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Before: SHRI N.K. SAINI & SMT. BEENA PILLAI
ORDER
PER BEENA PILLAI, JUDICIAL MEMBER:
The present appeal has been filed by the Revenue against the order of the ld. CIT(A)’s-XXV, New Delhi vide his order dated 16/04/2012 for A.Y. 2002-03 on the following grounds:
1. “On the facts and in circumstances of the case, the ld. CIT(A)-XXV, New Delhi has erred in deleting the addition of Rs. 20,00,000/- made by the Assessing Officer u/s 69A of the I.T. Act.
2. On the facts and in the circumstances of the case the ld. CIT(A)-XXV, New Delhi has erred in concluding that assessee has received loan from Sh. Brij Mohan Gupta Group of cases whereas assessee as per incriminating documents is a loan provider.
The appellant craves leave for reserving the right to amend, modify, alter, add or forego any grounds of appeal at any time before or during the hearing of this appeal.”
Brief facts of the case as recorded by the authorities below are as under: 2.1. A search and seizure operation u/s 132 of the Act was conducted on 15/12/04 in the case of one Brij Mohan Gupta and group. During the course of search and seizure operation various incriminating documents/diaries/loose papers were found and seized. The assessment in the case of M/s Rishi Kumar Naveen Kumar, was reopened on the basis of search proceedings in the case of Brij Mohan Gupta group, from where the AO received an information regarding the present assessee. Accordingly, the ld. AO issued show cause notice. Detailed reasons for reopening of the case u/s 148 were given and the assessee was asked to furnish the details mentioned therein. 2.2. In response to the aforementioned notice issued by the ld. AO the assessee filed a letter dated 17/12/08 in which it was claimed that no transaction has taken place between the assessee and Shri Brij Mohan Gupta Group. The assessee also confirmed that none of the partners of the firm, being Naveen Kumar or Rishi Kumar has ever had any transaction with the alleged Shri Brij Mohan Gupta Group. 2.3. The AO rejected the arguments and submissions of the assessee and made addition to an extent of Rs. 20 lacs as unexplained transaction u/s 69A of the Act. The assessee preferred an appeal to the CIT(A) who in turn deleting the addition so made by the assessee. The Revenue filed an appeal before this Tribunal in against the order of the ld. CIT(A). This Tribunal, vide its order dated 19/03/2010, set aside the issue to the files of the AO, with a direction that opportunity may be granted to the asessee to cross examine the deponents on the basis of which the addition was made by the AO. It was also open for the AO to make any further enquiry/investigation, as may be necessary for deciding the issue. The assessee was given opportunity to produce further evidence in support of its case and also any rebuttal of the additions made by the Revenue. 2.4. In the proceedings before the AO in the second round of reassessment the assessee submitted affidavits by Shri Rishi Kumar, Naveen Kumar being partner of the assessee, which is placed at pages 20 to 21 of the paper book. The ld. AO during the second round of assessment proceedings, provided the assessee with the copies of the statement of Shri Brij Mohan Gupta, his son Shri Rajeev Gupta and Shri Ram Avtar Singhal, his accountant, which was recorded at the time of search u/s 131 of the I.T. Act. The ld. AO also issued fresh notice to all these persons u/s 131 of the Act. The assessee was asked to remain present for cross examining these three persons and also to confront the statements and the documents recorded originally in the course of search proceedings. In the fresh statement and cross examining of Shri Ram Avtar and Shri Rajeev Gupta it was stated that they were involved in the business of Shri Brij Mohan Gupta and acted as per the instructions/directions of Shri Brij Mohan Gupta only. At the relevant time Shri Brij Mohan Gupta had demised. The ld. AO has recorded that Shri Ram Avtar Singhal and Rajeev Gupta denied that they knew any party by the name of M/s Rishi Kumar, Naveen Kumar and both of them failed to identify the assessee. The ld. AO completed the assessment on the same basis as the previous assessment order made addition of Rs. 20 lacs under the head “unexplained income” u/s 69A of the Act.
3. Aggrieved by the order of the AO the assessee preferred an appeal before the ld. CIT(A). 3.1. Before the ld. CIT(A) the assessee submitted that there is no evidence before AO to show that the assessee has taken any cash loan or hundi loan and that the issue has been examined in detail by the previous CIT(A), during the course of the appellate proceedings in the first round of appeal. It was also submitted before the ld. CIT(A) that no documents that have been seized belongs to the assessee and, therefore, no adverse inference could be drawn against the assessee. 3.2. Considering the submissions and the orders passed in the case of the assessee the ld. CIT(A) deleted the addition made by the AO.
Aggrieved by the order of the ld. CIT(A) the Revenue is in appeal before us. 4.1. We have perused all the records in respect of the first round of assessment proceedings, the submissions and the paper book filed before us.
4.2. It is pertinent to note that in the second round of proceedings the said persons i.e. Rajeev Gupta (son of Late Shri B.M. Gupta) and Ram Avtar Singhal (Accountant of Late B.M. Gupta), in the course of the cross examination before the AO have clearly denied any sought of dealings with the assessee and that they identify the assessee. Even in the affidavits filed by these persons before the ld. AO they have denied that Shri B.M. Gupta knew the assessee and that they have never come across any transaction of Rs. 20 lacs or any other financial transaction between Late Shri B.M. Gupta and Ram Avtar Singhal are placed at pages 16 to 19 of the PB. The ld. AR has submitted that the AO has not brought any corroborative evidence which could prove that the documents seized during the time of search on BM Gupta and Group had any relation with the assessee or its partners. 4.3. The ld. AR thus, contended that the AO could not corroborate the entries found in the seized material to justify the additions made in the case of the assessee. 4.4. On the contrary, the ld. DR relied upon the orders of the AO. 4.5. From the facts enumerated above, it is clear that the Assessing Officer failed to establish any case against the appellant. The impugned order does not throw any light on any inquiry/investigation carried out by the Assessing Officer that could corroborate the entries found in the seized material and justify the additions made in the case of the assessee. Further inquiry/investigation, was required to be carried out on the information passed by the DCIT, Central Circle 19, New Delhi, but apparently no worthwhile or cogent work was done towards this end. 4.6. In the second round of assessment proceedings, the said persons during the cross examination has denied any sort of dealings with the assessee and in fact has even failed to identify the assessee. They have furnished their duly sworn affidavits deposing these facts(supra). No direct of corroborative evidence could be discovered by the ld.AO from the assessee’s possession, which could substantiate the alleged addition. It is not at all the case where the assessee has made an unexplained investment of cash. The Assessing Officer merely summarized the salient features of the assessment proceedings relating to Shri Brij Mohan Gupta and thereafter summarily rejected the reply of the assessee as ‘not acceptable’. Therefore, the Assessing Officer was not justified in making the addition of Rs. 20,00,000/-.
From the above discussions, we do not find any merits in the case of the Revenue. We, accordingly, dismissed the appeal filed by the Revenue. The order is pronounced in the open court on 08/02/2016 Sd/- Sd/- (N.K. SAINI) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 08/02/2016 *Kavita, P.S.