TMI Blog2021 (9) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... can express his opinion in 67 cases in a single day. - Decided in favour of assessee. - IT(SS)A No.650/LKW/2019 - - - Dated:- 20-9-2021 - SHRI. A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER Appellant by : Shri Swaran Singh, C.A. Respondent by : Smt. Namita Pandey, CIT (DR) ORDER PER A. D. JAIN, V. P. This is assessee s appeal against the order of the ld. CIT(A)-IV, Kanpur, dated 9.10.2019 for the assessment year 2017-18, raising the following grounds: 1. That the Ld. AO has erred in law and on facts in completing the assessment under Section 143(3) of the Income Tax Act,1961 in gross violation of Section 153C of the Income Tax Act,1961, therefore the impugned assessment order is illegal, void-ab-initio and liable to be quashed. 2. That the Ld. Commissioner of Income Tax (Appeals) has erred in law and on facts in rejecting the ground of appeal raised by the appellant, challenging the validity of assumption of jurisdiction by the Ld. A.O. and validity of impugned assessment order pursuant to an illegal order passed under section 127 of the Income Tax Act, 1961, dated 18.11.2016. 3. That the Ld. Commissioner of Income Tax (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsustainable in law and on facts and liable to be deleted. 8. That the Ld. CIT(A) has erred in law and on facts in sustaining the addition of ₹ 21,00,00,000/- made by the Ld. AO, being the addition for deemed speculative Income allegedly earned on account of rate fluctuation in Gold Silver, by invoking provisions of Section 69A of the Income Tax Act,1961, without appreciating that statements u/s 132(4) of the Income Tax Act,1961 were retracted soon after the conclusion of search and no other corroborative evidence was found during the course of search. 9. That the Ld. CIT(A) has erred in law and on facts in sustaining the addition of ₹ 81,00,000/- made by the Ld. AO, being the addition for alleged investment by way of providing margin money @ 20% of Speculative profit of ₹ 4,05,00,000/- in the first month that is April 2016 of doing speculative transactions, by invoking provisions of Section 69A of the Income Tax Act, 1961. 10. That the Ld. Commissioner of Income Tax (Appeals) has erred in law and on facts in holding that the retraction of statement u/s 132(4) of the Income Tax Act,1961, dated 08.09.2016, filed by the appellant before ITO, Ward 3(3), K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT in IT(SS)A No. 639/LKW/2019, in Shri Navin Jain vs. Dy. CIT , and therein also the approval u/s 153D of the Act was given through the same approval letter under section 153D of the Act, F. No. Addl. CIT(CR)/KNP/Approval u/s 153D/2018-19/1521, which was considered by the ITAT, Lucknow Bench in Shri Navin Jain vs. Dy. CIT , in IT(SS)A Nos.639 to 641/LKW/2019, that the arguments as put forth by the assessee before the Tribunal in the above referred case are reiterated and the same may be considered for deciding this appeal; and that due to the mechanical approval by the JCIT, the assessee s case stands prejudiced. 4. The ld. Counsel for the assessee has also placed on record the summary of the factors demonstrating such prejudice, which are as under:- a) The JCIT failed to consider that the assessee, aged about 77 years, was retired from Ministry of Defence, and drawing Pension from Central Government and had no background of speculative business of trading in gold and bullion or any commodity, because during service as per Central Government Conduct Rules, a Government Servant cannot indulge in any type of speculative business activities. b) The JCIT failed to appreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s recorded in the statement u/s 132(4) of the Income Tax Act, 1961 clearly show that the statement was continued for 3 days without giving any rest in night on 23rd and 24th of August, 2016 from question No. 26 to 31. Thereafter, only 2 questions relating to cash and jewellery found and gold and silver jewellery were recorded and statement was closed as if the Officers were waiting for the formal declaration of income in the statement. g) The JCIT also failed to observe that while recording the purported statement of Shri. Naresh Kumar Jam, no question except Confirmation of surrender of ₹ 21,00,00,000/- was asked by him, clearly establishing coercion on the part of the Revenue Officer. Moreover, basic facts were not enquired about by the Authorized Official, where purchase/sale figures were in hundreds of crores, like Broker or opposite party, record documents, contract notes, bills, mode of payment, margin money for such huge volume of trading in bullion, physical custody of approximately 75 kgs of gold, which is not common in usual course of investigation and recording of statement by the Departmental Official. h) The JCIT failed to appreciate that neither any phys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed to conduct any independent enquiry or any further investigation and also did not brought on record any adverse material/evidence in relation to documents/evidences submitted by the assessee with respect to the addition of ₹ 2,00,00,000/- on account of unsecured loan, are not correct. o) The JCIT also failed to consider the fact of the case that the assessee was not provided with an opportunity for cross-examination and confrontation of the adverse material found in the course of search conducted in the case of Rich Group of cases for explanation or rebuttal at any stage from the date of search, i.e., 23.08.2016 till the completion of the assessment on 30.12.2018 with respect to the addition of ₹ 2,00,00,000/- on account of unsecured loan. p) The JCIT also failed to consider that the search in the case of Rich Group of Companies was conducted on 28.04.2015 thus, the additions on account of Unsecured Loan made in IT(SS)A No. 650 for the Assessment Year 2017-18, amounting to ₹ 2,00,00,000/-, on the basis of entries in BK-2 found during the search of Rich Group showing entries for the period 12/01/2015 to 25/04/2015, i.e., subsequent to this period is with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are prejudiced due to the mechanical approval under section 153D of the Income Tax Act, 1961 granted by the Joint Commissioner of Income Tax (Central Range) Kanpur, that such approval is unsustainable in law being mechanical and therefore, the impugned assessment orders passed in consequence thereof, are liable to be quashed. In this regard, he placed reliance on the decision of the ITAT, Lucknow Bench in the case of Shri Navin Jain vs. Dy. CIT (supra) in IT(SS)A Nos.639 to 641/LKW/2019, etc., wherein the provisions of Section 153D of the Income Tax Act, 1961 have been explained in detail and the Tribunal has allowed the appeal of the assessee, holding as under in paras 9.9 to 11 of its order:- 9.9 In this case, the Addl. Commissioner has showed his inability to analyze the issues of draft order clearly stating that no much time was left as the draft order was placed before him on 31.12.2010 and approval was granted on the same day. In the case before us the Addl. CIT has though not expressly expressed his inability to analyze the issues of draft order but it is abundantly clear that he had not analyzed the issues in the draft order as in the present cases the approval has b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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