TaxTMI 
TaxTMI 
TaxTMI 
2015 (5) TMI 984
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....A.O. and investigation made during assessment proceedings. 3. The applicant craves leave to add, to alter, or amend any grounds of the appeal raised above at the time of hearing." 3. From the above grounds, it would be clear that the grievance of the department relates to the deletion of the addition of Rs. 93,45,000/- made by the AO u/s 68 of the IT Act 1961 (hereinafter referred to as the Act in short) on account of unaccounted sale proceeds of shares and Rs. 1,86,900/- on account of unaccounted commission. 4. Facts of the case in brief are that the assessee filed the return of income on 24.10.2003 declaring an income of Rs. 1950/-, thereafter, the AO on the basis of information received from the investigation wing that the assessee had received accommodation entry of Rs. 96,25,000/- had reason to believe that the said amount escaped the assessment and accordingly the case was reopened u/s 147 of the Act, after recording the reasons. In response to notice u/s 148 of the Act the assessee stated that the return already filed on 24.10.2003 may be treated as a return filed. The AO noticed that the assessee had received amounts from the following parties through cheques / payee ord....
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....of provisions of Section 68 of the Act and that the amount of Rs. 93,45,000/- allegedly received from the parties represented unaccounted money of the assessee and the transactions were only a camouflage. He, therefore, made the addition of Rs. 93,45,000/- and also added Rs. 1,86,900/- on account of commission. Reliance was placed on the following Cases Laws :- - CIT Vs. Precision Finance Pvt. Ltd. (1994) 208 ITR 465 (Cal.) - Mc. Dowell & Co. Ltd, Vs. ITO. 148 ITR 154 (S.C.) 6. Being aggrieved the assessee carred the matter to the Ld. CIT(A) and the submissions made as incorporated in para 5 of the impugned order are reproduced verbatim .as under :- "The learned ITO is quite descriptive about the introduction of unaccounted money in the shape of share capital and/ or unsecured loans. He has invoked the provisions of sec. 68 and has made an addition of Rs. 93,45,000/-. This money has been received during this year by the assessee from 21 persons listed in asst. order being sale proceeds of shares held brought forward from previous year as well purchased in this year. First of all we submit that the total of balance sheet as on 31/03/2003 is 1,81,35,543/- and the same figure is....
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....ys that the confirmations, bank statements, copy of the ITRs from all these parties were filed before him. Please find enclosed herewith another set of all those paper which were filed before the ITO. These are enough to treat as proper discharge of onus by the assessee. Kindly note -(a) all are income tax payees (b) all transaction are by a/c payee cheques through their bank a/cs. (copy on ITO file is there) (c) All parties are confirming the transactions. (d) ROC details in case of companies. Merely for certain reasons, these parties did not appear before the ITO in response to summons u/s 131, no adverse inference can be drawn. The ITO had their PAN No. & ward. He could have made enquiry from their respective wards. Delhi faced lot of disturbance due to sealing and shifting of commercial establishments from residential areas. The notice sent by ITO returned back as the time when transaction took place and date of notice, there is a gap of over 6 years. The opportunity given by the ITO thereafter to the assessee was too small to justify the same. In this assessee's own case for asst. year 2002-03 is appeal no. 124/2007-08 order date 05/01/2009 your honour in similar circums....
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.... the assessee. 9. The Ld. CIT(A) further observed that even though the AO has vast powers u/s 131 and 133(6) of the Act, he had not used any office power to verify the genuineness of the claim of the assessee by verifying the documents furnished by it and if the AO had doubted the impugned transaction after receiving the evidences which had been produced by the assessee in support of its claim it was very much open to the AO to do his independent inquiry and verification but the same had not been done by the AO. The Ld. CIT(A) categorically stated that the assessee had adduced the documentary evidences in support of the transaction in question and that the identity of the purchasers of the shares was established. The Ld. CIT(A) observed that the purchasers had PAN Card and there was no evidence or material even to suggest that the cheques directly or indirectly emanated from the assessee so that it could be said that the assessee's own money was brought back in the guise of sale proceeds of the shares. The Ld. CIT(A) also observed that though the purchasers of the shares could not be examined by the AO, but they were existing on the file of the Income Tax Department and their Inco....
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....erroneous. He also submitted that the matter may be remanded back to the AO for an in-depth examination of relevant facts and the evidences. 11. In his rival submissions, the Ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the assessee was having investment in shares etc. which were duly shown on the asset aside of the balance sheet, out of those investments some were sold and few new were purchased and if there was any gain on the sale the same was offered for taxation. It was further submitted that in earlier year under similar circumstances, the case was reopened u/s 147 of the Act and the addition made by the AO was deleted bythe I.T.A.T. It was further submitted that the assessee sold the shares which were earlier purchased in different years and duly shown in the balance sheet of the respective years and that the assessee had shown the sale proceeds in the books of accounts, the investments were reduced after making the sales. It was contended that there was no obligation under the law that the assessee was required to prove the source of payee. It was further contended that the AO had not rejected the book....