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Income Tax Officer, Ward 4 (4) , New Delhi Versus M/s Lokesh Secfin pvt. Ltd.

2017 (9) TMI 246 - ITAT DELHI

Notice u/s 148 for reassessment- exparte qua assessee order u/s. 144/147 - addition on account of unexplained cash credit u/s 68 - reasons to believe - non-cooperation from assessee - non-independent inquiry and verification - Held that:- AO in his assessment order held that as the assessment proceedings were getting time barred on 31.12.2008 and in spite of the having been given numerous opportunities, assessee has not furnished any of the details asked vide questionnaire and order sheet entrie .....

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te to the file of the AO to decide the same afresh, after making independent inquiry and verification, as deem fit. However, the Assessee is also directed to submit all the necessary documents, as asked by the AO during the assessment proceedings and fully cooperate with the AO and did not take any unnecessary adjournment. Accordingly, the issue in dispute is set aside to the file of the AO with the aforesaid directions. Appeal filed by the Revenue stands allowed for statistical purposes. - ITA .....

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he facts and in the circumstances of the case, and in law, the Ld. CIT(A) has erred in deleting the addition made o fRs. 71,76,750/- made u/s. 68 of the I.T. Act being the unexplained cash credits. 2.1 The Ld. CIT(A) ignored the findings recorded by the AO and the fact that the assessee is involved in the business of receiving accommodation entries. 3. The appellant craves leave to add, to alter, or amend any grounds of the appeal raised above at the time of the hearing. 2. The brief facts of th .....

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u/s. 148 of the Act dated 31.3.2008 was issued. Finally, the reassessment order was completed on 26.12.2008 determining the total income at ₹ 71,49,221/- wherein the AO has made an addition of ₹ 71,76,750/- under section 68 of the Act. Against the assessment order, the assessee appealed before the Ld. CIT(A), who vide his impugned order dated 2.11.2010 has deleted the addition in dispute by partly allowing the appeal of the assessee. Aggrieved with the impugned order passed by the L .....

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ase, Notice of hearing to the assessee was sent by the Registered AD post, in spite of the same, assessee, nor his authorized representative appeared to prosecute the matter in dispute, nor filed any application for adjournment. Keeping in view the facts and circumstances of the present case and the issue involved in the present Appeal, we are of the view that no useful purpose would be served to issue notice again and again to the assessee, therefore, we are deciding the present appeal exparte .....

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e assessment order as well as in the remand report and the facts on record. It is observed that the AO based his arguments purely on the basis of information from Investigation wing of the Income-tax Department, New Delhi. He has entirely relied upon such information for reaching such conclusion. The above information may be a sufficient ground to initiate reassessment proceedings of a case, but to make an addition the AO has to establish the fact of fraudulent nature of such transaction. Purely .....

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information. The source of cash has also been fully explained and the amount received from M/s Iris Infrastructural Pvt ltd, M/s MKM Finsec Pvt Ltd and M/s' Kaul Securities Pvt Ltd has been fully explained. In fact, no new capital has been introduced in the account. This also implies 'that there has neither been fresh loan nor fresh share capital introduced in the accounts of the appellant company during the year under consideration. The perusal of the accounts of the appellant company d .....

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that the Assessing Officer could not point out any discrepancy in the evidences relied upon by the assessee. He has neither brought out any direct or inferential evidence to contradict the contention of the assessee. It is further observed that even though AO. has vast powers uls 131 and 133(6) of the Act, he has not used any of his powers to verify the genuineness of the claim of the assessee by verifying the documents furnished by it. If AO. had doubted the impugned transaction after receivin .....

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established as it was borne on the record on the Income-tax Department. Durning to the shares which were sold by the appellant as per its version, there is no evidence or material to even suggest, as pointed out on behalf of the appellant, that the cheques directly or indirectly emanated from the assessee so that it could be. said that the assessee's own money was brought pack in the guise of sale proceeds of the shares. Though, the purchasers of the shares could not be examined by the AO, .....

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Act. Under section 68 of the Act if any sum is found credited in the books of accounts of the appellant & the appellant offers no explanation about the nature and source thereof or the explanation offered by him is not satisfactory in the opinion of the Assessing Officer, the sum so credited may be charged to income tax as the income of the assessee of the relevant previous year. Therefore, what has to be enquired into by the Assessing Officer is the nature & 'source of the sum or d .....

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TR 62 (Cal.); Prakash Textile Agency vs. CIT (1980) 121 ITR 890 (Cal.); Oriental Wire Industries Pvt. Ltd .. vs. CIT (1981) 131 ITR 688; CIT Vs. B.C. Mohanty (1995) 212 ITR 199(Ori.); lalan Timbers Vs. CIT (1997) 223 ITR 11 (Gau.) & CIT vs. Korlay Trading Company Ltd. (1999) 232 ITR 820 (Cal.)]. If all the aforesaid three conditions are proved the burden shifts on the Revenue to prove that the amount belonged to the assessee. [CIT vs. United Commercial & Industrial Co. (P) Ltd. (1,991) 1 .....

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R 344 (Pat.); CIT vs. Orissa Corpn. (P) Ltd. (1986) 159 ITR 78 (SC) & Kishan Chand Chellaran vs. CIT 125 713 (SC). In this regard, it is important to take note of the judgment in the case of Kishan Chand Chellaram (Supra) holding that the burden is on the department to show that the money belonged to the assessee by bringing proper evidence on record & the assessee could not be expected to put evidence to help the department to discharge the burden that lay upon it. The evidence, if any, .....

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7. On going through the aforesaid findings of the Ld.CIT(A) as well as the finding of the Assessing Officer made in the assessment order, we find that AO has passed the assessment order 26.12.2008 u/s. 144/147 of the Income Tax Act, 1961 i.e. exparte qua assessee by holding that assessee has failed to give satisfactory explanation about the nature and source of the amount of ₹ 71,76,750/- credited in its bank accounts and discharge its onus of proving the genuineness of transactions and cr .....

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