DCIT, New Delhi V. M/s. Paramount Residency Pvt. Ltd., New Delhi

ITA 6150/DEL/2014

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1601 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2020
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 10-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUSHMA SINGH
• Assessee Lawyers: DR RAKESH GUPTA
• Keywords: Bogus purchase; Search and seizure; Fair market value; Set aside
• Section: 13; 22; 131; 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI F BEN CH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCING) ITA NO.6150/DEL/2014 [A.Y 2011-12] DCIT VS. PARAMOUNT RESIDENCY PVT. LTD. CENTRAL CIRCLE-18 208, SAVITA VIHAR, SIKKA MANSI ON NEW DELHI LSC, 2 ND FLOOR NEW DELHI-110092 APPELLANT BY : MS. SUSHMA SINGH, C IT (DR) RESPONDENT BY : DR. RAKESH GUPTA, ADVOCATE DATE OF HEARING : 10.12.2020 DATE OF PRONOUNCEMENT : .12.2020 ORDER PER N. K. BILLAIYA , AM : THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST TH E ORDER OF THE CIT(A)-3, NEW DELHI DATED 08.08.2014 PERTAINING TO A.Y. 2011-12. 2 2. REPRESENTATIVES OF BOTH THE SIDES WERE HEARD AT LENGTH. CASE RECORD CAREFULLY PERUSED. 3. THE GRIEVANCE OF THE REVENUE READ AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS. 22,18,88,782/- MAD E BY THE AO ON ACCOUNT OF UNVERIFIABLE PURCHASES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HIDING THAT THE PURCHASES MADE FROM THE THREE PARTI ES ARE SHOWN IN THE MATERIAL AT SITE WHEN NO SUCH CONNECTION HAS BEEN ESTABLISHED BY THE ASSESSEE BY PRODUCTION OF ANY DOCUMENT IN THIS REGARD. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HIDING THAT NO ADDITION CAN BE MADE TO THE INCOME OF THE A SSESSEE IF THE EXPENDITURE IS NOT CLAIMED IN THE P&L ACCOUNT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HIDING THAT THE AO IS AT LIBERTY TO EXAMINE THE ALLOWABILI TY OF PURCHASE IN THE ASSESSMENT YEAR 2012- 13 WHEN THE TRANSACTIONS HAS BEEN UNDERTAKEN IN THE A. Y. 2011-12 AND HAS BEEN FOUND TO BE BOGUS. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN IGNORING THE FUNDAMENTAL CANNONS OF PRINCIPLE OF TAXATION TH AT THE DETERMINATION OF INCOME AND EXAMINATION OF ACCOUNTS UNDER THE INCOME TAX ACT IS QUA ASSESSMENT YEAR WISE. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(AS) HAS ERRED IN DELETING THE ADDITION OF RS. 6,25,00,000/- MADE BY THE AO ON ACCOUNT OF UNVERIFICABLE PURCHASES. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HOLDING THAT THE CREDITWORTHINESS, GENUINENESS AND IDENTITY OF THE CREDITOR SHALL BE EXAMINED WHILE EXAMINING THE CASE OF GRUGAL DEVELOPERS PVT. LTD. W HEN AMOUNTS WERE FOUND CREDITED IN THE ACCOUNTS OF THE ASSESSEE. 3 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION AS THE SAME HAS BEEN ALLOWED IN CLEAR VIOLATION OF THE EXPRESSION PROVISIONS OF LAW IN AS MUCH AS WHEN THE CREDITORS ARE FOUND TO B E BOGUS THE ADDITION HAS TO BE MADE IN THE HANDS OF THE ASSESSEE AND PROVISIONS OF THE INC OME TAX ACT DOES NOT ALLOW ANY DISCRETION IN THIS REGARD. 9. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TEN ABLE ON FACTS AND IN LAW. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 4. GROUND NO.1 TO 5 ARE IN RESPECT OF THE DISALLOWA NCE OF RS.22,18,88,782/- WHICH WERE DELETED BY THE CIT(A). 5. FACTS ON RECORD SHOW THAT DURING THE COURSE OF T HE SCRUTINY ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE ASSESS EE HAS DEBITED EXPENDITURE ON ACCOUNT OF PURCHASE OF MATERIAL MADE FROM THE FOLLOWING PARTIES :- 1. M/S. MOHAN RAM TRADING CO. AMOUNTING TO RS.1,25, 40,049/- 2. M/S. SHYAMJI TRADERS AMOUNTING TO RS.25,79,978/- 3. GANGA TRADING CO. AMOUNTING TO RS.85,01,193/- 4. U-TEK SALES CORPORATION AMOUNTING TO RS.5,50,00, 100/- 6. DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDI NGS CARRIED OUT BY THE INVESTIGATION WINGS, IT WAS FOUND THAT THESE PA RTIES ARE NOT EXISTING AT THE ADDRESSES MENTIONED ON THE BILLS AND COULD NOT BE FOUND IN THE FIELD 10 . 4 INQUIRIES CONDUCTED FOR THIS PURPOSE. THE AO MADE THE ADDITIONS BY HOLDING AS UNDER :- 5. I HAVE CONSIDERED THE REPLY FILED BY THE ASSESS EE AND DO NOT FIND ANY MERIT IN THE SUBMISSIONS. WHEN A CLAIM OF EXPEN DITURE HAS BEEN MADE, THE ASSESSEE IS DUTY BOUND TO SUPPORT THE SAM E BY POSITIVE EVIDENCES. THE ALLEGED SUPPLIERS OF MATERIALS WERE NEITHER FOUND EXISTING AT THE GIVEN ADDRESSES DURING THE COURSE O F SEARCH & SEIZURE PROCEEDINGS AND POST SEARCH INQUIRIES, NOR THEY COU LD BE LOCATED DURING THE PRESENT PROCEEDINGS. SUMMONS U/S 131 OF THE INCO ME TAX ACT WERE ISSUED TO ALL THE ABOVE MENTIONED PARTIES BUT THE S AME WERE RECEIVED BACK UNSERVED. SINCE THE GENUINENESS OF THE EXPENDIT URE CLAIMED BY WAY OF ALLEGED PURCHASES FROM THE ABOVE MENTIONED P ARTIES HAS NOT BEEN PROVED, THE PURCHASES MADE FROM THE ABOVE PART IES HAS NOT BEEN PROVED, THE PURCHASES MADE FROM THE ABOVE PARTIES A GGREGATING TO RS. 22,18,88,782/- ARE TREATED AS NON GENUINE AND THERE FORE DISALLOWED. I AM THEREFORE MAKING AN ADDITION OF RS.22,18,88,782/ -TO THE TOTAL INCOME OF THE ASSESSEE COMPANY ON ACCOUNT OF UNVERI FIABLE PURCHASES. FURTHER SUBMISSIONS OF THE ASSESSEE THAT WHEN ASSES SEE IS FOLLOWING PERCENTAGE OF COMPLETION METHOD FOR DECLARING ITS I NCOME, THE CLAIM OF EXPENDITURE BY WAY OF ABOVE PURCHASES IN ONLY TO TH AT EXTENT IS ALSO NOT ACCEPTABLE BECAUSE IN THE PROJECT WORK IN PROGRESS, ENTIRE PURCHASES ARE DEBITED. 7. ON PERUSAL OF THE RECORD WE FIND THAT ON IDENTIC AL SET OF FACTS FOR THE SAME PARTIES THE AO IN A.Y.2010-11 IN ASSESSEE S OWN CASE HAD MADE ADDITION OF RS.78621320/-. THE QUARREL TRAVELLED U PTO THE TRIBUNAL AND 5 THE TRIBUNAL IN ITA NO.4907/DEL/2014 VIDE ORDER DAT ED 13.08.2018 HAS DEALT WITH THE DISALLOWANCE AS UNDER :- 14. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE OR DERS OF THE AUTHORITIES BELOW. THE FACTS ON RECORD SHOW THAT A S EARCH AND SEIZURE OPERATION WAS CARRIED OUT IN THE APPELLANTS GROUP ON 11.3,2011, IT IS PERTINENT TO MENTION HERE THAT NO I NCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH PROCEED INGS. THE AO CHOSE FOUR PARTIES FROM WHOM BUILDING CONSTRUCTION MATERIALS WERE PURCHASED. IT WOULD NOT BE OUT OF PLACE TO MENTIO N THAT THE FAIR MARKET VALUE OF THE PROJECT SITUATED AT PARAMOUNT SYMPHONY, NH - 24, GHAZIABAD IS AT RS. 3,29,82 68 526/ WHICH WAS ESTIMATED BY THE VALUATION CELL OF THE INCOME-TAX DEPARTMENT AT RS, 3,53,47,33,96;1/-. THIS MEANS THAT THE VALUATION CEL L OF THE I.T. DEPARTMENT HAS ESTIMATED THE FAIR MARKET VALUE OF TH E SAID PROJECT MUCH HIGHER THAN THE VALUE DECLARED BY THE AS SESSEE. FURTHER, ON A PROJECT OF MORE THAN 300 CRORES, THE A O HAS DOUBTED THE GENUINENESS OF PURCHASES ONLY TO THE EXTENT OF RS , 7,86 CRORES, WHICH IS ABOUT 2.52%, 15. THE LOWER AUTHORITIES HAVE HARPED UPON THE FACT THAT THE PARTIES WERE NOT PRODUCED FOR VERIFICATION. WHILE DO ING SO, BOTH THE LOWER AUTHORITIES HAVE IGNORED THE CONCLUSIVE DIR ECT EVIDENCES BROUGHT ON RECORD,; NAMELY, PAN DETAILS, VTA DETAIL S, TIN NUMBERS, CONFIRMATIONS AND BANK STATEMENTS. THERE IS NO DISPUTE THAT ALL THE PAYMENTS HAVE BEEN MADE BY ACCOUNT PAYE E CHEQUES. THE LOWER AUTHORITIES HAVE TAKEN AN ADVERSE VIEW BE CAUSE THEY FOUND THAT THE PAYEES HAVE WITHDRAWN CASH ON THE SAM E OR SUCCEEDING DAY. THERE IS NOT AN IOTA OF EVIDENCE WHA TSOEVER TO 6 SHOW THAT THE CASH HAS REACHED BACK TO THE ASSESSEE . 16. THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS, DATAWARE PRIVATE LIMITED IN TAX APPEAL NO. 263 OF 2 011 A GA NO. 2856 OF 2011 IN ITS ORDER DATED 21.09.2011 HAS OBSE RVED AS UNDER: 'IN OUR OPINION, IN SUCH CIRCUMSTANCES, THE ASSESSING OF FICER OF THE ASSESSEE CANNOT TAKE THE BURDEN OF ASSESSING THE PRO FIT AND LOSS ACCOUNT OF THE CREDITOR WHEN ADMITTEDLY THE CREDITOR HIMSELF IS AN INCOME TAX ASSESSES. AFTER GETTING THE RAN NUMBER AN D GETTING THE INFORMATION THAT THE CREDITOR IS ASSESSED UNDER THE ACT, THE ASSESSING OFFICER SHOULD ENQUIRE FROM THE ASSESSING O FFICER OF THE CREDITOR AS TO THE GENUINENESS OF THE TRANSACTION AN D WHETHER SUCH TRANSACTION HAS BEEN ACCEPTED BY THE ASSESSING OFFI CER OF THE CREDITOR BUT INSTEAD OF ADOPTING SUCH COURSE, THE ASSE SSING OFFICER HIMSELF COULD NOT ENTER INTO THE RETURN OF THE CREDIT OR AND BRAND THE SAME AS UNWORTHY OF CREDENCE' 17. THE HONBLE SUPREME COURT IN THE CASE OF TEJUA ROHIT KUMAR KAPADIA 94 TAXMANN.COM 325 HAS DECLINED TO ALL OW THE SLP AGAINST THE JUDGMENT OF THE HON'BTE GUJARAT HIGH COUR T WHEREIN THE HON'BLE HIGH COURT HAS HELD THAT PURCHASES MADE B / THE ASSESSEE - TRADER WERE DULY SUPPORTED BY BILLS AND P AYMENTS WERE MADE BY ACCOUNT PAYEE CHEQUE AND THE SELLER ALSO CONF IRMED THE 7 TRANSACTION AND THERE WAS NO EVIDENCE TO SHOW THAT THE AMOUNT WAS RECYCLED BACK TO THE ASSESSEE AND ACCORDINGLY, HELD THAT ADDITION WAS NOT CALLED FOR. IN THAT CASE ALSO, THE AO HAD DISALLOWED SOME EXPENDITURE TREADING THE PURCHASES AS BOGUS AND MADE THE ADDITION. 18. THE ID. DR HAS STRONGLY RELIED UPON THE JUDGMENT OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF N.K. PROTE INS LTD 2016- TIOL 3165- AHM-IT WHEREIN THE FACTS SHOW THAT DURING T HE COURSE OF SEARCH PROCEEDINGS AT THE OFFICE PREMISES OF NKP L, BLANK SIGNED CHEQUE BOOKS AND VOUCHERS OF NUMBER OF CONCERNS WERE F OUND. FURTHER, ENDORSED BLANK CHEQUES OF NKPL BY THESE CONC ERNS WERE ALSO FOUND WHEREIN THE ENDORSEMENT WAS ON THE BACK O F THE CHEQUES. ACCORDINGLY, THE PURCHASES MADE FROM THESE C ONCERNS WERE TREATED AS BOGUS PURCHASES BY THE AO. 19. THE FACTS OF THE CASE IN HAND ARE CLEARLY DISTI NGUISHABLE FROM THE FACTS OF THIS CASE IN AS MUCH AS THERE; WAS NOTH ING OF SUCH DOCUMENTS, AS REFERRED, WERE FOUND FROM THE POSSESSIO N OF THE ASSESSEE EVEN DURING THE COURSE OF SEARCH AND SEIZURE OPERATION. THE ID, PR HAS ALSO PLACED RELIANCE ON SOME OTHER JUD ICIAL DECISIONS, BUT THE FACTS ARE TOTALLY DIFFERENT FROM THE FACTS OF THE CASE IN HAND. 20. AS MENTIONED ELSEWHERE, TOTAL ESTIMATED VALUE OF THE PROJECT FOR THE YEAR UNDER CONSIDERATION IS MORE THAN RS. 30 0 CRORES, 8 THEREFORE IT WOULD BE A FUTILE EXERCISE TO DOUBT THE G ENUINENESS OF A MEAGER AMOUNT OF RS.7.86 CRORES. MOREOVER, AS M ENTIONED ELSEWHERE, THE PURCHASES WERE DULY SUPPORTED BY BILL S AND VOUCHERS. THE PAYMENT HAVE BEEN MADE THROUGH ACCOUNT PAYEE CHEQUES. THE PAYMENTS ARE REFLECTED IN THE BANK STAT EMENT OF THE PAYER AND THE PAYEE. WE, THEREFORE, DO NOT FIND ANY REASON FOR DOUBTING THE GENUINENESS OF THESE PURCHASES. WHILE RES TRICTING THE DISALLOWANCE TO RS. 1,96,55,330/-, THE REASONING GI VEN BY THE FIRST APPELLATE AUTHORITY IS HOT ONLY ABSURD, BUT ILLOGICAL. THE FIRST APPELLATE AUTHORITY HAS HEAVILY RELIED UPON THE DECI SION IN THE CASE OF VIJAY PROTEINS LTD 55 TTJ [AHD] 76. CONSIDE RING THE FACTS OF THE CASE IN TOTALITY, AS DISCUSSED HEREINABOVE, WE A RE OF THE CONSIDERED VIEW THAT THAT ENTIRE ADDITION DESERVES TO BE DELETED. WE, ACCORDINGLY, SET ASIDE THE FINDINGS OF THE CIT(A ) AND DIRECT THE AQ TO DELETE THE ENTIRE ADDITION OF RS.7,86,21,320/ -. 8. AS NO DISTINGUISHING FACTS HAVE BEEN BROUGHT TO OUR NOTICE NOR WE FIND ANY IN THE ASSESSMENT ORDER, RESPECTFULLY FOLL OWING THE FINDINGS OF THE COORDINATE BENCH (SUPRA) GROUND NO. 1 TO 5 TAKE N TOGETHER ARE DISMISSED. 9. GROUND NO.6 TO 8 RELATES TO THE DELETION OF ADDI TION OF RS.6.25 CRORES. 9 10. FACTS ON RECORD SHOW THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSESSEE HAS OB TAINED LOANS FROM VARIOUS PERSONS AS UNDER :- 1. BHOLA MOTOR FINANCE (P) LTD. RS.1,00,00,000/- 2. P. SEVEN GENERAL FINANCE (P) LTD. RS.2,55,00,00 0/- 3. TOOR FINANCE COMPANY LTD. RS.1,55,00,000/- 4. VEMURI FINVEST (P) LTD. RS.1,15,00,000/- TOTALING TO RS. 6.25 CRORES 11. THE ASSESSEE WAS ASKED TO EXPLAIN THESE CREDITS IN THE LIGHT OF SECTION 68 OF THE ACT. THE AO OBSERVED THAT THE AS SESSEE HAS FAILED TO DISCHARGE THE ONUS CAST UPON IT BY THE PROVISIONS O F SECTION 68 OF THE ACT. THE AO FURTHER OBSERVED THAT ONE OF THE GROUP CONCE RNS M/S. FUSION CONBUILD PRIVATE LIMITED HAS ALSO RECEIVED SHARE AP PLICATION FROM THE SAME PARTIES MENTIONED HEREIN ABOVE. THE AO FURTHE R OBSERVED THAT THE ANOTHER GROUP CONCERNS NAMELY M/S. FRUGEL DEVELOPER S PVT. LTD. HAS ALSO SHOWN TO HAVE RECEIVED SHARE APPLICATION MONEY FROM ALL THESE PARTIES MENTIONED HERE IN ABOVE. 12. THE ASSESSEE IN ITS REPLY BEFORE THE AO STATED AS UNDER :- 10 DURING THE YEAR UNDER CONSIDERATION TO ARGUMENT T HE NEED OF WORKING CAPITAL WE HAD OBTAINED LOANS FROM CERTAIN PARTIES THROUGH RTGS/BANKING CHANNELS. THE FUNDS SO OBTAINED WERE HO WEVER RETURNED THROUGH ACCOUNT PAYEE CHEQUES DRAWN ON OUR DISCLOSE D BANK ACCOUNTS WITHIN SAME ACCOUNTING YEAR. AS REQUIRED BY YOUR GOO DSELF, THE COMPLETE DETAILS AND ADDRESSES OF SUCH PARTIES ALON GWITH THEIR RESPECTIVE STATEMENTS OF ACCOUNTS WERE ALREADY PLAC ED ON RECORD. IT IS ALSO A MATTER OF FACT ON RECORD AS BORNE OUT BY THE SEARCH PROCEEDINGS AS WELL THAT NOTHING ON THE CONTRARY IS FOUND SUGGESTING THAT THE SHARE APPLICATION MONEY IS OTHERWISE NOT G ENUINE. NOTHING IN THIS CONNECTION HAVE BEEN CONFRONTED TO US IN EITHE R THE ASSESSMENT OR SEARCH AND LATER POST SEARCH PROCEEDINGS. IT IS ALS O A MATTER OF FACT BORNE OUT BY THE ASSESSMENT PROCEEDINGS THAT TILL D ATE NOTHING ON THE CONTRARY IS COMMUNICATED TO US. 13. REPLY OF THE ASSESSEE DID NOT FIND ANY FAVOUR W ITH THE AO WHO PROCEEDED BY MAKING ADDITION OF RS.6.25 CRORES U/S. 68 OF THE ACT. 14. BEFORE THE CIT(A) THE ASSESSEE STRONGLY CONTEND ED THAT THE LOANS RECEIVED FROM FOUR PARTIES WERE IN THE MONTH OF SEP TEMBER, 2010 AND THE SAME WERE DULY REPAID BACK IN THE MONTH OF OCTOBER, 2010. THE LOANS WERE RECEIVED THROUGH BANKING CHANNELS AND WERE PAI D BACK THROUGH BANKING CHANNELS. 15. IT WAS ALSO CONTENDED THAT SUFFICIENT OPPORTUNI TY WAS NOT GIVEN BY THE AO TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE 11 TRANSACTION FROM THE FOUR LENDERS. ADDITIONAL EVID ENCES WERE FURNISHED UNDER RULE 46 A WHICH WERE DULY CONSIDERED BY THE C IT(A). A REMAND REPORT WAS CALLED AND THE AO SUBMITTED HIS REPORT V IDE LETTER DATED 15.04.2014 WHICH IS EXHIBITED AT PARA 8.3 OF THE OR DER OF THE CIT(A). 16. THE ASSESSEE MADE FURTHER SUBMISSIONS BY WAY OF A REJOINDER TO THE AOS REMAND REPORT AND SUCH REJOINDER IS EXHIBITED AT PAGES 22 TO 30 OF THE ORDER OF THE CIT(A). 17. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS AND THE REJOINDER THE CIT(A) HELD AS UNDER :- I HAVE GONE THROUGH THE ABOVE SUBMISSION OF THE APPE LLANT AND HAVE CONSIDERED THE FACTS AND EVIDENCES ON RECORD. THE AO'S CONTENTION IS THAT THEY RECEIVED LOANS FROM THE ABO VE MENTIONED 4 PARTIES AND IMMEDIATELY THE SAID LOANS WERE RETURNED BACK TO THEM AND THEREAFTER THE SAME AMOUNT WAS INVESTED BY THESE 4 INVESTORS, AS SHARE APPLICATION MONEY IN APPELLANT' S OTHER GROUP COMPANY FOR WHICH SEPARATE ADDITION HAS ALSO BEEN M ADE BY THE SAME AO. THE DETAILS OF AMOUNTS RECEIVED AND RETURNED BACK AR E AS UNDER:- 12 FROM THE PERUSAL OF THE ABOVE WHICH WAS RECEIVED DURING THE YEAR FROM THE 4 INVEST ORS WAS IMMEDIATELY REFUNDED BACK AND IT FOUND THAT THE SAME MONEY IS BEING INVESTED IN THE APPELLANT'S GROUP ENTITY, NAM ELY FRUGAL DEVELOPERS PVT. LTD. AS SHARE APP THE ADDITION OF THE LIKE AMOUNT HAS BEEN MADE BY THE SAME AO IN THE YEAR UNDER CONSIDERATION ON THE GROUND THAT FRUG AL DEVELOPERS PVT. LTD. HAVE NOT BEEN ABLE TO EXPLAIN THE IDENTIT Y, CREDITWORTHINESS AND GENUINENESS OF TH RECEIVED FROM THE ABOVE MENTIONED 4 INVESTORS. SINC E AS PER PRINCIPLE OF EQUITY AND JUSTICE, THE SAME AMOUNT CANNO T BE ADDED TWICE, ACCORDINGLY THE ADDITION OF RS. 6.25 CRORES MADE IN THE APPELLANT'S HAND STANDS DELETED AND THE CR GENUINENESS AND IDENTITY OF THE ABOVE 4 PARTIES WILL BE CONSIDERED IN THE HANDS OF FRUGAL DEVELOPERS PVT. LTD. FOR WHI CH THE APPEAL HAS ALSO BEEN FILED SEPARATELY VIDE APPEAL NO. 179/ 2013 26.04.2013. 13 FROM THE PERUSAL OF THE ABOVE CHART, IT IS CLEAR THAT RS. 6.25 CRORE WHICH WAS RECEIVED DURING THE YEAR FROM THE 4 INVEST ORS WAS IMMEDIATELY REFUNDED BACK AND IT FOUND THAT THE SAME MONEY IS BEING INVESTED IN THE APPELLANT'S GROUP ENTITY, NAM ELY FRUGAL DEVELOPERS PVT. LTD. AS SHARE APP LICATION MONEY, AND IN THEIR CASE THE ADDITION OF THE LIKE AMOUNT HAS BEEN MADE BY THE SAME AO IN THE YEAR UNDER CONSIDERATION ON THE GROUND THAT FRUG AL DEVELOPERS PVT. LTD. HAVE NOT BEEN ABLE TO EXPLAIN THE IDENTIT Y, CREDITWORTHINESS AND GENUINENESS OF TH E SHARE APPLICATION MONEY RECEIVED FROM THE ABOVE MENTIONED 4 INVESTORS. SINC E AS PER PRINCIPLE OF EQUITY AND JUSTICE, THE SAME AMOUNT CANNO T BE ADDED TWICE, ACCORDINGLY THE ADDITION OF RS. 6.25 CRORES MADE IN THE APPELLANT'S HAND STANDS DELETED AND THE CR EDITWORTHINESS, GENUINENESS AND IDENTITY OF THE ABOVE 4 PARTIES WILL BE CONSIDERED IN THE HANDS OF FRUGAL DEVELOPERS PVT. LTD. FOR WHI CH THE APPEAL HAS ALSO BEEN FILED SEPARATELY VIDE APPEAL NO. 179/ 2013 - 14 DATED CHART, IT IS CLEAR THAT RS. 6.25 CRORE WHICH WAS RECEIVED DURING THE YEAR FROM THE 4 INVEST ORS WAS IMMEDIATELY REFUNDED BACK AND IT FOUND THAT THE SAME MONEY IS BEING INVESTED IN THE APPELLANT'S GROUP ENTITY, NAM ELY FRUGAL LICATION MONEY, AND IN THEIR CASE THE ADDITION OF THE LIKE AMOUNT HAS BEEN MADE BY THE SAME AO IN THE YEAR UNDER CONSIDERATION ON THE GROUND THAT FRUG AL DEVELOPERS PVT. LTD. HAVE NOT BEEN ABLE TO EXPLAIN THE IDENTIT Y, E SHARE APPLICATION MONEY RECEIVED FROM THE ABOVE MENTIONED 4 INVESTORS. SINC E AS PER PRINCIPLE OF EQUITY AND JUSTICE, THE SAME AMOUNT CANNO T BE ADDED TWICE, ACCORDINGLY THE ADDITION OF RS. 6.25 CRORES MADE IN THE EDITWORTHINESS, GENUINENESS AND IDENTITY OF THE ABOVE 4 PARTIES WILL BE CONSIDERED IN THE HANDS OF FRUGAL DEVELOPERS PVT. LTD. FOR WHI CH THE APPEAL 14 DATED 14 19. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE AFO REMENTIONED FINDINGS OF THE CIT(A). AT THE VERY OUTSET WE DON T AGREE WITH THE FINDINGS OF THE FAA HOLDING THAT THIS IS A CASE OF DOUBLE ADDITION. MERELY BECAUSE THE ALLEGED REPAYMENT BY THE ASSESSEE WAS I NVESTED AS SHARE APPLICATION MONEY IN GROUP CONCERNS M/S. FRUGEL DEV ELOPERS PRIVATE LIMITED WHERE AGAIN THE GENUINENESS OF THE TRANSACT ION WAS DOUBTED AND THE ADDITIONS WERE MADE, WOULD NOT MAKE THE ADDITIO N AS DOUBLE ADDITION IN THE HANDS OF THE PRESENT APPELLANT. SINCE THE LO ANS WERE FOUND CREDITED IN THE BOOKS OF ACCOUNTS OF THE APPELLANT, IN THE LIGHT OF THE PROVISIONS OF SECTION 68 OF THE ACT, IT WAS INCUMBE NT UPON THE ASSESSEE TO DISCHARGE THE INITIAL BURDEN IN PROVING THE IDENTIT Y, GENUINENESS AND CREDITWORTHINESS OF THE LENDER, WHICH IN OUR OPINIO N THE ASSESSEE HAS GROSSLY FAILED TO DISCHARGE. ONCE THE ASSESSEE FAI LS TO DISCHARGE THE INITIAL BURDEN CAST UPON IT, THE PROVISIONS OF SECT ION 68 BECOME IMPERATIVE. THE FAA HAS BEEN CARRIED AWAY WITH THE FACT THAT THE SAME AMOUNT HAS BEEN ADDED IN THE GROUP CONCERNS WHICH W AS NOT AT ALL RELEVANT ON THE FACTS OF THE PRESENT CASE. 19. WE ACCORDINGLY SET ASIDE THE FINDINGS OF THE CI T(A) SO FAR AS THIS DELETION OF RS.6.25 CRORES IS CONCERN AND RESTORE T HAT OF THE AO. GROUND NO. 6 TO 8 ARE ACCORDINGLY ALLOWED. 20. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED. SD/- SD/- [SUCHITRA KAMBLE] [ N. K. BILLAIYA] JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED: .12.2020 *NEHA* 15 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR ITAT, NEW DELHI DATE OF DICTATION 10.12.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER