TMI Blog2021 (2) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... has explained that the assessee is making efforts to get the bank statements and in case of urgency the same may be summoned from the concerned Bank of the creditors. The assessee also requested that this creditor may be summoned under section 131 - Since the A.O. did not take any steps in the matter, therefore, no adverse inference could be drawn against the assessee in respect of the creditor Star Technosoft Pvt. Ltd. A.O. has found that income of the creditor is low as compared to the corresponding transaction, but, their bank statements clearly show they have sufficient means to give loan to the assessee and in case of two of the creditors even their income was higher as compared to the loan given to the assessee. Merely because low income is shown in the return of income by the creditor is no ground to make any addition against the assessee. In the case of creditor Kshitiz Infratech Pvt. Ltd., the A.O. from the balance sheet found that amount of ₹ 50 lakh have been shown as advance against the property, but, it is a fact that this creditor has given an amount of ₹ 50 lakhs to the assessee, therefore, no further adverse inference could be taken against the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee on 26.03.2011 declaring a total income of ₹ 2,75,250/-, which was processed under section 143(1) of the Income Tax Act, 1961. A search and seizure action under section 132 of the Income-Tax Act, 1961 was carried-out in the case of Shri Mukesh Gupta Group 21.05.2009. This case was centralized with this Circle of the A.O. by CIT-IV, New Delhi. As the assessee failed to comply with the statutory notices, an ex-parte assessment order was passed under section 144 of the Income-Tax Act, 1961, on the basis of material available on record and the A.O. made the following additions (1) Unexplained Share Application Money - ₹ 9,50,000/- (2) Unexplained Loan - ₹ 1,50,00,000/- (3) Administrative and Financial Expenses unverifiable - ₹ 29,063/-. 3.1. The assessee preferred an appeal before the Ld. CIT(A) which was dismissed. 3.2. The assessee preferred an appeal before the ITAT challenging the validity of the assessment order passed under section 153 of the Income-Tax Act, 1961 and the additions of ₹ 9,50,000/- and ₹ 1.50 crores, which has decided the appeal of assessee for the assessment year under appeal i.e., 2009-2010 as well as A.Y. 2010-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank account of Ankit Rekhan there was usually very low balance in the account except for some period during which large amounts were credited and have been debited. The A.O, further asked for the audit report of the company and regarding details of any property sold to Kshitiz Infratech Pvt. Ltd., and loans returned to the parties and if shares have been allotted to the share applicants. No compliance was made. The assessee also made an application under section 144A of the I.T. Act to the JCIT, Central Range, which was also disposed of. The A.O. in order to ascertain the identity and creditworthiness of the above-mentioned creditors and share applicants, issued summons under section 131(1) on 17.05.2018 and the case was fixed for 24.05.2018. In response to summons, none of the above seven parties appeared before A.O. on the given date. Reply from Star Technosoft Pvt. Ltd., was received on 25.05.2018 wherein it enclosed copy of the ITR for A.Ys. 2009-2010 and 2010-2011 and copy of the bank book and ledger account of Assessee [M/s. Garima Polymers Private Limited]. No copy of their bank account has been filed. The A.O, therefore, made addition of ₹ 9,50,000/- on account of un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to Order of Ld. CIT(A)-23, Dated 06.07.2020 for A.Y. 2010-2011 in which the same CIT(A) did not consider non-compliance of summons as sufficient to make addition under section 68 of the Income Tax Act in the case of same assessee. Learned Counsel for the Assessee relied upon the following decisions: 1. CIT-IV vs., Dwarkadhish Investment (P.) Ltd., [2011] 330 ITR 298 (Del.). 2. Mod Creations (P.) Ltd., vs., ITO [2013] 354 ITR 282 (Del.) 3. CIT vs., Varinder Rawlley [2014] 366 ITR 232 (P H) 4. Pr. CIT vs., Himachal Fibers Ltd., [2018] 98 taxmann.com 173 (SC). 5. On the other hand, the Ld. D.R. relied upon the Orders of the authorities below and submitted that assessee did not follow the Order of the Tribunal Dated 27.03.2017 and since parties did not appear before A.O, therefore, additions were rightly made against the assessee. 6. We have considered the rival submissions and perused the material available on record. The issue of share application money received and unsecured loans are decided as under. SHARE APPLICATION MONEY : 7. The assessee has received ₹ 3,50,000/- from Smt. Renu Rekhan and ₹ 6 lacs from Smt. Nisha Rekh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their bank statements clearly show they have sufficient means to give loan to the assessee and in case of two of the creditors even their income was higher as compared to the loan given to the assessee. Merely because low income is shown in the return of income by the creditor is no ground to make any addition against the assessee. The Hon ble Delhi High Court in the case of CIT vs., vs. Vrindavan Farms Pvt. Ltd., etc. ITA.No.71 of 2015 dated 12th August, 2015 (Del.), in which it was held as under : The sole basis for the Revenue to doubt their creditworthiness was the low income as reflected in their return of income. It was observed by the ITAT that the AO had not undertaken any investigation of the veracity of the documents submitted by the assessee, the departmental appeal was dismissed by the Hon ble High Court. 8.1. In the case of creditor Kshitiz Infratech Pvt. Ltd., the A.O. from the balance sheet found that amount of ₹ 50 lakh have been shown as advance against the property, but, it is a fact that this creditor has given an amount of ₹ 50 lakhs to the assessee, therefore, no further adverse inference could be taken against the assessee. The authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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