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Income Tax Appellate Tribunal, DELHI BENCH ‘G’ NEW DELHI
Before: BEFORE SHRI SHAMIM YAHYA & SHRI YOGESH KUMAR U.S.
This appeal is filed by the Assessee against the order of Learned Commissioner of Income Tax (Appeals)-3 Noida, [“Ld. CIT(A)”, for short], dated 13/02/2024 for the Assessment Year 2013-14.
The grounds of Appeal are as under: -
“1. Whether on facts and circumstances of the case and in law, the Ld. CIT(A)-3, Noida has erred in deleting the addition of Rs.3,34,70,889/- made by the AO by treating the advances of Rs.2,73,00,000/- made to suppliers and other advances of Rs.61,70,889/- as unexplained, without appreciating the fact that the assessee failed to explain the genuineness of transactions during the course of assessment proceedings.
2. Whether on facts and circumstances of the case and in law, the Ld. CIT(A)-3, Noida has erred in deleting the addition of Rs. 15,78,00,000/- made by the Assessing Officer u/s 40A(3) of Act, 1961 on account of cash purchases made by the assessee. without appreciating the fact that no cogent explanation or documentary evidence had been furnished by the assessee in support of exception as provided under Rule 6DD of the Income Tax Rules, 1962 during the course of assessment proceedings.
3. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) has erred deleting the addition of Rs. 1,90,00,000/- made by the AO u/s 68 of the Act on account of unsecured loan given by the assessee by not appreciating the fact that the creditworthiness and genuineness of this transaction have not been established properly for want of sufficient documentary evidences during the course of assessment proceedings.
4. Whether on facts and circumstances of the case and in law, the Ld.CIT(A) in justified while admitting the additional evidences ignoring the factthat the conditions of Rule -46A(1) of Income Tax Rules, 1962 under which additional evidences could not filed before the Ld.CIT(A) were not satisfied.
Whether on facts and circumstances of the caseand in law, the Ld. CIT(A) is justified in pronouncing its decision only based upon the judgements in favor of the appellants. However, reliance should also have been placed other judicial pronouncement and analysis with respect to the case. Like: Decision of Hon'ble Supreme Court in the case of Kale Khan Mohammad Hanif v.CIT [1963] 50 ITR 1 wherein it has been held that "If an assessee fails to prove satisfactorily the source and nature of certain amount received during the accounting year, the Assessing Officer is entitled to draw the inference that the receipts are of an assessable nature". Further, in the case of Som Nath Maini v CIT, [2008] 306 ITR 414 the Hon'ble Punjab and Haryana High Court has also held that "the burden of proving that income is subject to tax is on the Revenue but on the facts, to show that the transaction is genuine, burden is primarily on the assessee."
Brief facts of the case are that, the Assessee filed return of income declaring an income of Rs. 179,15,450/- the Return filed by the Assessee was selected for scrutiny and the assessment has been completed on 28/03/2016 u/s 143(3) of the Act by accepting the returned income. A search and seizure operation carried out on the Assessee and other group entities/person on 05/02/2017 and a notice u/s 153A wasissuedto the Assessee on 08/10/2010. The assessment order came to be passed u/s 153A read with Section 143(3) of the Act on 28/12/2018 wherein returned income of the Assessee was accepted. Thereafter the Ld. PCIT, Central Kanpur vide order dated 01/03/2021 by invoking the provision of Section 263 of the Act quash the said assessment order and directed the A.O. to pass fresh assessment after making proper enquiry. Pursuant to the order of the Ld. PCIT and an assessment order came to be passed u/s 263/153/143(3) of the Act on 28/02/2022 assessing the income of the Assessee at Rs. 22,81,86,339/- as against the returned income of Rs. 1,79,15,450/- by making addition of Rs. 21,02,70,889/- on following three issues:-
• “An addition of Rs.3,34,70,889/-, was made holding that the advances given by the appellant to various parties and suppliers were unexplained advances. • A disallowance of Rs. 15,78,00,000/-, was made holding that the cash purchases made by the appellant from milk producers were to be disallowed u/s 40A(3) of the Act. • An addition of Rs. 1,90,00,000/- was made holding that the unsecured loan given by the appellant of the said amount was unexplained in terms of section 68 of the Act.”
Aggrieved by the Assessment order dated 28/02/2022 the Assessee preferred an appeal before the Ld. CIT(A). During the appeal proceedings, the Assessee has also produced various documents in support of its claim.
The Ld. CIT(A) called for two remand reports from the A.O. and ultimately on 13/02/2024 decided all the above three issues in favour of the Assessee by deleting the additions made by the A.O. Aggrieved by the order of the Ld. CIT(A) in deleting the addition made by the A.O. the Department of Revenue is before us by way of present Appeal challenging the order of the Ld. CIT(A) dated 13/02/2024.
5. The Ld. Departmental Representative submitted that the Ld. CIT(A) has committed error in deleting the addition made by the A.O. and by relying on the adjudication, finding and the conclusion made by the A.O. in his assessment order sought for allowing the Appeal filed by the Department.
Per contra, the Assessee's Representative submitted on all the three additions made by the A.O., the Assessee has produced sufficient documents to prove the case of the Assessee in order to delete the addition and the Ld. CIT(A) after calling for two remand reports from the A.O. satisfied itself and deleted the additions made by the A.O, therefore, submitted that the Grounds of appeal of the Revenue are not tenable.
We have heard both the parties and perused the material available on record. During the appellate proceedings the Ld. CIT(A) while deleting all the three additions relied on the remand reports submitted by the A.O. and deleted the additions in following manners: -
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From the above findings of the Ld. CIT(A), it is found that the Ld. CIT(A) called for Remand Reports and the A.O. could not find any error or inconsistency in the documents filed by the Assessee and the Ld. CIT(A) after analyzing the Remand Report has decided the issues in favour of the Assessee. Considering the fact that the order of t he Ld. CIT(A) in deleting the addition came to be passed bases on the remand report submitted by the A.O. and in the absence of any adverse remark on the documents submitted by the Assessee in the Remand Report and also in the absence of any material produced by the Department of Revenue to decide the issue against the Assessee, we find no reason to interfere with the order of the Ld. CIT(A). Accordingly finding no merit in the Grounds of Appeal of the Revenue, we dismiss the Appeal of the Revenue.