TMI Blog2018 (2) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by the AO towards unproved sundry creditors under Section 41(1)(a), deletion of addition made towards unsecured loans under Section 68 of the Act, deletion of unexplained credit card expenses under Section 69C, deletion of unexplained jewellery and deletion of unexplained purchase of Ipod. The AO is directed to reconsider the issues in the light of the additional evidences filed by the assessee after affording reasonable opportunity of hearing. - ITA Nos. 2402 to 2406/Mum/2015, ITA Nos. 2534 to 2537/Mum/2015, ITA Nos. 2400 & 2401/Mum/2015 And ITA Nos. 2540 to 2542/Mum/2015 - - - Dated:- 19-1-2018 - Shri Joginder Singh, Judicial Member And Shri G. Manjunatha, Accountant Member For The Assessee : Ms. Pranali Dixit For The Revenue : Ms. Jacinta Zimik Vashai ORDER Per Bench These cross appeals filed by two different assessee s and the Revenue are directed against separate, but identical orders of the CIT(A)- 48, Mumbai dated 16th February, 2015 for assessment years 2004-05 to 2010-11. Since the facts are identical and issues are common, for the sake of convenience these appeals were heard together and are disposed off by this common order. 2. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rutiny and accordingly notices under Sections 143(2) and 142(1) of the Act dated 25th April 2011 were issued. On 26th April, 2011 the assessee filed a letter of adjournment seeking time for filing details. A further notice under Section 142(1) dated 25th April, 2011 along with a questionnaire was issued fixing the case for hearing on 12.05.2011. The assessee neither appeared nor filed any details on the date fixed for hearing, however, filed a letter dated 19.05.2011 seeking adjournment of hearing. The AO has issued one more letter dated 15.10.2012 and directed the assessee to comply with the earlier notice issued on 25th April, 2011. The assessee neither appeared nor filed any details. Therefore, in view of the non-compliance on the part of the assessee, the AO issued a show cause notice on 29.10.2012 asking as to why the assessment should not be completed under Section 144 of the Act, on the basis of the material, documents and information available on record. Since the assessee failed to comply with the show cause notice issued, the AO has passed the assessment under Section 144 r.w.s. 153A of the Act, on 25th March, 2013 determining the total income on the basis of the material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is evidence from the facts recorded in the assessment order where number of notices have been issued to the assessee to file details for which the assessee has filed to file any evidence. In so far as the addition towards unexplained cash credit, the AO has reiterated the findings recorded in the assessment order and submitted that the assessee has failed to provide any evidence to justify the unsecured loans with identity of the parties and also failed to file any evidence to prove the genuineness of transaction and creditworthiness of the parties. As regards other additions made in the assessment order, the AO has reiterated his findings recorded at the time of assessment. 6. The CIT(A), after considering the submission of the assessee and also considering the additional evidences filed by the assessee, partially allowed the appeal filed by the assessee, wherein he deleted the additions made by the AO towards cessation of liability towards unproved sundry creditors under Section 41(1)(a) by holding that the additions made by the AO is not based on any incriminating material found as a result of search. The CIT(A) further observed that so far as unexplained cash credit towa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned A.R. further submitted that the CIT(A) has confirmed the addition only on the ground that the assessee was not able to substantiate the loan with any evidence ignoring the fact that all these loans have been accepted by cheque and the assessee has filed confirmation letters from the parties. The learned A.R. further submitted that the CIT(A) has erred in confirming the disallowance of interest expenditure of ₹ 5,51,378/- for A.Y. 2008-09 when he has allowed such interest payment for A.Y. 2010-11 under similar facts without bringing any contrary evidence. The A.R. further submitted that the assessee has incurred consultancy expenses which have been paid by cheque. Merely for non production of bills and vouchers expenditure incurred by the assessee cannot be disallowed. Similarly, in respect of deductions claimed under Section 80C/80D the assessee has submitted that the assessee has claimed deductions towards investments under Section 80C/80D and proof of which has been furnished before the CIT(A). The CIT(A) ignored all evidences to sustain the additions. 8. The learned A.R. further submitted that the additions made by the AO for A.Y. 2004-05 to A.Y. 2008-09 in the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of liability without discussing how the addition made by the AO is not sustainable when the assessee is not able to file any evidence to prove sundry creditors appearing in the books of account. 10. We have heard both the parties, perused the material available on record and gone through the orders of the Authorities below. In this case the search and seizure action under Section 132 of the Act, was conducted on 20th April, 2010. The facts born out from the record reveals that during the course of search incriminating material relating to the assessee was found and seized. The AO has passed ex-parte assessment order under Section 144 r.w.s. 153A of the Act and made various additions towards cessation of liability under Section 41(1)(a), unexplained cash credit under Section 68 towards unsecured loans, disallowance of interest expenses, disallowance of consultancy expenses, disallowance of 80C/80D deductions, addition towards unexplained credit card expenditure and addition on account of undisclosed jewellery and unexplained purchase of Appeal Ipod. The AO further observed that the assessee is non-cooperative and not filed any details in respect of various notices and questionnai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) has taken similar view wherein it was categorically observed that the AO is not empowered to make any addition in the absence of any seized material in respect of assessments that have unabated/concluded as on the d ate of search. In this case, the search took place on 20th April, 2010. Admittedly, as on the date of search the assessment for A.Y. 2004-05 to A.Y. 2008-09 have been unabated. The time limit for issue of notice under Section 143(2) has also expired as on the date of search. Therefore, we are of the considered view that the AO cannot make any additions in respect of unabated assessments, if no incriminating material is found during the search for A.Y. 2004-05 to A.Y. 2008-09. 12. Coming to the addition made by the AO towards unsecured loans under Section 68 of the Act. Admittedly the assessee has not filed any details before the AO at the time of assessment. The assessee has filed additional evidences in the form of confirmation letters before the CIT(A). Though the CIT(A) has forward the additional evidences filed by the assessee for the comments of the AO, in the remand report the AO has opposed admission of additional evidences and also commented that mere fili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imed under Section 80C/80D the CIT(A) has either deleted the additions or confirmed the additions without discussing the issue raised by the AO as well as the assessee. Therefore, we are of the view that the issue needs to be reexamined by the AO in the light of the additional evidences filed by the assessee. Similarly, in respect of deletion of addition in respect of undisclosed jewellery and unexplained purchase of Apple Ipod the CIT(A) has not given any cogent reason for deleting the additions made by the AO. The order of the CIT(A) is brief and cryptic and no reason has been given to counter the allegations made by the AO. On the other hand, the assessee has filed various details in respect of jewellery and Apple Ipod to explain the source. Therefore, we are of the considered view that the issues need to be re-examined by the AO in the light of the additional evidences filed by the assessee. Hence, we set aside the issue of disallowance of interest expenses, disallowance of consultancy expenses, disallowance of deduction claimed under Section 80C/80D, disallowance of addition based on loose papers, deletion of addition made by the AO towards unproved sundry creditors under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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