INCOME TAX OFFICER, WARD-`1(5), GUWAHATI vs. M/S. A.S. APARTMENT (P) LTD, GUWAHATI

IN THE INCOME TAX APPELLATE TRIBUNAL “GUWAHATI BENCH, GAUHATI VIRTUAL HEARING AT KOLKATA �ी संजय गग�, �या�यक सद�य एवं �ी मनीष बोरड, लेखा सद�य के सम� Before Shri Sanjay Garg, Judicial Member and Dr. Manish Borad, Accountant Member I.T.A Nos.65 & 66/GTY/2020 Assessment years: 2013-14 & 2014-15 ITO, Ward-1(5) , Guwahati…………..............................………...…..…Appellant vs. M/s A. S. Apartment Pvt. Ltd …. ...….......................................…..…..Respondent Chand Thapa, Hastinapur, Amerigog, G S Road, Saket, Jorabat, Near Montfort School, Assam – 781023. [PAN: AAFCA9087K] Appearances by: Shri Ashwani Kumar, FCA appeared on behalf of the appellant. Shri Amit Kumar Pandey, JCIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : November 10, 2022 Date of pronouncing the order : February 09, 2023 आदेश / ORDER संजय गग�, �या�यक सद�य �वारा / Per Sanjay Garg, Judicial Member: The captioned two appeals have been preferred by the Revenue against the separate orders both dated 22.10.2019 of the Commissioner of Income Tax (Appeals)-2, Guwahati [hereinafter referred to as the ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). Since, identical facts are involved in both the appeals hence the same have heard together and are being disposed of by this common order.

I.T.A Nos.65 & 66/GTY/2020 Assessment years: 2013-14 & 2014-15 M/s A S Apartment Pvt. Ltd First, we take up Revenue’s appeal ITA No.65/GTY/2020 for 2. assessment year 2013-14. The Revenue in this appeal has taken the following grounds of appeal:

“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing appeal of the assessee without appreciating the facts of the case. 2. The Ld. CIT(A) has erred in Law and in facts in deleting the additions of Rs.3,06,50,000/- made u/s 68 when the assessee has failed to bring on record any evidence to prove the credit worthiness and genuineness of the transaction of the creditors M/s Renovate Marketing Private Limited which is shell/paper company. 3. For that the Ld. CIT(A) has erred in Law and in facts in deleting the additions of Rs. 1,60,000/- made u/s 69C on account of unexplained expenditure. 4. The Appellant craves the leave to add/modify/alter any of the ground during the course of hearing/pendency of appeal.”

I.T.A Nos.65 & 66/GTY/2020 Assessment years: 2013-14 & 2014-15 M/s A S Apartment Pvt. Ltd assessment in this case was bad in law. The relevant part of the order of the CIT(A) is reproduced as under:

“Thus, the satisfaction arrived at by the AO that income had escaped assessment in the case of the Appellant was not his own but was completely that of the Investigation Wing that income had escaped assessment in the case of the Appellant. In other words, the satisfaction arrived at by the AO that income had escaped assessment in the case of the Appellant was borrowed from the Investigation Wing. Any notice issued under Section 148 of the Act on the basis of borrowed satisfaction is bad in law and, consequentially, the ensuing proceedings are bad in law.” 5. The ld. counsel has submitted that the Revenue has not raised any ground against the aforesaid findings of the CIT(A) holding that the reopening of the assessment u/s 147 read with section 148 was bad in law. That the Revenue has contested the addition only on the merit and not on the legal point, therefore, the legal point decided by the CIT(A) has remained uncontested. Even if the appeal of the Revenue is allowed on merits, yet the very assessment framed by the Assessing Officer u/s 147 r.w.s. 148 has been held bad in law by the CIT(A) on the ground of validity of the reopening of the assessment, therefore, the appeal of the Revenue is liable to be dismissed on this score only. 6. Even during the appellate proceedings before us, no arguments have been addressed by the ld. DR on this legal point. Even the ld. CIT(A) has categorically held that it was a case of borrowed satisfaction that the Assessing Officer has not applied his mind to form an independent belief that the income of the assessee has escaped assessment. In view of this, the appeal of the Revenue is liable to be dismissed on this legal ground. 8. The ld. counsel has further invited our attention from pages 152 to 174 of the impugned order of the CIT(A), wherein, in the first para of page 152, the ld. CIT(A) has given the following followings:

I.T.A Nos.65 & 66/GTY/2020 Assessment years: 2013-14 & 2014-15 M/s A S Apartment Pvt. Ltd

“FAILURE TO CONDUCT ENQUIRY - NO NOTICE/SUMMON ISSUED TO THE UNSECURED LOAN LENDER FOR CONDUCTING ANY ENQUIRY In the present case, it is clear that the AO had relied sacrosanctly on the purported report of Investigation Wing. It is noted that while placing such reliance, the AO did not deem to appropriate to examine the purported party independently. The records of the case show that the Appellant had duly discharged its primary onus as cast upon it under Section 68 of the Act and but for the purported report of the Investigation Wing, the AO neither carried out any independent enquiry on his own nor brought out any contrary material on record based on any such independent enquiry conducted by him.” 9. A perusal of the above findings of the CIT(A) shows that the ld. CIT(A) has given a clear-cut findings that the Assessing Officer did not examine the transaction, in question, independently rather solely relied upon the report of the Investigation Wing in making the impugned addition, whereas, the assessee has duly discharged its primary onus by furnishing the relevant details and evidences to prove the identity and creditworthiness of the creditor and genuineness of the transaction. A perusal of the impugned order of the CIT(A) reveals that the ld. CIT(A) has thoroughly discussed the facts of the case and relied upon various decisions of higher courts.

I.T.A Nos.65 & 66/GTY/2020 Assessment years: 2013-14 & 2014-15 M/s A S Apartment Pvt. Ltd categorically observed that the only contention raised by the Assessing Officer was that the aforesaid amounts were not accounted in the books of account of the appellant although these were debited from the bank account of the appellant. The ld. CIT(A), in this respect, has rightly held that since the Assessing Officer himself has noted that the amount was debited from the bank account of the assessee itself, therefore, there was no doubt regarding the source of the said expenditure. Therefore, even if the assessee has not claimed the said expenditure in its books of account that itself cannot be the reason for further disallowance of the said expenditure. The addition u/s 69C of the Act could have been made only if the assessee could not have established the source of the expenditure. However, in this case, it was agreed by the Assessing Officer that the said amount was debited from the bank account of the assessee. 13. The ld. DR could not rebut the above finding of the CIT(A). 14. We, therefore, do not find any reason to interfere in the impugned order of the CIT(A) and the same is upheld. Ground No.3 raised by the Revenue is hereby dismissed. The appeal of the Revenue in ITA No.65/GTY/2020 is hereby dismissed. Now, coming to the Revenue’s appeal in ITA No.66/GTY/2020 for 15. assessment year 2014-15. The Revenue in this appeal has taken the identical Ground No.2 as taken in ITA No.ITA No.65/GTY/2020 for assessment year 2013-14, whereby, the Revenue has contested the action of the CIT(A) in deleting the addition made by the Assessing Officer of Rs.2,00,00,000/- in respect of loan transaction from M/s Renovate Marketing Pvt. Ltd. Since the facts and issues involved in this appeal are identical and in view of our findings given above while

I.T.A Nos.65 & 66/GTY/2020 Assessment years: 2013-14 & 2014-15 M/s A S Apartment Pvt. Ltd adjudicating Revenue’s appeal in ITA No.65/GTY/2020, we do not find any merit in this appeal of the Revenue and the same is also hereby dismissed. 16. In the result, both the appeals of the Revenue stand dismissed.

Kolkata, the 9th February, 2023. Sd/- Sd/- [डॉ�टर मनीष बोरड /Dr. Manish Borad] [संजय गग� /Sanjay Garg] लेखा सद�य /Accountant Member �या�यक सद�य /Judicial Member Dated: 09.02.2023. RS Copy of the order forwarded to: 1. ITO, Ward-1(5) , Guwahati 2. M/s A S Apartment Pvt. Ltd 3. CIT(A)- 4. CIT- , 5. CIT(DR),

//True copy// By order Assistant Registrar, Kolkata Benches