M/S VAJDI EDUCATION SOCIETY,INDORE vs. THE ITO-EXEMPTION, INDORE

Briefly stated the facts the assessing officer levied penalty on the additions confirmed by the Ld. CIT(A) i.e. addition of Rs.15,36,486/-, of Rs.30,00,000/- and Rs.45,81,092/-. Against this the assessee filed an appeal before Ld. CIT(A) who also sustained the penalty. Now the assessee is in appeal before this Tribunal. 3. At the outset, Ld. counsel for the assessee submitted that in the quantum proceedings the matter reached up to the stage of the Tribunal in ITANo.653/Ind/2013. In quantum the Tribunal has deleted the addition in respect of the addition of Rs. 15,36,486/- and in respect of the addition of Rs.30,00,000/- issue was restored to the file of the AO and similarly the issue of addition of Rs.45,81,092/- was also restored for decision afresh. He submitted therefore, the penalty on these additions cannot be sustained.

Ld. DR has conceded the fact that in the quantum proceedings the issues i.e. addition of Rs. 15,36,486/- has been deleted and the issues relating to additions in respect of loan taken from K.K. Patel Finance Ltd. and Jayant Security & Finance Ltd. have been restored to the file of the AO. Hence the penalty confirmed by the Ld. CIT(A) would not survive. 5. We have heard the rival contentions and perused material available on record. The Tribunal in ITANo.653/Ind/2013 in quantum proceedings in respect of addition has been deleted by the Tribunal by observing as under: “10. There is no dispute with regard to the fact that the accounts of the assessee are audited. The auditors have not made any adverse observation regarding the labour expenditure. Both the authorities below have made addition and sustained the same on the basis of guess work which in our view is not a proper approach, therefore, such addition cannot be sustained. The Assessing Officer is directed to delete the same. Thus ground no.3 and 3.1 of assessee’s appeal are allowed.” 6. Further, we find that in respect of addition of Rs. 45,81,092/- and Rs.30,00,000/- issue are restored to the file of AO for decision afresh. Therefore, under these undisputed fact the penalty was levied and confirmed by the Ld. CIT(A) does not survive. We hold accordingly, AO is directed to delete the penalty however we may it clear that AO would at liberty to initiate the penalty proceedings in respect of the issues restored for fresh decision. Now we take up Assessee’s appeal in ITANo.05/Ind/2017 for A.Y. 2012-13 The assessee has raised following grounds of appeal: “1. The order of the Ld. CIT(A) is bad in law. 3

At the very outset, the Ld. counsel for the assessee submitted that the authorities below have followed their order pertaining to the A.Y.2010-11. He submitted in earlier year the matter had reached up to the stage of the Tribunal and the Tribunal in ITANo.653/Ind/2013 pertaining to the A.Y. 2010-11, was pleased to restore the issues to the file of the AO for decision afresh. The Ld. DR opposed the submissions of the Ld. counsel and supported the orders of authorities below.

We have heard the rival submission and perused the material available on record. We find that the Ld. CIT(A) has decided the issue in para 5.1 of his order as under: “5.1 The AO has primarily relied on the assessment framed u/s 143(3) for A.Y.2010-11 and the claim of the appellant regarding loan taken from the very same company i.e. M/s. Jayant Security & Finance Ltd. was not found to be genuine. My predecessor had confirmed the above addition in appeal no.IT- 245/12-13 vide order dated 20.09.2013. Respectfully, following the order of my predecessor and the detailed reasons mentioned therein, I hereby confirm the addition so made on account of loan taken Rs.48 lakhs and on account of disallowance of interest of Rs.49,52,090/-. Both the grounds of appeals are dismissed.” 9. There is no dispute with regard to the fact that similar additions was made in the A.Y. 2010-11 as well and the Tribunal in ITANo.653/Ind/2013 pertaining to A.Y. 2010-11 has decided as under: “13. The contention of the assessee is that the opinion of AO these companies belong to Lunkad Group. The assesse had filed the confirmations from the creditors, the balance sheet, the copy of bank statement and copy of income tax return of the said creditors. It is contended on behalf of the assessee that the companies do not belong to Lunkad Group. The confirmation along with balance sheet and the income tax returns with the bank statement were filed in the case of M/s. K.K. Patel Finance Ltd. and M/s. Jayant Securities Finance ltd. and if the Ld. counsel drew our attention to paper book page nos. 62 to 68 and 95 to 99 in support of this contention. There is no dispute with regard to the fact that the law is well settled. The assessee is required to prove identity of the creditors genuineness of transactions and creditworthiness of the creditors. In the present case, the revenue has doubted about the genuineness of the transactions. It is stated by the Ld. counsel for the assessee that the company from whom loan was taken does not 5