar M. Patel 222 Taxman 96 (Guj) upholding the order of ITAT in IT(SS)A 61/Ahd/2007 and the order of the Tribunal in IT(SS) 1, 2 & 3/Ahd/2011 in the case of Shailesh R. Daxini v .....

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ct submitted that the authority competent to make block assessment cannot pass the order without previous approval of the Commissioner or Director of Income-tax. This specific condition has not been adhered to by the Assessing Officer while framing de novo assessment order u/s 143(3) r.w.s. 254 r.w.s. 158BD/158BG of the Act. In support of his contention ld. AR referred and relied on the judgment of Hon. Supreme Court and the decisions of the Tribunal wherein it has been held that once the assess .....

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y for some reason or other with a direction to the Assessing Officer to redo them, the reassessments done accordingly would simply take place of the original assessments and should, therefore, possess all the characteristics of the original assessments. In such cases, therefore, there should be no reason why these reassessments should also not be considered as regular assessments, especially when these reassessments are required to be done essentially in accordance with the provisions of Section .....

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er the below mentioned decisions, once the original assessment order is set-aside by an appellate authority, it wipes out the said original order. ITO v. Seohu Buchiah Settv T19641 52 ITR 538 (SC) Therefore if a debt is to cease to exist it must be because the source from which it sprang, namely, the original order, has been annihilated by the appellate order annulling it, In fact section 31(3)(a) contemplates an annulment of the original assessment order itself; the demand under section 29 or s .....

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fficer vs Kalvan Kumar Roy Trust (20011 75 ITD 36 (Cal) I have heard the parties and considered their rival submissions. An apparent look of the first two orders of D.C.(A) of even date 28-4- 1988 show that the assessments appealed against were set aside. This is because in both the orders the last sentence is "In the result the assessment is set aside". / find myself in agreement with the assessee's contention that the term "set aside" simplicitor may mean nothing but an .....

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tio and bad in law. 11. On the other hand, ld. DR could not place anything new before the Tribunal. When the question was proposed about furnishing of approval of CIT before proceedings u/s 143(3) r.w.s. 254 r.w.s. 158BD/158BG of the Act, ld. DR denied to have any such proof of approval being granted by the CIT and similarly could not throw any light on the issue for supplying the satisfaction note. 12. We have heard the rival contentions and perused the material on record and judgments and deci .....

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relating to the director of the company i.e. assessee Shri Gautam A. Parmar were also seized and the same were handed over to the Assessing Officer having jurisdiction over the assessee on 4.7.1997. During the course of assessment proceedings assessee requested for a copy of the satisfaction note recorded by the Assessing Officer which needs to be done before initiating proceedings u/s 158BD of the Act but the request of the assessee was not accepted by Assessing Officer with specific observati .....

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aj Group of cases and (ii) during the assessment proceedings of Jayraj Group no satisfaction was recorded by the AO of Jayaraj Group but reasons was recorded by the AO of the assessee for issuing of notice under Section 158BD. In support of his contention, he relied upon the decision of the Hon ble Apex Court in the case of Manish Maheshwari Vs. ACIT, 289 ITR 341 and Special Bench of the ITAT in the case of Manoj Agarwal Vs. DCIT, 113 ITD 377. The learned DR, on the other hand, relied upon the o .....

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provisions of section 158BD has been considered by the Hon ble Apex court in the case of Manish Maheshwari (supra). At Page No.348 of the report, Their Lordships held as under: The condition precedent for invoking a block assessment is that a search has been conducted under section 132, or documents or assets have been requisitioned under section 132A. The said provision would apply in the case of any person in respect of whom search has been carried out under section 132A or documents or assets .....

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been handed over to the Assessing Officer having jurisdiction over such other person ; and (iii) the Assessing Officer has proceeded under section 158BC against such other person. The conditions precedent for invoking the provisions of section 158BD, thus, are required to be satisfied before the provisions of the said Chapter are applied in relation to any person other than the person whose premises had been searched or whose documents and other assets had been requisitioned under section 132A .....

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tiated. It cannot be said that such jurisdiction can be assumed without recording satisfaction. It has tote noted that the proceedings under section 158BC are against the person searched and if in the course of such proceeding the Assessing Officer assessing the person searched comes across material indicating the presence of undisclosed income in the hands of the person not searched, there has to be a provision for making a similar assessment in the case of the other person. As section 158BC re .....

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his can be recorded only and only in the course of the section 158BC proceeding and nowhere else. It is the Assessing Officer assessing the person searched who goes, through the seized material and comes to a decision as to whether there is any undisclosed income unearthed as a result of search, if so its nature and to whom it belongs. If the said undisclosed income belongs to the person searched that is the end of the matter. If, on the other hand, the material examined shows that the undisclos .....

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cord which forms the 'note of satisfaction' or the 'record of satisfaction . In such circumstance, the recording of such satisfaction is impliedly to be done in the course of the section 158BC proceeding as the satisfaction has to be recorded only by the Assessing Officer making the block assessment in the case of the person searched which in turn means the section 158BC proceedings such satisfaction cannot be recorded beyond the date of the block assessment in the section 158BC proc .....

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to the person searched and this too has to be in the course of the said proceeding only. If he finds that any or all of such income belongs to a person not searched, then he has to record such finding in this behalf and takes follow-up action as envisaged in section 158BD which again has to be only in the course of section 158BC proceeding and, hence, if no such satisfaction is recorded in course of section 158BC proceeding, then assumption of jurisdiction under section 158BD is not possible. In .....

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me belongs to the person other than the person searched and then books of accounts or other documents seized has to be handed over to the AO of the person to whom the undisclosed income belongs. Thereafter on the basis of such satisfaction, the AO of the persons to whom the undisclosed income belongs will take proceedings under Section 158BD. Special Bench of the ITAT has further held that such satisfaction by the AO of the person searched has to be recorded in the course of proceedings under Se .....

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is the reasons recorded by the AO before the issue of notice under Section 158BD. Obviously, the reason is recorded by the AO who issued the notice under Section 158BD. It seems that the AO considered the provision of section 158BD similar to Section 148 and therefore before the issue of notice, he recorded the reasons for issuing of such notice. ii) The name of the assessee mentioned in the satisfaction note is Shri Upendra N. Patel, Shri Lalit M. Patel & Shri Champak M. Patel. Thus, the r .....

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atisfaction note was recorded by the AO of Jayraj group of cases, he would have mentioned a search and seizure action has taken place in the case of the assessee. iv) At the end of the notice, the AO has mentioned since this fact could be discovered from the various MOUs seized during the course of search in Jayraj Group, the notices u/s.158BD are issued to the assessees . This noting clearly proves that the reason was recorded by the AO of Shri Lalit M. Patel and not of the AO of Jayraj group. .....

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rched. As per the decision of the Hon ble Apex Court in the case of Manish Maheshwari (supra) as well as Special Bench decision in the case of Majoj Aggarwal (suipra), the satisfaction is to be recorded by the AO of the persons searched that too during the course of assessment proceedings under Section 158BC of the person searched. 13. That the reasons recorded for issue of notice under Section 158BC was dated 23-2-2004,while the assessment of Jayraj Group was originally completed under Section .....

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f the totality of the above facts, we are of the opinion that the reasons recorded for issue of notice under Section 158BD by the AO of the assessee cannot be said to be valid satisfaction for issue of notice under Section 158BD, we therefore respectfully following the decision of the Hon ble Apex Court in the case of Manish Maheshwari (supra) and the decision of the Special Bench of the ITAT in the case of Manoj Aggarwal (supra), hold that the issue of notice under Section 158BD in the case of .....

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the Assessing Officer having the jurisdiction over the assessee. The Co-ordinate Bench has observed as below :- 12. We have heard rival submissions. Case files stands perused. There is no dispute that this assessee is not the one searched since the impugned proceedings are under section 153C of the Act conducted on 25.03.2008 in case of M/s. Kunvarji Commodities Brokers Pvt. Ltd. There is further no issue that the DCIT Central Circle 1(1) is the common assessing authority in case of both the ass .....

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e is that there is no satisfaction at first level in case of the searched entity opposed by the Revenue by saying that the Assessing Officer is the same who has expressed satisfaction in assessee s case. The law about entering of such a satisfaction is very well settled now. Hon ble apex court in the case of Manish Maheshwari vs. ACIT (2007) 289 ITR 341 (SC) holds that such a satisfaction is indeed mandatory. We deem it appropriate to observe that this case dealt with block assessment scheme und .....

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t in case of searched person followed by transmission of the case records to the Assessing Officer of the other assessee. Para no.4 of this Circular further envisages that this dual exercise is to be complied with even if the Assessing Officer happens to be the same in both cases. We deem it appropriate to observe in this factual and legal backdrop that an Assessing Officer has to mandatorily follow the above stated dual satisfaction exercise before initiating section 153C proceedings. We find t .....

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hed party. The latter decision precedes a step further. It holds that the Assessing Officer in case of searched and third party is the same. And it is very difficult to create a distinction to find out when such satisfaction was recorded since both files were lying together on the assessing authority s table. It is therefore clear to us that there is no distinction on legal principle of the satisfaction precondition before initiation of section 153C proceedings in both these decisions. The latte .....

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d entity s case that the money, bullion, jewellery etc. in question belongs to a third person, places the same in it s file followed by an opinion of the above stated material having caused escapement of any income. It is accordingly argued that the impugned satisfaction does not adhere to above stated settled law. The Revenue on the other hand makes out a case that the Assessing Officer s satisfaction has come only after careful examination of the above stated incriminating material being exami .....

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fore drawing the impugned satisfaction note. It is made clear that the Revenue s contention based on Kolkata bench decision of the tribunal puts a heavy onus on the department to positively prove that the same Assessing Officer in case of searched assessee as well as the third party had collectively examined the case files before recording a satisfaction note contemplated under section 153C of the Act. Needless to say, this burden stands un-discharged. We hold in these peculiar facts and circums .....

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going through the judgment of Hon. Apex Court in the case of Manish Maheshwari vs. ACIT (supra) as duly considered by the Co-ordinate Bench in the case of DCIT vs. Lalitkumar M. Patel (supra) upheld by the Hon. Jurisdictional High Court and the decision of Co-ordinate Bench in the case of Shailesh P. Daxini (supra) wherein uniform view has been taken taking recourse with the block assessment u/s 158BD/158BG of the Act the preceding conditions are that firstly satisfaction must be recorded by th .....

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assessee which has been specifically mentioned by the Assessing Officer in his assessment order and also Revenue has not placed on record the copy of satisfaction note, if any, made. In all, the juncture at which proceedings u/s 158BD of the Act commenced for block assessment of a person other than the searched person, Assessing Officer completely failed to satisfy the provisions of section 158BD of the Act. We are, therefore, of the view that the impugned assessment order for the block period .....

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o be quashed as it has been passed without prior approval of the Commissioner of Income-tax. Ld. AR pleaded that in the first round of assessment necessary approval was taken from the Commissioner of Income-tax for framing the assessment under section 158BD of the Act. However, in the second round of assessment post the decision of Co-ordinate Bench in assessee s case for framing de novo assessment order, necessary approval as required u/s 158BG was not taken. As we have already quashed the bloc .....

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essment order while adjudicating ground nos. 1 & 2 of the appeal, we dismiss the ground nos. 3 to 19 as infructuous. IT(SS)A No.15/Ahd/2012 is allowed. 18. Now we take assessee s appeals in ITA Nos. 1811, 182 & 183/Ahd/2012 for Asst. Years 1991-92, 1992-93 & 1993-94 respectively. Common issues involved in all these three appeals of assessee are against the action of ld. CIT(A) confirming addition u/s 68 of the Act at ₹ 46,62,471/-, ₹ 1,85,29,421/- & ₹ 1,04,29,09 .....

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alance Sheet, the impugned addition of ₹ 46,62,471/-requires to be deleted as the same will not fall within the definition of section 68 of the Act. 2. The learned CIT(A) has further erred in law in relying upon the original Audited Balance Sheet, whereas the issue that the said Balance Sheet was not correct and not based on books of account has already attained finality. Thus, even otherwise in view of the said facts, the impugned addition requires to be deleted. The appellant craves leav .....

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nly addition towards unexplained cash credit of ₹ 46,62,471/-. Ld. Assessing Officer during the course of making addition u/s 68 on account of unexplained cash credit observed as below :- 2.2 The submissions made by the assessee have been carefully considered and not acceptable as the onus of proving the cash credits is on the assessee. The assessee has stated that the credit balances were shown in the names of nonexistent persons to balance the effect of inflation in purchases, stock, sal .....

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time of the original assessment proceedings failed to produce the books of accounts. The assessee's submission that the cash credits were actually not received but was only created to balance the bogus purchase of machinery is not acceptable. Once the credits are found not genuine and has been admitted by the assessee these remain unexplained and therefore, has to be treated as unexplained cash credits. Therefore, the amount of ₹ 46,62,471/-(after reducing the opening balance of ͅ .....

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tements of the sole proprietary concern of the assessee namely -Renco Engineering Works of the group company which could have helped in attracting capital from general public at the time of public issue of Renco Gears Ltd. Ld. AR further submitted that pursuant to search assessee got the actual and real books of account audited by independent auditor which do not have any bogus credit balance and inflated purchases and sales. As far as the issue of unexplained cash credit and unexplained income .....

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e neither in any form and records whatsoever. Therefore, provisions of section 68 are not applicable and hence any addition on this basis cannot be warranted because the actual books of accounts do not consist of any such entries because the assessee has never received these amounts. 23. On the other hand, ld. DR supported the orders of lower authorities. 24. We have heard the rival contentions and perused the material on record. Solitary grievance of the assessee in this appeal is against the o .....

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le documentary evidences to prove the identity of the creditors, genuineness of the transactions and creditworthiness. Assessee submitted that these loans have never been received by it and the loans declared in the balance sheet are fictitious. Thereafter assessee placed on record new audited balance sheet which did not have the amount of unsecured loans and cash credits. 25 We further observe that ld. CIT(A) dismissed the appeal by observing as under :- 3.4 I have carefully considered the riva .....

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erified all the contents of the return. Even the balance sheet and P & L A/c. and other relevant annexures of balance sheet filed with Income-tax return are also verified by the statutory auditor and the appellant. It is strange that in spite of these specific verifications, the appellant is stating that the contents of balance sheet as submitted along-with the Income-tax return are false. 3.5 It is a matter of fact that M/s. Renco Engineering Works is a proprietorship concern of the appella .....

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00 x 17.5) by way of this public issue. It is submitted by the appellant that the sales of M/s. Renco Engineering Works were inflated to show a rosy picture and to make the public issue of M/s. Renco Gears Ltd. successful as both the concerns are intricately connected. It is further submitted that the equity share of M/s. Renco Gears Ltd., had touched a height of ₹ 270/- per share. In 1995 M/s. Renco Gears Ltd. brought right-cum-public issue at a price of ₹ 90 per share which include .....

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/95. The appellant contended that falsification of account came to the notice of various Government agencies as a result of these searches. : 3.7 The above facts make it very clear that the appellant along with another sister concern IWs. Renco Gears has inflicted a huge fraud on public. At first instance they collected a sum of ₹ 5,25,00,000/- from public at the time of first public issue. It is also a matter of fact that the highest price of Renco Gears Ltd. share had touched ₹ 270 .....

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basis of alleged falsification of the accounts. However, when the tax dues are raised on the basis of so called falsified accounts the appellants contention is that these accounts are fictitious and should not be considered for the tax purposes. In my considered view, the appellant cannot be allowed to present the different facts on different occasions. The appellant is presenting different facts which benefit it at different point of time. In the instant case the appellant has filed duly verifi .....

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ts are dis-owned as by adopting these accounts the appellant is affected adversely. During the assessment proceedings the appellant contested that the real books were lying with the official liquidator which has been released by official liquidator after a lot of persuasion. During the appellate proceedings as well as assessment proceedings the appellant filed an audited balance sheet statedly drawn on the basis of these books and contended that the same should be accepted for the taxation purpo .....

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im and statutory auditors, which is not an accepted practice. In view of above, I hold that the appellant cannot be allowed to dis-own the audit report and other financial statement which are drawn on the basis of facts as it prevailed at the relevant time and duly owned up the appellant as per the provisions of law, as these documents will fasten higher tax liabilities on the appellant. 3.8 It is further seen that the A.O. had made an addition of ₹ 46,62,471/- u/s.68 of the I.T. Act. Duri .....

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placed reliance on various case laws in his written submissions. I have gone through these case laws and in none of these cases the duly verified Balance Sheet and Profit & Loss Account filed along with the income-tax return has been disowned. All these case laws can be distinguished on this single fact. Accordingly the ratio of these case laws cannot be applied in the case of appellant. In view of these facts, I hold that the appellant has clearly failed to discharge onus cast upon him by t .....

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subject matter of dispute now. Even the appellant has not raised this issue in grounds of appeal. Accordingly, this issue cannot be adjudicated. It is also observed that the addition of ₹ 46,62,471/- has been made u/s.68 of the I.T. Act, which is a residuary section. The additions made under section 68 are assessed as income from other sources'. As per the scheme of the I.T. Act, no deduction or set off are allowable against this addition. In view of above this ground of appeal is dism .....

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ssessee is indulged into mal practices of fabricating books of accounts and depicting unrealistic financial data with a view to cheat the public and, therefore, deserves no mercy. We find no reason to interfere with the order of ld. CIT(A). The appeal of the assessee is dismissed on this issue. 27. Other ground is general in nature, which need no adjudication. 28. Accordingly ITA No.1811/Ahd/2012 for Asst. Year 1991-12 is dismissed. 29. Now we take up ITA Nos.1812/Ahd/2012 for Asst. Year 1992- 9 .....

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nt proceedings when the assessee was confronted to prove the genuineness, creditworthiness and identity of the cash creditors, assessee came up with new set of financial documents which did not have the impugned cash credits. We, therefore, follow the decision taken by us in ITA No.1811/Ahd/2012 for Asst. Year 1991-92 and applying the same to these cases, we dismiss the appeals of assessee. 32. Other grounds raised in these appeals are of general nature, which need no adjudication. 33. In the re .....

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rder in ITA No.912/Ahd/2003 & 1034/Ahd/2003 dated 31/01/2011 and the issue was restored back to the file of Assessing Officer. Accordingly notice u/s 143(2) of the Act dated 20/07/2011 was issued. After making various additions income was assessed at ₹ 4,36,92,671/- on 27/12/2011. Assessee got part relief from ld. CIT(A). 36. Aggrieved, Revenue is now in appeal before us and the assessee has filed Cross Objection. 37. We take Revenue s appeal in ITA No.1601/Ahd/2013 for Asst. Year 1994 .....

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ssued in the name of applicant but later on they were transferred in the name of B. S. Panchal who happens to be the brother in law of the assessee. B. S. Panchal does not have any source of income and accordingly the investment in shares of ₹ 30,80,000/- was added to the income of assessee as unaccounted investment. 39. Ld. AR reiterated the submissions made before lower authorities. 40. Ld. DR supported the order of Assessing Officer. 41. We have heard the rival contentions and perused t .....

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above said order. The concluding para had been reproduced by the appellant in its reply and the same is made part of this order. The facts available on record indicate that the impugned addition has been made on the basis of list of shares transferred in the name of Shri B.S. Panchal, This list was seized as page No,1 to 36 of loose paper file No. A-5 seized from the business premises of Renco Finance Ltd. It is also seen that addition of ₹ 30,87,000/- has been made in the block assessment .....

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had already made. Perusal of records further reveals that the A.O. had failed to bring any evidence on record to prove that the investment of ₹ 30,87,000/- was made by the appellant. In view of above, I hold that addition of ₹ 30,87,000/- in the hands of the appellant is untenable and the same is ordered to be deleted. This ground of appeal is allowed. 42. We further observe that the impugned addition of ₹ 30,80,000/- has been made in the block assessment of the assessee as wel .....

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Ground No.(ii) The CIT(A) has erred in law and on facts in deleting the addition of ₹ 1,87,68,750/- on account of unaccounted investment in shares of Rehco Gears Ltd. 43. So far as ground no.(ii) is concerned, during the course of examination of examination of Annexure -A/5 containing certain loose papers, ld. Assessing Officer came through the shares allotted against application money of ₹ 2,08,66,250/- which were not owned by the applicant. Assessing Officer observed that assessee .....

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tion of addition at ₹ 1,87,68,750/- has been made by ld. CIT(A) by observing as under :- 3.2 I have carefully considered the rival contentions. It is seen that addition of ₹ 2,08,86,250/- has been made by the A.O. mechanically. These additions have been made on the lines of original assessment order dated 25.3.1997. In the original assessment order there were some typographical mistakes. The A.O. has not bothered even to correct these typographical mistakes. For example in the impugn .....

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only. These glaring inaccuracies in the assessment order shows the non-application of mind by the A.O. In the earlier round of appeals, the Ld. CIT(A) had discussed this issue in para 8.1 of appeal No.CIT(A)-XIII/256797-98 dated 31.12.2002. The facts available on record clearly indicates that investment in the shares of Renco Gears Ltd. of ₹ 1,87,68,750/-(21,87,500 + 1,29,06,250 + 36,75,000) has been owned by the investors. The source of this investment is from Dena Bank, Ambawadi Branch, .....

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4, Sushilanagar Society, Memnagar, Ahmedabad and inveslment in 41000 shares of Renco Gears Ltd. of ₹ 7,17,500/- from the address 9, Parvati Apartments, Ankur Road, Naranpura, Ahmedabad is concerned, the appellant has failed to file cogent evidences to prove the identity and existence of the alleged share holders by giving their PA Nos. The appellant had also not filed any evidences to prove the source of these investments. Since the appellant has failed to discharge its onus cast upon him .....

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investment was from FCNR account with Dena Bank, Ambawadi, Ahmedabad and the impugned amount was given towards share application money through banking channel but later on these shares have been transferred to Jashwant Shan and Mrudula Shah. Surprisingly these two persons have denied the ownership of the shares. In such situation complete transaction looks doubtful. From going through the facts we are of the view that addition was rightly made at ₹ 1,87,86,750/- for unaccounted investment .....

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on similar line as discussed by us above in ground no.(ii). We find that ld. CIT(A) has deleted this addition by observing as under :- 5.2 I have carefully considered the rival contentions. It is seen that this issue had been decided in favour of the appellant in appeal No.CIT(A)-XllI/256/97-98 dated 31.12.2002. The facts available on record clearly indicates that these investments has • been properly owned by Jaswant Shah, Mrudula Shah and Nalini T. Vasa. The investments have been made thr .....

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of above, addition of ₹ 40,25,000/- is ordered to be deleted. This ground of appeal is allowed. 48. We observe that during the post search operation, all the three persons- Mrudula Shah, Nalini T. Vassa & Jaswant J. Shah denied to have made any such share application. 49. During the course of hearing assessee could not place anything new to prove contrary to the view taken by ld. Assessing Officer. Therefore, we are of the view that source of share application money is not explained a .....

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nt in machinery, the ld. Assessing Officer the addition as he was not convinced by the explanation given by the assessee. Ld. CIT(A) has deleted the impugned addition of ₹ 25,00,000/- by observing as under :- "9.2 / have considered the submissions of the appellant carefully and have gone through the impugned order in appeal. On perusal of the facts and details furnished by the appellant and the agreement dated 30.1.1995 referred to by the AO,, it is seen that the machineries in questi .....

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machineries worth of ₹ 47,79,664/- during the year in appeal from HMT Ltd. The three machineries referred are C.N.C. Lathe, Radial Drill and Hobber, all three of HMT make. It is found from the details filed by the appellant that the Radial Drilling Machine referred to in the assessment order as Radial Grill was purchased by REW from HMT Ltd. under invoice No.V/60804 dated 18/10/93 for an amount of ₹ 4,67J52/-. Payment thereof was made by cheque No.384576 dated 16/10/93. The other mac .....

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own in the books of accounts and therefore, there is no logic for the addition of ₹ 25,00,000/-, considering the investment in such plant and machinery as unexplained. It has been found that the appellant has shown bogus purchase of machineries in A.Y.91-92 and A.Y.92-93 which have not been accepted by the Assessing Officer. Since the necessary evidences pertaining to investment in machineries have been furnished in support of the claim that the same are duly accounted for, the addition of .....

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2002, I am inclined to agree with the contentions of Ld. A.R. Accordingly, addition of ₹ 25,00,000/- is ordered to be deleted. This ground of appeal is allowed. 51. We observe that ld. Assessing Officer has completely ignored the facts so much so that all necessary details including purchase bills containing invoice no., date and amount, details of payment, which were made in the Financial Year 1993-94 itself and the sale consideration was received against the sale of these machines only. .....

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94-95 :- 1. The ld. CTT(A) has erred in partly confirming the addition of ₹ 21,17,500/- out of total addition of ₹ 2,08,86,250/- made by the AO on account of unaccounted investment in share application money. In view of facts of the case and more particularly since no such investment has been made by the appellant; the addition being based on surmises and conjectures and thus required to be deleted. 2. CIT(A) has erred in confirming the addition of ₹ 7,91,000/- made by the AO a .....

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l appellate proceedings, the addition of ₹ 21,11,446/- required to be deleted. 4. The Id. CIT(A) has erred in issuing directions to the AO for verification of the claim of the appellant regarding depreciation on Plant and Machinery of ₹ 8,51,494/-. In view of the facts and details furnished, the Id. CIT(A) ought to have allowed full depreciation claimed by the appellant since the entire basis adopted by the AO is on estimation as well as without any factual position. 5. The Id. CIT(A .....

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ngs. That since extra income was already shown to that extent, no addition should have been made by the AO and confirmed by the Id. CIT(A). The appellant craves leave to add, amend, alter, modify or delete any of the above grounds as well as to submit additional grounds at the time of hearing of the appeal. 54. Cross Objection no.1 of the assessee. While adjudicating ground no.2 of Revenue s appeal we observed that ld. Assessing Officer made an addition of ₹ 2,08,86,250/- out of which we h .....

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completely failed to discharge its onus cast upon him as per provisions of section 69, no relief can be granted. Addition of ₹ 27,71,500/- is confirmed. This ground of cross objection is dismissed. 56. Ground no.2 of cross objection against confirmation of the addition of ₹ 7,91,000/- made by the AO as unaccounted investment in Renco Gears Ltd. shares. Addition of ₹ 7,91,000/- was made for investment in shares of Renco Gears Ltd. and the source of investment is shown at pages 4 .....

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. The concluding para of this order is reproduced as under for the sake of ready reference :- "8.2 As regards the addition of ₹ 7,91,000/ for investment in the shares of Renco Gears Ltd., I find that the addition has been made on the basis of page No.41 & 42 of the seized document marked as Annexure a-5 wherein list of shareholders for 90 applications for 45,200 shares was found. The addresses of the shareholders were not furnished by the appellant and the list of shares was found .....

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s as well as appellate proceedings has failed to file cogent evidence to prove the identity of the investors and the creditworthiness of the investors. During the appellate proceedings the appellant has made general submissions. These contentions cannot be accepted in the absence of clinching evidences. Accordingly, I hold that the Ld. A.R. has failed to discharge his onus cast upon him by the provisions of section 69 of the I.T. Act, 1961. In view of above, addition of ₹ 7,91,000/- made b .....

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