TMI Blog2019 (4) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... as unexplained investment - HELD THAT:- With respect to the addition made towards the advance of ₹ 10,00,000/- extended to M/s. Vicky Films, we find that the finding of the Ld.AO to be vogue which is further confirmed by the Ld.CIT(A) by general discussion in his order. Revenue had simply rejected the returns filed by the assessee and also not examined the detailed explanation offered by the assessee, needless to mention that the books of accounts of the assessee was incomplete. In this situation, we do not find any merit in the order of the Ld.Revenue Authorities for making addition for ₹ 10,00,000/- and ₹ 4,50,000/- towards advance extended to M/s. Vicky Films and M/s. Nadiadwala Grandson Entertainment without conclusive finding. Therefore we hereby direct the Ld.AO to delete the addition made for ₹ 10,00,000/- and ₹ 4,50,000/- with regard to the advances extended to M/s. Vicky Films and M/s. Nadiadwala Grandson Entertainment respectively. Addition towards various investment - HELD THAT:- The decision rendered in the case of the assessee s related parties Shri Rakesh Sarin and Smt. Renu Sarin, Shri Akshay Sarin M/s. B.R. Sarin Sons HUF hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined those aspects. There is every probability that if such exercise would have been carried out the source of the amount utilized in the finance business would have been explainable as the amount utilized in the business would have been much less than the addition made by the Ld.AO. Therefore adhoc addition of the amount mentioned in the entire pro-notes is not justifiable. Addition towards purchases of fixtures amenities as unexplained investment - HELD THAT:- Revenue Authorities have not arrived at any conclusive finding on the issue after proper investigation. Therefore we do not find any merit in the orders of the Ld.Revenue Authorities for making addition - I.T.(SS)A.No.19/Chny/2014 - - - Dated:- 3-4-2019 - Shri A. Mohan Alankamony, Accountant Member And Shri Duvvuru RL Reddy, Judicial Member For the Appellant : Dr.M.Srinivasa Rao, CIT For the Respondent : Shri K.Ravi, Advocate ORDER PER A. MOHAN ALANKAMONY, AM:- This appeal by the assessee is directed against the order passed by the learned Commissioner of Income Tax (A)(C)-II, Chennai, dated 30.09.2014 in ITA No.452/06-07 for the block period 01.04.1996 to 27.03.2003 passed U/s.250(6) r. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 158BD of the Act vide order dated 28.02.2007 wherein the Ld.AO made several additions which was further sustained by the Ld.CIT(A). 4. Ground No.2(i) : Non filing of Income Tax returns:- During the course of investigation, it was observed that the assessee had made substantial investments in recurring deposit, RBI Relief bonds, shares, KVP, HDFC Relief bonds etc., and also had advanced huge loans to various parties. It was explained by the assessee that they had disclosed the same in its return of income for all the assessment years and also produced the acknowledgements for having filed the return of income. However on verifying the acknowledgements submitted by the assessee, it was observed that the acknowledgement number did not pertain to the assessee but to different persons. Therefore the Ld.AO opined that the returns filed by the assessee are bogus towards which the assessee strongly objected. On appeal the Ld.CIT(A) held the issue in favour of the Revenue by relying on various decisions of the higher judiciaries. 4.1 Before us the Ld.AR reiterated the submissions made before the Ld.Revenue Authorities that the lapse on the part of the Revenue to maintain prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved otherwise. Further enquiry in Mumbai revealed that Shri Rakesh Sarin had received ₹ 50 lakhs under various denominations by way of Demand Draft drawn on Bank of Baroda favoring various persons. One among them is M/s. Rakesh Sarin Sons HUF. The Ld.AO further observed that the amount of ₹ 50 lakhs received by M/s. Rakesh Sarin Sons HUF, through M/s. Adlab Films Ltd., was in connection with the loan advanced by Shri Rakesh Sarin for the production of film kranthi . The Ld.AO further made a finding that the two bank draft dated 08.03.2002, DD No.034404 05 drawn on Bank of Baroda for ₹ 9 lakhs ₹ 1 lakhs respectively was not reflected in the accounts regularly maintained in the computer. Therefore the Ld.AO added the amount of ₹ 10 lakhs as the unexplained income of the assessee. On appeal, the Ld.CIT(A) confirmed the addition. 5.1 Similarly it was observed by the Ld.AO that the assessee had advanced ₹ 4,50,000/- to M/s. Nadiadwala Grandsons through M/s. Akshay Mercantile Ltd and the same was not accounted in the accounts maintained in the computer of the assessee. Therefore the Ld.AO made addition of ₹ 4,50,000/- as unexpla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the source was not explained. On appeal the Ld.CIT(A) agreeing with the view of the Ld.AO confirmed the addition. On perusing the facts of the case, we do not find any justification in the order of the Ld.Revenue Authorities. It is an admitted fact that the assessee had produced the return filed by her before the Ld.AO, however the Ld.AO had rejected the same because in the Revenue records no such return was filed. For the above stated reasons the Ld.AO also did not venture into examine the return filed by the assessee or to examine the source of investment disclosed in the return of income. It is pertinent to mention that it was the primary duty of the Ld.AO to examine the disclosure made in the return of income along with the amount of tax paid by the assessee during the relevant assessment years and also to examine the source of funds flowing through the bank accounts for making the investments and thereafter arrived at an appropriate conclusion. But in the case of the assessee it appears that no such exercise was carried out. On appeal the Ld.CIT(A) also confirmed the order of the Ld.AO by simply agreeing with the view of the Ld.AO. In the identical situation, in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld.AO that the assessee had deposited cash in its bank account for ₹ 13,41,800/- and ₹ 14,106/- in Recurring Deposit account during the block period. The Ld.AO added the same to the undisclosed income of the assessee because the transactions were not accounted in the assessee s books of accounts. The Ld.AO further observed that the assessee had not filed any return of income before the date of search. On appeal the Ld.CIT(A) confirmed the Order of the Ld.AO by agreeing with his view. In similar situation herein above, we have deleted the addition made by the Ld.AO because the Ld.AO had failed to examine the return filed by the assessee and the explanation submitted. Therefore the same decision holds good for this issue also. Accordingly as we have held in the case of the assessee s related parties Smt. Renu Sarin in IT(SS)A No.17/Chny/2014, Shri Rakesh Sarin in IT(SS)A No.66/Chny/2007, Shri Akshay Sarin in IT(SS)A No.18/Chny/2014 and M/s. B.R. Sarin Sons HUF in IT(SS)A No.11/Chny/2014 we hereby direct the Ld.AO to delete the addition made for ₹ 13,41,800/- towards unexplained cash deposit in bank account ₹ 14,106/- towards recurring deposit. 8. Groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e business would have been much less than the addition made by the Ld.AO. Therefore adhoc addition of the amount mentioned in the entire pro-notes is not justifiable. Further the Ld.AO has also not made any investigation in the market to find out whether any amount borrowed from the assessee was pending to be returned to the assessee. Further the Ld.AO had also not made proper investigation from the borrowers. When the Ld.AO has not made any investigation on this regard addition made only on the basis of presumption is not justifiable. Moreover there is no corroborative evidence to support the case of the Ld.AO. Even before us the Ld.DR was not able to successfully controvert to the findings of the Ld.CIT(A). The decision cited by the Ld.DR is also not applicable to the facts and circumstance of the case of the assessee. The assessee has also explained various situations wherein such documents are accumulated in the premises of the assessee. The Ld.DR could also not furnish any materials to reject the explanation offered by the assessee. Hence we do not find it necessary to interfere with the order of the Ld.CIT(A) on this regard. Thus this ground is also decided in favou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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