DCIT, V. M/s Mongia Hi-Tech pvt ltd.,

ITSSA 15/RAN/2014

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2443 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 19-06-2014
• Court: TRIBUNAL
• Department Lawyers: DEEPAK ROUSHAN
• Assessee Lawyers: K N PRASAD
• Keywords: Unexplained cash credit; Unexplained investment; Unexplained expenditure; Search and seizure; Document seized; Corroborative evidences; Onus to prove; Documents seized
• Section: 133A; 153A; 68

Judgement Text

1 IT(SS)A NOS. 15-16/RAN/2014, IT(SS)A NO. 13/RAN/20 14 & CO. NOS. 15 & 16/RAN/2014 MONGIA HI-TECH PVT. LTD. AYS 2007-08 & 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL: RANCHI BENCH, RANCHI [BEFORE SHRI N. V. VASUDEVAN, JM & SHRI M. BALAGAN ESH, AM] I.T(SS).A NO. 15/RAN/2014 ASSESSMENT YEAR: 2007-08 DEPUTY COMMISSIONER OF INCOME-TAX, VS. M/S. MONGI A HI-TECH PVT. LTD. CENTRAL CIRCLE, DHANBAD BURHIADIH, TUNDI ROAD, GIRIDIH-815301 (PAN: AABCM4621M) (APPELLANT) (RESPONDENT) & C.O. NO. 15/RAN/2014 IN I.T(SS).A NO. 15/RAN/2014 ASSESSMENT YEAR: 2007-08 M/S. MONGIA HI-TECH PVT. LTD. VS. DEPUTY COMMISSI ONER OF INCOME-TAX, CENTRAL CIRCLE, DHANBAD (CROSS OBJECTOR) (RESPONDENT) & I.T(SS).A NO. 16/RAN/2014 ASSESSMENT YEAR: 2009-10 DEPUTY COMMISSIONER OF INCOME-TAX, VS. M/S. MONGI A HI-TECH PVT. LTD. CENTRAL CIRCLE, DHANBAD BURHIADIH, TUNDI ROAD, GIRIDIH-815301 (PAN: AABCM4621M) (APPELLANT) (RESPONDENT) & C.O. NO. 16/RAN/2014 IN I.T(SS).A NO. 16/RAN/2014 ASSESSMENT YEAR: 2009-10 M/S. MONGIA HI-TECH PVT. LTD. VS. DEPUTY COMMISSI ONER OF INCOME-TAX, CENTRAL CIRCLE, DHANBAD (CROSS OBJECTOR) (RESPONDENT) & I.T(SS).A NO. 13/RAN/2014 ASSESSMENT YEAR: 2009-10 M/S. MONGIA HI-TECH PVT. LTD. VS. ASSTT. COMMISSI ONER OF INCOME-TAX, CENTRAL CIRCLE, DHANBAD (APPELLANT) (RESPONDENT) DATE OF HEARING: 06.09.2016 DATE OF PRONOUNCEMENT: 09.09.2016 2 IT(SS)A NOS. 15-16/RAN/2014, IT(SS)A NO. 13/RAN/20 14 & CO. NOS. 15 & 16/RAN/2014 MONGIA HI-TECH PVT. LTD. AYS 2007-08 & 2009-10 FOR THE REVENUE: SHRI DEEPAK ROUSHAN, DR FOR THE ASSESSEE: SHRI K. N. PRASAD, ADVOCATE ORDER PER SHRI M. BALAGANESH, AM: BOTH THESE APPEALS BY REVENUE AND C.OS. OF ASSESSEE ARE ARISING OUT OF SEPARATE ORDERS OF CIT(A), DHANBAD VIDE APPEAL NO. 369 & 375/DHN/11-12 DATED 05.03.2014 AND APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A), DHANBAD VIDE APPEAL NO. 375/DHN/11-12 DATED 05.03.2014. ASSESSM ENTS WERE FRAMED BY ACIT, CENTRAL CIRCLE-DHANBAD U/S. 153A R.W.S. 144 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AYS 2007 -08 AND 2008-09 VIDE HIS SEPARATE ORDERS DATED 29.12.2011. FOR THE SAKE OF CONVENIENCE, WE DISPOSE OF ALL THE APPEALS AND COS BY THIS CONSOLIDATED ORDER. FIRST WE TAKE UP ITA NO. 15/RAN/2014, AY 2007-08 (R EVENUES APPEAL) 2. THE FIRST ISSUE TO BE DECIDED IN THE APPEAL OF THE REVENUE IS AS TO WHETHER THE LD. CIT(A) IS JUSTIFIED IN DELETING THE ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN LAND IN THE SUM OF RS.15,97,454/- AND UNACCOUNTED CASH DEPOSIT OF RS.1,79,42,000/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2.1. BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSESSE E IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING OF M. S. I NGOTS AND TMT BARS. A SEARCH AND SEIZURE OPERATION U/S. 132(1) OF THE ACT WAS CA RRIED OUT IN THE BUSINESS AS WELL AS RESIDENTIAL PREMISES OF MONGIA GROUP OF CASES ON 16.09.2009 AND ON SUBSEQUENT DATES. SIMILARLY, SURVEY U/S. 133A OF THE ACT WAS ALSO CONDUCTED IN DIFFERENT FACTORY PREMISES OF THE GROUP OF THOSE ASSESSEES. T HE PRESENT ASSESSEE IS THE FLAGSHIP CONCERN OF THE GROUP. THE AO OBSERVED FRO M THE SEIZED DOCUMENTS VIDE REFERENCE NO. MHPL-46 COMPRISING OF PAGES 1 TO 107 THAT CERTAIN LANDS WERE ACQUIRED BY THE ASSESSEE COMPANY AS BELOW: PAGE NO. DEED NO. DATE OF REGISTRATION PURCHASE CONSIDERATION RS. STAMP DUTY & FEES ETC. 3 IT(SS)A NOS. 15-16/RAN/2014, IT(SS)A NO. 13/RAN/20 14 & CO. NOS. 15 & 16/RAN/2014 MONGIA HI-TECH PVT. LTD. AYS 2007-08 & 2009-10 09-10 47-51 52-56 9815 3955 3954 29.08.2006 17.04.2006 17.04.2006 TOTAL : 14,56,000/- 25,000/- 40,000/- 15,21,000/- 73,144/- 1,280/- 2,030/- 76,454/- THE AO ALSO OBSERVED FROM SEIZED DOCUMENTS REFERENC E NO. BM-4 COMPRISING OF PAGES 1 TO 7 CONTAINING BANK STATEMENTS WITH SBI, G IRIDIH A/C. NO. 01650/020015 WHEREIN CASH DEPOSITS TO THE TUNE OF RS.1,79,42,000 /- WERE MADE. THE LD. AO FOUND THAT NO SATISFACTORY EXPLANATION WAS GIVEN BY THE ASSESSEE IN RESPECT OF THESE TWO ISSUES AND ACCORDINGLY, TREATED THE SUM OF RS.1 5,97,454/- AS UNDISCLOSED INVESTMENT IN LAND AND ALSO ADDED A SUM OF RS.1,79, 42,000/- AS UNEXPLAINED CASH CREDIT IN THE ASSESSMENT COMPLETED U/S. 153A OF THE ACT. BEFORE THE LD. CIT(A) THE ASSESSEE STATED THAT THE ASSESSEE COMPANY COULD NOT FILE THE DETAILS DUE TO NON AVAILABILITY OF SOME PAPERS WHICH WERE SEIZED BY TH E CENTRAL EXCISE DEPARTMENT DURING THE COURSE OF ITS SEARCH. IT WAS ALSO SUBMI TTED THAT THE HONBLE HIGH COURT OF JHARKHAND DIRECTED THE DEPARTMENT OF CENTRAL EXC ISE TO SUPPLY THE SEIZED DOCUMENTS TO THE ASSESSEE IN THE COURT ITSELF BY 26 .06.2013. ACCORDINGLY, ON RECEIPT OF ALL THE SEIZED DOCUMENTS THE ASSESSEE SUBMITTED THE DETAILS IN RESPECT OF THE ADDITIONS MADE IN THE ASSESSMENT BEFORE THE LD. CIT (A). THE DETAILS FILED BY THE ASSESSEE WERE SOUGHT TO BE EXAMINED BY REMANDING TH E PROCEEDING TO THE FILE OF THE AO BY THE LD. CIT(A). THE AO VIDE HIS REMAND REPOR T HAD MADE THE FOLLOWING COMMENTS: THE PERUSAL OF THE AUDITED REPORT OF THE COMPANY FOR THE PERIOD 2006-07 FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), DHANBAD P RIMA FACIE SUGGEST THAT PURCHASE OF LAND AMOUNTING TO RS.15,97,454.00 WHICH HAS BEEN TREATED BY THE ASSESSING OFFICER AS UNEXPLAINED INVESTMENT HAS BEEN PART OF THE LAND ASSET SHOWN IN THE BALANCE SHEET AT RS.25,96,031.00 AS ON 31.03.2006. IN FACT, THE DET AILS OF THE LAND PURCHASE THAT FIND MENTION IN SEIZED DOCUMENTS IDENTIFIED AS MHPL-45 & 46 AND WERE BASIS FOR THE ADDITION MADE BY THE ASSESSING OFFICER PRIMA FACIE STAND CORROBORATED BY THE LEDGER ACCOUNTS OF LAND FOR THE RELEVANT PERIOD WHICH HAVE ALSO BEEN SUBMITTED BY THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), DH ANBAD. THE ASSESSING OFFICER ADDED A SUM OF RS.1,79,42,00 0/- TREATING THE SAME AS UNEXPLAINED CASH WHICH WAS UNACCOUNTED. IT HAS BEE N CLAIMED THAT PAGES 1-7 OF THE SEIZED DOCUMENTS IDENTIFIED AS BM 4 COMPRISE THE CO PIES OF PAYING SLIP OF BANK REPRESENTING CASH DEPOSIT OUT OF SALE PROCEED WHICH ARE DULY REFLECTED IN THE REGULAR BOOKS OF ACCOUNT. COPIES OF BANK ACCOUNT, LEDGER A ND OTHER SUPPORTING DOCUMENTS HAVE BEEN SUBMITTED FOR REFERENCE AS WELL. THE SAL E FIGURES REFLECTED IN THE PROFIT & 4 IT(SS)A NOS. 15-16/RAN/2014, IT(SS)A NO. 13/RAN/20 14 & CO. NOS. 15 & 16/RAN/2014 MONGIA HI-TECH PVT. LTD. AYS 2007-08 & 2009-10 LOSS ACCOUNT, THE SALE LEDGER AND BANK BOOK PRIMA F ACIE SEEMS TO MAKE A CASE FOR THE ASSESSEE. THE LD. CIT(A) FOUND THAT THE AO HAD ACCEPTED THE C ONTENTIONS OF THE ASSESSEE IN THE REMAND PROCEEDINGS AND HAD ALSO NOT MADE ANY AD VERSE COMMENTS ON THE SAME. PLACING RELIANCE ON THE SAME, THE LD. CIT(A) DIRECT ED TO DELETE THE ADDITION MADE IN THE SUMS OF RS.15,97,454/- AND RS.1,79,42,000/-. A GGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUND NO. 1: 1. THAT THE LD. CIT(A), DHANBAD, HAS ERRED IN DELE TING THE ADDITION ON UNDISCLOSED INVESTMENT IN LAND AND UNACCOUNTED CASH DEPOSIT WIT HOUT ANY COGENT VERIFIABLE EVIDENCE. 2.3. THE LD. DR VEHEMENTLY RELIED ON THE ORDER OF T HE AO AND ON THE OTHER HAND, THE LD. AR VEHEMENTLY SUPPORTED THE ORDER OF THE LD . CIT(A). 2.4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROU GH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE LD. CIT(A) HAD DELET ED THE ADDITION AFTER OBTAINING REMAND REPORT FROM THE AO WHO HAD ACTUALLY ACCEPTED THE CONTENTIONS OF THE ASSESSEE AND HAD NOT MADE ANY ADVERSE COMMENTS ABOU T THE SAME. UNDER THESE FACTS AND CIRCUMSTANCES, THE LD. AO OUGHT NOT TO HA VE PREFERRED ANY FURTHER APPEAL BEFORE US ON THE IMPUGNED ISSUE. IN VIEW OF THE SA ME, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY UPHE LD. ACCORDINGLY, GROUND NO.1 OF REVENUES APPEAL IS DISMISSED. 3. THE NEXT GROUND TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) IS JUSTIFIED IN DELETING THE ADDITION MADE ON ACCOU NT OF UNEXPLAINED EXPENDITURE OF RS.1,43,322/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3.1. THE LD. AO OBSERVED FROM THE SEIZED DOCUMENTS REFERENCE BM-6 COMPRISING OF PAGES 48 TO 50 THAT CERTAIN PAYMENTS TOWARDS TRANSPORTATION HAVE BEEN MADE TO CHOUDHARY & SONS ON VARIOUS DATES TO T HE TUNE OF RS.1,43,322/-. SINCE NO REPLY WAS FORTHCOMING FOR THE SHOW CAUSE N OTICE SENT TO THE ASSESSEE IN THIS REGARD THE LD. AO COMPLETED THE ASSESSMENT BY TREATING THE SUM OF RS.1,43,322/- AS UNEXPLAINED EXPENDITURE OF THE ASS ESSEE COMPANY IN THE SEARCH 5 IT(SS)A NOS. 15-16/RAN/2014, IT(SS)A NO. 13/RAN/20 14 & CO. NOS. 15 & 16/RAN/2014 MONGIA HI-TECH PVT. LTD. AYS 2007-08 & 2009-10 ASSESSMENT FRAMED U/S. 153A OF THE ACT. THE ASSESS EE FILED THE DETAILS OF THE SAME BEFORE THE LD. CIT(A), WHO CALLED FOR REMAND REPORT FROM THE AO AND ACCEPTED THE CONTENTIONS OF THE ASSESSEE BY OBSERVING AS UNDER: THE ASSESSING OFFICER HAS FURTHER ADDED A SUM OF RS.1,43,322/- ON ACCOUNT OF PAYMENT MADE TO M/S. CHOUDHARY & SON AGAINST TRANSP ORTATION CONSIDERED AS UNDISCLOSED/UNACCOUNTED EXPENSES. THE CONTENTION O F THE ASSESSEE IS THAT THIS AMOUNT HAS NOT BEEN PAID BY THE COMPANY. IT WAS PA ID BY ONE OF THE DIRECTORS OF THE COMPANY SRI GUNWANT SINGH SALUJA AND THE AMOUNT HAS BEEN CONSIDERED IN HIS INDIVIDUAL ACCOUNT. ALTHOUGH IT HAS BEEN CONTENDED THAT EVIDENCE TO THAT EFFECT HAS ALSO BEEN SUBMITTED AS ANNEXURE C, THE PERUSAL OF A NNEXURE C DOES NOT REVEAL ANY DOCUMENT TO SUGGEST THAT THE PAYMENT HAS BEEN MADE BY SRI GUNWANT SINGH SALUJA. THE ANNEXURE C IS ANNEXED FOR REFERENCE. HOWEVER, IT HAS BEEN FOUND FROM THE DOCUMENTS ATTACHED IN CASE OF MONGIA HIGH TECH PRIV ATE LIMITED FOR AY 2010-11 THAT SRI GUNWANT SINGH HAS OFFERED TO TAX THIS UNDI SCLOSED AMOUNT FOR AY 2007-08. IN THAT EVENTUALITY, THIS AMOUNT SHALL BE ADDED TO THE TOTAL INCOME OF SRI GUNWANT SINGH SALUJA FOR AY 2007-08 AS NO RETURNS FOR AY 20 07-08 IN RESPONSE TO NOTICE U/S. 153A HAS BEEN FILED BY SRI G. S. SALUJA AND THE RET URNS FILED U/S. 139(1) DOES NOT INCLUDE THIS AMOUNT. 3.2. THE LD. CIT(A) AFTER PERUSING THE REMAND REPOR T OF THE AO FOUND THAT THERE IS NO EVIDENCE TO PROVE THE SUBJECT MENTIONED EXPEN DITURE. HOWEVER, SINCE ONE OF THE DIRECTORS OF THE ASSESSEE COMPANY SHRI GUNWANT SINGH SALUJA HAD OWNED UP THIS EXPENDITURE, THE SAME IS TO BE ADDED ONLY IN HIS HA NDS FOR AY 2007-08 AND ACCORDINGLY, DIRECTED THE LD. AO TO DELETE THE SAID ADDITION IN HANDS OF THE ASSESSEE COMPANY. AGGRIEVED, THE REVENUE IS IN APPEAL BEFOR E US ON THE FOLLOWING GROUND NO. 2: 1. THAT THE LD. CIT(A), DHANBAD, HAS ALSO ERRED IN DELETING THE ADDITION ON ACCOUNT OF UNEXPLAINED EXPENDITURE OF RS.1,43,322/- ON THE PREMISE THAT SAME HAS TO BE ADDED IN THE HANDS OF DIRECTOR OF THE COMPANY WHO H AS NOT EVEN FILED HIS RETURN OF INCOME. 3.3 THE LD. DR VEHEMENTLY RELIED ON THE ORDER OF TH E AO AND ON THE OTHER HAND, THE LD. AR VEHEMENTLY SUPPORTED THE ORDER OF THE LD . CIT(A). 3.4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROU GH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE LD. CIT(A) HAD DELET ED THE ADDITION AFTER OBTAINING REMAND REPORT FROM THE AO WHO HAD ACTUALLY ACCEPTED THE CONTENTIONS OF THE ASSESSEE AND HAD NOT MADE ANY ADVERSE COMMENTS ABOU T THE SAME. UNDER THESE FACTS AND CIRCUMSTANCES, THE LD. AO OUGHT NOT TO HA VE PREFERRED ANY FURTHER APPEAL 6 IT(SS)A NOS. 15-16/RAN/2014, IT(SS)A NO. 13/RAN/20 14 & CO. NOS. 15 & 16/RAN/2014 MONGIA HI-TECH PVT. LTD. AYS 2007-08 & 2009-10 BEFORE US ON THE IMPUGNED ISSUE. IN VIEW OF THE SA ME, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY UPHE LD. ACCORDINGLY, GROUND NO.2 OF REVENUES APPEAL IS DISMISSED. 4. THE CROSS OBJECTION NO. 15/RAN/2014 FILED BY ASS ESSEE IS IN SUPPORT OF THE ORDER OF LD. CIT(A) AND HENCE, THE SAME IS DISMISSE D AS INFRUCTUOUS . NOW, WE ARE COMING TO IT(SS)A NO. 16/RAN/2014, AY 2 009-10 (REVENUES APPEAL.) 5. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) IS JUSTIFIED IN DELETING THE ADDITION TOWARDS UNDISCLO SED PURCHASES AND UNACCOUNTED SHARE APPLICATION MONEY IN THE SUMS OF RS.32,58,468 /- AND RS.5,89,01,100/- RESPECTIVELY IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 5.2. THE LD. AO OBSERVED FROM THE SEIZED DOCUMENTS REFERENCE KP-27 COMPRISING OF PAGES 125-126 THAT PURCHASE FOR RS.6, 76,449/- WAS MADE ON 17.08.2009. SIMILARLY, FROM THE SEIZED DOCUMENT RE FERENCE KP-27 COMPRISING OF PAGES 90 TO 96, 100 TO 104 THAT PURCHASES WERE MADE FROM DIFFERENT PARTIES ON DIFFERENT DATES TO THE TUNE OF RS.25,82,019/-. THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE TOTAL SUM OF RS.32,58,468/- SHOULD NO T BE TREATED AS UNEXPLAINED EXPENDITURE MADE BY THE ASSESSEE COMPANY. SINCE NO EXPLANATION WAS OFFERED BY THE ASSESSEE THE AO TREATED THE SAID SUM OF RS.32,5 8,468/- AS UNEXPLAINED EXPENDITURE IN THE ASSESSMENT FRAMED U/S. 153A OF T HE ACT. 5.3. THE LD. AO OBSERVED FROM THE SEIZED DOCUMENTS REFERENCE MHPL-20 COMPRISING OF PAGES 12 TO 14 CONTAINING LIST OF SHA REHOLDERS OF THE ASSESSEE COMPANY AS ON 31.03.2009 AND CALLED FOR THE DETAILS REGARDING THE NAMES AND ADDRESSES OF THE PARTIES FROM WHOM SHARE CAPITAL WA S RECEIVED, PAN, DATE, MODE OF PAYMENT TOGETHER WITH PROVING THEIR IDENTITY, GENUI NENESS AND CREDITWORTHINESS OF THE SHAREHOLDERS. SINCE NO DETAILS AND EXPLANATION WERE SUBMITTED BY THE ASSESSEE THE LD. AO TREATED THE SUM OF RS.5,89,01,100/- AS U NEXPLAINED CASH CREDIT U/S. 68 OF THE ACT IN THE ASSESSMENT FRAMED U/S. 153A OF THE A CT. THE ASSESSEE SUBMITTED THE 7 IT(SS)A NOS. 15-16/RAN/2014, IT(SS)A NO. 13/RAN/20 14 & CO. NOS. 15 & 16/RAN/2014 MONGIA HI-TECH PVT. LTD. AYS 2007-08 & 2009-10 ENTIRE DETAILS BEFORE THE LD. CIT(A) AND ALSO STATE D THAT ALL THESE TRANSACTIONS WERE ALREADY RECORDED IN THE BOOKS OF ACCOUNT OF THE ASS ESSEE COMPANY. SINCE THE DETAILS AND SUBMISSIONS WERE MADE FOR THE FIRST TIME BEFORE THE LD. CIT(A), THE LD. CIT(A) CALLED FOR A REMAND REPORT FROM THE AO, WHO ACCEPTE D THE CONTENTIONS OF THE ASSESSEE BY MAKING THE FOLLOWING OBSERVATIONS: THE ASSESSING OFFICER ADDED A FURTHER SUM OF RS.3 2,58,468/- ON ACCOUNT OF PURCHASE ON THE BASIS OF SEIZED DOCUMENTS MARKED AS KP-27. IT HAS BEEN CONTENDED THAT ALL THE PURCHASES ARE DULY ENTERED IN THE REGU LAR BOOKS OF ACCOUNTS OF THE ASSESSEE COMPANY. PHOTOCOPIES OF THE BILLS AND COP IES OF PURCHASE LEDGER AND CASH BOOK HAVE BEEN SUBMITTED AS ANNEXURE C. SAME ARE B EING ANNEXED FOR REFERENCE. THE PERUSAL OF THE DOCUMENTS SUBMITTED PRIMA FACIE SEEMS TO CORROBORATE THE CONTENTION OF THE ASSESSEE. THE ASSESSING OFFICER HAS ADDED A SUM OF RS.5,89,0 1,100/- AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT IN RESPECT OF SHARE APPLICATION MONEY RECEIVED FROM DIFFERENT SHAREHOLDERS ON THE OBSERVATION THAT SINC E THE ASSESSEE COMPANY FAILED TO SUBMIT THE PRESENT COMPLETE ADDRESS, PAN, DATE WISE MODE OF PAYMENT RECEIVED FROM THOSE PERSONS FOR INVESTING IN SHARE CAPITAL/S HARE PREMIUM IN THE ASSESSEE COMPANY AS WAS ASKED SPECIFICALLY TWICE AND EVEN AF TER SPECIFIC SHOW CAUSE ON THIS ISSUE, THE ASSESSEE COMPANY FAILED TO DISCHARGE ITS PRIMARY ONUS TO PROVE THE GENUINENESS OF THE RELEVANT TRANSACTIONS AND CREDIT WORTHINESS OF THOSE SHARE HOLDERS. IT HAS BEEN CONTENDED THAT DURING THE PREVIOUS YEA R RELEVANT TO AY 2009-10, IT RECEIVED NEW SHARE APPLICATION MONEY ALONG WITH SHARE PREMIUM AMOUNTING TO RS.5.87 CRORE WHICH ARE REFLECTED IN THE BALANCE SH EET FILED BY THE ASSESSEE ALONG WITH THE RETURN OF THE INCOME U/S. 139(1) OF THE AC T. PHOTOCOPIES OF THE BALANCE SHEET BUT NOT THE COPY OF ITR-V PERTAINING TO E FILING OF RETURN OF INCOME FOR AY 2009-10 HAVE BEEN SUBMITTED ALONG WITH THE LIST OF SHAREHOL DERS MARKED AS ANNEXURE D WHICH IS ANNEXED FOR REFERENCE. IT IS WORTH MENTIONING THAT INDEPENDENT THIRD PART Y ENQUIRY WAS MADE WITH THE PERSONS WHO HAD CONTRIBUTED TO SHARE APPLICATIO N MONEY FOR CONFIRMATION OF THE TRANSACTION AND SUBMISSION OF DOCUMENTS WHICH PROVE D THEIR CREDIT WORTHINESS AND IDENTITY BEYOND DOUBT. THE REPLY RECEIVED FROM THO SE PERSONS WHICH ARE SELF EXPLANATORY ARE BEING SUBMITTED FOR CONSIDERATION D EEMED FIT. 5.4. THE LD. CIT(A) BY PLACING RELIANCE ON THE REMA ND REPORT SUBMITTED BY THE AO DELETED THE ADDITIONS. AGGRIEVED, THE REVENUE I S NOW IN APPEAL BEFORE US ON THE FOLLOWING GROUND NO.1: 1. THAT THE LD. CIT(A), ERRED IN DELETING ADDITIO N OF RS.32,58,468/- AND RS.5,89,01,100/- ON ACCOUNT OF UNDISCLOSED PURCHASE S AND UNACCOUNTED SHARE APPLICATION MONEY WITHOUT ANY VERIFIABLE EVIDENCES. 8 IT(SS)A NOS. 15-16/RAN/2014, IT(SS)A NO. 13/RAN/20 14 & CO. NOS. 15 & 16/RAN/2014 MONGIA HI-TECH PVT. LTD. AYS 2007-08 & 2009-10 5.5. THE LD. DR VEHEMENTLY RELIED ON THE ORDER OF T HE AO AND ON THE OTHER HAND, THE LD. AR VEHEMENTLY SUPPORTED THE ORDER OF THE LD . CIT(A). 5.6. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROU GH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE LD. CIT(A) HAD DELET ED THE ADDITION AFTER OBTAINING REMAND REPORT FROM THE AO WHO HAD ACTUALLY ACCEPTED THE CONTENTIONS OF THE ASSESSEE AND HAD NOT MADE ANY ADVERSE COMMENTS ABOU T THE SAME. UNDER THESE FACTS AND CIRCUMSTANCES, THE LD. AO OUGHT NOT TO HA VE PREFERRED ANY FURTHER APPEAL BEFORE US ON THE IMPUGNED ISSUE. IN VIEW OF THE SA ME, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY UPHE LD. ACCORDINGLY, GROUND NO.1 OF REVENUES APPEAL IS DISMISSED. 6. THE NEXT ISSUE TO BE DECIDED IN THIS APPEAL OF R EVENUE IS AS TO WHETHER THE LD. CIT(A) IS JUSTIFIED IN DELETING THE ADDITION MA DE IN THE SUM OF RS.27,68,249/- TOWARDS UNEXPLAINED INVESTMENT IN LAND IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 6.1. THE LD. AO OBSERVED FROM THE SEIZED DOCUMENTS REFERENCE MHPL-45 COMPRISING OF PAGES 45 TO 96 SHOWING DETAILS OF VAR IOUS INVESTMENTS IN LANDS MADE ON DIFFERENT DATES DURING THE YEAR BY THE ASSESSEE. SINCE NO EXPLANATION WAS SUBMITTED BY THE ASSESSEE WITH REGARD TO THE SAME, THE LD. AO TREATED THE SUM OF RS. 27,68,249/- AS UNDISCLOSED INVESTMENT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSMENT FRAMED U/S. 153A OF THE ACT. BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED THAT THE INVESTMENT IN LAND HAD ALREADY BEEN SHOWN IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND ALSO SUBMITTED THE DETAILS OF THE SAME TOGETHER WITH COPY OF INCOME TAX RETURN ACKNOWLEDGEMENT THER EON. THE LD. CIT(A) SOUGHT FOR A REMAND REPORT FROM THE AO WHEREIN NO COMMENTS WERE MADE BY THE LD. AO ON THE SUBJECT MENTIONED ISSUE. THE LD. CIT(A) OBS ERVED THAT THE SUM OF RS.27,68,249/- TOWARDS INVESTMENT IN LANDS WAS DULY DISCLOSED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND ALSO VERIFIED THE LEDGE R ACCOUNT OF LAND FILED BEFORE HIM WHICH WAS ALSO SUBJECTED TO REMAND PROCEEDINGS. HE FURTHER OBSERVED THAT THE LD. AO HAD NOT FILED ANY ADVERSE COMMENTS ON THIS ISSUE AND GAVE A CATEGORICAL FINDING THAT THE INVESTMENT IN LAND POINTED OUT IN THE ASSE SSMENT ORDER HAVE BEEN DULY 9 IT(SS)A NOS. 15-16/RAN/2014, IT(SS)A NO. 13/RAN/20 14 & CO. NOS. 15 & 16/RAN/2014 MONGIA HI-TECH PVT. LTD. AYS 2007-08 & 2009-10 REFLECTED BY THE ASSESSEE IT ITS BOOKS OF ACCOUNT. ACCORDINGLY, HE DELETED THE ADDITION MADE THEREON. AGGRIEVED, REVENUE IS NOW I N APPEAL BEFORE US ON THE FOLLOWING GROUND NO.2: 2.INVESTMENT IN LAND OF RS.27,68,249/- TREATED AS UNEXPLAINED INVESTMENT HAS BEEN DELETED BY THE LD. CIT(A) WITHOUT ANY REASON. 6.2. THE LD. DR ARGUED THAT THE LD. CIT(A) DID NOT GIVE ANY REASONING FOR THE DELETION MADE BY HIM IN HIS ORDER. ACCORDINGLY, HE PRAYED FOR SETTING ASIDE THIS ISSUE TO THE FILE OF AO FOR PROPER VERIFICATION OF THE FACTS. IN RESPONSE TO THIS, THE LD. AR VEHEMENTLY OPPOSED FOR THE SAME BY ARGUING T HAT THE LD. CIT(A) ON VERIFICATION OF THE LEDGER ACCOUNT OF THE LAND HAD GIVEN A CATEGORICAL FINDING THAT THE INVESTMENT IN LAND WHICH WERE REFLECTED IN THE SEIZ ED DOCUMENTS WERE ALREADY RECORDED IN THE REGULAR BOOKS OF ACCOUNT OF THE ASS ESSEE AND IN THE ABSENCE OF ANY ADVERSE COMMENTS GIVEN BY THE AO IN HIS REMAND REPO RT ON THE SUBJECT MENTIONED ISSUE, IT HAS TO BE CONSTRUED AS LD. AO NOT HAVING ANY OBJECTION ON THE ISSUE. ACCORDINGLY, HE PRAYED FOR NON-INTERFERENCE IN THE ORDER OF THE LD. CIT(A). 6.3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROU GH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM THE ORDER OF THE LD. CIT (A) THAT HE HAD GIVEN A CATEGORICAL FINDING ON VERIFICATION OF THE LEDGER A CCOUNT OF THE LAND VIS--VIS THE SEIZED DOCUMENTS THAT THE INVESTMENT IN LAND HAS AL READY BEEN DISCLOSED IN THE REGULAR BOOKS OF ACCOUNT OF THE ASSESSEE. WE FIND THAT NO CONTRARY EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE REVENUE OR TO NEGATE THE FINDING OF THE LD. CIT(A) IN THIS REGARD. WE ARE ALSO IN AGREEMENT WITH THE ARG UMENT OF THE LD. AR THAT THE REMAND REPORT WERE CALLED FOR BY THE LD. CIT(A) ON ALL THE ISSUES AND IF THE LD. AO DOES NOT OFFER ANY COMMENTS ON ANY OF THE ISSUES, I T SHOULD BE CONSTRUED ONLY AS ACCEPTANCE AND HENCE, UNDER THESE CIRCUMSTANCES, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD. CIT(A) AND THE SA ME IS HEREBY UPHELD. ACCORDINGLY, GROUND NO. 2 RAISED BY THE REVENUE IS DISMISSED. 7. THE CROSS OBJECTION NO. 16/RAN/2014 FOR AY 2009- 10 FILED BY ASSESSEE IS IN SUPPORT OF THE ORDER OF LD. CIT(A) AND HENCE, THE S AME IS DISMISSED AS INFRUCTUOUS . 10 IT(SS)A NOS. 15-16/RAN/2014, IT(SS)A NO. 13/RAN/20 14 & CO. NOS. 15 & 16/RAN/2014 MONGIA HI-TECH PVT. LTD. AYS 2007-08 & 2009-10 8. NOW, WE ARE COMING TO IT(SS)A NO. 13/RAN/2014 FO R AY 2009-10 (ASSESSEES APPEAL) 8.1. THIS CROSS APPEAL FILED BY THE ASSESSEE IS AGA INST THE ORDER OF LD. CIT(A) WITH REGARD TO SUSTENANCE OF ADDITION MADE IN THE SUM OF RS.2,74,387/- TOWARDS UNEXPLAINED EXPENDITURE. 8.2. THE LD. AO FOUND FROM THE SEIZED DOCUMENTS REF ERENCE BM-1 COMPRISING OF PAGES 1 TO 56 THAT THE ASSESSEE HAS SPENT RS.1,9 7,01,213/- ON DIFFERENT HEADS AND BY CONSIDERING CERTAIN UNDISCLOSED RECEIPTS AND UND ISCLOSED EXPENSES HE ARRIVED AT A DEFICIT OF RS.2,74,387/- WHICH WAS SOUGHT TO BE ADD ED BY HIM AS UNEXPLAINED EXPENDITURE INCURRED BY THE ASSESSEE OUTSIDE THE BO OKS OF ACCOUNT. THE LD. AO ALSO OBSERVED THAT SHRI GUNWANT SINGH SALUJA, DIRECTOR A ND KEY PERSON OF THE ASSESSEE COMPANY HAD STATED IN HIS PAGE WISE ANALYSIS OF THE SEIZED DOCUMENTS VIDE REFERENCE BM-1 COMPRISING OF PAGES 1 TO 56. HE WAS REQUESTED BY THE AO TO IDENTIFY WITH PROPER EXPLANATION AND SUPPORTING EVIDENCE FOR HIS ANALYSIS MADE. NEITHER HE NOR THE ASSESSEE CAME FORWARD TO EXPLAIN THE SAME. HENC E, THE LD. AO RESORTED TO OBTAIN A STATEMENT U/S. 132(4) OF THE ACT FROM THE DIRECTO R ON 19.09.2009 WHEREIN IN RESPONSE TO SPECIFIC QUERY RAISED BY THE AO SHOWING PAGE NO. 21 OF THE SEIZED DOCUMENT WHICH CONTAINED MISC. EXPENSES INCURRED IN CASH ON 04.12.2008 FOR RS.2,34,628/- AND SIMILARLY BY SHOWING PAGE NO. 19 OF THE SEIZED DOCUMENT COMPRISING MISC. EXPENSES INCURRED IN CASH ON 26.11 .2008 FOR RS.39,759/- TOTALING TO RS.2,74,387/-. IN THE STATEMENT, DIRECTOR REPLI ED THAT HE IS NOT ABLE TO EXPLAIN THE SAME RIGHT NOW. ACCORDINGLY, THE AO PROCEEDED TO TREAT THE SAME AS UNEXPLAINED EXPENDITURE AND BROUGHT TO TAX A SUM OF RS.2,74,387 /- IN THE ASSESSMENT COMPLETED U/S./ 153A OF THE ACT. BEFORE THE LD. CIT(A) THE A SSESSEE SUBMITTED THAT PAGE NOS. 19 AND 21OF THE SEIZED DOCUMENT REFERENCE BM-1 CONT AINED CERTAIN EXPENSES ON ESTIMATE BASIS AND FACTUALLY NO SUCH PAYMENTS WERE NEITHER INCURRED NOR PAID BY THE ASSESSEE. THE LD. CIT(A) ALSO CALLED FOR REMAND RE PORT AND ON VERIFICATION OF THE SAME THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE AO IN THIS REGARD. AGGRIEVED, THE ASSESSEE IS NOW IN APPEAL BEFORE US. 11 IT(SS)A NOS. 15-16/RAN/2014, IT(SS)A NO. 13/RAN/20 14 & CO. NOS. 15 & 16/RAN/2014 MONGIA HI-TECH PVT. LTD. AYS 2007-08 & 2009-10 8.3. THE LD. AR ARGUED THAT SHRI G. S. SALUJA THE K EY PERSON AND DIRECTOR OF THE ASSESSEE COMPANY HAD MADE A TOTAL DISCLOSURE OF RS. 6,76,96,624/- FOR WHICH YEAR WISE BREAK UP FROM FYS. 2003-04 TO 2009-10 WERE FIL ED TOGETHER WITH ITS WORKINGS THEREON BY THE ASSESSEE PURSUANT TO THE SEARCH. TH ESE DETAILS CONTAINING DISCLOSURE ARE ENCLOSED IN PAGES 1 AND 2 OF THE PAPER BOOK FIL ED BY THE ASSESSEE. HE DREW THE ATTENTION OF THE BENCH TO PAGE NO. 1 OF THE PAPER B OOK WHEREIN A SUM OF RS.2,87,378/- WAS DISCLOSED TOWARDS UNACCOUNTED EXP ENDITURE FOR AY 2008-09 IN RESPECT OF SEIZED DOCUMENTS REFERENCE BM-1 COMPRISI NG OF PAGES 1 TO 56 AND PLEADED THAT THIS SUM HAS ALREADY BEEN CONSIDERED I N THE HANDS OF SHRI G. S. SALUJA AND ACCORDINGLY, THE SAME SHOULD NOT BE ADDED AGAIN IN THE HANDS OF THE ASSESSEE COMPANY HEREIN. HE ALSO PLACED ON RECORD THE COPY OF THE ORDER OF THE LD. CIT(A) PASSED IN THE HANDS OF SHRI G. S. SALUJA IN APPEAL NO. 358/CIT(A)-3/PAT/2011-12 DATED 29.09.2015 WHEREIN IN PAGES 7 AND 8 OF THE S AID ORDER THE LD. CIT(A) HAD CATEGORICALLY GIVEN A FINDING THAT SHRI G. S. SALUJ A HAD FURNISHED PAGE WISE ANALYSIS OF THE SEIZED DOCUMENTS BM-1 PERTAINING TO AY 2009- 10 WHICH REFLECTED A SHORTAGE OF FUND TO THE TUNE OF RS.2,87,378/- REPRESENTING U NDISCLOSED EXPENSES WHICH WERE DULY OFFERED BY HIM IN HIS DISCLOSURE PETITION. AC CORDINGLY, THE LD. AR PRAYED FOR DELETION OF THIS ADDITION MADE IN THE HANDS OF THE ASSESSEE COMPANY IN ORDER TO AVOID DOUBLE ADDITION. IN RESPONSE TO THIS, LD. DR ARGUED THAT THE ASSESSEE HAS RAISED A GROUND FOR THE ADDITION OF RS.2,74,387/- W HEREAS THE ADDITION WAS ACCEPTED BY THE DIRECTOR OF THE COMPANY SHRI G. S. SALUJA TO WARDS UNDISCLOSED EXPENDITURE IN RESPECT OF THE SAME SEIZED DOCUMENTS VIDE REFERENCE BM-1 WAS RS.2,87,378/-. HENCE, THERE SEEMS TO BE DISCREPANCY IN THE FIGURE WHICH REQUIRED TO BE VERIFIED BY THE AO AND ACCORDINGLY PRAYED FOR SETTING ASIDE TH IS ISSUE. 8.4. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD INCLUDING THE PAPER BOOK FILED BY THE ASSESSEE COMP RISING OF PAGES 1 TO 19. WE FIND LOT OF FORCE IN THE ARGUMENT ADVANCED BY THE LD. DR THAT IN THE FACTS AND CIRCUMSTANCES THE ISSUE NEEDS TO BE DECIDED IN THE LIGHT OF CORRECT FIGURES TAKEN BY THE AO AFTER DUE VERIFICATION OF THE ASSESSMENT REC ORDS OF SHRI G. S. SALUJA IN RESPECT OF THE SUBJECT MENTIONED UNACCOUNTED EXPEND ITURE VIDE SEIZED DOCUMENT 12 IT(SS)A NOS. 15-16/RAN/2014, IT(SS)A NO. 13/RAN/20 14 & CO. NOS. 15 & 16/RAN/2014 MONGIA HI-TECH PVT. LTD. AYS 2007-08 & 2009-10 REFERENCE NO. BM-1. THE AO HAS TO RECORD A FINDING AS TO WHICH OF THE FIGURES I.E. RS.2,74,387/- OR RS.2,87,378/- IS CORRECT FROM THE SEIZED DOCUMENT BM-1 AND DECIDE THE ENTIRE ISSUE ACCORDINGLY. WE HEREBY DIRECT THA T THIS ARITHMETICAL INACCURACY SHOULD BE SORTED OUT AND IF THE SUBJECT MENTIONED S UM HAS ALREADY BEEN CONSIDERED IN THE HANDS OF THE DIRECTOR SHRI G. S. SALUJA THEN THE SAME SHOULD BE DELETED IN THE HANDS OF THE ASSESSEE COMPANY WHICH HAS TO BE DECID ED BASED ON THE VERIFICATION MADE BY THE AO. ACCORDINGLY, THIS GROUND OF ASSESS EES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, TO SUM UP, IT(SS)A NOS. 15&16/RAN /2014 FILED BY REVENUE AND CO NOS. 15 & 16/RAN/2014 FILED BY ASSESSEE ARE DISMISSED AND IT(SS)A NO. 13/RAN/2014 FILED BY ASSESSEE IS ALLOWED FOR STATIS TICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 09.09.2016 SD/- SD/- (N. V. VASUDEVAN) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED :9 TH SEPTEMBER, 2016 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT 2 RESPONDENT 3 . THE CIT(A), 4. 5. CIT DR, ITAT, RANCHI / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .