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2010 (3) TMI 1108
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....on facts and in law in holding that the learned AO was justified in initiating proceedings under s. 147/148 of the IT Act, 1961, insofar as learned AO had no reasons to believe to initiate proceedings under s. 147/148 of IT Act, 1961. 2. That the appellant craves the right to amend, add, delete or withdraw any of the grounds of appeal either before or at any time of hearing of this appeal. 3. The return of income in the present case was filed at an income of Rs. 3,53,959. A survey operation under s. 133A of IT Act, 1961 ('the Act') was conducted at the premises of the assessee by the Investigation Wing Unit-V, Delhi on 10th Aug., 2006 wherein statement of Shri Amit Gupta (director of assessee company) was recorded. In the statement said Shri Amit Gupta offered an amount of Rs. 4,80,00,000 for taxation by way of admission of routing through the said amount into company's capital by way of accommodation entries during financial year 2002-03. According to assessment order, cheques were also issued to satisfy the payment which may accrue as tax on the said offer. The impugned amount constituted the share capital and share premium received from 15 parties the details o....
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....ssessee were non-genuine entities and were giving only accommodation entries. The fact that those companies were neither reliable nor genuine as per investigation carried out by Investigation Wing and the fact that those companies were not in a position to advance those deposits was brought to the notice of the assessee company. Copies of statements of the persons relating to share applicants, namely, Shri Perminder Singh, Shri Raghuvir Singh, Shri Sanjay Gupta, Shri Mukesh Kumar, Shri Sonu Sharma, Shri Pankaj Khaitan, Shri Vinod Kumar Aggarwal, which were recorded by Addl. Director of IT, Investigation Wing-I, New Delhi were also given and it was brought to the notice of directors of the company and counsel of the assessee company that those persons have reiterated in their statements that they were not doing any genuine business/investment, but were giving accommodation entries after taking equivalent cash from the parties which were routed through the bank accounts maintained by them by giving cheques and the AO asked the assessee to produce those parties with their creditworthiness to establish its claim. 6. Stating the history of investigation, learned AO has observed that ....
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....-operative Bank and Syndicate Bank, etc. The list of different companies utilized by the group for operation of bank accounts is : * Vivek Cyber Tech (P) Ltd. * Blossom Advertising (P) Ltd. * Atalantic Vision (P) Ltd. * N.S.M. Securities (P) Ltd. 2. The next group called Khemka Group is managed by Shri Sanjay Gupta, Shri Raghubir Singh and Shri Parminder Singh. This group used the following companies : -Tulip Engineering (P) Ltd., Saar Enterprises (P) Ltd., -Savitri Electricals (P) Ltd., FMEC Tours & Travels (P) Ltd., -Kylsans Finance (P) Ltd., Gupta Impex (P) Ltd. and -Impulsive Financial Services (P) Ltd. 3. The next group is managed by Govind Ram Saini under the name of M/s KVF Securities (P) Ltd. This group has accounts with the Syndicate Bank, Punjabi Bagh." 8. It may be mentioned that statement of Shri Pankaj Khaitan was recorded on 27th Nov., 2003 and according to statement, he was proprietor of various concerns, namely, Shree Apparles, Shree Beecan, Khetan & Co., Honey Trading Company and number of bank accounts were opened by him for giving entries on a commission of 0.30 to 0.50 per cent. These entries were in the nature of turnover and ca....
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....03-04 in which such capital was raised. It was observed that the assessee did not even produce any of the so-called directors or principal officers of the share applicants/concerns for the purpose of verification or cross-examination. In these circumstances, to verify the facts of the case, the AO examined Shri Amit Gupta after summoning him and on his examination the AO has summarized his statement as under : 11. The AO again recorded the statement of Shri Amit Gupta on 22nd Oct., 2007 partly and the same was concluded on 2nd Nov., 2007 and the facts emerging from the statement have been stated by the AO as under : ' "That he was appointed independent director on 14th April, 2004. ' He recognized and affirmed his statement given on oath on 10th Aug., 2004 and accepted that it was under his signature. He nowhere claimed that any pressure or threat etc. was used against him to give that statement. ' He agreed with the statement given on 10th Aug., 2006 upto the answer to the question 12. Regarding answer to question No. 13, it was stated that he believed the version of the officer present that the share capital raised by the company was from dummy concerns pr....
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....owards share capital and Rs. 142.50 towards share premium. The balance was to be paid as and when called by the company. It was also stated by him that the applicants did not pay the balance share capital call money and balance towards share premium account even after repeatedly sending of demand notices and the amount was forfeited. ' He was shown the statement of Shri Amit Gupta and was offered to give his comments on the same in response to which he stood by the reply of the company filed on 22nd Oct., 2007. ' He was shown the statements of Shri Amit Gupta recorded during the course of assessment proceedings on 22nd Oct., 2007 and on 2nd Nov., 2007 wherein it had been admitted by Shri Amit Gupta that he had the authority to surrender the amount in the capacity of director. Further that fact is that he had signed and given cheque of Rs. 1,76,40,000 towards the payment of cheques. The company also paid tax of Rs. 25,00,000 on 21st Aug., 2006. To this Shri Saurabh Aggarwal had no answer or justification except stating that Shri Amit Gupta was not a director in the company during the period the share capital was issued, he perhaps was not aware of the full facts. La....
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....ned in the office of the RoC, Ministry of Corporate Affairs, Government of India, which, according to the AO, was not a conclusive proof in the light of the pre-planned and deliberate system in vogue employed to defraud the Revenue in providing the accommodation entries in view of the modus operandi adopted by those persons. The contention of the assessee company that the shareholder companies existed at the given addresses with proper books of account since the accounts of those companies have been properly audited as prescribed under the Indian Companies Act, 1956 and the status at the site of the RoC also showed that it was active, it is observed by the AO that this was also not a conclusive proof of genuineness of the transaction in view of the modus operandi adopted by the persons who were involved in the activity of providing accommodation entries. The AO also rejected the claim of the assessee that all the share applicants were being assessed to tax and were having PAN on the ground that it was a racket and these entities have obtained PAN to defraud the Revenue and to help the beneficiaries. Referring to the poor state of the persons who were handling the share applicant co....
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....thereon also amounting to Rs. 4,80,000 was added. Aggrieved, the assessee filed an appeal before the CIT(A). 15. Before the CIT(A), after narrating the facts it was submitted that the statements recorded by Investigation Wing and report of Investigation Wing could not be relied upon by the AO as the transactions of the assessee were not during that period as none of the so-called confessional statements records that transactions with the assessee in financial year 2002-03 were bogus or the assessee indulged in Hawala business. Nothing could be brought on record to controvert the authenticity or admissibility of the evidence obtained from RoC from where the certified audited balance sheets of the shareholder companies were obtained. The latest confirmations of the transactions were also produced which have remained uncontroverted from the AO. It was submitted that all the shareholder companies were existing at the given addresses with proper books of account since all the accounts of these companies were audited as prescribed under Indian Companies Act and status of all these companies was "active." They were regularly being assessed to income-tax and their PANs were also provide....
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....ssee to support its contention on the identity, creditworthiness and genuineness of the transaction which could not be controverted by the AO even during the prolonged assessment proceedings. The evidence produced by the assessee has been arbitrarily ignored and nothing was made available to the assessee to controvert the extensive explanation of the assessee. 19. So far as it relates to payment of Rs. 25 lacs as tax, it was contended that the same was under compelling circumstances as the assessee could not prevent deposit of the said cheque and on realizing that said Shri Amit Gupta who was non-working director not associated with the assessee in the year of investment, none of the cheques was got adjusted by the Revenue on account of tax payment. It was submitted that non-encashment of other issued and scheduled cheques itself is evident of the fact that retraction was made by the assessee. For forfeiture of share it was submitted that it did not happen during financial year 2002-03, therefore, no adverse inference could be drawn. It was submitted that forfeiture of share capital was necessitated due to business compulsions as in spite of repeated calls shareholders were not ....
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....were made from a common bank account given also could not be relevant because it is not possible to know how an investor would invest in a public issue. Then, the CIT(A) referred to the decision of Hon'ble Delhi High Court in the case of CIT vs. Divine Leasing & Finance Ltd. (2007) 207 CTR (Del) 38 to hold that if the relevant details of address or PAN, identity of the creditor/subscriber are furnished to the Department along with copies of shareholders register, share application form, share transfer register, etc. it would constitute acceptable proof or acceptable explanation of the assessee and the Department would not be justified in drawing an adverse inference only because the creditor/subscriber fails or neglects to respond to its notice. The onus would stand discharged if the creditor/subscriber denies or repudiates the transaction set up by the assessee nor should the AO take such repudiation at face value and construe it, without more, against the assessee. Taking note of the fact that some of the subscribers did not respond to the summons or were not available due to change of address, no adverse inference could be drawn by the Revenue and, then, learned CIT(A) refer....
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....ated 15 companies during the financial year 2002-03 relevant to asst. yr. 2003-04 and the same was duly accounted for and credited in the appellant's regular books of account as share capital. (ii) Shri Amit Gupta, on the basis of whose alleged statements the addition of Rs. 4.80 crores was made under s. 68 became the director of the company only on 14th April, 2004 subsequent to asst. yr. 2003-04 much after the period in which the share transactions were effected. This fact and position was duly admitted by Mr. Gupta in his sworn statement under s. 133A on 10th Aug., 2006 Q. Nos. 10-12 (pp. 22-23 of paper book), that he was not the working director of the company and all the stated share transactions were made before he joined the company as director. (iii) All the share subscribers are incorporated and registered with the concerned RoC, NCT (D&H) Delhi under the Indian Companies Act, 1956 and having been duly allotted registration numbers and company identification numbers (CIN). by the RoC, Ministry of Corporate Affairs, Government of India after having completed necessary formalities and their status shown 'active' which has indicated that these companies are ....
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....at page Nos. 83 to 107 of the paper book. 22. Considering the totality of the material facts and following the aforesaid various pronouncements/decisions on similar facts and circumstances, it can be held that the appellant has duly established the identity of the creditor subscribers, their creditworthiness and genuineness of the share transactions with documentary evidence as per law and as per provisions of s. 68 of the IT Act, 1961. Also, the appellant has duly explained and substantiated the nature and source of credits found credited in its books of account during the relevant financial year as per requirements of s. 68 of the Act. I therefore find the addition of Rs. 4.80 crores under s. 68 as unexplained income of the appellant is neither justified nor maintainable as per law and facts of the case. Accordingly the said addition is directed to be deleted." 22. In this manner, the CIT(A) has deleted the addition while upholding the validity of reassessment proceedings. The Department in its appeal is agitating the deletion of addition of share application money and commission thereon and the assessee in its cross-objection is agitating the order of the CIT(A) vide which....
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....itworthiness of the investor companies. He submitted that the AO in the assessment order has brought out all these facts elaborately and the learned CIT(A) has failed to appreciate those facts which are sufficient to prove that what was stated to be received by the assessee company as share application money was not in fact money belonging to the persons to whom such money was stated to be belonging. 24. He submitted that to better understand the case of the Revenue, it will be necessary to have a close look on the facts. The assessee company is alleging that it had issued 3,20,000 shares of Rs. 10 as face value on the premium of Rs. 190 per share. Thus, the premium which is stated to be charged is 19 times of the face value. Referring to the paper book filed by the assessee, wherein from pp. 1 to 16 copy of audited balance sheet and audit report for the year ending 31st March, 2003 is submitted, it was submitted by the learned Departmental Representative that the year under consideration was the first year of operation of the assessee company. The assessee company does not have any capital asset in the shape of land, building or machinery. During the year under consideration on....
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....er piercing the veil of the corporate entity in exceptional cases so as to take into consideration the economic reality behind the legal facade. He contended that the present case is very much a fit case where such veil has to be pierced as in the name of legal facade the assessee is showing his own money in the garb of share application money. 27. Referring to the decision of Hon'ble Supreme Court in the case of Kale Khan Mohammad Hanif vs. CIT (1963) 50 ITR 1(SC), the learned Departmental Representative submitted that the onus on the assessee has to be understood with reference to the facts of each case and proper inference drawn from those facts. 28. It was submitted that it has been held by Hon'ble Calcutta High Court in the case of CIT vs. United Commercial & Industrial Co. (P) Ltd. (1991) 187 ITR 596(Cal) that though the Department often acts on the confirmatory letters as evidence, the onus does not get discharged merely by such confirmatory letters. Thus he submitted that so-called confirmation filed by the assessee cannot be considered to be sufficient to discharge the onus. 29. He contended that simply because the amount is received by account payee chequ....
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....e from the IT Department, the learned Departmental Representative observed that it is a planned racket which uses PAN etc. to defraud the Revenue and help the beneficiaries. The persons involved were of very poor status earning few thousand rupees per month having virtually no assets and denied categorically that they had not (sic) entered into any genuine transactions. So as far as it relates to the plea of the assessee company that their bank accounts were produced in which no cash was deposited except a sum of Rs. 3,72,041, it has been observed by the AO that the statements of the persons running the entry business had clearly shown that various accounts were maintained to complete the chain of depositing the cash and the transactions were being routed through number of bank accounts related to the group members in order to give it a guise in which it may look genuine. 32. So far as it relates to the contention of the assessee that at no point of time the investor companies have admitted in any of their statements that they had issued cheques to the assessee company from their dummy enterprises by accepting cash from the assessee company and otherwise also there is no mention....
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....contended that the said fact was a most relevant factor which has been completely ignored by the learned CIT(A). He contended that though the statements recorded during the course of survey proceedings may not have much evidentiary value as compared to statement recorded during the search proceedings but it was an indicator of the fact that the claim of the assessee having received share application money from those 15 concerns was not an honest claim as the Department was having solid material against the said claim. Without discarding the said basis of the AO, the learned CIT(A) was wrong in arriving at a conclusion that no addition in the present case was called for. He submitted that unless facts are first ascertained, the law cannot be applied and learned CIT(A) without ascertaining the facts relying on certain decisions has deleted the addition. He contended that before deleting the addition on the basis of judicial pronouncement, it was necessary to establish the nature of the money shown to have been received by the assessee as share application money. In view of statements of those seven persons who were controlling the share applicant companies, the onus laid upon the ass....
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....is purpose he relied upon the following decisions : (i) Prakash Chand Nahta vs. CIT (2008) 218 CTR (MP) 367 : (2008) 4 DTR (MP) 8 : (2008) 170 Taxman 520 (MP); (ii) Ghaziabad Footwear (P) Ltd. vs. Dy. CIT (2005) 142 Taxman 18(Del)(Mag). 40. The learned Authorised Representative submitted that admission being a declaration may be good evidence but the same cannot be conclusive and a person who is making the admission would always be at liberty to withdraw the admission by proving that admission was either mistaken, untrue or under some misconception of facts and for this purpose, learned Authorised Representative relied on the following decisions : (i) Pullangode Rubber & Produce Co. Ltd. vs. State of Kerala & Anr. 1972 CTR (SC) 253 : (1973) 91 ITR 18 (SC); (ii) S. Arjan Singh vs. CWT (1988) 73 CTR (Del) 37 : (1989) 175 ITR 91 (Del); (iii) Krishan Lal Shiv Chand Rai vs. CIT (1973) 88 ITR 293 (P&H); (iv) R.P. Locks Co. vs. Dy. CIT (2000) 67 TTJ (Del) 588. 41. Learned Authorised Representative referred to the decision of Hon'ble Gujarat High Court in the case of Rohini Builders (supra), which is also approved by the Hon'ble Supreme Court reported at 254....
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....irmations obtained from all these shareholder companies are also placed at pp. 104 to 128 of the paper book. Similarly, it was pointed out that the evidence submitted by the assessee was enough to arrive at the conclusion that the assessee had in fact received share application money from those concerns and the learned CIT(A) has rightly deleted the addition after proper appreciation of the evidence submitted by the assessee which the AO had failed to appreciate. 44. On the cross-objection filed by the assessee it was submitted that reasons recorded by the AO are placed at p. 40 of the paper book which read as under : "A survey operation under s. 133A of the IT Act, 1961 was carried out by Investigation Wing, Unit V, Delhi in the case of M/s South East Impex (P) Ltd., A-2/27, WHS, Marble Market, Kirti Nagar, New Delhi-110015 on 10th Aug., 2006 and statement of the director of the company Shri Amit Gupta was recorded. Shri Amit Gupta admitted that the share application money and premium amounting to Rs. 24 lakhs and Rs. 456 lakh respectively received during financial year 2002-03 were routed through accommodation entries in the concern. He also offered the amount of Rs. 480 la....
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....ings is not correct, de hors the material and rather they are whimsical and totally contrary to the facts as are bearing out from records. The Authorised Representative has also cited plethora of decisions such as ITO vs. Lakhmani Mewal Das 1976 CTR (SC) 220: (1976) 103 ITR 437(SC)/United Electrical Co. (P) Ltd. vs. CIT (2002) 178 CTR (Del) 192: (2002) 258 ITR 317(Del)/Dy. CIT vs. GVS Investments (P) Ltd. (2005) 92 TTJ (Del) 706/Mogi Printing Works vs. ITO (2005) 97 TTJ (Jd) 573 to reinforce the contention that 'information must have direct nexus with reasons to believe and such information should be precise and certain inference drawn from certain facts which are assumed to exist and not supported by specific date cannot amount to in formation of reopening assessment'." He thus pleaded that initiation of reassessment proceedings in the present case is not valid and hence assessment should be struck down on that ground. 46. The learned Departmental Representative relying on the order of the learned CIT(A), wherein it has been held that reassessment proceedings were validly carried out, pleaded that the earlier assessment was framed under s. 143(1) and on the basis of ....
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.... not qualified by the pre-condition of faith and true disclosure of material facts by an assessee as contemplated in the pre-amended s. 147(a) and for justifying reassessment proceedings the learned CIT(A) relied on the following decisions : (i) Bawa Abhai Singh vs. Dy. CIT (2001) 168 CTR (Del) 521 : (2001) 117 Taxman 12 (Del); (ii) Rakesh Aggarwal vs. Asstt. CIT (1997) 142 CTR (Del) 272 : (1996) 87 Taxman 306 (Del); (iii) CIT vs. Bhanji Lavji (1971) 79 ITR 582(SC)/Parashuram Pottery Works Co. Ltd. vs. ITO 1977 CTR (SC) 32: (1977) 106 ITR 1(SC). 48. After hearing both the parties, we are of the opinion that the learned CIT(A) was justified in upholding the initiation of reassessment proceedings as the very basis of statement of director Shri Amit Gupta was the examination of seven persons who were organizing the affairs of the share applicant companies. Those statements were shown to Shri Amit Gupta and he offered the amount as income of the assessee company. He not only offered the said amount as income of the assessee company but also had given cheques to the Department to satisfy the income-tax liability arising from such offer. Later on, the said offer has been stat....
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....ompanies. Those companies were run only for the purpose of providing accommodation entries. Not only those persons have admitted that they were doing this activity for the purpose of earning commission, but they have also clearly stated what modus operandi they were adopting to give the entry the colour of share application money, etc. as for that purpose they are maintaining several bank accounts in the names of several persons who were only name lenders and signing the blank cheques and giving other documents for some small monthly remuneration. The statements of those persons were also confronted to the director of the assessee company who was also asked to produce those persons and the director of the assessee company by stating that those persons are telling blatant lie, therefore, in his opinion production of those parties was not required. Thus, to controvert those statements, which were confronted to the assessee, the assessee has denied to avail the opportunity to establish that what was stated by them was not true. It appears that learned CIT(A) without going into all these details so described by the AO in the assessment order has decided the issue in favour of the asses....
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....ention, which will depict that the facts of present case are peculiar, we may point out the following discrepancies in those documentary evidence to show that the conclusion which has been arrived at by the CIT(A) is not applicable to the facts of the present case. 51. The assessee company claims that it has received share application money amounting to Rs. 4,80,00,000 from 15 entities listed in para 3 of this order. It is claimed that 3,20,000 shares were privately placed to those 15 companies having face value of Rs. 10 at the premium of Rs. 190 per share. We have gone through the copy of audited balance sheet of the assessee company for the year under consideration which is placed at pp. 1 to 16 of the paper book. From the said audit report, we found that this is the first year of operation of the assessee company and it does not have any capital asset under the head "Current assets, loans and advances". The cumulative amount mentioned under the said head is Rs. 95,58,063.40 which includes amounts of Rs. 95,11,948, Rs. 8,53,88,802 and Rs. 6,79,313.40 in the names of inventories, sundry debtors and cash and bank balances respectively. Inventories represent the closing stock as....
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....Copies of those notices are placed at pp. 407 to 410 of the paper book and these notices represent the share applicants, namely, M/s Meerut Credits & Leasing (P) Ltd., M/s Bliss Credits (P) Ltd., M/s Vivek Cybertech (P) Ltd. and M/s Blossom Advertisers (P) Ltd. The amount received by the assessee from so-called share applicants is running in several lacs and represents substantial part (75 per cent) of the total amount of share face value and its premium. The remaining amount payable by them was only 25 per cent. So the stake involved of those parties was not a small amount. Suppose if the assessee company had any justification on which so-called hefty premium of Rs. 190 per share could be charged then how that situation had vanished in a very short time and none of the appellant was ready to pay the balance amount which was only 25 per cent. No prudent and genuine person will forego such substantial money without making any effort to recoup the same. The so-called notices issued by the advocates of the some of the share applicant companies cannot be relied upon unless proper verification is made in that regard. One more fact appears to be very strange that none of the share applic....
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....these three companies the address of the share applicant company is given. This fact has to be seen in the light of the fact that in the copy of bank statement relating to Kylsans Finance (P) Ltd., which is submitted at p. 183 of the paper book, the address shown is E-14/D, Vishnu Garden, whereas as per record of RoC, the address shown is C-63, Vishnu Garden and on confirmation no address has been given at all. The signatory to the confirmation and application for share application money, a copy of which is placed at p. 176 of the paper book, is said Shri Parminder Singh only who has accepted that he has been carrying on the activities of providing accommodation entries. The three companies regulated by said Shri Parminder Singh have cummulatively contributed an aggregated sum of Rs. 81,00,000 as share application money and share premium (Rs. 30 lacs Kylsans Finance Ltd. + 21 lacs Savitri Electricals Ltd. + 30 lacs Impulsive Financial Services Ltd.). 54. In the case of Tulip Engineering (P) Ltd. which is stated to have contributed an amount of Rs. 24 lacs in the name of share application and share premium, the copy of share application is filed at p. 188 of the paper book. The s....
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....ompany. 55. In the case of Pushpak Exports (P) Ltd. which is stated to have contributed an amount of Rs. 30 lacs to the assessee company being share application money and premium thereon copy of the share application is placed at p. 225 of the paper book. The application has been submitted by one Shri Amit Gupta, the address of the company is shown as 64, Saini Enclave, Vikas Marg Extension, Delhi which is also mentioned as registered office of that company in the confirmation and the copy of confirmation placed at p. 223 of the paper book. On the bank account the copy of which is placed at pp. 222 and 223 of the paper book, the address of the said company is mentioned as C-107, ABC Complex, 20, Veer Sarvarkar Block, Shakarpur, Delhi-110 092 and the same address is given in the company master details obtained by the assessee from the office of RoC, a copy of which is placed at p. 234 of the paper book. Thus, there is a difference of address of registered office as mentioned in the confirmation and share application form and as mentioned in the bank statement and record of RoC. It is also equally important to note down that the registered office which is stated on the confirmatio....
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....ress of this share applicant who has contributed a sum of Rs. 37,50,000 belongs to a person who is a man of no means. 57. It has been the contention of learned Authorised Representative that in the case of Meerut Gredits & Leasing (P) Ltd. the assessee has been able to obtain copy of audited account filed with the RoC and in that account the investment made by that company in the shares of assessee company has duly been shown. In that regard he invited our attention towards copy of audit report placed at pp. 118 to 127 of the paper book. We have carefully gone through the said balance sheet and annexed documents. The said company has authorized capital of Rs. 5 lakhs for the year ending 31st March, 2002 and only 40 equity shares of Rs. 100 face value were issued and subscribed. During the year under consideration 4,720 shares of Rs. 100 face value have been shown to be issued at the premium of Rs. 400 per share. In that company also there is complete absence of any material to suggest that whether there was any justification of charging so much premium. Profit is reported by the auditor at Rs. 1,460 against earlier year loss of Rs. 1,805. P&L a/c is not annexed. It is also not k....
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....view that the AO did not carry out any investigation or did not provide the assessee with the opportunity to cross-examine and to produce the persons in support of evidence filed by it, then, he was fully authorized to do so in the proceedings before him as per decision of Hon'ble Bombay High Court in the case of Smt. Prabhavati S. Shah vs. CIT (1998) 148 CTR (Bom) 192 : (1998) 231 ITR 1 (Bom) wherein their Lordships have observed as under : "Under sub-s. (4) of s. 250, the AAC is empowered to make such further inquiry as he thinks fit or direct the ITO to make further inquiry and to report the result of the same to him. Sub-s. (5) of s. 250 empowers the AAC to allow the appellant, at the hearing of the appeal, to go into any ground of appeal not specified in grounds of appeal, on his being satisfied that the omission of the ground from the form of appeal was not willful. It is clear from the above provisions that the powers of the AAC are much wider than the powers of an ordinary Court of appeal. The scope of his powers is co-terminous with that of the ITO. He can do what the ITO can do. He can also direct the ITO to do what he failed to do. The power conferred on the AAC u....
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.... maintaining several bank accounts in the names of various individuals in various banks where the cash received from the customers was deposited from where the money was transferred to the main accounts to give the said money the colour of share application money or in whatever mode it was required by the customer. 63. It is also important to note that the assessee has forfeited the so-called share application money and share premium and the entire money has come to the coffers of the assessee without quid pro quo. The evidence submitted by the assessee to show that in fact the share applicant companies had objected to the action of the assessee for forfeiture of share application money is also to be examined as no prudent man will easily surrender its right towards huge money belonging to it in an easy manner as substantial part of the share price had already been tendered by them and only small portion of the total consideration was left to be paid. It has already been mentioned that the issue of charging share premium is not substantiated by the financial health of the assessee company and no material has been brought on record by the assessee company to show that on what fac....