M/s. Asma Estates and Investments Private Limited Vs DCIT (ITAT Hyderabad)
Conclusion: No addition could be made under section 69B because the two pieces of evidence relied on by Revenue Authorities viz., the data retrieved from the Pen-drive and the admission by the vendors of the property though might have a persuasive value but would not have much substantive evidentiary value in order to make additions in the hands of the assessee.
Held: AO concluded that assessee company had paid on-money to the sellers of the property and added to the income of assessee invoking the provisions of section 69B. It was held that Revenue Authorities had not produced the seller’s assessment orders to verify the facts of those cases and by relying on the oral statements such addition was made in the hands of the sellers which was not appropriate. The final outcome of those assessment Orders was also not brought to notice. When there were no other cogent corroborate evidence, it was not understood as to how such addition could be made in the hands of the buyers as well as the sellers of the property. The two evidence relied by Revenue Authorities viz., the data retrieved from the Pen-drive and the admission by the vendors of the property though might have a persuasive value but would not have much substantive evidentiary value in order to make additions in the hands of assessee. Therefore, in the interest of justice, AO was directed to delete the addition made for Rs. 14,09,25,000/- in the hands of assessee towards on-money paid for the purchase of the residential property.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
The instant batch of three appeals pertain to twin assessees namely M/s. Asma Estates and Investments Private Limited and M/s. S.V. Multi Logitech Private Limited. The former assessee herein has filed its appeal ITA No.782/Hyd/2020 against the CIT(A)-11, Hyderabad’s order dt.11-09-2020 in appeal No.10275/2019-20, the latter assessee’s appeals ITA Nos.784 & 785/Hyd/2020 arise against the very CIT(A)’s orders dt.04-09-2020 all in appeal Nos. 10280/2019-20 & 10286/2019-20, involving proceedings u/s.143(3) r.w.s.153C in former and u/s.143(3) r.w.s.153A in latter twin assessee’s; respectively.
Heard both the assessees as well as the department.
Case files perused.
2. It transpires at the outset that all these appeals involve delay in filing of 03 days (ITA No.782/H/20) and 06 days (ITA Nos.784 & 785/H/20); respectively, stated to be attributable to the reason(s) beyond their control as per the respective condonation petition(s)/affidavit(s). No rebuttal has come from the departmental side. The impugned delay is condoned in all the above said appeals
3. We notice at the outset that all the three instant appeals arise from the departmental search action dt.04-07-2017. The same led to initiation u/s.143(3) r.w.s.153C and 153A proceedings; as the case may be, finally culminating in Section 69B un-explained investment addition(s) in the nature of on-money payments involving varying sums of money, stated to be based on the alleged incriminating material found/seized during the course thereof.
4. Before we proceed further, these assessees as well as the department are ad idem during the course of hearing that this tribunal’s co-ordinate bench in ITA No.783/Hyd/2020 (involving yet another group concern M/s.Zainab Investments Private Limited Vs. DCIT pertaining to the very search action) stands reserved for final pronouncement on 04-03-2021. And that whatever decision is taken therein on the basis of the seized material would apply mutatis mutandis herein as well.
5. We have given our thoughtful consideration to both parties’ foregoing uniform stand. We next find that this tribunal’s co-ordinate bench’s order in the assessee’s group concern’s appeal (supra) has already decided the very un- explained investment addition issue in assessee’s favour and against the department as under:
“5. The brief facts of the case are that the assessee is a Private Limited company engaged in the business of investing in real estate and undertaking infrastructure projects etc. Shri Ajaz Farooqi is the Director of the assessee company who had predominant control over the company. The assessee company filed its original return of income on 19/11/2015 for the AY 2015-16 declaring total income of Rs. 2,83,810/- and the same was processed U/s. 143(1) of the Act on 30/06/2018. Thereafter, search and seizure operations U/s. 132 of the Act was conducted in the case of the assessee company and its related persons and concerns on 4/7/2017. Subsequently, the assessment U/s. 143(3) r.w.s 153A of the Act was completed vide order dated 28/12/2019 wherein the Ld. AO made several additions along with the addition mentioned in the grounds herein above.
6. Ground No.1: Addition of Rs. 95 lakhs towards unaccounted commission:
7. The Ld. AR at the outset submitted before us that the Ld. AO had made the addition of Rs. 95 lakhs U/s. 69C of the Act on the presumption that the assessee had paid commission in order to obtain accommodation entries of Rs. 18,60,00,000/-. The Ld. AR further submitted that the CIT (A) had deleted the addition made by the Ld. AO for Rs. 18,60,00,000/- towards the accommodation entries received by the assessee in page 74 to 80 of his order at para 7.2.3 by observing as under against which the Revenue is not in appeal:-
“ 7.2.3. On consideration of AO’s findings and basis thereof and the contentions of the appellant, the following position emerges:
i) The appellant has submitted documentary evidences to prove the identity, credit worthiness of the creditor and the genuineness of the There is no adverse finding on the documents produced by the appellant.
ii) The enquiries at the Delhi and the statement recorded of Mr. Bardia create suspicion as to the transactions of the appellant company with the The suspicion should lead to investigation to bring out the facts and material on record to disprove the contention of the appellant. No such enquiries were conducted by the AO to bring out facts/material on record. Suspicion, however strong, cannot substitute for evidence. The AO ought to have conducted further enquiries to take it to the logical conclusion.
iii) The appellant discharged, the initial ‘burden of proof by producing all the documentary evidences. The AO has not contradicted any of the evidences produced by the Unless some evidence is brought on record and appellant is confronted with such evidence, the burden does not shift back to the appellant.
iv) No evidences, were found during the Search which are ‘incriminating as to the transactions with various companies. The enquiries conducted were post search enquiries only. Otherwise, the transactions are duly recorded in the hands of recipient and the payer.
v) The statement recorded by DDIT(Inv), Hyderabad at Delhi of Mr Bardia is perused. The statement is reproduced for ready reference.
Ql. Please introduce yourself?
Ans: I am Abhay Chand Bardia, So/a. Sri Dharm Chand Bardia, Aged about 64 Yrs, Resident of 20-B, Kiran Kutir, Old gupta colony, Delhi-110 009. My mobile number is 9811024165 and [email protected]. I am furnishing herewith copy of my aadhar card no.3850 8843 1656 as identity proof.
Q2. Please state if you are aware of the penal consequences of giving a false statement on oath.
Ans: Yes, I am made aware of.
Q3. What is your occupation?
Ans: I am a director in the following companies/firms.
i) Terinl Enterprises
ii) Dwinger Agents P Ltd
iii) Rochhard Enterprises P Ltd
iv) Verbena Developers P
v) KD Stock broking p ltd
vi) Micron precision engineering p ltd.
Q4. What are the other companies operated from this address i.e 3/14A, Ist Floor, Double Storey, Vijaya Nagar.
Ans: The following companies are operated from this premises:
