DCIT, CC-I, LUDHIANA vs. M/S GENEX POLYFAB LTD., LUDHIANA

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ITA 955/CHANDI/2018Status: DisposedITAT Chandigarh15 April 2019AY 2012-134 pages
AI SummaryDismissed

What did the Tribunal hold?

The CIT(A) deleted the addition after the assessee provided evidence, including bank statements and confirmations, to prove the source of funds in the hands of Shri Anubhav Aggarwal. The Tribunal found no reason to interfere with the CIT(A)'s factual findings.

What were the facts?

The Assessing Officer made an addition of ₹ 9.72 crores to the assessee's income, treating it as unaccounted income, as the assessee could not satisfactorily prove the source of funds received from Russia. The assessee argued before the CIT(A) that the amount was a gift from a brother-in-law to the company's promoter-director, Shri Anubhav Aggarwal.

What were the issues?

Whether the CIT(A) erred in accepting the assessee's explanation and additional evidence regarding the source of funds, which was not furnished during assessment proceedings.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

आदेश/Order

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the Revenue against the order dated 06.04.2018 of the Commissioner of Income Tax (Appeals)-2, Jalandhar [hereinafter referred to as CIT(A)].

2.

Following grounds have been raised by the assessee in this appeal :-

1.

Whether on the facts and in circumstances of the case, the Ld. CIT (A) has erred in law in accepting the plea of the assessee that amount of Rs. 9.72 Crore represented gifts received by Sh. Anubhav Aggarwal from his brother-in-law Sh. Roman Umarov when no such explanation/ evidence was filed during assessment proceedings.

2.

Whether on the facts and in circumstances of the case, the Ld. CIT (A) has erred in law in accepting

ITA No.955-C-18- Genex Polyfab Ltd., Ludhiana 2

the explanation of the assessee which was never furnished before the AO, thereby admitting additional evidence / grounds in violation of Rule 46A of the Income Tax Rules.

3.

The Appellant craves leave to add or amend the grounds of appeal on or before is heard and disposed off.

3.

The brief facts relating to the issue are that the Assessing officer

noticed that during the year under consideration a sum of ₹ 9.72 crores

was found credited in the account of the assessee which was received from

Russia under the head as “Promoter Contribution”. The Assessing officer

asked the assessee to prove the identity, creditworthiness and genuineness

of the source of the funds. Since the assessee could not satisfy the

Assessing officer about the source of funds, the Assessing officer made

the impugned additions into the income of the assessee treating the said

amount as own unaccounted income of the assessee.

4.

Being aggrieved by the above noted income of the assessee, the

assessee preferred appeal before the Ld. CIT(A).

5.

Before the Ld. CIT(A), the assessee submitted that the aforesaid

amount of ₹ 9.72 cores had been invested by the Director and Promoter of

the assessee company namely Shri Abubhav Aggarwal, who was an NRI

and married with a Russian national. That the source of amount in the

hands of Shri Anubhav Aggarwal was gift from his brother in law based in

Russia. The said amount of ₹ 9.72 crores received from his brother in law

was invested by Shri Abhinav Aggarwal in the company. To prove this

contention, the assessee also furnished copies of the bank statements, the

ITA No.955-C-18- Genex Polyfab Ltd., Ludhiana 3

confirmation from Shri Anubhav Aggarwal and also the copy of the

account of Shri Anubhav Aggarwal in the book of the assessee showing

the investment made by Shri Anubhav Aggarwal, the Promoter - director

of the company. It was also explained before the Ld. CIT(A) that even in

the assessment proceedings of Shri Anubhav Aggarwal, an addition of ₹

20,27,66,730/-, which included the aforesaid amount of ₹ 9.72 cores, was

made in the hands of Shri Anubhav Agagrawal in his individual capacity.

Since the addition of the amount of ₹ 20,27,66,730/- which included the

aforesaid amount of ₹ 9.72 cores was made into the income of Shri

Anubhav Aggarwal, in the circumstances, the source of funds at the hands

of Shri Anubhav Aggarwal was duly proved. The assessee has also proved

genuineness of the transactions by furnishing the copies of the bank

accounts to prove that the aforesaid entries were routed through the bank

account into the account of the assessee- company. The Ld. CIT(A)

considering the above documentary evidence, deleted the addition so made

by the Assessing officer.

6.

After hearing the Ld. representatives of both the parties, we do not

find any reason to interfere in the above factual findings given by the

CIT(A) which remain unrebutted.

There is no merit in the appeal of the Revenue and the same is

accordingly dismissed.

Order pronounced in the Open Court on 22.04.2019.

Sd/- Sd/- (संजय गग� / SANJAY GARG) (एन. के. सैनी / N.K. SAINI) उपा�य� / Vice President �या�यक सद�य/ Judicial Member Dated : 22.04.2019 “आर.के.”

ITA No.955-C-18- Genex Polyfab Ltd., Ludhiana 4

आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar

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