TMI Blog2022 (8) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... s of other assessee s of the Group, where a considered finding of the Settlement Commission is already in place. Accordingly, we refrain ourselves from interfering with the just and proper findings recorded by the CIT(A) in this regard. Thus, we uphold the same and dismiss ground No.1 of the assessee. Disallowance of interest on unsecured loan - As on perusal of the findings given by the Settlement Commission in this regard, we found that the assessee could not prove the creditworthiness of the lender company in view of the enquiry report submitted by the Pr.CIT, Central Circle. Since, the findings of Settlement Commission are applied in the case of assessee and a relief of 90% has already been given to the assessee on her unexplained income U/s 68 of the Act, no expense with respect to the said income can be further allowed. Thus, we are of the considered opinion that the interest paid with reference to the impugned unsecured loan cannot be allowed to the assessee and, therefore, we uphold the order of the CIT(A) on this ground. Accordingly, the ground No.2 of the assessee is also dismissed. Consequently, the appeal of the assessee is dismissed. - ITA No.178/RPR/2017 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reproduced hereinabove, I also treat 10% of the amount credited in the books of account of the assessee as income of the assssee and reject the account furnished by the learned AR that the assesseehad incurred interest also. Thus, the 10% of amount added by the AO is hereby treated as income of the assessee keeping in view the respectful finding of Hon ble Settlement Commission because the asessee is beneficiary of the Modus Operandi adopted by the members of the group. Thus out of 1,00,75,342/- added by the AO Rs.10,07,534/- is confirmed. (Relief-90,67,808/-) 4. Now, the assessee is in further appeal before the Tribunal against the additions sustained by the CIT(A). 5. Ld. AR before us filed his written submissions, which read as under:- 1. Only basis of addition is letter dated 21.12.20121 submitted to DDIT(Inv.) by the husband of assessee Shri Sunil Kumar and her brother in law Shri Sanjay Kumar Agrawal, mentioning that the cash deposits in account of five persons was made by these persons (page 2 of the assessment order, observations just after the table on the top) :- i) If the money was owned by above named 2 persons, it was liable to be considered in their h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). 4. CIT(A) s action of sustaining 10% of addition is illogical and based on incorrect understanding of ITSC s order. ITSC did not sustain addition of 10% of loan from Karnimata Commerce. It estimated contract business income of applicants at 10%. CIT(A) misunderstood facts. Applicants before ITSC rejected their own books estimated contract business profit @ 8% of contract receipts. Fact of suo moto rejection of books on PN 41 of PB, 2nd to 5th line from top. It was this estimate of 8% which was revised to 10% voluntarily by them (PN 81 of PB, 1st para, last 3 lines) Same conclusion in para 39.3 of ITSC s order, PN 91 of PB. 6. On the other hand, ld. Sr. DR, vehemently supported the orders of the authorities below. 7. We have considered the rival submissions and perused the relevant material available on record. On perusal of the assessment order as well as appellate order, we found that the assessee as well as other members of Radheshyam Agarwal Group have received certain amounts from M/s Karnimata Commerce Pvt. Ltd., Kolkata. The AO in the course of assessment proceedings found that there has been rerouting of the money through various lay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. As mentioned above he was required to explain under which head how much amount he had surrendered before the Settlement Commission for the search period but he has not disclosed these details before me on the ground that this is confidential. Moreover, he has not offered any explanation in respect of the treatment of amount received from Karnimata Commerce Pvt. Ltd. in his case whereas the JC'IT(Inv.). Raipur has observed in his appraisal report that dealyering of funds received by Shri Sunil Kumar Agrawwal from Karnimata Commerce Pvt. Ltd. in the grab of unsecured loan was attempted and extensive delayering excise has been carried out as a matter of hot-pursuit post search enquiries. The result of this exercise conclusively showed that the cash deposits in the accounts of Holiram Yadav. Chamar Singh Yadav and Laxmi Prasad Yadav has been routed to the account of Karnimata Commerce Pvt. Ltd.. Subsequently, on 21:12.2011, the assessee submitted a letter and owned up the funds belongs to him. Thus, the assessee miserably failed to discharge the initial onus laid down upon the assessee in terms of section 68 of the I.T. Act, 1961 i.e. creditworthiness and genuineness of the tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e paid back to the Kolkata entities, although apparently so claimed in the books of account. This modus operandi of the applicants need to be noted as the applicants had not made full and true disclosure. Para 39.3- To sum up in the cases of M/s Radhey Shyam Agrawal, Shri Sunil Kumar Agrawal and Shri Sanjay Kumar Agrawal, since the main allegation of the Department that the unaccounted money were routed back by way of unsecured loans could not have been established by the department, the Bench is of the considered view that an estimate of 10% in the cases of the above applicants will be in a more proper manner of working their income than making additions substantially in their hands. 8. Further the Settlement Commission in para 33 has held that Shri Sunil Agrawal was the key family member, who was handling funds on behalf of the other assessee/applicants. The relevant observations of the Settlement Commission is as under:- 33. It is further relevant to note that after considering all relevant facts, we note that substantial part of the income is derived by the three applicants from execution of Government contracts. The main person controlling the affairs of the group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nguish the case of assessee from the cases of other assessee s of the Group, where a considered finding of the Settlement Commission is already in place. Accordingly, we refrain ourselves from interfering with the just and proper findings recorded by the CIT(A) in this regard. Thus, we uphold the same and dismiss ground No.1 of the assessee. 11. With regard to ground No.2 in respect of disallowance of Rs.75,342/- made by the AO on account of interest on unsecured loan, on perusal of the findings given by the Settlement Commission in this regard, we found that the assessee could not prove the creditworthiness of the lender company in view of the enquiry report submitted by the Pr.CIT, Central Circle. Since, the findings of Settlement Commission are applied in the case of assessee and a relief of 90% has already been given to the assessee on her unexplained income U/s 68 of the Act, no expense with respect to the said income can be further allowed. Thus, we are of the considered opinion that the interest paid with reference to the impugned unsecured loan of Rs.1,00,00,000/- cannot be allowed to the assessee and, therefore, we uphold the order of the CIT(A) on this ground. Accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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