Smt. Rita Agarwal Vs DCIT (ITAT Chennai)
Held that addition, only on the basis of information received from investigation wing ignoring all the evidences filed by the assessee, is unsustainable in law
Facts-
The search and seizure operations under section 132 of the Act took in the residential premises of Shri Pankaj Agarwal, Managing Director of M/s. Suryadev Alloys and Power Pvt. Ltd., documents belonging to the assessee were seized and a notice u/s. 153A was served on the assessee. In response, the assessee filed ROI admitting income of ₹29,64,800/-.
Thereafter, the Assessing Officer has completed the assessment under section 143(3) r.w.s. 153A of the Act dated 31.03.2015 by making addition of ₹1,25,00,000/- u/s. 68 of the Act. On appeal, the ld. CIT(A) confirmed the addition made under section 68 of the Act.
On appeal, CIT(A) confirmed the addition made under section 68 of the Act. Being aggrieved, the assessee filed the present appeal.
Conclusion-
We find that the sole basis for the Assessing Officer to make the addition under section 68 of the Act is that investigation carried out by the Income Tax Department on certain entry providers and statement recorded from them. Except this, no other evidence was available with the Assessing Officer to prove that share capital received from M/s. Kaner Investments Ltd. is accommodation entry taken to convert unaccounted income of the assessee. On the other hand, the assessee has filed all the evidences.
Held that once it is proved that the assessee has discharged her onus, then the onus shift to the Assessing Officer to prove otherwise.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
The appeals filed by different assessee are directed against separate orders of the ld. Commissioner of Income Tax (Appeals) 19, Chennai, all dated 20.09.2019 relevant to the assessment year 2011-12. Since the facts are identical and common issue has been raised except change of figures, all the appeals were heard together and being disposed off by this common order for the sake of brevity. The only common issued raised in all the appeals relate to confirmation of addition made under section 68 of the Income Tax Act, 1961 [“Act” in short].
2. Brief facts of the case are that the consequent to the search and seizure operations under section 132 of the Act, on 18.12.2012 in the residential premises of Shri Pankaj Agarwal, Managing Director of M/s. Suryadev Alloys and Power Pvt. Ltd., documents belonging to the assessee were seized and a notice under section 153A of the Act dated 13.08.2013 was served on the assessee. In response to the notice, the assessee filed a letter dated 22.07.2014, duly acknowledging the receipt of the said notice and filed a copy of the return of income filed on 31.07.2011 admitting income of ₹.29,64,800/-
with a request to treat the same as the return of income filed in response to the said notice. Notices under section 143(2) and 142(1) of the Act were also duly served on the assessee. Thereafter, the Assessing Officer has completed the assessment under section 143(3) r.w.s. 153A of the Act dated 31.03.2015 by making addition of ₹.1,25,00,000/- under section 68 of the Act. On appeal, the ld. CIT(A) confirmed the addition made under section 68 of the Act.
3. On being aggrieved, the assessee is in appeal before the Tribunal. By relying upon the grounds of appeal, the ld. Counsel for the assessee has submitted that the action of the Assessing Officer in bringing to tax the unsecured loans despite establishing the identity of the contributor/creditor as well as the genuineness of the transactions was wholly unjustified and unsustainable in law. It was further submission that the ld. CIT(A) went wrong in rejecting the plea of the assessee for cross-examination of Jagdish Prasad Roy and Prasad Lahoti and concluding that the right of cross examination was not absolute. It was also challenged the validity of the search assessment in the absence of any incriminating seized material(s) and prayed for deleting the addition made under section 68 of the Act.
4. On the other hand, the ld. DR strongly supported the orders of authorities below.
5. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. During the course of assessment proceedings, the Assessing Officer issued show-cause notice dated 25.03.2015 asking the assessee to furnish the details of unsecured loan received amounting to ₹.1,25,00,000/- from Echolac Vinimay Pvt. Ltd. In response to the show cause notice, vide his letter dated 26.05.2015, the assessee has submitted the following before the Assessing Officer:
“I have gone through the above show cause notice and wish to inform that I have received the said unsecured loan of ₹.1,25,00,000/- from Echolac Vinimay Pvt. Ltd. The said loan was received by me on dates as mentioned below:
