MEEZAN REALTORS P. LTD,CALICUT vs. THE ACIT, CALICUT

It emerges at the outset that the assessee’s former twin appeals ITA.Nos.367 & 368/Coch./2014 raise an identical issue of correctness of sec.68 unexplained cash credits addition; representing share application/premium money; amounting to Rs.70 lakhs and Rs.35.10 lakhs in assessment years 2004-2005 and 2005-2006; respectively. Learned counsel refers to the assessee’s additional evidence application placing on record a copy of the order dated 23.04.2019 passed by the Deputy Director of Enforcement [under the provisions of Foregin Exchange Amendment Ac, 1999] that the said prescribed competent authority has levied Rs.5 lakhs penalty after concluding that the appellant had violated the provisions of “FEMA” law whilst receiving Rs.50 lakhs in the first and foremost assessment year 2004-2005 herein. He accordingly seeks to buttress the point that given a finding coming from the statutory authority under FEMA law; it is clear that he is deemed to have discharged the onus of proving identity, genuineness and creditworthiness of the sum in question of Rs.50 lakhs atleast in

The Revenue’s case on the other hand is that since the assessee has filed the instant additional evidence for the first time, the same requires Assessing Officer’s afresh factual verification.

We find merit in the Revenue’s instant vehement arguments since all these FEMA proceedings’ details have not seen light of the day in the instant income tax proceedings. We thus accept the assessee’s substantive grievance only to the tune of Rs.50 lakhs in principle subject to the Assessing Officer’s factual verification of all these intervening developments of assessment year 2004-2005 in ITA.No.367/Coch./2014. Ordered accordingly.

We now left with the remaining share application money/premium addition of Rs.20 lakhs in assessment year 2004-2005 and Rs.35,10,000/- in assessment year 2005-2006 (supra). Learned counsel has vehemently argued that not only the impugned sum(s) had come from banking channels in assessee’s account(s) but also all the relevant details thereof

Lastly comes the assessee’s third appeal ITA.No.369/ Coch./2014 for the assessment year 2006-2007. Learned counsel is indeed very fair in filing before us a copy of the relevant document found and seized during the course of search/survey leading to the impugned addition of Rs.429 lakhs u/sec.68 of the Act representing the alleged cash credits. Learned counsel submits that neither there is any signature nor the relevant

Learned DR on the other hand referred to all the relevant entries in the documents which has come from the assessee’s side itself. Her case is that it duly indicates heading i.e., “profit and loss account’ for the period from 01.04.2003 to 27.05.2008. Learned DR accordingly drawn strong support from the impugned addition based on the said seized document.

We have given our thoughtful consideration to the foregoing rival stands and find no merit in assessee’s arguments. We make it clear first of all that the clinching fact admittedly is that the document hereinabove had indeed been found during the course of search/survey only. That being the clinching fact, we are of the considered opinion that the statutory presumption u/sec.292C(1) of the Act [inserted by the Finance Act, 2007 with retrospective effect from 01.10.1975] indeed comes into play. We

Learned counsel’s next submissions that it was incumbent for the departmental authorities to prove that the said document pertains to the assessee. We are of the considered view that once the assessee has failed to rebut sec.292C statutory presumption by explaining these entries in the document impounded; there is no other option with the Assessing Officer but to invoke sec.292C of the Act for the purpose of making the addition in question. We accordingly reject the assessee’s instant sole substantive ground in his last appeal ITA.No.369/Coch./ 2014. Dismissed.

To sum-up, assessee’s first and foremost appeal ITA.No.367/Coch./2014 is partly allowed for statistical purposes, and the remaining two appeals ITA.Nos.368 & 369/Coch./2014