THE DCIT, 2(1), Indore V. M/s. KBG LIFE INFRA PVT. LTD., Indore

ITA 951/IND/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0591 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 15-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA LD
• Keywords: Unexplained cash credit; Unexplained investment; Additional evidence
• Section: 143(3)

Judgement Text

KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCHE, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.951/IND/2016 ASSESSMENT YEAR:2012-13 DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 2(1), INDORE / VS. M/S KBG LIFE INFRA PVT. LTD, 101 - 102, 1 ST FLOOR, 385-390 LOKHANDWALA STREET, GOYAL NAGAR MAIN RING ROAD, INDORE (REVENUE) (RESPONDENT ) P.A. NO. AA DCK7914K REVENUE BY SMT. ASHIMA GUPTA, LD.CIT RESPONDENT BY NONE DATE OF HEARING: 06.09.2018 DATE OF PRONOUNCEMENT: 12.09.2018 / O R D E R PER MANISH BORAD, A.M: THIS APPEAL FILED AT THE INSTANCE OF REVENUE PERTAI NING TO A.Y. 2012-13 IS DIRECTED AGAINST THE ORDER OF LD. COMMIS SIONER OF INCOME TAX(APPEALS)-I, INDORE, (IN SHORT CIT(A)), VIDE APPEAL NO. IT- 119/2015-16 ORDER DATED 29.04.2016 WHICH IS ARISING OUT OF THE ORDER U/S 143(3) OF THE INCOME TAX ACT 1961(HEREINA FTER CALLED AS THE ACT) FRAMED ON 31.03.2015 BY ACIT, CIRCLE 3( 1), INDORE. KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 2 2. WHEN THE CASE WAS CALLED FOR HEARING NONE APPEAR ED ON ASSESSEES BEHEST. LD. DEPARTMENTAL REPRESENTATIVE PLACED THE COPY OF REMAND REPORT DATED 29.08.18 GIVEN BY ACIT, CIRCLE-2(1), INDORE WHICH WAS MADE ON THE DIRECTION OF THE TRIBU NAL GIVEN ON 4.7.2018. THE CASE WAS HEARD WITH THE ASSISTANCE OF LD. DEPARTMENTAL REPRESENTATIVE AND THE RECORDS AVAILAB LE IN THE FILE. 3. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE ACTIVITY OF CIVI L CONSTRUCTION AND DEVELOPMENT INCOME OF RS. 1,11,87,070/- DECLAR ED IN THE RETURN OF INCOME FILED ON 26.09.2012. CASE SELECTE D FOR SCRUTINY THROUGH CASS. NECESSARY NOTICE U/S 143(2) AND 142( 1) OF THE ACT ALONG WITH THE QUESTIONNAIRE WERE DULY SERVED UPON THE ASSESSEE. SURVEY PROCEEDINGS U/S 133(A) OF THE ACT WERE CONDU CTED ON 30.1.2002 AT THE BUSINESS PREMISES OF THE ASSESSEE AND CERTAIN DOCUMENTS WERE IMPOUNDED AND ASSESSEE ALSO SURRENDE RED UNDISCLOSED INCOME AS PROVIDED IN PARA 2.1 OF THE I MPUGNED ASSESSMENT ORDER. THE LD. ASSESSING OFFICER ON PER USING THE PROFIT & LOSS ACCOUNT & CIB INFORMATION ON ITD MODEL GENER ATED THROUGH SYSTEM, CONDUCTED ENQUIRY ABOUT THE FIXED DEPOSITS MADE BY THE ASSESSEE AS WELL AS INCREASE IN CASH IN HAND DURING THE YEAR. BUT DUE TO LACK OF SUFFICIENT INFORMATION, LD.A.O COULD NOT EXAMINE THE ISSUES IN THE LIGHT OF BOOKS OF ACCOUNTS AND COMPLE TED THE ASSESSMENT AFTER MAKING FOLLOWING ADDITIONS TO THE TOTAL INCOME KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 3 DECLARED IN THE INCOME TAX RETURN THEREBY ASSESSING INCOME AT RS.20,98,96,744/-; TOTAL INCOME AS PER RETURN RS.1,11,87,070/ - ADD: UNEXPLAINED INVESTMENT RS.17,07,05,058/ - ADD: DISALLOWANCE OF LEGAL EXPENSES RS.13,17,264/ - ADD:INTEREST ON FDR NOT SHOWN IN THE BOOKS OF ACCOUNT RS.1,19,49,354/ - ADD: UNEXPLAINED CASH CREDIT RS.97,3 9,949/ - DISALLOWANCE OF COMMISSION EXPENSES RS.49,98,049/ - ASSESSED INCOME RS.20,98,96,744/ - 4. AGGRIEVED ASSESSEE PREFERRED AN APPEAL FOR THE LD.CIT(A). REMAND REPORT WAS CALLED FOR AND SUBMISSIONS FILED BY THE ASSESSEE HAS BEEN EXAMINED AND LD.CIT(A) CONCLUDED THE APPE LLATE ORDER BY DELETING ALL THE ADDITIONS MADE BY THE LD.A.O. 5. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL RAISING FOLLOWING GROUNDS; 1. LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS AN D THE CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.17,07,05,05 8/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN FDR BY IGNORING THE FINDI NGS OF AO AND BY BRINGING OUT SOURCE OF INVESTMENT SPECIFICALLY IN H IS ORDER. 2. LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS AN D THE CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.1,19,49,354 /- ON ACCOUNT OF KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 4 INTEREST ON FDRS BY IGNORING THE FINDINGS OF AO AND BY BRINGING OUT SOURCE OF INVESTMENT SPECIFICALLY IN HIS ORDER. 3. LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.97,39,949/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT BY IGNORING THE FINDINGS OF AO AND WITHOUT HAVING ANY EVIDENCES RELATED TO THE GENUINENESS OF UNEXPLAINED CASH CREDIT. 4. LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS.149,98,049/ - ON ACCOUNT OF DISALLOWANCE OF COMMISSION EXPENSES BY IGNORING THE FINDINGS OF AO AND IGNORING THE FACT MERE DEDUCTION OF TDS ON ANY PAYM ENT DOES NOT PROVE ITS GENUINENESS. 6. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUE D AND SUPPORTING THE ORDER OF LD. ASSESSING OFFICER AND A LSO PLACED COPY OF REMAND REPORT ISSUED IN PURSUANCE OF THE DIRECTI ONS GIVEN BY THE TRIBUNAL ON 4.7.18. 7. WE HAVE HEARD THE CONTENTION OF LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORDS PLACED BEFOR E US. 8. APROPOS GROUND NO.1 & 2 RELATING TO ADDITION FOR UNEXPLAINED INVESTMENT IN FDRS AT RS.17,07,05,058/-, INTEREST E STIMATED ON THESE FDRS AT RS.17.07 CRORES AT RS.1,19,49,354/-. WE OBSERVE THAT THE LD.A.O MADE IMPUGNED ADDITION ON THE BASIS OF CIB INFORMATION GENERATED THROUGH SYSTEM AT ITR MODEL A S PER WHICH DETAILS OF VARIOUS FDRS MADE B Y THE ASSESSEE DURI NG THE YEAR WERE REFLECTED. IN THE ABSENCE OF NECESSARY SUBMISSIONS AND REPLY BY THE KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 5 ASSESSEE, LD.A.O GROSSLY ADDED ALL THE FDRS MADE DU RING THE YEAR. ESTIMATED INTEREST ACCRUED ON THESE FDRS WERE ALSO CALCULATED AND ADDED TO THE INCOME OF THE ASSESSEE. 9. WHEN THE MATTER CAME UP BEFORE LD.CIT(A, HE) AF TER MAKING NECESSARY VERIFICATION OF THE BOOKS OF ACCOUNTS AND DOCUMENTS FILED BY THE ASSESSEE, DELETED THE IMPUGNED ADDITION TOWA RDS FIXED DEPOSIT RECEIPTS OF RS.17,07,05,058/- AS WELL AS ES TIMATED INTEREST ACCRUED ON RS.1,19,49,354/- OBSERVING AS FOLLOWS; 6. BY THESE GROUNDS THE APPELLANT HAS DISPUTED THE ADDITION OF RS.17,07,05,058/- BEING UNEXPLAINED INVESTMENT I N FDRS AND RS. L,19,49,354/- BEING INTEREST ON THE SAID FD RS. THE DETAILED FACTS OF THE CASE AS PER THE ASSESSMENT OR DER ARE REPRODUCED AT PARA NO.2 ABOVE AND THE DETAILED SUBM ISSIONS OF THE APPELLANT ARE REPRODUCED AT PARA NO.3 ABOVE. THE AO IN THE REMAND REPORT HAS NOT MADE ANY COMMENTS ON THE MERITS OF THE EXPLANATION GIVEN BY THE APPELLANT DURING TH E COURSE OF APPELLATE PROCEEDINGS. 6.1 AS SEEN FROM THE ASSESSMENT ORDER THE SAID ADDITION HAS BEEN MADE AS THE APPELLANT FAILED TO GIVE ANY EXPLA NATION OF THE SOURCE OF INVESTMENT IN THE FDRS AS REFLECTED I N THE AIR/CIB INFORMATION AS AVAILABLE WITH THE AO, COPY OF WHICH WAS SUPPLIED TO THE APPELLANT, AND BOOKS OF ACCOUNT S WERE NOT PRODUCED. DURING THE COURSE OF 8PPEAL PROCEEDINGS T HE APPELLANT HAS GIVEN DETAILED EXPLANATION OF THE SOU RCES OF THE SAID INVESTMENT. THE APPELLANT FILED A CHART SHOWIN G THE SOURCE OF INVESTMENT IN THE FDR AND ALSO EXPLAINED THAT THE FDRS WERE TAKEN FOR SHORT PERIODS AND WERE RENEWED WHEN KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 6 MATURED WHICH IS REPRODUCED AS ANNEXURE -A 6.2 COPY OF THE LEDGER ACCOUNT OF FDR WAS ALSO SUBMITTE D AND BANK BOOK AND CASH BOOK WAS ALSO PRODUCED FOR VERIF ICATION. THE EXPLANATION OF THE APPELLANT WAS VERIFIED WITH RESPECT TO THE CASH AND BANK BOOK PRODUCED AND IT WAS SEEN THA T THE FDI;CS WERE DULY RECORDED IN THE BOOKS OF ACCOUNTS AND WERE ROUTED THROUGH THE BANK ACCOUNT OF THE APPELLANT. T HE CASH DEPOSIT IN THE BANK ACCOUNT WAS ALSO EXPLAINED TO B E FROM SALE OF FLATS OR ADVANCE AGAINST SALE OF FLATS. CONSIDER ING THE TOTALITY OF FACTS IT IS FOUND THAT THERE WAS NO BAS IS TO HOLD THAT THE INVESTMENT IN FDR WAS NOT RECORDED OR THAT IT W AS OUT OF UNEXPLAINED SOURCES. THE INVESTMENT AND INTEREST BO TH WERE DULY REFLECTED IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE APPELLANT WHICH WERE ALSO AUDITED. IN VIEW OF THE A BOVE THE ADDITION OF RS.17,07,05,058/- AND GROUNDS OF THE AP PELLANT RS.17,07,05,058/- & RS.1,19,49,354/- DELETED 10. WE FURTHER FIND THAT DURING THE APPELLATE PROCEEDINGS BEFORE THE LD.CIT(A) REMAND REPORT WAS CALLED FOR FROM THE ASSESSING OFFICER BUT NO SPECIF IC COMMENT ABOUT THE ISSUE RAISED IN THIS GROUND WAS MADE. THEREFORE WHEN THE CASE CAME UP FOR HEARING BEFORE US ON 4.7.18, THE LD.A.O WAS DIRECTED TO FIL E THE REMAND REPORT ON INVESTIGATION MADE ON FDRS WITHIN FOUR WEEKS. IN COMPLIANCE THERE TO THE LD.ACIT, CI RCLE- 2(1), INDORE FAILED THE REMAND REPORT ON 29.08.2018 ON KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 7 RECORD. IN THIS REMAND REPORT LD.A.O HAS SPECIFICA LLY MENTIONED THAT SOURCE OF INVESTMENT IN FDR AND CASH DEPOSITS REFLECTING IN AIR INFORMATION WERE FOUND D ULY RECORDED/REFLECTED IN THE BANK ACCOUNTS AND BOOKS O F ACCOUNTS OF THE ASSESSEE. THE RELEVANT PORTION OF THE REMAND REPORT DATED 29.8.18 IS MENTIONED BELOW; KBG LIFE INFRA PVT. LTD. , A.; 2012-13 OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-2(1), INDORE. ROOM NO. 204, AAYAKAR BHAWAN (ANNEXE), OPP: WHITE CHURCH, INDORE E-MAIL: [e-mail].: -2494077 NO.:IND/ACIT/CIR-2(1)/REPORT/KBGLIPL/2018- 19 DATE: 29.08.2018 TO THE COMMISSIONER OF INCOME-TAX (DR), ITAT, INDORE. [SUBMITTED THROUGH PROPER CHANNEL] RESPECTED SIR, SUB: REPORT IN THE CASE OF KBG LIFE INFRA PVT. LTD . FOR THE A.Y. 2012-13 KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 8 REF: LETTER NO. CIT(DR)/ITAT /IND/2018-19 DATED 05.07.2018 ********* KINDLY REFER TO THE ABOVE. 2. AT THE OUTSET, IT IS SUBMITTED THAT AMOUNT OF RS . 17,07,05,058/- AS PER AIR INFORMATION INCLUDES AMOU NT OF RS. 14,31,44,383/- AS FOR AND AMOUNT OF RS. 2,75,60,675 /- AS CASH DEPOSITS EXCEEDING RS. 2,00,000/-. THUS WHOLE OF AMOUNT DO NOT PERTAIN TO FORS ONLY. 3. DURING ASSESSMENT PROCEEDINGS, SUPPORTING EVIDEN CES AND DETAILS HAD NOT BEEN PRODUCED BY THE ASSESSEE AND T HEY WERE PRODUCED FIRST TIME AS ADDITIONAL EVIDENCES BEFORE THE LD. CIT(A) DURING THE APPELLATE PROCEEDINGS. REMAND REPORT HAD BEEN CALLED BY LD. CIT(A)-L, INDORE ON ADDITIONAL EVIDENCES SUB MITTED BY THE ASSESSEE. REMAND REPORT DATED 06.04.2015 IN THE CAS E WAS SUBMITTED TO THE LD. CIT (A)-L, INDORE ON 08.04.2015. IT IS PERTINENT TO MENTION HERE THAT ON FOR DETAILS SUBMI TTED BY THE ASSESSEE, THE AO, VIDE PARA 'B' ON PAGE 3 OF REMAND REPORT, HAD COMMENTED AS UNDER:- ... ' HOWEVER ALONG WITH APPLICATION SUBMITTED AS F RESH EVIDENCE UNDER RULE 46A, THE ASSESSEE COMPANY HAS SUBMITTED DETAILS OF FOR WITH STATE BANK OF INDIA ALONG WITH LEDGER, AS REFLECTED IN AIR/CIB INFORMATION, WHICH IS PERUSED AND APPROPRIA TE DECISION MAY BE TAKEN ON THE BASIS OF MERIT' KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 9 AND THE REMAND REPORT SUBMITTED BY THE AO HAS BEEN MADE PART OF APPELLATE ORDER DATED 29.04.2018 IN APPEAL NO. I T-119/2015- 16. IT IS PERTINENT TO MENTION HERE THAT ON MERITS OF EVIDENCES, NO ADVERSE COMMENTS HAD BEEN MADE BY THE THEN AO IN TH E REMAND REPORT SUBMITTED. 4. VIDE PARA 6.1 AND 6.2 OF THE APPELLATE ORDER DAT ED 29.04.2015, IT IS SEEN THAT THE LD. CIT(A) HAD EXAMINED FDRS AN D CASH DEPOSITS DURING APPELLATE PROCEEDINGS. RELEVANT POR TION OF THE ORDER IS ENUMERATED AS UNDER: 'DURING THE APPEAL PROCEEDINGS THE APPELLANT HAS GI VEN DETAILED EXPLANATION OF THE SOURCE OF INVESTMENT. THE APPEL/ ANT FILED A CHART SHOWING THE SOURCE OF INVESTMENT IN THE FDR A ND ALSO EXPLAINED THAT THE FDRS WERE TAKEN FOR SHORT PERIOD S AND RENEWED WHEN MATURED WHICH IS REPRODUCED AS ANNEXUR E- A. 6.2 COPY OF LEDGER ACCOUNT OF FDR WAS ALSO SUBMITTE D AND BANK BOOK AND CASH BOOK WAS ALSO PRODUCED FOR VERIFICATI ON. THE EXPLANATION OF THE APPELLANT WAS VERIFIED WITH RESP ECT TO THE CASH AND BANK BOOK PRODUCED AND IT WAS SEEN THAT THE FDRS WERE DULY RECORDED IN THE BOOKS OF ACCOUNTS AND WERE ROU TED THROUGH THE BANK ACCOUNT OF THE APPELLANT. THE CASH DEPOSIT IN THE BANK ACCOUNT WAS ALSO EXPLAINED TO BE FROM SALE OF FLATS OR ADVANCE AGAINST SALE OF FLATS. ''' 5. AS PER THE DIRECTIONS OF THE HON'BLE TRIBUNAL, R EPORT OF AO ON THE ISSUE OF INVESTMENT IN FDR HAS ONLY BEEN SOUGHT . ACCORDINGLY, THE ASSESSEE WAS ASKED TO ADDUCE EVIDE NCES IN SUPPORT OF INVESTMENT MADE IN FDRS FOR VERIFICATION OF FACTS BY THE AO. ON THE BASIS OF DETAILS SUBMITTED AND DETAI LED VERIFICATION MADE FROM ORIGINAL RECORDS I.E. CERTIF IED BANK STATEMENTS, CASH BOOK, ORIGINAL RECEIPTS FOR CASH D EPOSITS, LEDGER KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 10 OF FLAT OWNERS, REGISTERED DOCUMENTS IN THEIR NAMES ETC, SOURCES OF INVESTMENT IN FDRS AND OF CASH DEPOSITS AS PER A IR INFORMATION FOR TOTAL AMOUNT OF RS. 17,07,05,058/- WERE FOUND DULY RECORDED/ REFLECTED IN BANK ACCOUNTS AND BOOKS OF ACCOUNTS OF ASSESSEE. SUBMITTED. YOURS FAITHFULLY, SD/- (N.K. AGARWAL) ASST. COMMISSIONER OF INCOME-TAX, CIRCLE- 2 (1), IN DORE. 11. FROM PERUSAL OF THE FINDINGS OF LD.CIT(A) AS WE LL AS REMAND REPORT AND ALSO ON THE PERUSAL OF THE PAPER BOOK FILED BY THE ASSESSEE RUNNING FROM PAGE 1 TO 85 DATED 23. 12.16 AND PAPER BOOK RUNNING PAGE 1 TO 107 DATED 29.6.18, WE FIND THAT THE ADDITION MADE BY THE LD.A.O HAS BEEN RIGHTLY DE LETED BY LD.CIT(A) AS THE ALLEGED FIXED DEPOSIT RECEIPTS ARE NOT UN ACCOUNTED AND NECESSARY TRANSACTIONS RELATING THERE TO HAVE BEEN PASSED THROUGH THE BOOKS OF ACCOUNTS VERIFIED BY THE LD.A.O. AS THE IMPUGNED AMOUNT OF FIXED DEPOSIT REC EIPT HAS BEEN EXPLAINED THERE REMAINS NO BASIS FOR THE ADDIT ION OF INTEREST COMPUTED THERE ON. LD. DEPARTMENTAL REPRES ENTATIVE FAILED TO CONTROVERT THE DETAILS SUBMITTED BY THE L D.A.O IN ITS KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 11 REMAND REPORT. WE, THEREFORE IN THE GIVEN FACTS AN D CIRCUMSTANCES OF THE CASE FIND NO INCONSISTENCY IN THE FINDINGS OF LD.CIT(A) AND THEREFORE GROUND NO.1 & 2 OF REVENUES APPEAL DESERVES TO THE DISMISSED. 12. APROPOS GROUND NO.3 RELATED TO DELETION OF ADDI TION OF RS.97,39,949/- ON ACCOUNT OF UNEXPLAINED CASH, BRI EF FACTS ARE THAT THE LD.A.O WHILE EXAMINING THE BALANCE SHE ET OBSERVED THAT AS ON 31.3.2012, CASH AND CASH EQUIVA LENT OF RS.3,66,76,221/- HAS BEEN REFLECTED WHEREAS THE OPE NING BALANCE ON 1.4.2011 STOOD AT RS.2,69,36,273/-. AS THE ASSESSEE FAILED TO PRODUCE BOOKS OF ACCOUNTS, INCRE ASE IN CASH AND CASH EQUIVALENT OF RS.97,39,949/- WAS ADDED TO THE INCOME. LD.CIT(A) DELETED THE ADDITION AFTER MAKIN G DUE VERIFICATION OF BOOKS OF ACCOUNTS. 13. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNA L. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING THE ORDER OF LD. ASSESSING OFFICER. KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 12 14. WE HAVE HEARD THE CONTENTION OF LD. DEPARTMENTA L REPRESENTATIVE AND PERUSED THE RECORDS PLACED BEFOR E US. THE IMPUGNED UNEXPLAINED CASH CREDIT OF RS.97,39,949/- WAS DELETED BY LD.CIT(A) OBSERVING AS FOLLOWS; 7. GROUND NO.4: BY THIS GROUND THE APPELLANT HAS DISPUTED THE ADDITION OF RS.97,39,949/- BEING UNEXPLAINED CASH CREDIT. THE DETAILED FACTS OF THE CASE AS PER THE ASSESSMENT OR DER ARC REPRODUCED AT PARA NO.2 ABOVE AND THE DETAILED SUBMIS SIONS OF THE APPELLANT ARE REPRODUCED AT PARA NO.3 ABOVE. THE AO IN THE REMAND REPORT HAS NOT MADE ANY COMMENTS ON THE MERITS OF THE EXPLANATION GIVEN BY THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS. 7.1 THE FINDINGS ON THE ISSUE IN DISPUTE ARE RECORDED AT PARA NO.6 PAGE 12 OF THE ASSESSMENT ORDER. THC AO FOUND THAT AS PER THE BALANCE SHEET AS ON 3L.3.2012 THE CASH AND CASH EQUI VALENT STOOD AT RS.3,66, 76,222/- OUT OF WHICH RS.2,69,36,273/- PERTAINED TO THE PRECEDING YEAR AND THE BALANCE INCREASE OF RS.97,39, 949/- WAS NOT SATISFACTORILY EXPLAINED AS NO BOOKS WERE PRODUCED BY THE APPELLANT. THE AMOUNT WAS THEREFORE TREATED AS UNEXP LAINED CASH CREDIT AND ADDED TO THE TOTAL INCOME. THE APPELLANT AR GUED THAT THE ADDITION OF RS. 97 ,39,949/- - WAS UNJUSTIFIED AS THE AMOUNT WAS THE REFLECTION OF THE CASH AND CASH EQUIVALENT POSIT ION FOR THE YEAR UNDER CONSIDERATION AS PER THE BOOKS OF ACCOUNTS WHICH WERE DULY AUDITED. IT WAS ALSO EXPLAINED THAT THE INCREASE WAS IN VIEW OF THE INCREASE IN ADVANCES FROM CUSTOMERS, SHORT TERM BORRO WINGS AND INCREASE IN PAID UP CAPITAL. CONSIDERING THE FACT TH AT THE AMOUNT REPRESENTED RECORDED TRANSACTIONS AND THE BOOKS WERE DULY KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 13 AUDITED THERE WAS NO REASON TO CONCLUDE THAT THE AMOU NT WAS NOT SATISFACTORILY EXPLAINED. IN THE RESULT THE ADDITION OF RS. 97,39,949/- IS THEREFORE DIRECTED TO BE DELETED. THIS GROUND OF THE APPELLANT IS THEREFORE ALLOWED. RS.97,39,949/- DELETED 15. LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THE FINDINGS OF LD.CIT(A). WE FIND THAT THE IMPUGNED ADDITION WAS MADE ONLY DUE TO LACK OF VERIFICATION FROM THE BOOKS OF ACCOUNTS. LD. CIT(A ) AFTER DULY APPRECIATING THE BOOKS OF ACCOUNTS PRODUCED BEFORE HIM HAS EXAMINED THE REGULAR ENTRIES APPEARI NG IN THE CASH BOOK AND COMING TO THE CONCLUSION THAT THE INCREASE IN CASH AND CASH EQUIVALENT WAS IN VIEW OF THE INCREASE IN ADVANCES FROM CUSTOMERS, SHORT TERM BORROWINGS AND INCREASE IN PAID UP CAPITAL. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE CONSIDERED VIEW THAT THE LD.A.O WAS NOT JUSTIFIED I N MAKING THE ADDITION OF RS.97,39,949/- AS THE NECESS ARY INCREASE HAS BEEN DULY EXPLAINED AND SAME IS NOT SPECIFICALLY FROM A PARTICULAR PERSON OR PARTIES BU T IT IS A CUMULATIVE EFFECT COMING AT THE YEAR END BEING EX CESS KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 14 OF CASH AND CASH EQUIVALENT RECEIPT AS AGAINST THE TOTAL OF CASH AND CASH EQUIVALENT PAID DURING THE YEAR FO R VARIOUS TRANSACTIONS DONE IN DUE COURSE OF BUSINESS . NO INTERFERENCE THEREFORE IS CALLED FOR IN THE FIND INGS OF LD.CIT(A). GROUND NO.3 OF THE REVENUES APPELLANT IS DISMISSED. 16. APROPOS GROUND NO.4 RELATED TO DELETION OF ADDI TION OF RS.49,98,049/- ON ACCOUNT OF DISALLOWANCE OF COMMISSION EXPENSES, BRIEF FACTS OF THE CASE ARE TH AT THE LD.A.O OBSERVED THAT BROKERAGE AND COMMISSION EXPENSES OF RS.49,98,049/- HAVE BEEN DEBITED IN THE PROFIT & LOSS ACCOUNT. HE DIRECTED THE ASSESSEE TO FILE THE DETAILS ABOUT THE GENUINENESS OF THE EXPENSES A ND ALSO TO PROVIDE DETAILS OF TAX DEDUCTED AT SOURCE. NECESSARY INFORMATION COULD NOT PROVIDED WHICH LEFT NO OPTION WITH THE LD.A.O EXCEPT TO DISALLOW THE COMMISSION EXPENDITURE OF RS.49,98,049/-. WHEN THE ASSESSEE CAME UP IN APPEAL BEFORE THE LD.CIT(A) ABO UT THE IMPUGNED DISALLOWANCE, THE LD.CIT(A) AFTER GOIN G THROUGH THE DETAILS OF COMMISSION PAID AND TAX KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 15 DEDUCTED AT SOURCE AND COPIES OF ACCOUNTS OF BROKER S ALONG WITH COMPARATIVE CHART FOR LAST THREE YEARS, DELETED THE DISALLOWANCE OBSERVING AS UNDER; 8. GROUND NO.5: BY THIS GROUND THE APPELLANT HAS DISPUTED THE ADDITION OF RS.49,98,049/- BEING DISALLOWANCE OF COMMISSION EXPENSES. THE DETAILED FACTS OF THE CASE A S PER THE ASSESSMENT ORDER ARE REPRODUCED AT PARA NO.2 ABO VE AND THE DETAILED SUBMISSIONS OF THE APPELLANT ARE REPROD UCED AT PARA NO.3 ABOVE. THE AO IN THE REMAND REPORT HAS NOT MADE ANY COMMENTS ON THE MERITS OF THE EXPLANATION GIVEN BY THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS . 8.1 FROM THE ASSESSMENT ORDER PARA NO 7 PAGE 13 IT IS S EEN THAT THE PRIMARY REASON FOR THE DISALLOWANCE WAS TH AT THE APPELLANT FAILED TO FILE ANY EVIDENCES IN SUPPORT OF THE CLAIM OF COMMISSION EXPENSES. 8.2 DURING APPEAL PROCEEDINGS THE APPELLANT HAS FILED THE DETAILS OF COMMISSION PAID TDS MADE ON THE COMM ISSION PAID, COPIES OF ACCOUNTS OF BROKERS TO WHOM COMMISS ION PAID AND HAS ALSO FILED A COMPARATIVE CHART OF THE COMMIS SION PAYMENT FOR THE LAST THREE YEARS. APPELLANT HAS ALS O EXPLAINED THAT THE BROKERAGE HAS BEEN PAID ON THE BASIS OF AD VANCE RECEIVED FROM THE CUSTOMERS. THE BROKERAGE FOR THE YEAR HAS INCREASED DUE TO INSTALLMENTS AND FINAL PAYMENTS RE CEIVED DURING THE YEAR ON WHICH BROKERAGE WAS PAID IN THE YEAR. IT WAS ALSO POINTED OUT THAT THE SIMILAR PAYMENT OF BR OKERAGE IN THE YEARS 2011 12 AND 2013-14 WAS ALSO FUND REASONA BLE IN SCRUTINY PROCEEDINGS FOR THOSE YEARS AND NO DISALLO WANCE WAS MADE. CONSIDERING ALL RELEVANT FACTS THE ADDITION O F RS.49,98,049/- IS THEREFORE DIRECTED TO BE DELETED. THIS GROUND KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 16 OF THE APPELLANT IS THEREFORE ALLOWED. RS.49,98,04 9/- DELETED. 17. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNA L. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED AND SUPPORTING THE ORDER OF LD. ASSESSING OFFICER. 18. WE HAVE HEARD THE CONTENTION OF LD. DEPARTMENTA L REPRESENTATIVE AND PERUSED THE RECORDS PLACED BEFOR E US. 19. THE ISSUE RAISED IN THIS GROUND BY THE REVENUE ON DELETION OF DISALLOWANCE OF COMMISSION EXPENSES OF RS.49,98,049/- HAS BEEN DELETED BY LD.CIT(A). WE F IND THAT THE ASSESSEE HAS FILED LEDGER ACCOUNT OF THE B ROKER WHICH SHOWS THAT REGULAR COMMISSION HAVE BEEN PAID ROUND THE YEAR TO VARIOUS PERSONS. YEARLY DETAILS OF THE BROKER HAS ALSO BEEN FURNISHED ALONG WITH DETAILED LEDGER ACCOUNT SHOWING PERMANENT ACCOUNT NUMBER OF THE BROKERS. INCOME TAX HAS BEEN DEDUCTED AT SOURC E ON THE ALLEGED COMMISSION EXPENSES AS AND WHEN APPLICABLE. THE ALLEGED COMMISSION HAS BEEN PAID T O THE BROKERS FOR PROVIDING SERVICES OF SELLING FLATS KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 17 CONSTRUCTED BY THE ASSESSEE. RESPECTIVE DETAILS SHOWING NAME OF THE FLAT OWNER, FLAT NO AND THE SAL E CONSIDERATION HAS BEEN PREPARED AND ALSO BEEN FILED IN THE PAPER BOOK RUNNING PAGE NO 36 TO 85. LD. DEPARTMENTAL REPRESENTATIVE FAILED TO CONTROVERT TH ESE DETAILS AS WELL AS THE FINDINGS OF LD. CIT(A). 20. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CAS E WE ARE OF THE VIEW THAT THE ALLEGED AMOUNT OF COMMISSI ON EXPENSES ARE GENUINE AND LD.CIT(A) HAS RIGHTLY DELE TED THE DISALLOWANCE. WE UPHOLD THE SAME AND DISMISS GROUND NO.4 RAISED BY THE REVENUE. 21. IN THE RESULT THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 12.09.2 018. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 12/09/2018 /DEV COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER KBG LIFE INFRA PVT. LTD I.T.A. NO. 951/IND/16 18 PRIVATE SECRETARY/DDO, INDORE