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TMI Blog2018 (2) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1961 (hereinafter "the Act"), disallowance of interest expenses, disallowance of consultancy expenses and disallowance us 80C/80D of the Act. Revenue has taken the grounds challenging the deletion made by the CIT(A) towards cessation of liability under Section 41(1)(a) of the Act, deletion of unsecured loan added under Section 68 of the Act, deletion of unexplained credit card expenses made under Section 69C of the Act, deletion of additions made towards unexplained purchase of Apple Ipod. Similarly in the case of Shri Bhavesh L. Gala the assessee has taken grounds challenging the additions sustained by the CIT(A) towards unsecured loans made under Section 68 of the Act, interest disallowance claimed against rental income, disallowance of consultancy expenses and addition towards Mundan Ceremony gifts under Section 68 of the Act. The Revenue has taken grounds challenging the deletion made by the CIT(A) towards cessation of liability under Section 41(1)(c), unexplained credit towards unsecured loans under Section 68 of the Act and deletion of adhoc additions towards bank deposits under Section 69 of the Act. 3. The brief facts of the case extracted from ITA No. 2402/Mum/2015 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons including additions towards unsecured loans as unexplained cash credit under Section 68 of the Act, cessation of liability, towards unproved sundry creditors under Section 41(1)(a), adhoc addition towards bank deposit under Section 69C, disallowance of interest expenses, disallowance of consultancy expenses, disallowance of deduction claimed under Section 80C/80D, addition on account of undisclosed jewellery and unexplained purchase of Appeal Ipod. 5. Aggrieved by the assessment order the assessee preferred an appeal before the CIT(A). Before the CIT(A), the assessee challenged the assessment order passed by the AO under Section 144 r.w.s. 153A of the Act, on the ground that the AO has passed the assessment order without providing reasonable opportunity of being heard. The assessee has also taken a legal plea in as much as the additions made by the AO for A.Y. 2004-05 to A.Y. 2008-09 are bad in law as the assessment for A.Y. 2004 -5 to A.Y. 2008-09 have be unabated/concluded as on the date of search and hence in the absence of any incriminating material found as a result of the search no addition can be made. In this regard relied upon the decision of the ITAT, Mumbai Special ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credits, wherever the assessee has filed confirmation letters, the CIT(A) has deleted the additions made by the AO by holding that the assessee filed confirmation letters to prove the identity of creditors, therefore the AO was incorrect in making the additions only on the ground that the assessee has failed to prove genuineness of transaction and creditworthiness of the parties. Similarly, the CIT(A) deleted the additions made by the AO towards unexplained credit card expenses under Section 69C of the Act on the ground that the AO has failed to bring on record any evidence to prove that the assessee has incurred credit card expenses. Merely possessing credit card does not mean that the assessee has incurred expenditure. Therefore, the question of disallowance on adhoc basis on suspicions and surmises cannot arise. Similarly, the CIT(A) has deleted the addition made by the AO towards interest expenses for A.Y. 2010-11 and also deleted the disallowances on account of undisclosed jewellery and unexplained purchase of Appeal Ipod. However, the CIT(A) confirmed the additions made by the AO towards disallowance of consultancy expenses and disallowance on account of claim under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20th April, 2010 and by the time the assessments for A.Y. 2004-05 to A.Y. 2008-09 have been unabated and the time limit for issue of notice under Section 142(1) has been expired, therefore, in the absence of any incriminating material found as a result of search no addition can be made in the assessment order under Section 153A of the Act. In this regard relied upon the decision of the Hon'ble Bombay High Court in the case of CIT vs. Continental Warehousing Corporation (Nava Sheva) Ltd. (2015) 374 ITR 645 and Division Bench judgement of the Hon'ble Bombay High Court in the case of CIT vs. Murli Agro Products Ltd. (2014) 49 taxmann.com 172. The assessee also relied upon the decision of the ITAT Mumbai Special Bench in the case of All Cargo Global Logistics Ltd. vs. DCIT (2012) 137 ITD 287. 9. The learned D.R., on the other hand, submitted that the CIT(A) has deleted the additions made by the AO towards unsecured loans, unexplained liability towards unproved sundry creditors and unexplained credit card expenditure by admitting additional evidences, eventhough the AO has commented on additional evidences filed by the assessee and admissibility of such additional evidences. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losed jewellery and unexplained purchase of Apple Ipod and also unexplained expenditure made on loose papers, the AO has not referred to any incriminating material found as a result of search in all other additions made for all the assessment years. It is the claim of the assessee that the additions made by the AO towards unsecured loans, cessation of liability, disallowance of interest expenses, disallowance of consultancy expenses and disallowance of deduction claimed under Section 80C/80D are based on the return of income filed by the assessee without there being any incriminating material found as a result of search. The assessee further contended that in the assessment framed under Section 153A, AO is not empowered to make any addition in the absence of seized material in respect of assessments that have been unabated or already completed as on the date of search. 11. Having heard both the sides and considering the material on record, we find that the additions made by the AO towards unsecured loans under Section 68 of the Act, cessation of liability under Section 41(1)(a), unexplained credit card expenditure under Section 69C, disallowance of interest expenses, consultancy e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y reason in respect of genuineness of transaction and creditworthiness of the parties. The assessee claims to have filed all evidences to prove unsecured loans including confirmation letters, ITR acknowledgement and bank statement to prove the identity, genuineness of transaction and creditworthiness of the parties. The facts are contrary. The CIT(A) deleted addition made by the AO towards unsecured loans, without any reason. Therefore, we are of the considered view that the issue needs re-examination by the AO in the light of the additional evidences filed by the assessee to prove identity, genuineness of transaction and creditworthiness of the parties. Therefore, we set aside the issue to the file of the AO and direct him to consider it afresh after affording reasonable opportunity of being heard. If the assessee files details in respect of the identity, genuineness of transaction, etc. then the AO is directed to delete the addition made towards unsecured loans. Once the assessee discharges its initial onus of identity, genuineness of transaction and creditworthiness then the AO is precluded from going to question the source in view of the decision of the Hon'ble Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the additional evidences filed by the assessee after affording reasonable opportunity of hearing. 14. In the result, the appeals filed by the assessee and appeals filed by the Revenue are allowed for statistical purposes. ITA Nos. 2400 & 2401/Mum/2015 and 2540 to 2542/Mum/2015 15. The facts and issues involved in these appeals are identical to the facts and issued discussed in ITA Nos. 2402 to 2406/Mum/2015 and ITA Nos. 2534 to 2537/Mum/2015, in the case of Shri Lakhamshi J. Gala. In these appeals the assessee has challenged the additions sustained by the CIT(A) in respect of unsecured loans for A.Y. 2008-09 and disallowance of interest expenditure against rental income, consultancy expenses and additions towards Mundan Ceremony gifts under Section 69A for A.Y. 2006-07. The Revenue has challenged the deletion of additions made by AO towards outstanding liability and unexplained loans under Section 68 of the Act and adhoc addition towards bank deposits under Section 69 of the Act. We have considered similar issues in the case of Shri Lakhamshi J. Gala, where we set aside all issues to the file of the AO for reconsideration. The reasons given by us in ITA No. 2402 to 2406/M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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