Deputy Commissioner Of Income Tax, Central Circle-II vs Pacific Mining Products Pvt. Ltd.

“Whether on facts and circumstances of the case and in law, the Ld. CIT(A)-3, Noida has erred in deleting the protective addition of Rs. 17,80,36,912/- on account of undisclosed income admitted during search simply on the ground that the substantive addition has been upheld in the hands of Sh. Ashish Garg, without appreciating the fact that fate of the substantive addition has not attained finality and the same is liable to be assailed before a higher appellate body. The protective addition is made with an intent to protect the interest of revenue in the event that the substantive addition falls to fructify. Thus, in order to protect the interest of revenue, the protective addition in the hands of the assessee is required to be sustained.

2.

Whether on facts and circumstances of the case and in law, the Ld. CIT(A)-3, Noida has erred in deleting the subject protective addition simply on the ground that the same may constitute double addition while paradoxically upholding the addition in principle. Ld. CIT(A) has failed to appreciate the fact that protective addition does not constitute double addition as the protective addition is made in order to protect the interest of revenue in the event that the substantive addition fails to fructify.

3.

Whether on facts and circumstances of the case and in law, the Ld. CIT(A)-3, Noida has erred in holding that the addition of Rs. 2,86,00,945/- on account of unexplained unsecured loan received by the assessee was double addition as the, same amount was added under head "Share Application" and "sundry creditors" in AY 2011-12 completely overlooking the fact that there is no evidence submitted by the assessee to support its claim.

4.

Ld. CIT(A) has erroneously reproduced and conferred with the submissions of the assessee that an amount of Rs. 1 Crore has been transferred from sundry creditors to unsecured loans and the addition was made in A.Y. 2011-12 even though there is no documentary evidence to support the assertions of the assessee. During the course of the assessment proceedings, the assessee had failed to submit any evidence to justify the sources and nature of the unsecured loans. Even during the appellate proceedings, Ld. CIT(A) has expressly stated that no additional evidence were admitted. Thus, in absence of any additional evidence, there is nothing available on record from which the claim of the assessee can be verified. Ld. CIT(A) has not referred to any documents or evidence submitted by the assessee that would demonstrate the claim of the assessee that 'sundry debtors from A.Y. 2011-12 were transferred to unsecured loans' and the same were doubly added. The observations made by Ld. CIT(A) are unsubstantiated and lack any evidentiary basis. That the appellant craves leave to add alter, adduce or amend or any ground or grounds on or before the date of hearing of appeal.”