TaxTMI 
TaxTMI 
2017 (9) TMI 367
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of jurisdiction by the Assessing Officer to initiate proceedings u/s 153A. The Revenue has filed cross appeals challenging the orders of the CIT(A) deleting certain additions on merits. 4. Firstly, we are taking up the legal issue raised in the appeals of the assessee, challenging the jurisdiction of the AO in issuing notices u/s 153A and the consequential framing of assessments. 5. We have heard the parties and perused the relevant material on record. Similar issue was raised by the assessee in its appeal for the assessment year 2004-05 also. Such appeal also came to be heard simultaneously with the instant appeals. Both the sides have chosen not to make any separate arguments but adopted their respective arguments made on this issue for the said earlier assessment year 2004-05. We have passed a separate order for the A.Y. 2004-05 (ITA Nos.6759 & 6662/Del/2013), holding that the Assessing Officer wrongly assumed jurisdiction u/s 153A of the Act without there being any initiation of search on the assessee u/s 132 of the Act. Resultantly, all the proceedings flowing from such invalid notice u/s 153A, including the passing of the assessment order, have been quashed. As the fac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as filed to prove that M/s Saphire Commercial Pvt. Ltd. had income/capital to make investment during the financial year. On going through the assessee's balance sheet, it was noticed that the money received as share capital was passed on to other unlisted and non-descript companies. The AO found that the assessee was facilitating introduction of unaccounted money through its books of account. The modus operandi was noted, being, an entry operator operating a number of accounts in the same bank/branch or in different branches in the name of companies/firms and individuals. He found that there was an elaborate network of transactions involved in the entry racket. These accounts, in the opinion of the Assessing Officer, were used for routing the money for providing accommodation entries. Coming to the facts of the case, the Assessing Officer observed that no reasonable person would invest an amount equal to 'twice its annual earning in an unknown company without getting any benefit in return.' Taking into consideration the human probabilities and the judgments of the Hon'ble Supreme Court in CIT vs. Durga Prasad More (1971) 82 ITR 540 (SC) and Sumati Dayal vs. CIT (1995) 214 ITR 8....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Department is that the ld. first appellate authority could not have restored the addition for a fresh adjudication. 14. We have heard the rival submissions and perused the relevant material on record. We agree in principle with the ld. DR that the ld. CIT(A) cannot send the matter back to the AO for a fresh decision. Section 251 lists the powers of the CIT(A) in disposing an appeal. Sub-section (1)(a) of sec. 251 provides that the Commissioner (Appeals), in an appeal against an order of assessment, may confirm, reduce, enhance or annul the assessment. Thus, the power of restoration to the AO is no more available to the ld. CIT(A). He has to take a decision at his own end. In that view of the matter, the decision of the ld. CIT(A) in restoring the issue to the AO for a fresh decision cannot be upheld. 15. It is noticed from the assessment order for this year as well as the earlier years that the assessee is showing to have received share capital with a huge share premium and simultaneously passing it on to other unlisted companies. The ld. DR submitted that such total amount allegedly received by the assessee and then passed on to other non-descript companies during th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ration to the AO for a fresh decision as per law. 16. In the result, both the appeals are allowed for statistical purposes. Assessment Year 2010-11 17. The only issue raised by the Revenue in its appeal is against the deletion of addition of Rs. 40 lac made by the Assessing Officer on account of the alleged receipt of unexplained share capital along with share premium. The facts of the case are that, like earlier years, the assessee showed to have received share capital (including share premium) of Rs. 20 lac from M/s Wizard International Ltd. and Rs. 20 lac from M/s CRM Systems Pvt. Ltd.). On being called upon to furnish the details of the amount received and evidence in support of identity and credit worthiness of the lender and also the genuineness of the transactions, the assessee simply furnished a reply which has been summarized by the Assessing Officer by way of a table on page 5 of the assessment order, reproduced below:- S.No. Name Assessment Year Income returned 1 M/s Wizard International Ltd. 2010-11 Not submitted 2 M/s CRM Systems Pvt. Ltd. 2010-11 Rs.36,192/- 18. On the basis of the details fi led by the asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o enclosed which form part of the departmental records or public documents.' We are unable to find any logic in the impugned order deleting the addition on the ground that no independent enquiry was conducted by the Assessing Officer, when the ld. CIT(A) has himself recorded that certain fresh documents were also filed before him which were not there before the AO. 20. We have noticed above that the assessee was showing to have received share capital with a huge share premium and simultaneously passing it on to other unlisted companies. This practice is not confined only to the year under consideration, but can be seen in all the years argued before us starting from the A.Y. 2004-05. The ld. CIT(A) was swayed by certain documents filed by the assessee and deleted the addition. At the cost of repetition, we state that escape from section 68 can be made not only by showing the identity but also by simultaneously proving the capacity of the depositor and also the genuineness of transaction. All the three ingredients need to be simultaneously satisfied. Merely because a proper paper work has been done, it will not discharge the onus on the assessee under section 68 from further esta....