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Income Tax Appellate Tribunal, MUMBAI BENCH “C” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY
These appeals by the These appeals by the Revenue and cross-objection objections by the assessee are directed against two separate orders, both dated assessee are directed against two separate orders assessee are directed against two separate orders 28.03.2023, passed by the Ld. Commissioner of Income passed by the Ld. Commissioner of Income passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. National Faceless Appeal Centre, Delhi [in short ‘the Ld. National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment years 2 CIT(A)’] for assessment years 2015-16 and 2016-17 respectively. As 17 respectively. As common issue in dispute, permeating common issue in dispute, permeating from same set of facts is same set of facts is involved in these appeals involved in these appeals , therefore same were heard together and therefore same were heard together and disposed off by way of this consolidated order for convenience. disposed off by way of this consolidated order for convenience. disposed off by way of this consolidated order for convenience.
The The grounds grounds raised raised by by the t he Revenue Revenue in in ITA ITA No. No. 1919/Mum/2023 for assessment year 2015 1919/Mum/2023 for assessment year 2015-16 are reproduced as 16 are reproduced as under:
1. On the facts and circumstances of the case and in law, the Ld. CIT(A) 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 16,67,41,120/ erred in deleting the addition of Rs. 16,67,41,120/-made by the AO on made by the AO on account of cash loan and account of cash loan and interest income earned on such cash loan, interest income earned on such cash loan, only on the ground that no opportunity of cross examination was only on the ground that no opportunity of cross examination was only on the ground that no opportunity of cross examination was provided to the assessee during the course of assessment proceedings provided to the assessee during the course of assessment proceedings provided to the assessee during the course of assessment proceedings when the reliable and sufficient material was available on record and when the reliable and sufficient material was available on record and when the reliable and sufficient material was available on record and alternatively the CIT(A) himself could have provided the opportunity of ely the CIT(A) himself could have provided the opportunity of ely the CIT(A) himself could have provided the opportunity of cross examination to the assessee as per the ratio laid down by the cross examination to the assessee as per the ratio laid down by the cross examination to the assessee as per the ratio laid down by the Hon'ble Apex Court in the case of Kanpur Coal Syndicate 1965 AIR Hon'ble Apex Court in the case of Kanpur Coal Syndicate 1965 AIR Hon'ble Apex Court in the case of Kanpur Coal Syndicate 1965 AIR 325,1964 SCR (6) 85. 325,1964 SCR (6) 85.
2. On the facts and circumstances of the 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) case and in law, the Ld. CIT(A) failed to appreciate the facts that the information regarding cash loan failed to appreciate the facts that the information regarding cash loan failed to appreciate the facts that the information regarding cash loan and interest thereon was received from the Hon'ble Income Tax and interest thereon was received from the Hon'ble Income Tax and interest thereon was received from the Hon'ble Income Tax Settlement Commission, which has accepted the content of the Settlement Commission, which has accepted the content of the Settlement Commission, which has accepted the content of the information. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate the fact that the AO had all the materials on record failed to appreciate the fact that the AO had all the materials on record failed to appreciate the fact that the AO had all the materials on record
Prakash Chandumal Rohra. 3 & 1920/Mum/2023 and CO No. 94 & ITA Nos. 1919 & 1920/Mum/2023 and CO No. 94 & 93/Mum/2023 and the same were corroborated with the financials of the assessee for and the same were corroborated with the financials of the assessee for and the same were corroborated with the financials of the assessee for the corresponding year and made the ad the corresponding year and made the addition on merit.
The appellant prays that the order of the CIT (Appeals) on the above 4. The appellant prays that the order of the CIT (Appeals) on the above 4. The appellant prays that the order of the CIT (Appeals) on the above ground be set aside and that of AO be restored. ground be set aside and that of AO be restored.
5. The appellant craves leave to amend or alter any ground or submit 5. The appellant craves leave to amend or alter any ground or submit 5. The appellant craves leave to amend or alter any ground or submit additional ground which may be necessary. additional ground which may be necessary.
The cross-objection objections raised by the assessee for assessment raised by the assessee for assessment year 2015-16 are reproduced as under: 16 are reproduced as under:
On the facts and circumstances of the cross . On the facts and circumstances of the cross-objector's case and in objector's case and in law, the Ld. AO erred in passing an impugned assessment order u/s law, the Ld. AO erred in passing an impugned assessment order u/s law, the Ld. AO erred in passing an impugned assessment order u/s 147 of the Act which is bad 147 of the Act which is bad in law and liable to be quashed. in law and liable to be quashed.
2. On the facts and circumstances of the cross 2. On the facts and circumstances of the cross-objector's case and in objector's case and in law, the Ld. AO erred in relying on the information received from the law, the Ld. AO erred in relying on the information received from the law, the Ld. AO erred in relying on the information received from the third party, without any evidence on record, for the reasons mentioned third party, without any evidence on record, for the reasons mentioned third party, without any evidence on record, for the reasons mentioned in the impugned order or otherwise. ned order or otherwise. 3. On the facts and circumstances of the cross 3. On the facts and circumstances of the cross-objector's case and in objector's case and in law, the Ld. AO erred in not providing the opportunity of cross law, the Ld. AO erred in not providing the opportunity of cross law, the Ld. AO erred in not providing the opportunity of cross- examination to the assessee, for the reasons mentioned in the examination to the assessee, for the reasons mentioned in the examination to the assessee, for the reasons mentioned in the impugned order or otherwise. impugned order or otherwise. 4. On the facts and circumstances of the cross he facts and circumstances of the cross-objector's case and in objector's case and in law, the Ld. AO erred in making an addition of law, the Ld. AO erred in making an addition of Rs.14,81,00,000/ Rs.14,81,00,000/- on account of alleged unsecured loan given to account of alleged unsecured loan given to Wadhwa Group, ignoring the Wadhwa Group, ignoring the fact that the assessee had not entered into any such tr fact that the assessee had not entered into any such transaction, for the ansaction, for the reasons mentioned in impugned order or otherwise. reasons mentioned in impugned order or otherwise. 5. On the facts and circumstances of the cross 5. On the facts and circumstances of the cross-objector's case and in objector's case and in law, the Ld. AO erred in making an addition of Rs.1,86,41,120/ law, the Ld. AO erred in making an addition of Rs.1,86,41,120/ law, the Ld. AO erred in making an addition of Rs.1,86,41,120/- on account of alleged interest income, for the reason account of alleged interest income, for the reasons mentioned in s mentioned in impugned order or otherwise. impugned order or otherwise. 4. Briefly stated, facts of the case are that the assessee filed Briefly stated, facts of the case are that the assessee filed Briefly stated, facts of the case are that the assessee filed return of income for the year under consideration on 24.08.2015 return of income for the year under consideration on 24.08.2015 return of income for the year under consideration on 24.08.2015 declaring total income at Rs.44,61,910/ declaring total income at Rs.44,61,910/-. The return of income was . The return of income was processed u/s 143(1) of the Income 3(1) of the Income-tax Act, 1961 (in short ‘the Act’) tax Act, 1961 (in short ‘the Act’) on 08.03.2016. Thereafter on 08.03.2016. Thereafter, on receipt of information from the Dy. on receipt of information from the Dy. Commissioner of Income Commissioner of Income-tax that the assessee had given cash loans tax that the assessee had given cash loans
Prakash Chandumal Rohra. 4 & 1920/Mum/2023 and CO No. 94 & ITA Nos. 1919 & 1920/Mum/2023 and CO No. 94 & 93/Mum/2023 to M/s Wadhwa Group and also rec Wadhwa Group and also received interest income in cash, eived interest income in cash, the Assessing Officer a essing Officer after recording reasons to believe fter recording reasons to believe that income escaped assessment escaped assessment, he issued notice u/s 148 of the Act on he issued notice u/s 148 of the Act on 19.03.2020 .Thereafter hereafter, he completed the assessment u/s 147 completed the assessment u/s 147 r.w.s. 144B of the Act and made addition of Rs.14,81,00,000/- for r.w.s. 144B of the Act and made addition of Rs.14,81,00,000/ r.w.s. 144B of the Act and made addition of Rs.14,81,00,000/ loan advanced in cash and addition on account of interest income in cash and addition on account of interest income in cash and addition on account of interest income of Rs.1,86,41,120/-.
4.1 On further appeal, the Ld. CIT(A) deleted both the addition On further appeal, the Ld. CIT(A) deleted both the addition On further appeal, the Ld. CIT(A) deleted both the additions. Aggrieved, the Revenue is in appeal challenging the deletion of the the Revenue is in appeal challenging the deletion of the the Revenue is in appeal challenging the deletion of the addition on merit whereas assessee is agg addition on merit whereas assessee is aggrieved for not adjudicating rieved for not adjudicating the grounds of appeal challenging the validity of the reassessment. the grounds of appeal challenging the validity of the reassessment. the grounds of appeal challenging the validity of the reassessment.
Before us, the Ld. Counsel of the assessee has filed a Paper Before us, the Ld. Counsel of the assessee has filed a Paper Before us, the Ld. Counsel of the assessee has filed a Paper Book containing pages 1 to 68. Book containing pages 1 to 68.
Before us, the Ld. Departmental Representative (DR) relied o Before us, the Ld. Departmental Representative (DR) relied o Before us, the Ld. Departmental Representative (DR) relied on the order of the Assessing Officer and submitted that the Ld. CIT(A) the order of the Assessing Officer and submitted that the Ld. CIT(A) the order of the Assessing Officer and submitted that the Ld. CIT(A) is not justified in deleting the addition for the reason that no is not justified in deleting the addition for the reason that no is not justified in deleting the addition for the reason that no opportunity for cross cross-examination was provided by the Assessing examination was provided by the Assessing Officer. He submitted that the Assessing Officer has clearly Officer. He submitted that the Assessing Officer has cle Officer. He submitted that the Assessing Officer has cle mentioned in the order that he had relied on the circumstances mentioned in the order that he had relied on the circumstances mentioned in the order that he had relied on the circumstances evidences and therefore, providing cross and therefore, providing cross-examination was not examination was not mandatory in the case of the assessee. mandatory in the case of the assessee.
Prakash Chandumal Rohra. 5 & 1920/Mum/2023 and CO No. 94 & ITA Nos. 1919 & 1920/Mum/2023 and CO No. 94 & 93/Mum/2023
On the contrary, the Ld. Counsel On the contrary, the Ld. Counsel for the assessee relied on the the assessee relied on the finding of the Ld. CIT(A) and also submitted that no addition could IT(A) and also submitted that no addition could IT(A) and also submitted that no addition could be made on the basis of the third party evidence unless copy of the be made on the basis of the third party evidence unless copy of the be made on the basis of the third party evidence unless copy of the same is provided to the assessee same is provided to the assessee. In support of contention n support of contention, he relied on the decision of the Hon’ble Delhi High Court in the case of CIT v. on the decision of the Hon’ble Delhi High Court in the case of on the decision of the Hon’ble Delhi High Court in the case of Ashwani Gupta [2010] 322 ITR 396 (Delhi). Ashwani Gupta [2010] 322 ITR 396 (Delhi).
We have heard rival submissions of the parties on the issue in We have heard rival submissions of the parties on the issue in We have heard rival submissions of the parties on the issue in dispute and perused the relevant material on record. As far as dispute and perused the relevant material on record. As far as dispute and perused the relevant material on record. As far as ground of appeal of the Revenue is concerned, we find that Revenue ground of appeal of the Revenue is concerned, we find that Revenue ground of appeal of the Revenue is concerned, we find that Revenue is aggrieved with the finding of the Ld. CIT(A) that in absence of the finding of the Ld. CIT(A) that in absence of the finding of the Ld. CIT(A) that in absence of providing material relied upon by the Assessing Officer and failure providing material relied upon by the Assessing Officer providing material relied upon by the Assessing Officer in providing opportunity of the cross unity of the cross-examination, t examination, the addition being made in violation of principal on natural justice, was not being made in violation of principal on natural justice being made in violation of principal on natural justice sustainable. The relevant finding of the Ld. CIT(A) is reproduced as le. The relevant finding of the Ld. CIT(A) is reproduced as le. The relevant finding of the Ld. CIT(A) is reproduced as under:
“5. FINDING & DECISION: “5. FINDING & DECISION: 5.1 I have gone through the Assessment Order and submissions of the I have gone through the Assessment Order and submissions of the I have gone through the Assessment Order and submissions of the appellant. The learned AO has carried out addition u/s 69A of the I.T. The learned AO has carried out addition u/s 69A of the I.T. The learned AO has carried out addition u/s 69A of the I.T. Act for sum of Rs. 14,81,0 Act for sum of Rs. 14,81,00,000/- on account of cash loan given to on account of cash loan given to Wadhwa Group and addition on account of interest there to for sum Rs. Wadhwa Group and addition on account of interest there to for sum Rs. Wadhwa Group and addition on account of interest there to for sum Rs. 1,86,41.120/-.All the grounds of appeal are related to the addition .All the grounds of appeal are related to the addition .All the grounds of appeal are related to the addition carried out on account such cash loan and therefore, disposed off carried out on account such cash loan and therefore, disposed off carried out on account such cash loan and therefore, disposed off collectively as under. y as under. The learned AO carried out this adjustment based on The learned AO carried out this adjustment based on The learned AO carried out this adjustment based on information received from office of DCIT, CC5(4), Mumbai. information received from office of DCIT, CC5(4), Mumbai. information received from office of DCIT, CC5(4), Mumbai. Apparently search and seizure proceedings were carried out at Apparently search and seizure proceedings were carried out at Apparently search and seizure proceedings were carried out at the premises of Wadhwa Group on 16 the premises of Wadhwa Group on 16-12-2015 and as per 2015 and as per information retrie information retrieved from cloud based software which was ved from cloud based software which was maintained by a third party Shri. Arun Nagar. Pursuant to such maintained by a third party Shri. Arun Nagar. Pursuant to such maintained by a third party Shri. Arun Nagar. Pursuant to such data the learned AO contested that appellant's name was data the learned AO contested that appellant's name was data the learned AO contested that appellant's name was Prakash Chandumal Rohra. 6 & 1920/Mum/2023 and CO No. 94 & ITA Nos. 1919 & 1920/Mum/2023 and CO No. 94 & 93/Mum/2023 revealed by Wadhwa group before settlement commission for revealed by Wadhwa group before settlement commission for revealed by Wadhwa group before settlement commission for accepting cash loan of Rs. 14.81 crores accepting cash loan of Rs. 14.81 crores. 5.2 In view of the above the learned AO reopened the assessment In view of the above the learned AO reopened the assessment In view of the above the learned AO reopened the assessment proceedings u/s 147. In response to the same the appellant denied any proceedings u/s 147. In response to the same the appellant denied any proceedings u/s 147. In response to the same the appellant denied any cash dealings with Wadhwa cash dealings with Wadhwa Group and requested learned AO to Group and requested learned AO to provide material available within and relied by him for alleged cash provide material available within and relied by him for alleged cash provide material available within and relied by him for alleged cash loan of Rs. 14.81 crores. The appellant also requested for opportunity to loan of Rs. 14.81 crores. The appellant also requested for opportunity to loan of Rs. 14.81 crores. The appellant also requested for opportunity to cross examination. However, the appellant was neither provided cross examination. However, the appellant was neither provided cross examination. However, the appellant was neither provided material availa material available basis which such addition carried out nor he was ble basis which such addition carried out nor he was provided opportunity of cross examination. In this regard the extract provided opportunity of cross examination. In this regard the extract provided opportunity of cross examination. In this regard the extract from AO's order is reproduced as under from AO's order is reproduced as under: "The next contention raised is that the assessee should be given "The next contention raised is that the assessee should be given "The next contention raised is that the assessee should be given opportunity to cross opportunity to cross-examine the third party. In this regard, it is the third party. In this regard, it is pointed out that since the additions are mainly being made on pointed out that since the additions are mainly being made on pointed out that since the additions are mainly being made on the basis of circumstantial evidence against the assessee and the basis of circumstantial evidence against the assessee and the basis of circumstantial evidence against the assessee and not on the basis of submissions of third not on the basis of submissions of third-party, the contention party, the contention raised by the assessee is not raised by the assessee is not accepted. The assessee has The assessee has material and requested to provide him a copy requested to provide him a copy of seized of seized exact submissions made by Wadhwa Group. exact submissions made by Wadhwa Group. However, it is again reiterated that the assessee has relied upon in it is again reiterated that the assessee has relied upon in it is again reiterated that the assessee has relied upon in number of the case laws to contend that no addition can be number of the case laws to contend that no addition can be number of the case laws to contend that no addition can be made on the basis of seized material found from the premises of on the basis of seized material found from the premises of on the basis of seized material found from the premises of the third party. In this regard it is reiterated that the additions the third party. In this regard it is reiterated that the additions the third party. In this regard it is reiterated that the additions are not being made on the basis of material seized from the third are not being made on the basis of material seized from the third are not being made on the basis of material seized from the third party but on the basis of circumstantial evidence against the party but on the basis of circumstantial evidence against the party but on the basis of circumstantial evidence against the assessee as discussed above. assessee as discussed above. Therefore, all the contentions made by the assessee as Therefore, all the contentions made by the assessee as Therefore, all the contentions made by the assessee as discussed above are not justified and are accordingly rejected." discussed above are not justified and are accordingly rejected." discussed above are not justified and are accordingly rejected." 5.3 Having regard to the contention of AO that he has passed the order Having regard to the contention of AO that he has passed the order Having regard to the contention of AO that he has passed the order based on circumstantial evidences wi based on circumstantial evidences without disclosing such evidences is thout disclosing such evidences is very much against the principle of natural justice. In this regard reliance very much against the principle of natural justice. In this regard reliance very much against the principle of natural justice. In this regard reliance can be placed on the following judicial pronouncements can be placed on the following judicial pronouncements can be placed on the following judicial pronouncements Hon'ble Supreme Supreme Supreme Court Court Court in in in case case case of of of Anadaman Anadaman Anadaman Timber Timber Timber industries industries industries vs. vs. vs. Commissioner of Central Ex Commissioner of Central Excise (2015) 281 CTR 241 (SC) has held as cise (2015) 281 CTR 241 (SC) has held as under:- "According to us, not allowing the assessee to cross "According to us, not allowing the assessee to cross- -examine the witnesses by the Adjudicating Authority though the statements witnesses by the Adjudicating Authority though the statements witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order of those witnesses were made the basis of the impugned order of those witnesses were made the basis of the impugned order is a serious flaw w is a serious flaw which makes the order nullity inasmuch as it hich makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of amounted to violation of principles of natural justice because of amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in which the assessee was adversely affected. It is to be borne in which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the mind that the order of the Commissioner was based upon the mind that the order of the Commissioner was based upon the statements given by the statements given by the aforesaid two witnesses. Even when aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and the assessee disputed the correctness of the statements and the assessee disputed the correctness of the statements and wanted to cross wanted to cross-examine, the Adjudicating Authority did not examine, the Adjudicating Authority did not Prakash Chandumal Rohra. 7 & 1920/Mum/2023 and CO No. 94 & ITA Nos. 1919 & 1920/Mum/2023 and CO No. 94 & 93/Mum/2023 grant this opportunity to the assessee. It would be pertinent to grant this opportunity to the assessee. It would be pertinent to grant this opportunity to the assessee. It would be pertinent to note that in the impugned order pas note that in the impugned order passed by the Adjudicating sed by the Adjudicating Authority he has specifically mentioned that such an opportunity Authority he has specifically mentioned that such an opportunity Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was was sought by the assessee. However, no such opportunity was was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the granted and the aforesaid plea is not even dealt with by the granted and the aforesaid plea is not even dealt with by the Adjudicating Authority." Adjudicating Authority." Further, reliance ca Further, reliance can be placed on following judicial precedents n be placed on following judicial precedents wherein it has been upheld those additions based on seized wherein it has been upheld those additions based on seized wherein it has been upheld those additions based on seized material found from premises of third party cannot be material found from premises of third party cannot be material found from premises of third party cannot be considered for making additions unless the AO has carried out considered for making additions unless the AO has carried out considered for making additions unless the AO has carried out independent finding based on such ma independent finding based on such material. - Add. CIT Vs Lata Mangeshkar (97 ITR 696) Add. CIT Vs Lata Mangeshkar (97 ITR 696) - CBI VS V. C. Shuka (3 SCC 410)DEPARTMEN CBI VS V. C. Shuka (3 SCC 410)DEPARTMEN - Shri Mustafamiya H. Sheikh (Vide Shri Mustafamiya H. Sheikh (Vide ITA NO. 2588/Ahd/2012) Shri Mustafamiya H. Sheikh (Vide ITA NO. 2588/Ahd/2012) - DCIT Vs H.S. Chadramouli (ITA No. 1551/Bang/2012) DCIT Vs H.S. Chadramouli (ITA No. 1551/Bang/2012) DCIT Vs H.S. Chadramouli (ITA No. 1551/Bang/2012) - M/s Mohd. Ayub Mohd. Yakub Perfumers Pvt. Ltd (ITA M/s Mohd. Ayub Mohd. Yakub Perfumers Pvt. Ltd (ITA M/s Mohd. Ayub Mohd. Yakub Perfumers Pvt. Ltd (ITA NO.388/LKW/2013) NO.388/LKW/2013) - DCIT Vs Pawan Kumar Agarwal (ITA 413 LKW/2012) DCIT Vs Pawan Kumar Agarwal (ITA 413 LKW/2012) DCIT Vs Pawan Kumar Agarwal (ITA 413 LKW/2012) - MIs Bhola Nath Radha Krishan 9ITA 5149/Del/2012) MIs Bhola Nath Radha Krishan 9ITA 5149/Del/2012) MIs Bhola Nath Radha Krishan 9ITA 5149/Del/2012) - Pradeep Amrutial Runwal (149 |TR 548). Pradeep Amrutial Runwal (149 |TR 548). 5.4 In view of the above facts of the case and judicial pronouncement by In view of the above facts of the case and judicial pronouncement by In view of the above facts of the case and judicial pronouncement by Honourable Supreme Court Honourable Supreme Court it is observed that the learned AO has it is observed that the learned AO has grossly erred in passing an order which Is against principle of natural grossly erred in passing an order which Is against principle of natural grossly erred in passing an order which Is against principle of natural justice by not granting opportunity of cross examination and by not justice by not granting opportunity of cross examination and by not justice by not granting opportunity of cross examination and by not sharing the material available with him basis which he has carried out sharing the material available with him basis which he has carried out sharing the material available with him basis which he has carried out the addition. Therefore, the order of learned AO is bad in law and the dition. Therefore, the order of learned AO is bad in law and the dition. Therefore, the order of learned AO is bad in law and the addition on account of cash loan (Rs.14,81,00,000/ addition on account of cash loan (Rs.14,81,00,000/-) and interest (Rs. ) and interest (Rs. 1,86,41, 120/-) thereto carried out is liable to be deleted. ) thereto carried out is liable to be deleted.” 8.1 On the contrary, the Ld. Assessing Officer has referre On the contrary, the Ld. Assessing Officer has referre On the contrary, the Ld. Assessing Officer has referred that he has relied on the circumstances evidence has relied on the circumstances evidences. The Assessing Officer . The Assessing Officer has analyzed the financial financial statement of the assessee and concluded statement of the assessee and concluded that assessee was engaged in the extending loans to various parties that assessee was engaged in the extending loans to various parties that assessee was engaged in the extending loans to various parties for earning interest. After analysis of the fi for earning interest. After analysis of the financial statement, the nancial statement, the Assessing Officer was of the view that the household withdrawal Assessing Officer was of the view that the household withdrawal Assessing Officer was of the view that the household withdrawal
Prakash Chandumal Rohra. 8 & 1920/Mum/2023 and CO No. 94 & ITA Nos. 1919 & 1920/Mum/2023 and CO No. 94 & 93/Mum/2023 shown by the assessee of Rs.60,000/ shown by the assessee of Rs.60,000/- was not sufficient was not sufficient to meet the house hold expenditure of family of assessee house hold expenditure of family of assessee and the assessee and the assessee accumulated his capital balance his capital balance and earned interest interest on advancing cash loan. In response n response, the assessee explained that that the total house withdrawals of his family were withdrawals of his family were of the tune of Rs.14.35 crores of the tune of Rs.14.35 crores for the assessment year. The relevant explanation of the . The relevant explanation of the assessee, . The relevant explanation of the reproduced by the Assessing Officer by the Assessing Officer, is extracted as under: is extracted as under:
“The next contention raised is that low amount of cash withdrawals by The next contention raised is that low amount of cash withdrawals by The next contention raised is that low amount of cash withdrawals by the assessee is not a valid basis for making the addition since other the assessee is not a valid basis for making the addition since other the assessee is not a valid basis for making the addition since other family members have also contributed towards household expenses. T family members have also contributed towards household expenses. T family members have also contributed towards household expenses. To support his contentions, the assessee has furnished a simple chart support his contentions, the assessee has furnished a simple chart support his contentions, the assessee has furnished a simple chart showing total withdrawals by the family for the year at Rs.14.35 lakhs. showing total withdrawals by the family for the year at Rs.14.35 lakhs. showing total withdrawals by the family for the year at Rs.14.35 lakhs. However, this submission is not supported with any further details or However, this submission is not supported with any further details or However, this submission is not supported with any further details or evidence, such as total number of members of evidence, such as total number of members of the family, their age, the family, their age, amount of expenses on major items of expenditure, such as house rent, amount of expenses on major items of expenditure, such as house rent, amount of expenses on major items of expenditure, such as house rent, vehicle running and maintenance expenses, expenses on education and vehicle running and maintenance expenses, expenses on education and vehicle running and maintenance expenses, expenses on education and hostel of children, amount spent on household expenses, electricity bill hostel of children, amount spent on household expenses, electricity bill hostel of children, amount spent on household expenses, electricity bill expenses, amount inves expenses, amount invested out of cash withdrawals etc. In the absence ted out of cash withdrawals etc. In the absence of complete details and evidence, there is no basis for the contentions of of complete details and evidence, there is no basis for the contentions of of complete details and evidence, there is no basis for the contentions of the assessee and, therefore, the same are not acceptable. the assessee and, therefore, the same are not acceptable.” 8.2 In view of the above explanation, the contention of the In view of the above explanation, the contention of the In view of the above explanation, the contention of the Assessing Officer that cash loan cer that cash loan would had been extended out of extended out of accumulated cash balance accumulated cash balance by way of showing low house by way of showing low house withdrawals , can’t withstand. Further withstand. Further, it is not understandable as it is not understandable as how the cash loan are unexplained, when how the cash loan are unexplained, when the Assessing Officer has the Assessing Officer has not indicated any source of cash accumulation source of cash accumulation as from undisclosed from undisclosed sources, thus, even otherwise extending of such even otherwise extending of such cash cash loans out of accumulated cash balance (presumably out of cash saved by way balance (presumably out of cash saved by way balance (presumably out of cash saved by way not showing full household withdrawal) not showing full household withdrawal) does not justify for addition does not justify for addition under section 68 of the Act. on 68 of the Act. Thus, in our opinion Thus, in our opinion, there no Prakash Chandumal Rohra. 9 & 1920/Mum/2023 and CO No. 94 & ITA Nos. 1919 & 1920/Mum/2023 and CO No. 94 & 93/Mum/2023 circumtanitail evidences , which indicate or establish that the circumtanitail evidences , which indicate or establish that the circumtanitail evidences , which indicate or establish that the assessee would have extended cash loan to ‘Wadhwa group’ except assessee would have extended cash loan to ‘Wadhwa group’ except assessee would have extended cash loan to ‘Wadhwa group’ except the statement of ‘Wadhwa group’ but no the statement of ‘Wadhwa group’ but no such documents in such documents in support of contention support of contention have been supplied to the assessee the assessee. The Hon’ble Delhi High Court in the case of CIT v. Ashwani Gupta Hon’ble Delhi High Court in the case of CIT v. Ashwani Gupta Hon’ble Delhi High Court in the case of CIT v. Ashwani Gupta (supra), held as under: (supra), held as under:
“7 In view of the foregoing circumstances, we feel that no 7 In view of the foregoing circumstances, we feel that no 7 In view of the foregoing circumstances, we feel that no interference with the impugned order /s called for. The Tribunal has interference with the impugned order /s called for. The Tribunal has interference with the impugned order /s called for. The Tribunal has correctly understood the law and applied it to the facts of the case. correctly understood the law and applied it to the facts of the case. correctly understood the law and applied it to the facts of the case. Once there is a violation of the principles of natural just Once there is a violation of the principles of natural justice inasmuch ice inasmuch as seized material is not provided to an assessee nor is cross as seized material is not provided to an assessee nor is cross as seized material is not provided to an assessee nor is cross- examination of the person on whose statement the Assessing Officer examination of the person on whose statement the Assessing Officer examination of the person on whose statement the Assessing Officer relies upon, granted, then, such deficiencies would amount to a relies upon, granted, then, such deficiencies would amount to a relies upon, granted, then, such deficiencies would amount to a denial of opportunity and, consequently, would be denial of opportunity and, consequently, would be fatal to the fatal to the proceedings. Following approach adopted by us in SMC Share proceedings. Following approach adopted by us in SMC Share proceedings. Following approach adopted by us in SMC Share Brokers Ltd.'s case (supra), we see no reason to interfere with the Brokers Ltd.'s case (supra), we see no reason to interfere with the Brokers Ltd.'s case (supra), we see no reason to interfere with the impugned order. No substantial question of law arises for our impugned order. No substantial question of law arises for our impugned order. No substantial question of law arises for our consideration. The appeal is dismissed. The appeal is dismissed.” 8.3 Therefore, in view of the decision of the Hon’ble Delhi High Therefore, in view of the decision of the Hon’ble Delhi High Therefore, in view of the decision of the Hon’ble Delhi High Court in the case of CIT v. Ashwani Gupta (supra), the action of the Court in the case of CIT v. Ashwani Gupta (supra), the action of the Court in the case of CIT v. Ashwani Gupta (supra), the action of the Assessing Officer being in violation of principle of natural justice, Assessing Officer being in violation of principle of natural justice, Assessing Officer being in violation of principle of natural justice, the deletion of the addition by the Ld. CIT(A) is justified. In view of the deletion of the addition by the Ld. CIT(A) is justif the deletion of the addition by the Ld. CIT(A) is justif the above discussion, we do not find any infirmity in the order of the above discussion, we do not find any infirmity in the order of the above discussion, we do not find any infirmity in the order of the Ld. CIT(A) in deleting the addition. The grounds of the appeal of the Ld. CIT(A) in deleting the addition. The grounds of the appeal of the Ld. CIT(A) in deleting the addition. The grounds of the appeal of the Revenue are accordingly dismissed. the Revenue are accordingly dismissed.
The grounds raised by the assessee in cross The grounds raised by the assessee in cross The grounds raised by the assessee in cross-objection challenging the validity of the reassessment have validity of the reassessment have not been decided not been decided by the Ld. CIT(A). Since, the addition deleted by the Ld. CIT(A) has by the Ld. CIT(A). Since, the addition deleted by the Ld. CIT(A) has by the Ld. CIT(A). Since, the addition deleted by the Ld. CIT(A) has Prakash Chandumal Rohra. 10 & 1920/Mum/2023 and CO No. 94 & ITA Nos. 1919 & 1920/Mum/2023 and CO No. 94 & 93/Mum/2023 been upheld by us and therefore, adjudication of the said ground been upheld by us and therefore, adjudication of the said ground been upheld by us and therefore, adjudication of the said ground challenging the validity of the challenging the validity of the reassessment are merely rend merely rendered academic, therefore, therefore, we are not required to adjudication upon same not required to adjudication upon same at this stage.
In assessment year 2016 In assessment year 2016-17, the Ld. Assessing Officer has 17, the Ld. Assessing Officer has made addition for interest paid in respect of cash loans given to made addition for interest paid in respect of cash loans given to made addition for interest paid in respect of cash loans given to Wadhwa Group in assessment year 2015 Wadhwa Group in assessment year 2015-16. Since, we have Since, we have already deleted the addition of the cash loan advanced in already deleted the addition of the cash loan advanced already deleted the addition of the cash loan advanced assessment year 2015 assessment year 2015-16 and therefore, the issue of cash interest 16 and therefore, the issue of cash interest accrued on those cash loans does not survive. Accordingly, the on those cash loans does not survive. Accordingly, the on those cash loans does not survive. Accordingly, the grounds of appeal of the Revenue for AY 2016 grounds of appeal of the Revenue for AY 2016-17 are d 17 are decided. The grounds of the assessee in cross grounds of the assessee in cross-objection for AY 2016 for AY 2016-17 are therefore rendered only academic rendered only academic ,thus, we are not required we are not required adjudication upon the same. adjudication upon the same.
In the result, the appeal In the result, the appeals of the Revenue and cross he Revenue and cross-objections of the assessee are dismis of the assessee are dismissed.