PRESTIGIOUS ENTERPRISES PVT LTD,NEW DELHI vs. ACIT CC-18, NEW DELHI
Income Tax Appellate Tribunal, DELHI BENCH, F: NEW DELHI
Before: SHRI VIKAS AWASTHY & SHRI BRAJESH KUMAR SINGH[Assessment Year: 2007-08]
PER BRAJESH KUMAR SINGH, AM,
This appeal has been preferred by the assessee against the order of the Commissioner of Income Tax (Appeals)-31, [hereinafter referred to as the ‘Ld.
CIT(A)] Delhi, dated 30.09.2019 pertaining to Assessment Year 2007-08, arising out of Assessment order dated 26.03.2018 under Section 254/143(3) of the Income-tax Act, 1961(hereinafter referred to as ‘the Act’).
Prestigious Enterprises P Ltd.
This assessment order has been passed in consequence to the directions of the Tribunal vide order dated 29.11.2017 in ITA No. 5676/Del/2011, wherein inter alia the issue relating to the addition of Rs.50 lakhs u/s 68 of the Act was set aside to the file of the Assessing Officer (AO) to decide it denovo. 3. Brief facts of the case: The original assessment in this case was completed u/s.143(3) of the Act vide order dated 31.12.2009 at a total income of Rs.96,94,130/- against the returned loss of Rs.53,05,870/-. The assessed income included addition of Rs.1,00,00,000/- on account of compensation received on breach of contract in respect of purchase of immovable property and Rs.50,00,000/- on account unexplained cash credits. Both the above additions were set-aside by the order dated 19.11.2017 of the Co-ordinate Bench of the Tribunal in ITA No. 5676/Del/2018 to the file of the AO to decide denovo. The AO vide the impugned order dated 26.03.2018 accepted the claim of the assessee regarding the receipt of compensation of Rs.1,00,00,000/- as capital receipt and held it to be not taxable. 3.1 However, regarding the amount of Rs.50,00,000/- the AO on perusal of the confirmation furnished from the creditor, M/s Treat Well Investments Pvt. Ltd., observed that the confirmation did contain the date but did not contain company stamp, or details regarding the mode of advance, whether by cheque or by cash as Prestigious Enterprises P Ltd.
it did not contain any cheque number. Further, on perusal of the bank account submitted by the assessee, the AO noted that on 16.06.2006 there was a deposit of Rs. 50,00,000/- in the assessee’s bank account, but the entry did not indicate as to from whom the sum of Rs.50,00,000/- was received. In view of these deficiencies, the AO held that the source of the receipt of Rs.50,00,000/- remained unexplained and accordingly treated the same as unexplained cash credit under section 68 of the Act. The relevant observations of the AO in the assessment order are reproduced as under:
“As stated above the assessee vide letter dated 16.03.2018 has not filed the required details as were called for vide notice u/s 142(1) dated 26.02.2018 to explain these credits of Rs.50,00,000/-. However, vide letter dated 19.03.2018 the assessee has inter-alia filed copy of confirmation from M/s Treatwell Investments Pvt. Ltd. which does contain the date, it also does not contain the stamp of the company and even does not indicate the mode of advances whether by cheque or by cash as it does not contain any cheque no.
etc. With this letter the assessee has filed the copy of its own bank account showing that on 16.06.2006 there was a deposit of Rs.50,00,000/- in their bank account but this entry in the bank statement also does not indicate as to from whom this sum of Rs.50,00,000/- was received. In view of these facts the source of receipt of Rs.50,00,000/- remains unexplained. Accordingly, the same is being treated as unexplained and added to the income of the assessee u/s 68 of I.T. Act, 1961, The satisfaction for penalty proceedings u/s 271(1)(c) already recorded in the original assessment order shall maintain the status quo i.e. the assessee has concealed the income and penalty proceedings u/s.271(1)(c) will be initiated.”
Aggrieved by the above addition, the assessee filed an appeal before the Ld. CIT(A). Prestigious Enterprises P Ltd.
The Ld. CIT(A) confirmed the addition. The relevant findings of the Ld. CIT(A) in paragraphs 4 to 4.2 of the appellate order are reproduced below: “4. I have carefully considered the facts on record and submissions of the Ld. AR including the decisions relied upon by him. 4.1. On perusal of the grounds of appeal raised, it is noticed that the appellant has grievance only regarding violation of principles of natural justice without allowing adequate opportunities of being heard. I find that after receipt of order of Hon'ble ITAT, the AO issued notices u/s 142(1) and 143(2) on 26.02.2018, but in compliance thereof the appellant filed on 26.03.2018 only copy of order of Hon'ble High Court showing that AR Developers Pt Ltd had been merged with Prestigious Enterprises Pvt Ltd. It appears that no further request was made the AO for time. Moreover, the appellant has been provided as many as 06 opportunities of being heard during the course of appellate proceedings. Under these circumstances, 1 hold that principles of natural justice are properly followed and the appellant cannot now have any grievance on this account.
2. Although the merits of the addition of Rs. 50,00,000/- on account of unexplained cash credit are not specifically challenged, but the appellant had contested that the addition was made arbitrarily and illegally. During the course of appellate proceedings, the only evidences furnished in this regard are confirmation of Treatwell Investment Leasing Pvt Ltd (merged with BSBK Engineers Pvt Ltd) and copy of acknowledgement for filing of return for A.Y. 2007-08. It is claimed by the Ld. AR that the confirmation etc of investor company was already there on the record of AO. Even if this claim is accepted, the evidences have to be examined on merits. It is an established legal position that the identity and creditworthiness of the creditor and genuineness of the transaction have to be proved with cogent evidences. I find that the purpose of advance of Rs. 50,00,000/- has not been established by the appellant. The acknowledgement for filing IT Return for A.Y. 2007-08 shows gross total income NIL and total income also NIL. Thus, it is clear that the creditor has no worth to advance a sum of Rs. 50,00,000/- to the appellant. No proof regarding immediate source of Rs. 50,00,000/- has been furnished by the appellant. It is also an established legal position that the transaction through bank account is not sufficient to establish genuineness of the transaction. Accordingly I hold that the appellant has failed to explain cash credit of Rs. 50,00,000/ - within the meaning of section 68 and hence addition made on this account is confirmed.”
Aggrieved with the order of the Ld. CIT(A), the assessee has filed the present appeal before us on the following grounds: Prestigious Enterprises P Ltd.
“1. The Hon'ble Commissioner of Income Tax (A)-31, New Delhi., has not followed the law of natural justice while confirming additions and disallowances by the Ld. A.O.
That the impugned Appeal Order is bad in law, illegal, and in violation of rudimentary principal of contemporary jurisprudence.
That the Hon'ble Commissioner of Income Tax (Appeal)-31, New Delhi, has erred in law and on facts by confirming the addition of Rs.50,00,000/-.”
During the course of hearing, the Ld. AR reiterated the submissions made before the Ld. CIT(A) and contended that adequate opportunity of being heard was not provided. However, upon query from the Bench, the Ld. AR did not furnish the requisite details that were found deficient and adversely commented upon by the AO/ld. CIT(A).
The Ld. Sr. DR supported the orders of the AO and the Ld. CIT(A).
We have heard both the parties and perused the material available on record. The present assessment order has been passed in consequence to the order dated 29.11.2017 in ITA No. 5676/Del/2011 of the Co-ordinate Bench of the Tribunal in assessee’s own case for AY 2007-08. The relevant para 8 of the order of the Tribunal setting aside the matter relating to the addition of Rs.50 lakhs u/s 68 of the Act to file of the AO to decide denovo is reproduced as under:- “8. After hearing both sides it is observed that assessee has received an amount of Rs 50 Lakhs, via banking channel, from one M/s Treatwell Investment as advance against the purchase of flats. In order to verify the genuineness of the transaction the AO issued notice under section 133(6) of the Act. M/s Treatwell in compliance to the notice of 133(6) has denied any such advance the reply of Treatwell had been received on 29.12.2009. On 30.12.200, when the AR of the assessee appeared before the Assessing Prestigious Enterprises P Ltd.
Officer, the AO confronted the same to the AR and immediately passed the order. Before the ld. CIT(A), the ld. AR of the assessee filed fresh confirmation from the creditor wherein it has been confirmed that the said amount was given to the assessee and due to confusion as to the assessment year, wrong confirmation had been given to the AO. Be that as it may be, in the interest of justice, the matter is set aside to the file of the Assessing Officer, who will decide the case de novo, after affording adequate opportunity of being heard to the assessee. In view of our above findings, the issue of taxing the compensation of Rs. 1 crore and the second issue of Rs 50 lakhs have been restored to the AO for fresh adjudication. Thus, grounds raised by the assessee are allowed for statistical purposes.”
1. The present appeal filed by the assessee against the order dated 30.12.2019 of the ld. CIT(A) was earlier dismissed ex-parte by the Tribunal vide order dated 12.10.2023. Subsequently, the said order was recalled by the Tribunal vide order dated 27.06.2025 in MA No. 459/Del/2023 and the case was fixed for hearing and heard on 24.09.2025. 9.2 During the hearing before us, the assessee failed to furnish any material to rebut the deficiencies as noted by the AO and the adverse findings of the Ld. CIT(A) for treating the amount of Rs.50 lakhs as unexplained cash credit u/s 68 of the Act. The Ld. CIT(A) noted that no explanation was provided by the assessee regarding the immediate source of Rs.50,00,000/- received by the assessee.
3 Further, the AO on the perusal of the letter dt. 16.03.2018, filed by the assessee enclosing the relevant bank statement of the assessee noted that on 16.06.2006, there was a deposit of Rs.50,00,000/- in assessee’s bank account but that entry did not indicate as to from whom this amount was received. The Ld. Prestigious Enterprises P Ltd.
CIT(A) upon perusal of the document filed by the assessee which included the acknowledgment of the return of M/s Treatwell Investments Pvt. Ltd. for Asst.
Year 2007-08 wherein the gross total income was Nil and observed that the creditor had no worth to advance the sum of Rs.50 lakhs to the assessee. The Ld.
CIT(A) also noted that no proof regarding immediate source of Rs. 50 lakhs was established by the assessee and also the purpose of the said advance was also not established by the assessee. The Ld. CITA) also noted that it was an established legal position that the transaction through bank account was not sufficient to establish the genuineness of the transaction. No explanation or any evidence has been placed by the assessee to contradict the above findings of the Ld. CIT(A).
Therefore, in view of these facts, the genuineness and the creditworthiness of the transaction is not established.
4 Therefore, in view of these facts, the plea of the assessee taken in Ground Nos. 1 & 2 that the assessment order was passed in violation of nature justice and in violation of rudimentary principle of contemporary jurisprudence is not acceptable. Therefore, in view of these facts and in the absence of any contrary material brought on record to contradict the findings of the AO/Ld. CIT(A), we do not find any reason to interfere with the orders of the lower authorities. Accordingly, the addition of Rs.50,00,000/- made u/s 68 of the Act by the AO is upheld. Ground Nos. 1 to 3 of the appeal are dismissed. Prestigious Enterprises P Ltd.
In the result, appeal of the assessee is dismissed.
Order pronounced in the open court on 10th December, 2025. [VIKAS AWASTHY]
[BRAJESH KUMAR SINGH]
JUDICIAL MEMBER
ACCOUNTANT MEMBER
Dated 10.12.2025. NV/PK. Sr. P.S.