TMI Blog2020 (12) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... urden does not extent to establish the quality of source of money in the hands of source of source per se. In the instant case, the lender as well as the lender of the lender are both limited company and are tax assessee in the record of department. In absence of any evidence against the assessee qua the lender of the lender, the onus on the assessee to establish genuineness and creditworthiness of lender, in our view, stands discharged. We see no error in the process of reasoning adopted by the CIT(A) while concluding the issue in favour of the assessee Unexplained investment as capital of the assessee - HELD THAT:- Additions towards presumptive cash contribution amounting to ₹ 32,88,000/- in proportion to the partnership share appears prima facie inexplicable. The onus is on the Revenue to bring some cogent evidences on record to establish that alleged unaccounted cash contribution has been actually made by the assessee partner indeed. Unaccounted expenses for construction project carried out by the partnership firm has been attributed to the partner in proportion to the partner share as a figment of imagination without any legally sustainable basis. The impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in additions of ₹ 2,60,00,000/- stood deleted. However, another addition of ₹ 36,36,760/- remained to be disposed off in the said appellate order of the CIT(A). The tax effect on deletion of additions of ₹ 2,60,00,000/- was ₹ 80,34,000/-. Therefore, the department filed second appeal before the Tribunal on 01.10.2018 vide IT(SS)A No. 266/Ahd/2018 against the aforesaid order of the CIT(A). Thereafter, a rectification order under s.154 of the Act dated 11.09.2018 came to be passed by the CIT(A) in the case of assessee for AY 2012-13 adjudicating another ground of appeal which had remained to be disposed in CIT(A) s earlier order dated 17.07.2018. The CIT(A) vide rectification order dated 11.09.2018 has also deleted the addition of ₹ 36,36,760/- made by the AO. The tax effect was ₹ 11,56,489/-. The Revenue filed appeal before ITAT for this second limb of additions/disallowances vide ITA No.2376/Ahd/2018. The ITAT vide order dated 14.08.2019 has dismissed the appeal filed by the department in ITA No. 2376/Ahd/2018 vide order dated 05.12.2018 due to low tax effect involved in the said appeal having regard to Circular No. 3 of 2018 issued by CBDT. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee under s.132 of the Act on 04.12.2014. A notice under s.153A o the Act was issued and the assessee filed return of income declaring his income at ₹ 6,09,660/- in compliance of the aforesaid notice. The AO completed the assessment under s.153A of the Act assessing total income at ₹ 3,38,83,177/-. The additions made towards unexplained cash credit by invoking provisions of Section 68 of the Act amounting to ₹ 2,60,00,000/- is in challenge in the captioned appeal. 11. In the course of the assessment proceedings, the AO noted that the assessee has received unsecured loan of ₹ 2,60,00,000/- from one Anusthan Buildcon Pvt. Ltd. (lender). The AO asked the assessee to prove identity, capacity and genuineness of the transaction. In reply, the assessee submitted ledger copy of unsecured loan and confirmation. However, the AO observed that the confirmation is not signed by the lender concerned. The AO further noted that funds received in the lender s account have to be treated as non-genuine and therefore funds received by the assessee in the form of unsecured loan from the lender are also treated as non-genuine since creditworthiness of the lender is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce: 7. Submission of the appellant assessment order, report of the AO and rejoinder d by the appellant have been carefully considered. The First ground of appeal is general in nature, hence, does not require adjudication. Therefore, it is dismissed. Facts of the case in brief are that the appellant filed return of income for AY 2012-13 on 08.07.2012 showing total income of ₹ 7,13,357/. A search u/s. 132 of the Act was conducted upon the appellant alongwith other group persons/concerns on 4.12.2014. Notice dated 22.7.2015 was issued on 22.7.2015 u/s. 153A of the Act and served upon the appellant. The appellant vide letter dated 9.9.2015 requested to the AO that the return filed originally on 30.9.2009 may be treated as return filed in response to notice issued u/s. 153A of the Act. Notice u/s. 143(2) dated 16.12.2015 was issued served upon the appellant. The appellant, thereafter, filed revised return of income, during the course of assessment proceedings before the AO on 15.11.2016 showing total income of ₹ 6,09,660/-. During the course of appellate proceedings, the appellant filed additional evidences under Rule 46A and requested that the same may be admitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction with the appellant. So all the details of the creditors are available with the AO. The AO stated in the assessment order reiterated in remand report that the persons/concerns of this group have been found indulged in trading in share market, manipulation of share prices, giving taking accommodation entries and investing unaccounted income in real estate other business activities. Therefore, the AO considered that the loan obtained by the appellant remained unexplained. The appellant contended that to prove the genuineness of credit in the books of accounts, the following three things are to be proved :- i) identity of the creditor ii) genuineness of the transaction and iii) creditworthiness of the creditor The appellant contended that all the creditors were covered under search action u/s. 132 of the Act by the department alongwith the appellant and have been assessed by the same AO. Therefore, identity of the creditor is proved beyond doubt. To prove the genuineness of the transactions, the appellant contended that the loan was taken through regular banking channel. It has been reflected in the bank account of both the parties. The creditor has filed confirmation from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 ITR 360 (Guj) CIT v/s, Ranchhod Jivabhai Nakhava - 208 Taxman 35 (Guj) CIT v/s. Apex Therm Packaging P Ltd - 42 Taxman.com 473 (Guj) CIT v/s. Dharmdev Finance - (2014) 43 Taxman.com 395 (Guj) CIT v/s. Shailesh Kumar Rasiklal Mehta (2014) 41 Taxman.com 550/224 (Guj) Looking to the facts of the case, as narrated above and binding judgments, the additions made by the AO u/s. 68 amounting to ₹ 2,60,00,000/- are not found justified, hence, deleted. This ground of appeal is allowed. 15. Aggrieved by the reversal of additions under s.68 of the Act by first appellate authority, the Revenue has filed an appeal before the Tribunal to assail the action of the CIT(A). 15.1 The learned DR for the Revenue strongly relied upon the contents of assessment order. In furtherance, the learned DR submitted that the genuineness of loans in question is backbone of the entire controversy. Making reference to discussions in the assessment order, it was pointed out that one Jupiter Business Ltd. (JBL) has transferred money to Anusthan Buildcon Pvt. Ltd. (ABPL) which was, in turn, transferred to the assessee by way loan. The whole action of routing money fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt listed in the first appellate order and no interference therefore with the order of the CIT(A) is called for. 16. We have carefully considered the rival submissions. The additions under s.68 of the Act amounting to ₹ 2,60,00,000/- on loan received by assessee from a group company ABPL is in controversy. The identity and capacity of the lender has not been challenged on behalf of the Revenue. The genuineness of transaction however has been challenged. The AO proceeded on the footing that the documentary evidences towards confirmation, bank statement of the lender is not available and the seized documents reveal that ABPL has received money from JBL which has been transferred to the assessee. It is the case of the AO that some instances of cash deposited in JBL has come to the notice of the department which gives an inference that unaccounted cash of assessee as provided to JBL has come back in the form of loan entry in the hands of the assessee. 16.1 The CIT(A) in the first appeal collected the confirmation, bank statement etc. from the assessee. It was further noted that the lender is also assessed with the same AO as that of assessee and the relevant documents were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smissed. Cross Objection No. 46/Ahd/2020 18. The grounds of appeal raised by assessee in CO read hereunder: 1. The C.I.T.(Appeals) erred in not appreciating the facts that, there is no application of mind by joint CIT while giving approval u/s 153d vide no.17/2013 dated 29-12-2016 as mentioned by Assessing Officer in his order dated 29-12-2016 para 7 and therefore, the whole proceedings under sec. 153A(1)(b) is itself bad in law and void and liable to be quashed. 2. That, it is respectfully prayed that, this cross objection is going to the root of the matter regarding jurisdiction of the authority of sec.153D and it is came to our knowledge only when our new counsel has guided us recently while going through the brief of the case and therefore, this cross objection may please be decided on merits. 19. At the time of hearing, the learned AR for the assessee clearly submitted that in order to avoid protracted litigation, he does not want to press the issue. The Cross Objection is also noticed to be belated by 575 days. The CO of the assessee is accordingly dismissed as withdrawn. I.T.A. No. 2376/Ahd/2018 20. In its appeal, the Revenue has chall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case have been considered carefully. The AO made additions on substantive basis in the hands of Hiralal Buildcon LLP for unexplained investment made in purchase of land but the same has been deleted by my order dated 13.08.2018 while deciding the appeal of Hiraial Buildcon LLP for A.Y. 2012-13. in the said appeal order, the seized material has been analysed in detail and it has been adjudicated that the cash payment for purchase of land was paid out of amount received against booking of units in the projects. Therefore, additions of ₹ 3288000/- made by the AO considering the unexplained investment by the AO is not found justified and hence, deleted. Regarding the additions of ₹ 2487607-considering as unexplained expenditure, it has been considered in the appellate order passed for Hiralal Buildcon LLP for A.Y. 2012-13 that the finding of the AO are factually incorrect as the seized material have been analysed wrongly. Therefore, the substantive addition was deleted in the hands of Hiraial Buildcon LLP and it is hereby deleted also. This ground of appeal is allowed. 23. Aggrieved by the relief granted by the CIT(A), the Revenue has preferred appeal before the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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