ACIT CEN CIR 42, MUMBAI V. INDERJEET ARYA, MUMBAI

ITA 223/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2311 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 28-06-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 08-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B C S NAIK
• Keywords: Unexplained cash credit; Search and seizure; Source of fund; Deemed dividend
• Section: 153A; 131; 132; 144; 139; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I , MUMBAI BEFORE SHRI G.S. PANNU (ACCOUNTANT MEMBER) AND SHRI RAVISH SOOD (JUDICIAL MEMBER) ITA NO. 223 /MUM/201 4 ASSESSMENT YEAR: 20 0 5 - 06 ACIT, CENTRAL CIRCLE - 42 VS. SHRI INDERJEET ARYA MUMBAI 1 - D VICEROY PARK, TOWER - B, THAKUR VILLAGE, KANDIVALI EAST. MUMBAI 400101. PAN NO. ACXPA4179K (APPELLANT) (RESPONDENT) REVENUE BY : SHRI B.C.S. NAIK (CIT - DR) ASSESSEE BY : NONE DATE OF HEARING : 25/07/2016 DATE OF PRONOUNCEMENT : 26 / 10 /2016 O R D ER PER RAVISH SOOD, JUDICIAL MEMBER : T HE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY CIT(A) - 36 , MUMB AI , WHICH I N TURN HAVE ARISEN OUT OF ORDER PASSED BY T HE ASSESSING OFFICER (IN SHORT A.O) UNDER SECTION 144 R.W.S. 153A OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE FOR ASSESSMENT YEAR 2005 - 06 , READ AS UNDER: - . 2 ITA NO. 223/MUM/2014 INDERJEET ARYA 1. ON THE FACTS AND IN THE CIRCUMSTAN CES OF THE CASE AND IN LAW, THE LD. CIT(A)ERRED IN DELETING ADDITION OF RS. 12,50,00,000/ - MADE U/S 68 OF THE I.T. ACT, 1961, BY HOLDING THAT THE IMMEDIATE SOURCE OF FUNDS IS IDENTIFIED AS M/S RAJAT PHARMACHEM LTD, WITHOUT APPRECIATING THAT THE ADVANCES WE RE NOT RECEIVED DIRECTLY FROM M/S RAJAT PHARMACHEM LTD, BUT WERE ROUTED THROUGH DUMMY COMPANIES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING ADDITION OF RS. 12,50,00,000/ - MADE U/S 68 OF THE I.T. ACT, 1961, WITHOUT APPRECIATING THAT THE NATURE AND PURPOSE OF ADVANCES HAS NOT BEEN EXPLAINED . THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND AND/OR ADD NEW GROUNDS WHICH MAY BE NECESSARY. 3 . THE BRIEF FACTS OF THE CASE ARE THAT SEARCH AND SEIZURE PROCEEDING U/S 132 OF THE ACT WERE CONDUCTED AS ON 12.12.2008 ON THE RAJAT PHARMACHEM GROUP OF CASES (FOR SHORT GROUP), THEREIN COVERING THE MAIN COMPANY M/S RAJAT PHARMACHEM LTD. , MUMBAI (FOR SHORT COMPANY), THE DIRECTORS OF THE COMPANY AND OTHER ENTITIES CONNECTED WITH THE GROUP. THE ASSESSEE ALONG WITH HIS BROTHER SH. KISHORE KUMAR ARYA WERE THE KEY PLAYERS MANAGING THE AFFAI RS OF THE COMPANY WHICH WAS ENGAGED IN THE BUSINESS OF MANUFACTURING, IMPORT AND EXPORT OF PHARMACEUTICAL PRODUCTS AND WAS A GOVERNMENT OF INDIA RECOGNIZED ONE STAR EXPORT HOUSE. THE COMPANY HAD FLOATED A SEZ BY THE NAME OF RAJAT INDUSTRIAL PARK UNDER THE AEGIS OF M/S RAJAT INTERNATIONAL, A UNIT OF THE AFORESAID COMPANY AT BAZPUR, DISTRICT UDDHAM SINGH NAGAR, UTTRAKHAND. 3 ITA NO. 223/MUM/2014 INDERJEET ARYA 3.1 THAT AS STANDS GATHERED FROM THE RECORDS OF THE LOWER AUTHORITIES, THE AFORESAID GROUP WAS VISITED BY THE DIRECTORATE OF REVENUE INTELLIGENCE , ENFORCEMENT DIRECTORATE AND THE CENTRAL BUREAU OF INVESTIGATION, AND ACTION UNDER THE RESPECTIVE LAWS OF THE LAND WAS THEREAFTER INITIATED AGAINST THE AFORESAID GROUP FOR VIOLATION OF EXPORT LAWS, RAISING OF FRAUDULENT CLAIMS OF DEPB CREDITS , AS WELL AS CERTAIN OTHER FINANCIAL INFRACTIONS INVOLVING BANKING CHANNELS. THE GROUP WAS FOUND TO HAVE RESORTED TO CERTAIN BOGUS PAPER TRANSACTIONS PERTAINING TO EXPORT OF P HARMACEUTICAL PRODUCTS TO/THROUGH CERTAIN ENTITIES, AND THE INVESTIGATIONS REVEALE D THAT THE ASSESSEE AND HIS BROTHER SH. KISHORE KUMAR ARYA WERE ACTIVELY ENGAGED IN SIPHONING OFF THE FUNDS FROM THE COMPANY INTO THEIR RESPECTIVE PERSONAL ACCOUNTS BY AVAILING THE SERVICES OF HAWALA OPERATORS AND CERTAIN DUMMY CONCERNS FLOATED BY THEM, BO TH IN INDIA AND ABROAD. 3.2 THAT PURSUANT TO SEARCH CONDUCTED U/S 132 OF THE ACT IN THE HANDS OF THE ASSESSEE, WHO ALONGWITH HIS BROTHER SH. KISHORE KUMAR ARYA WERE THE KEY PLAYERS MANAGING THE AFFAIRS OF THE GROUP, NOTICES U/S 153A OF THE ACT WERE I SSUED TO THE ASSESSEE THEREIN CALLING UPON HIM TO FILE HIS RETURNS OF INCOME FOR A.Y(S) 2003 - 04 TO 2008 - 09. THE ASSESSEE WHO HAD FILED HIS ORIGINAL RETURN OF INCOME U/S 139 OF THE ACT FOR A.Y. 2005 - 06 AS ON 06.07.2006 DECLARING TOTAL INCOME OF RS. 4, 29,000 / - , HOWEVER FAILED TO COMPLY WITH THE DIRECTION OF THE A.O AND DID NOT FILE ANY RETURN OF INCOME U/S 153A OF THE ACT, PURSUANT WHERETO THE A.O BEING LEFT WITH NO OTHER ALTERNATIVE, THEREIN FRAMED THE ASSESSMENT U/SS. 144 R.W.S. 153A OF THE ACT. THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, KEEPING IN VIEW THE COMPLEXITIES INVOLVED IN THE ACCOUNTS AND THE HIGH STAKES INVOLVED IN THE CASE, THE ASSESSEE WAS DIRECTED TO GET HIS ACCOUNTS 4 ITA NO. 223/MUM/2014 INDERJEET ARYA AUDITED U/S 142(2A) OF THE ACT FOR THE A.Y(S) 2003 - 04 TO 2009 - 10. THEREAFTER THE SPECIAL AUDITORS AFTER METICULOUSLY ANALYZING THE MATERIAL TO THE EXTENT THE SAME COULD BE GATHERED BY THEM, THEREIN SUBMITTED THE SPECIAL AUDIT REPORT AS ON 15.04.2011. 3.3 THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE A.O TAKING COGNIZANCE OF THE FACT THAT THE BALANCE SHEET OF THE ASSESSEE FOR THE YEAR ENDING 31.03.2005 REFLECTED, INTER ALIA, THE FOLLOWING LOANS (LIABILITIES) : - SR. NO. PARTICULARS AMOUNT 1. BARCO PHARMA CEUTICALS PVT. LTD. RS. 6,25,00,000/ - 2. B LESSINGS BIO TECH P. LTD. RS. 6,25,00,000/ - TOTAL RS. 12,50,00,000/ - , THEREUPON CONFRONTED THE ASSESSEE WITH THE FINDINGS AS HAD EMERGED IN THE COURSE OF THE INVESTIGATIONS FOLLOWING THE SEARCH PROCEEDINGS CONDUCTED IN THE HANDS OF THE AFORESAID GR OUP, WHICH REVEALED THAT BOTH OF THE AFORESAID LENDOR COMPANIES, I.E. M/S BARC O PHARMA CEUTICALS PVT. LTD. (SUPRA) AND M/S BLESSINGS BIO TECH P. LTD. (SUPRA) WERE DUMMY COMPANIES FLOATED BY THE ASSESSEE ALONGWITH HIS BROTHER, THEREIN PROJECTING THE PETTY EM PLOYEES OF THE GROUP AS THE DIRECTORS OF THE AFORE SAID COMPANIES, WITH THE ULTERIOR MOTIVE TO FACILITATE SIPHONING OFF THE FUNDS OF THE COMPANY , I.E. M/S RAJAT PHARAMACHEM LTD., BY ROUTING THE SAME THROUGH THE AFORESAID LENDOR COMPANIES. THAT DESPITE THE F ACT THE ASSESSEE WAS CATEGORICALLY CONFRONTED BY THE A.O WITH A FINDING THAT THE PURPORTED LOANS RECEIVED BY HIM FROM THE AFORESAID LENDOR COMPANIES, I.E. M/S BARC O PHARMA CEUTICALS PVT. LTD. (SUPRA) AND M/S BLESSINGS BIO TECH 5 ITA NO. 223/MUM/2014 INDERJEET ARYA P. LTD. (SUPRA), WERE AS A MAT TER OF FACT FUNDS RECEIVED BY HIM FROM THE COMPANY, I.E. M/S RAJAT PHARMACHEM LTD. (SUPRA), HOWEVER CHOSE NOT TO FILE ANY REPLY, PURSUANT WHERETO THE A.O PROCEEDED WITH AND SUMMONED THE DIRECTORS OF THE AFORESAID LENDOR COMPANIES U/S 131 OF THE ACT AND R ECORDED THEIR RESPECTIVE STATEMENTS ON OATH : - SR. NO. PARTICULARS 1. SH. SATISH DIKSHIT R/O CHITRAKOOT SOCIETY, SINGH ESTATE, CROSS ROAD NO. 2, KANDIVALI(E), MUMBAI - 400 101. (A) DIRECTOR OF M/S BARCO PHARMACEUTICAL PVT. LTD., AND (B) DIRECTOR OF M/S BLESSINGS BI O - TECH P. LTD. 2. SH. RAKESH SHARMA R/O 603, VARUN BLDG, VASANT LEELA COMPLEX, WAGHBIL NAKA, GODHBUNDAR ROAD, THANE (W) - 400 601. (A) DIRECTOR OF M/S BLESSINGS BIO - TECH P. LTD. THE A.O ON BEING SATISFIED THAT BOTH OF THE AFORESAID PERSONS WHO WERE PETTY EMPL OYEES OF THE COMPANY M/S RAJAT PHARMACHEM LTD., AND WERE NEITHER AWARE OF THE AFFAIRS OF THE AFOREMENTIONED COMPANIES, AS WELL AS TOTALLY OBLIVIOUS OF THE MOVEMENT OF FUNDS INTO AND OUT OF THE COFFERS OF THE AFOREMENTIONED COMPANIES, WERE AS A MATTER OF F ACT DUMMIES WHO HAD BEEN PLANTED BY THE ASSESSEE AND HIS BROTHER SH. KISHORE KUMAR ARYA TO ACT AS SUBTERFUGES FOR FACILITATING CLANDESTINE DIVERSION OF FUNDS OF THE COMPANY FOR THE PERSONAL BENEFIT OF THE ASSESSEE AND HIS BROTHER SH. KISHORE KUMAR ARYA. 3.4 THE A.O THUS ON THE BASIS OF THE AFORESAID INESCAPABLE FACTUAL POSITION AS STOOD GATHERED BY HIM, THEREIN CONCLUDED THAT AS THE AMOUNT 6 ITA NO. 223/MUM/2014 INDERJEET ARYA AGGREGATING TO RS. 12.50 CRORE EACH WAS IN FACT DRAWN BY THE ASSESSEE AND HIS BROTHER SH. KISHORE KUMAR ARYA DIRECTLY FROM THE FUNDS OF THE COMPANY, I.E. M/S RAJAT PHARMACHEM LTD., HE THEREFORE PROCEEDED WITH AND ADDED THE ENTIRE AMOUNT OF RS. 12.50 CRORE AS INCOME IN THE HANDS OF THE ASSESSEE, ON THE FOLLOWING GROUNDS : I. THAT AS THE AMOUNT OF RS. 12.50 CRORE SIPHONED OF F BY THE ASSESSEE FROM THE FUNDS OF THE COMPANY M/S RAJAT PHARAMACHEM LTD., LEADING TO CREDIT OF THE SAID AMOUNT IN THE CAPITAL A/C OF THE ASSESSEE , THE SAME WAS THUS HELD BY THE A.O AS TAXABLE BEING IN THE NATURE OF R EVENUE RECEIPT IN THE HANDS OF THE ASS ESSEE. II. THAT ALTERNATIVELY THE A.O OBSERVING THAT AS THE ASSESSEE WAS HOLDING 47.5 % BENEFICIAL OWNERSHIP OF SHARES IN THE COMPANY, I.E. M/S RAJAT PHARAMACHEM LTD. WHICH WAS A CLOSELY HELD COMPANY, THEREFORE THE ADVANCES TAKEN BY THE ASSESSEE THROUGH THE D UMMY COMPANIES WAS AS A MATTER OF FACT FUNDS RECEIVED BY HIM DIRECTLY FROM THE AFORESAID COMPANY, I.E . M/S RAJAT PHARAMACHEM LTD., AND THE SAME THEREFORE TOOK THE COLOR AND CHARACTER AS THAT OF DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT. HOWEVER , THE A.O TAKING COGNIZANCE OF THE FACT THAT THE ACCUMULATED PROFITS AVAILABLE WITH THE COMPANY AMOUNTED TO RS. 9,96,43,053/ - , AND BOTH THE ASSESSEE AND HIS BROTHER SH. KISHORE KUMAR ARYA HAD EQUALLY DRAWN AN AMOUNT OF RS. 12.50 CRORE EACH FROM THE AFORESAID COMPAN Y, HE THEREFORE RESTRICTED THE ADDITION TO THE TOTAL INCOME OF THE ASSESSEE AT RS. 4,98,21,526/ - , BEING HALF THE AMOUNT OF THE RESERVES AVAILABLE IN THE BALANCE SHEET OF THE COMPANY. 7 ITA NO. 223/MUM/2014 INDERJEET ARYA THUS IN LIGHT OF THE AFORESAID OBSERVATIONS THE A.O MADE AN ADDITION OF RS. 12.50 CRORE (I.E. THE HIGHER OF THE AFORESAID TWO ADDITIONS) IN THE HANDS OF THE ASSESSEE, AND THEREAFTER DELIBERATING ON CERTAIN OTHER ISSUES ASSESSED THE INCOME AT RS. 41,30,96,830 / - . 4. THAT THE ASSESSEE BEING AGGRIEVED WITH THE ASSESSMENT THEREIN CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A), WHO PARTLY ALLOWED THE APPEAL. THAT THOUGH THE CIT(A) SUSTAINED THE ADDITION OF RS. 4,98,21,526/ - MADE U/S 2(22)(E) OF THE ACT, BUT NOT FINDING HIMSELF AS BEING IN AGREEMENT WITH THE VIEW OF THE A.O, BUT W ITHOUT ASSIGNING ANY SPECIFIC REASON AS REGARDS THE SAME, PROCEEDED WITH AND VACATED THE ADDITION OF RS. 12.50 CRORE SO MADE BY THE A.O. THUS THE CIT(A) TREATING THE AMOUNT RECEIVED BY THE ASSESSEE FROM THE COMPANY, I.E. M/S RAJAT PHARMACHEM LTD. THROUGH ITS COND UITS LENDOR COMPANIES, I.E. M/S BARC O PHARMA CEUTICALS PVT. LTD. (SUPRA) AND M/S BLESSINGS BIO TECH P. LTD. (SUPRA) , AS A DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT, BUT HOWEVER RESTRICTED THE SAID ADDITION IN THE HANDS OF THE ASSESSEE TO AN AMOUNT OF RS. 4,98,21,526/ - , I.E. HALF THE AMOUNT OF THE FREE RESERVES AVAILABLE IN THE BALANCE SHEET OF THE COMPANY , I.E. M/S RAJAT PHARMACHEM LTD. 5. THAT THE DEPARTMENT BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) THEREIN SETTING ASIDE THE ADDITION OF RS. 12.50 CRORE MADE BY THE A.O, HAD ASSAILED THE ORDER OF THE CIT(A) TO THE SAID EXTENT BEFORE US. THAT AT THE VERY OUTSET THE LD. DEPARTMENT REPRESENTATIVE (FOR SHORT D.R) SUBMITTED THAT THE CIT(A) HAD FAILED TO RECORD A SPECIFIC FINDING FOR NOT BEING IN A GREEMENT WITH THE ADDITION OF RS. 12.50 CRORE MADE BY THE A.O IN THE HANDS OF THE ASSESSEE . IT WAS FURTHER SUBMITTED BY THE LD. D.R THAT THE ASSESSEE HAD FAILED TO PUT FORTH ANY EXPLANATION AS REGARDS THE NATURE 8 ITA NO. 223/MUM/2014 INDERJEET ARYA OF THE AMOUNT OF RS. 12.50 CRORE SO RECEIV ED BY HIM. THE LD. D . R HEAVILY RELYING ON THE ORDER OF THE A.O THEREIN SUBMITTED THAT IN THE ABSENCE OF ANY EXPLANATION FORTHCOMING ON THE PART OF THE ASSESSEE AS REGARDS THE NATURE OF THE RECEIPT OF THE AFORESAID AMOUNT OF RS. 12.50 CRORE IN THE HANDS O F THE ASSESSEE, THE A.O BEING LEFT WITH NO OTHER ALTERNATIVE HAD RIGHTLY MADE AN ADDITION OF THE SAID AMOUNT IN THE HANDS OF THE ASSESSEE. IT WAS THUS AVERRED BY THE LD. D.R THAT THE ORDER OF THE CIT(A) VACATING THE ADDITION OF RS. 12 .50 CRORE BE SET ASIDE AND THE ADDITION MADE BY THE A.O BE RESTORED. 6. WE FIND THAT DESPITE AFFORDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE RESPONDENT, WHO HAD DULY BEEN PUT TO NOTICE VIDE REGISTERED POST (RPAD) AS REGARDS THE HEARING OF THE APPEAL, THE LATTER DESPITE HAVIN G BEEN ALLOWED ADJOURNMENTS AT HIS REQUEST, HAD CHOSEN TO CONTINUE WITH HIS CALLOUS AND NON - COOPERATIVE CONDUCT, AND HAD FAILED TO PUT UP AN APPEARANCE ON THE DATE FIXED FOR HEARING OF THE APPEAL BEFORE US, PURSUANT WHERETO WE ARE CONSTRAINED TO DISPOSE OF THE APPEAL IN TERMS OF RULE 25 OF THE APPELLATE TRIBUNAL RULES, 1963, AFTER PERUSING THE ORDERS OF THE LOWER AUTHORITIES, MATERIAL AVAILABLE ON RECORD AND TAKING NOTE OF THE SUBMISSIONS MADE BY THE LD. D.R BEFORE US. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE AND FIND SUBSTANTIAL FORCE IN THE SUBMISSIONS OF THE LD. D . R. THAT A BARE PERUSAL OF SEC. 68 OF THE ACT, WHICH READS AS UNDER : - CASH CREDITS. 68. WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF 9 ITA NO. 223/MUM/2014 INDERJEET ARYA OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. , THEREIN REVEALS THAT AS PER THE STATUTORY REQUIREMENTS CONTEMPLATED U/S 68 OF THE ACT, A STATUTORY OBLIGATION IS CAST UPON AN ASSESSEE TO PUT FORTH A SATISFACTORY EXPLANATION, BOTH AS REGARDS THE NATURE AND SOURC E OF ANY SUM WHICH IS FOUND CREDITED IN HIS BOOKS OF ACCOUNTS, AND IN THE ABSENCE OF A CUMULATIVE SATISFACTION OF BOTH OF THE SAID STATUTORY REQUIREMENTS, THE SAID SUM IS LIABLE TO BE CHARGED TO INCOME - TAX AS THE INCOME OF THE ASSESSEE U/S 68 OF THE ACT . THAT CONSTRUING THE SCOPE AND GAMUT OF SEC. 68 BY ADHERING TO THE RULE OF STRICT LITERAL INTERPRETATION, WE ARE OF THE CONSIDERED VIEW THAT MERE PUTTING FORTH OF AN EXPLANATION BY THE ASSESSEE AS REGARDS THE SOURCE OF THE AMOUNT FOUND CREDITED IN HIS BOOKS OF ACCOUNTS, WITH NO SATISFACTORY EXPLANATION AS REGARDS THE NATURE OF THE SAID RECEIPT/CREDIT, WOULD BE SUFFICIENT TO INESCAPABLY JUSTIFY ADDITION OF THE SAID AMOUNT AS AN UNEXPLAINED CREDIT IN THE HANDS OF THE ASSESSEE U/S 68 OF THE ACT. WE FI ND THAT IN THE PRESENT CASE THOUGH THE IMMEDIATE SOURCE OF THE AMOUNT OF RS. 12.50 CRORE RECEIVED BY THE ASSESSEE STANDS ESTABLISHED, BEING THE AMOUNT S RECEIVED FROM THE FUNDS OF THE COMPANY, I.E. M/S RAJAT PHARMACHEM LTD., HOWEVER THE SAME IN THE ABSENCE OF ANY EXPLANATION BY THE ASSESSEE AS TO WHAT WAS THE NATURE OF THE SAID RECEIPT, COULD THUS SAFELY BE CONCLUDED AS A FAILURE ON THE PART OF THE ASSESSEE TO DISCHARGE THE ONUS CAST UPON HIM AS PER THE CLEARLY WORDED SEC. 68 OF THE ACT, PURSUANT WHERE TO THE SAID AMOUNT WAS RIGHTLY ASSESSED BY THE A.O AS A REVENUE RECEIPT I N THE HANDS 10 ITA NO. 223/MUM/2014 INDERJEET ARYA OF THE ASSESSEE. WE FIND THAT THE CIT(A) THOUGH NOT BEING IN AGREEMENT WITH THE A.O AS REGARDS THE ADDITION OF RS. 12.50 CRORE SO MADE BY HIM, HAD THUS VACATED THE SAME, BUT WHILE SO DOING THE CIT(A)) HAD ABSOLUTELY FAILED TO RECORD A SPECIFIC FINDING FOR HOLDING A DIFFERENT VIEW WHICH THEREIN COULD GO TO JUSTIFY THE DELETION OF THE AFORESAID AMOUNT ON HIS PART . WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE AND ARE OF THE CONSIDERED VIEW THAT THE CIT(A) WHILE VACATING THE ADDITION OF RS. 12.50 CRORE HAD WHIMSICALLY DISPENSED WITH AND FAILED TO APPRECIATE THE STATUTORY OBLIGATION SO CAST UPON AN ASSESSEE FOR EFFECTING CUMULATIVE SATISFACTION OF THE TWO F OLD STATUTORY REQUIREMENTS CONTEMPLATED U/S 68 OF THE ACT, I.E . EXPLANATION AS REGARDS BOTH THE NATURE AND SOURCE OF THE AMOUNT FOUND CREDITED IN THE BOOKS OF ACCOUNT S , AND DESPITE THE FACT THAT THE ASSESSEE HAD FAILED TO PUT FORTH ANY EXPLANATION, M UCH THE LESS A SATISFACTORY EXPLANATION AS REGARDS THE NATURE OF THE RECEIPT IN HIS HANDS, WHICH FACT AS REGARDS THE FAILURE ON THE PART OF THE ASSESSEE TO PUT FORTH AN EXPLANATION AS REGARDS THE NATURE OF THE SAID RECEIPT/CREDIT WAS DISCUSSED BY THE A .O IN THE BODY OF THE ASSESSMENT ORDER, HAD THUS GRAVELY ERRED IN LOOSING SIGHT OF THE SAID FACTUAL POSITION R.W. THE SETTLED POSITION OF LAW . WE ARE AFRAID TO SAY THAT THE ORDER OF THE CIT(A) IN THE ABSENCE OF RECORDING OF ANY SPECIFIC REASONING WHICH COU LD GO TO JUSTIFY THE DELETION OF THE ADD ITION OF RS. 12.50 CRORE BY HIM, CAN SAFEL Y BE HELD TO BE A CRYPTIC ORDER, WHICH THUS CANNOT BE ALLO WED TO SUSTAIN AS SUCH . WE THUS BEING OF THE CONSIDERED VIEW THAT AS THE ASSESSEE HAD FAILED TO PUT FORTH A SATISFAC TORY EXPLANATION AS REGARDS THE NATURE OF THE AMOUNT OF RS. 12.50 CRORE (SUPRA) SO RECEIVED BY HIM, AND AS A RESULT THEREOF HAD FAILED TO CARRY OUT CUMULATIVE SATISFACTION OF THE CONDITIONS CONTEMPLATED U/S 68 OF THE ACT, THEREFORE THE SAID AMOUNT OF RS. 12.50 CRORE (SUPRA) WAS RIGHTLY HELD BY THE A.O AS A REVENUE RECEIPT LIABLE TO BE ASSESSED AS 11 ITA NO. 223/MUM/2014 INDERJEET ARYA INCOME IN THE HANDS OF THE ASSESSEE. THUS IN LIGHT OF OUR AFORESAID OBSERVATIONS , WE HEREIN SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE ADDITION OF RS. 12. 50 CRORE MADE BY THE A.O. THE GROUNDS OF APPEAL NO. 1 & 2 ARE THUS ALLOWED . 1 7 . IN THE RESULT THE APPEAL OF THE DEPARTMENT IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 /10/2016. SD/ - SD/ - (G.S. PANNU) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 26 /10/2016 AG (ON TOUR) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CI T(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI