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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
Per contra, Ld. DR submitted that the impugned query-letter dated 08.06.2015 issued by AO is a general query-letter in which the AO has raised routine queries relating to assessment but the AO has not raised any specific query qua the survey. He submitted that the AO has nowhere discussed the points of survey in assessment-order which clearly shows that the AO has not examined the expenses out of which surrender was made. Ld. DR submitted that the assessment-order is cryptic and the AO has mechanically disallowed just 10% of expenses. On the issue of AY 2013-14 or 2015-16, Ld. DRadmitted that in last M/s Vision Infinity Limited, Bhopal I.T.A.No..467/Ind/2018 A.Y.2013-14 para of statement Shri Prakash Singh made surrender for AY 2015-16 but contended that in reply to preceding Q.No. 2 to 3 of statement, specific surrender was made for AY 2013-14. Ld. DR submitted that last para is not relevant, the preceding Q.No. 2 to 3 are more specific and relevant.
(iv) Regarding surrender of On-money payment for purchase of property (Rs. 1.80 Crore):
Ld. AR submitted that the surrender of Rs. 1.80 crore was based on entries on backside of BS-3 / Page No. 47 impounded by survey-team, copy placed at Page No. 60 in the Paper-Book dated 14.05.2019. Ld. AR drew our attention to same and submitted that the said document does not mention any date or year of cash payment but the authorities allege that the cash payment relates to purchase of land at village Barai made through cheque of Rs. 2,58,37,500/- mentioned in the very said document just above the impugned noting of cash-payment. Therefore, during hearing on 19.04.2023, Ld. AR filed a copy of registered sale-deed of purchase of said land at Barai (with an acknowledgement of copy served upon the office of Ld. DR on 17.04.2023) and argued that the said land was purchased for Rs. 2,42,50,000/- in the year 2013-14 relevant to AY 2014-15 and not in AY 2013-14. Ld. AR demonstrated that the deed was executed and registered on 26.08.2013. Ld. AR referred to Page- 1 of the deed and pointed out that prior to execution of registered-deed, the assessee made a registered-agreement for purchase of land on 21.06.2013 with a token payment of Rs. 21,50,000/-. Thus, the deal of land itself was agreed on 21.06.2013. And thereafter all subsequent payments were made on 04.07.2013, 05.07.2013, 13.07.2013, 16.07.2013, 24.07.2013 and 20.08.2013. All these payments have been M/s Vision Infinity Limited, Bhopal I.T.A.No..467/Ind/2018 A.Y.2013-14 made through DD / cheque. Thereafter, the assessee incurred a total cost of Rs. 15,87,500/- through cheque on stamps and registration. Thus, the total cost of land amounted to Rs. 2,58,27,500/- which exactly tallies with the noting of cheque- payment made on the seized document and the same is duly recorded in the books of account of assessee, copy of ledger A/c extracted from books of assessee is submitted alongwith copy of registered-deed. With these facts and evidences, Ld. ARsubmitted that when the purchase transaction itself was made in AY 2014-15, how can cash-payment, even if assumed to have been made, relate to AY 2013-14? Ld. AR submitted that the impounded document does not contain any date or year and the PCIT is wrong in assuming the same as related to AY 2013- 14. Therefore, the revision of AY 2013-14 qua this issue is patently wrong and unsustainable.
Per contra, Ld. DR submitted that the cash payment was made in the financial year 2012-13 relevant to AY 2013-14 though the registration might have been done in next AY 2014-15.
(v) Regarding surrender of Unsecured loans and interest thereon (Rs. 1.80 Crore): Ld. AR submitted that the surrender of Rs. 1.80 crore was based on entries on backside of BS-2 / Page No. 97 impounded by survey-team, copy placed at Page No. 66 in the Paper-Book dated 14.05.2019. Ld. AR drew our attention to same and submitted that the said document does not mention any date or year and this undisputed fact is clearly admitted by PCIT himself in Para No. 5 of the show-cause notice but then the Ld. PCIT goes on observing that in the statement recorded during survey, the same was accepted as transaction related to AY 2013-14.
Ld. AR also submitted that the surrender of Rs. 1.80 crore taken M/s Vision Infinity Limited, Bhopal I.T.A.No..467/Ind/2018 A.Y.2013-14 from assessee is not even corroborated mathematically by any amount or aggregate of amounts noted in the said document. However, the main entry of Rs. 1.70 crore (noted in the document)is in the name of one Shri Jagdish Thakur. Therefore, during assessment-proceeding, the AO issued summon dated 27.02.2015 u/s 131 to Shri Jagdish Thakur and recorded his statements on 03.03.2015, copy of statement placed at Page No. 78 to 85 of Paper-Book dated 14.05.2019. Ld. AR referred to Q.No. 5 and 15 which are re-produced below: “�. 5 �या आपके �वारा �याज पर ऋण �दया जाता है ॽ य�द हाँ तो �कस दर पर यह ऋण �दान �कया जाता है, आपके �वारा िज�ह� भी ऋण �दान �कया गया है उनका पूण� �ववरण दे । उ. 5 जी मेरे �वारा �कसी भी �कार का ऋण �दान नह�ं �कया जाता है । �.15 आपको सव� क� काय�वाह� के दौरान ज�त क� गयी डायर� को �दखाया जा रहा है िजसम� आपके �वारा �दान �कये गये ऋण �. 1.7 करोड (loan given by you of Rs. 1.7 Cr. @5.5% per month) का उ�लेख है, इस �वषय पर आपका �या कहना है । उ.15 यह �क मेरे �वारा ऐसी कोई भी रा�श नह�ं द� गयी है और ना ह� इस रा�श के संबंध म� मुझे कोई जानकार� भी नह�ं है । Referring to same, Ld. AR contended that even in the independent verification done by AO during scrutiny- assessment, Shri Jagdish Thakur has clearly denied having given any loan to assessee. Therefore, the surrender made during survey under mental pressure has no value.
Without prejudice, Ld. AR further argued that the allegation of department is that the assessee has taken cash-loan and not M/s Vision Infinity Limited, Bhopal I.T.A.No..467/Ind/2018 A.Y.2013-14 given cash-loan. Ld. AR submits that she fails to understand as to how there can be income of assessee if at all there was a cash-loan taken? Ld. AR submitted that at the best it could be an undisclosed income of the given but certainly it cannot be an income of assessee-receiver.
Per contra, Ld. DR relied upon the surrender made by Shri Prakash Singh and argued that once he has made surrender, the AO must have made addition.
We have considered rival submissions of both sides. After a careful consideration, we find several merits in the submission put forward by Ld. AR. At first, we take note of the fact that the survey was started at 4 P.M. on 29.10.2014 and ended at about 9 am on 30.10.2014 and the statements of Shri Prakash Singh, Managing Director, were recorded without mentioning time. It is also notable that the survey was conducted on 29.10.2014 falling within previous year 2014-15 relevant to AY 2015-16 but in the statements recorded, initially the surrender is made/obtained for AY 2013-14 but in the closing paragraph, certain components of surrender have been made/ obtained for AY 2015-16. Coupled with this, we also find on perusal of documents, that the AO, Mr. Aadesh Rai, was involved at three stages, (i) firstly he was a part of survey-team and he himself recorded the impugned statement of Shri Prakash Singh, Managing Director, making surrender; (ii) secondly during assessment-proceeding, Mr. Aadesh Rai himself summoned Shri Jagdish Thakur on 03.03.2015 u/s 131 of the act and examined qua the cash-loan of Rs. 1.70 crore alleged to have been taken by assessee which was one component of surrender; and (iii) thirdly, Mr. Aadesh Rai himself was the AO who passed the impugned assessment-order revised by Ld. PCIT. Therefore, the AO, Mr. Aadesh Rai was very much aware of the surrender made by assessee and has also taken step to examine the surrendered income during scrutiny-assessment. At the same time, we also find sufficient weightage in the submission of Ld. AR that no addition could have been M/s Vision Infinity Limited, Bhopal I.T.A.No..467/Ind/2018 A.Y.2013-14 made on the basis of mere surrender during survey in absence of any tangible or positive material. Therefore, the AO has rightly refrained from making any addition in assessment-order qua the surrender.
We have also looked into the submissions made by learned Representativesof both sides qua the components of surrender and after a careful consideration, we note our analysis as under:
(i) Regarding surrender out of Advertisement expenditure (Rs. 70,00,000), Distribution expenditure (Rs. 20,00,000), Salary & Wages (Rs. 40,00,000), we observe that the AO has raised specific queries relating to genuineness of expenses through notice u/s 142(1) and the assessee has filed details/documents and produced the books of account which were duly verified as categorically mentioned by AO in Para No. 2 and 3 of assessment-order. We further observe that after due consideration, the AO has made 10% disallowance of certain expenses. Thus, prima facie there is an investigation done by AO. Even otherwise, we also find that in the last para of statement, Shri Prakash Singh made surrender for AY 2015-16 and not for AY 2013-14. When it is so, the AO is justified in not making any addition on this count in AY 2013-14. Therefore, the revision on this issue cannot be said to be valid.
(ii) Regarding surrender of on-money payment of Rs. 1.80 crore, we firstly find that the impounded document does not contain any date or year which is an undisputed fact. Then, we find that the land at village Barai, for which there is allegation of cash-payment of on-money, had been purchased during AY 2014-15 and not during AY 2013-14 which is very much evident from the date of agreement, dates of payment of consideration and date of execution of sale-deed embodied in the registered sale-deed placed on record. Ld. DR could neither prove that the impounded document contained any date of alleged on-money payment not could rebut or contradict the documentary evidences M/s Vision Infinity Limited, Bhopal I.T.A.No..467/Ind/2018 A.Y.2013-14 which clearly shows purchase-deal having taken place in AY 2014-15; Ld. DR has simply made an unsubstantiated statement that the on- money must have been paid in AY 2013-14. Faced with such a situation, we do not find any valid basis to justify addition in AY 2013- 14. Therefore, the revision qua this issue is also not valid.
(iii) Regarding surrender of Rs. 1.80 crore, we firstly find that no date or year is mentioned in the impound document which is again a fact admitted by PCIT himself. Secondly, we also find that the main entry of Rs. 1.70 crore noted on the document, is in the name of one Shri Jagdish Thakur for which the AO issued summon dated 27.02.2015 u/s 131 to Shri Jagdish Thakur and recorded his statements on 03.03.2015 wherein he has clearly denied having given any cash-loan to assessee. Thirdly, we find merit in the submission of Ld. AR that if at all the assessee has taken cash-loan, how can it be treated as an income of assessee-receiver? Ld. DR could not rebut or contradict these points raised by Ld. AR. Therefore, the revision on this count is also not valid.
With regard to the contention raised by Ld. DR that the assessment- order is silent on the impugned surrender, in our considered view the writing of assessment-order is a task of AO and the same is neither controlled nor helped by assessee. In fact, the assessee has no hand or mind in writing the assessment-order. Being so, we are afraid to accept the pleading of Ld. DR that the assessment-order could be said to be erroneous- cum-prejudicial for that reason alone. This view is also fortified by the decision taken by Hon’ble ITAT, Mumbai in Reliance Payment Solutions Ltd. Vs. Pr. CIT (2022) 136 taxmann.com 277where it was accepted that merely because the Assessing Officer did not write specific reasons for accepting the explanation of the assessee cannot be reason enough to invoke powers under section 263, and non-mentioning of these reasons do M/s Vision Infinity Limited, Bhopal I.T.A.No..467/Ind/2018 A.Y.2013-14 not render the assessment order "erroneous and prejudicial to the interest of the revenue".
In view of above discussion and for the reasons stated therein, we are persuaded to hold that the facts of the present case do not warrant application of section 263. Therefore, the revision-order passed by Ld. PCIT is not a valid order. We, thus, quash the revision-order and restore the original assessment-order passed by AO. The assessee succeeds in this appeal.
Resultantly, this appeal is allowed.
Order pronounced in the open court on12.07.2023.