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2016 (5) TMI 854
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....9 & 2009-10 are directed against the separate orders each dated 25.03.2013 of the ld. CIT(A)- XXXI, New Delhi. 3. The issues involved in these appeal are common and the appeals were heard together so these are being disposed off by this consolidated order for the sake of convenience and brevity. 4. First we will deal with the Cross appeals for the assessment year 2005-06. In the assessee's appeal following grounds have been raised: "1. The learned CIT(A) erred in law and on facts in confirming the addition of Rs. 23,00,000/- for the amounts received against allotment of the share capital during the relevant period and without considering the documentary evidences placed on record. Thus the addition must be deleted. 2. The appellant craves the leave to add, substitute, modify, delete or amend all or any ground of appeal either before or at the time of hearing." 5. In the departmental appeal, the only effective ground raised reads as under: "On the facts and in the circumstances of the case, the ld. CIT(A) has erred in deleting the addition of Rs. 85,00,000/- out of total addition of Rs. 1,08,00,000/- made by the Assessing Officer u/s 68 of the IT Act, 1961 on accou....
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....J 55 (Mum-Trib) • Abhishek Industries Ltd. Vs CIT (2007) 290 ITR 655 (P&H) • Dedore Tools Pvt. Ltd. Vs CIT (1999) 238 ITR 268 (Del) • DIT(Exemption) Vs Arunodya (2006) 286 ITR 383 (Del) • Satish Kumar Keshari Vs ITO (2007) 106 TTJ 980 (ITAT-Pat.) • ITO Vs Gurinder Kaur (2006) 102 ITD 189 (ITATDel) • CIT Vs J.K. Cotton Spinning & Weaving Mills Co. Ltd. (2005) 197 CTR 73 (All.) • DCIT Vs Maruti Udyog Ltd. (2006) 99 ITD 666 (Del-Trib) • CIT Vs Ashok Leyland Ltd. (2001) 25) ITR 452 (Mad.) • Orissa Cement Ltd. Vs CIT (2001) 117 Taxman 625/250 ITR 856 (Del) • Eicher Motors Ltd. Vs DCIT (2004) 82 TTJ (Ind.) 61 9. During the course of hearing the ld. Counsel for the assessee reiterated the contents of the aforesaid applications and requested to admit the additional grounds. 10. In his rival submissions the ld. DR objected for the admission of the additional grounds and submitted that these grounds were not raised before the ld. CIT(A), therefore, these should not be admitted. 11. We have considered the submissions of both the parties and perused the mat....
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.... of cases on 31.07.2008 and certain documents belonging to the assessee were also seized. The AO thereafter issued a notice u/s 153C of the Act on 18.12.2009, in response the assessee furnished the return of income declaring an income of Rs. 1,080/- on 13.01.2010. 13. During the course of assessment proceedings, the AO noticed that the assessee had allotted 2,16,000 shares of Rs. 10/- each at a premium of Rs. 40/- per shares to the following companies: Sl. No. Name of the Party No. of Shares Amount Received in (Rs.) 1. M/s Reenu Fincap P. Ltd 20000 10,00,000/- 2. M/s Satellite Marcon P. Ltd. 26000 13,00,000/- 3. M/s GFC Finance Ltd. 100000 50,00,000/- 4. M/s Diplomat International P. Ltd. 30000 15,00,000/- 5. M/s Enjoy Commercial P. Ltd. 20000 10,00,000/- 6. M/s Mahanivesh India P. Ltd. 20000 10,00,000/- 1,08,00,000/- The AO also noticed that during the search operation at the residence 23/5, Shakti Nagar, Delhi of Sh. Rajender Aggarwal, Director of the assessee company, documents relating to buy back of shares of M/s Kiwi Food India Pvt. Ltd. a....
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....tail, the AO held that all the above companies did not have any creditworthiness of giving such huge amounts to the assessee company, thus, the creditworthiness of those persons was not established and that the genuineness of the transactions with abovementioned persons within the meaning of Section 68 of the Act had not been proved. He, therefore, treated the amount of Rs. 1,08,00,000/- received from those companies as unexplained cash credits and made the addition in the hands of the assessee. 16. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted as under: "a. It is an undisputed fact that the amounts received from all the above allottees were against the share capital allotted to them. b. In terms of the provisions of the income-tax Act as well as of the Companies Act, 1956, no company is under an obligation, rather cannot ask the shareholder as to wherefrom he got the money to invest nor the shareholder is obliged to give such information to the company. There is no provision under any of the two above Acts to ask for the balance sheets of the shareholders. However, the details regarding those investors as per list attached were very well ....
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....steem Towers (P) Ltd. (2006) 99 TTJ (Del) 472 • Uma Polymers (P) Ltd. Vs DCIT (2006) 100 1TD 1 (Jodh.) (TM) • Asstt. CIT Vs Anima Investments Ltd. (2000) 73 ITD 125 (Del) • United Cores (P) Ltd. Vs ACIT (1998) 62 TTJ (Delhi) 83 • Dy. CIT Vs Sahara India Financial Corporation Ltd. (2003) 81 TTJ (Lucknow) 389 • Swagat Synthetics (P) Ltd. Vs ITO (2002) 77 TTJ (Jodh.) 987 • Shiv Snakti Engg. Co. (P) Ltd. Vs DCIT (1999) 106 Taxman 224 (Delhi) • CIT Vs. Makhni & Tyagi Pvt. Ltd. (2004) 187 CTR (Del.) 550 • Mod Creations (P) Ltd. Vs. ITO [2011] 13 taxmann.com 114 (Delhi) • CIT Vs Orissa Corporation Ltd (1986) 159 ITR 78 (SC) 18. It was contended that if the assessee had furnished the evidences regarding the share capital allotted to the share applicants and the department alleges otherwise then onus lies on the department to prove the same. The reliance was placed on the following case laws: • CIT Vs Bedi & Co. Pvt. Ltd. (1998) 230 ITR 580 (SC) • CIT Vs Daulat Ram Rawatmull (1972) 87 ITR 349 (SC) • Rajabali Nazarali & Sons Vs CIT (19....
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....observing in para 6 of the impugned order as under: "ii) The appellant has filed information as mentioned herein to support its claim of the share capital investment as required u/s 68 of the Act. The amounts were received by the appellant undisputedly through the account payee cheques. It is also not the case of the assessing officer that the search in the year 2008 after the above investment in share capital at the premises of the appellant yielded any evidence to show that the appellant gave any cash or allowed any other benefit to the said investors or anybody else against the said investments. Nothing is apparent from assessment order that any adverse material exists in the assessment folder for the relevant period. It is not the case where any person claimed before the revenue that the impugned share capital is nothing but bogus introduction by way of accommodation entries. In the impugned appeal the issue is squarely covered by the earlier judgments in the case of Lovely Exports Pvt. Ltd., Divine Leasing and Finance Ltd. (supra) etc cited in the above preceding paragraphs as none of the reasons to give ruling in favour of the department by the Court exists here. Further o....
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....to make the impugned investments in the relevant period. The genuineness of the transaction has also not been found contrary to the audited books of account by the assessing officer. iv) In absence of any material contrary to the information on record, the action of the assessing officer based on surmises and conjecture while making addition u/s 68 of the Act in respect of share capital received cannot be sustained. Thus the addition of Rs. 85,00,000/- is deleted and for the balance amount of Rs. 23,00,000/- is confirmed." 21. Now the department is in appeal against the relief allowed to the assessee and against the sustenance of addition assessee is in appeal. At the first instance, the ld. Counsel for the assessee argued on the legal issues raised vide the additional grounds and submitted that no incriminating material was found during the course of search and Sh. Rajender Aggarwal, Director of the company admitted that shares allotted to different companies were bought by him and not by the company. He also surrendered the income on account of purchase of shares, therefore, the addition sustained by the ld. CIT(A) was not justified. He also submitted that the assessment fr....
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....raised before the ld. CIT(A), so he has no occasion to deal with this ground. It is also an admitted fact that the judgment of the Hon'ble Jurisdictional High Court in the case of CIT Vs Kabul Chawla (supra) relied by the ld. Counsel for the assessee was also not available to the ld. CIT(A) while deciding the appeal of the assessee. In the present case, the ld. CIT(A) observed that nothing was apparent from the assessment order that any adverse material existed in the assessment folder for the relevant period, on the other hand, claim of the ld. DR is that the additions were made by the AO on the basis of the documents found during the search. Thus, there is contradiction in the facts. On merit also the ld. CIT(A) without bringing on record the figures & statistics came to the conclusion that the companies had enough resources to make the impugned investment. Therefore, by keeping in view the aforesaid facts, we are of the opinion that the issues under consideration require a fresh adjudication. As the principles of natural justice demand that opportunity is to be given to both the parties, we, therefore, deem it appropriate to set aside these issues raised vide additional grounds ....