TaxTMI 
TaxTMI 
TaxTMI 
2017 (10) TMI 1208
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....erred in confirming the addition made by the Assessing Officer of share application money/share capital of Rs. 20,00,000/- as alleged unexplained income u/s 68 of the Income Tax Act, 1961. The addition made by the Assessing Officer is not sustainable and Commissioner of Income Tax (Appeals) should have deleted the same. 3. On the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeal) erred in confirming the addition of Rs. 40,000/- made by the Assessing Officer as alleged commission paid. The addition made by the Assessing Officer is not sustainable and Commissioner of Income Tax (Appeal) should have deleted the same. 4. The alleged reasons given by Assessing Officer and CIT (A) for making/confirming the additions of Rs. 20,00,000/- and Rs. 40,000/- are erroneous, both on facts and in law and, therefore, the additions of Rs. 20,00,000/- and Rs. 40,000/- made by the Assessing Officer and confirmed by CIT (A) are liable to be deleted. The appellant craves leave to add, alter, modify or delete one or more ground of appeal before or at the time of hearing of appeal. The aforesaid grounds of appeal are without prejudice of each other." 2. Briefl....
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.... that the incomes described above have escaped assessment and the case is fit for issuing. Notice u/s 148 of Income Tax Act, 1961." Assessment was completed by making addition of Rs. 20,40,000/- being the unexplained credits in the books of the assessee and commission at 2% thereon. In appeal assessee challenged the reopening of the assessment and also the additions. Ld. Commissioner of Income Tax held that the AO followed the procedure by issuing a notice u/s 148 of the Act, as such, there is nothing to vitiate the reopening of the proceedings. In so far as the additions are concerned, Ld. CIT (A) held that in reality all the creditors are only paper companies and the creditworthiness and genuineness of the transactions are not proved as all the three attributes required to be proved by the assessee as per the decision in CIT vs. Lovely Exports P. Ltd. (2008) 216 ITR 195 (SC), CIT vs. Sophia Finance Ltd. (1994) 205 ITR 98. Holding so Ld. CIT (A) confirmed the additions made by the AO. Hence, the assessee is in appeal now before us. 3. It is the argument of the Ld. AR that the reasons recorded by the AO in this case cannot be said to be reasons to believe that any income of the a....
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....see. Whether the creditors or the entry providers should be taxed separately leaving the entry taker, i.e. assessee is free from liability or not is a different issue altogether. But the circumstancial evidences and the design of the entry operator gives the benefit to the assessee more than anyone else. The assessee has introduced unaccounted money paying some commission to the entry operator under the grab of share application money taking advantage of some judicial decisions. In the era of high level of professionalism with degredation of ethics, circumstancial evidences have found due importance even in criminal proceedings and hence in the Income Tax proceedings, at the appellate stage it is difficult to do away with it. All the documents filed by the assessee only points towards identity of the creditors. He, therefore, prayed to dismiss the appeal. 6. We have carefully gone through the record, the documents and decisions relied upon by either side. In so far as the challenge of the assessee as to the legality and validity of the reopening is concerned, assessee is placing reliance on the decisions reported in G&G Pharma India Ltd. (Del. High Court) (supra), N.C. Cables Ltd.....
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....ction:- Entry Operator Beneficiary's Bank Amount Rs. Instrument No. by which entry taken and date Entry giving bank Account no. from which entry was given Mahesh Garg - 800480 30.11.2000 SBP-DG 4507 Performance Trading & Inv. - 700420 13.11.2000 SBP-DG 4281 Chintpurni Credits - 900540 22.11.2000 SBP-DG 50058 Subhash Chander Singhal - 500300 23.11.2000 SBP-DG 4544 Kuldeep Textiles P. ltd. - 500500 21546 24.03.2001 Innovative Wazipur 239 Sweta Stone P. Ltd. - 500500 23510 24.03.2001 -do- 1200259- CA Division Trading P. Ltd. - 500500 33612 24.3.2001 -do- 225 During the course of the proceedings u/s 148 for the same assessment year, which Was dropped on the technical ground that proper sanction was not obtained, it was noticed that there are other receipts also from the identified entry operators. Information about those entries was not available in the data received from the Investigation Wing. Nevertheless they also fall within the ambit of section 68 of the Act. The assessee has received unexplained sums from the entry operators as per the abov....
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....ind by the AO. The Hon'ble Court held that it was indeed a "borrowed satisfaction" and reopening was not justified. 9. Now coming to the second limb of challenge made by the assessee to the effect that the reassessment proceedings initiated are bad in as much as the approval/sanction by Addl. CIT is without recording satisfaction and the same is not in accordance with the requirements of Section 151 of the Act, Ld. AR brought it to our notice that vide sl. no. 11 the Addl. CIT, Range 6, New Delhi recorded that "Yes, I am satisfied". On this aspect Ld. AR placed reliance on the decisions reported in Chhugamal Rajpal vs. S.P. Chaliha (1971) 79 ITR 602 (SC), Central India Electric Supply Co. Ltd. vs. ITO (2011) 10 taxmann.com 169 (Delhi), ITO vs. N.C. Cables Ltd. (Delhi ITAT) - Judgment dated 22.10.2014, ITO vs. M.B. Jewellers (P) Ltd. (Delhi ITAT) judgment dated 14.11.2014, Amar Lal Bajaj vs. ACIT (2013) 37 Taxmann.com 7 (Mum) (Trib), CIT vs. M/s S. Goyanka Lime and Chemicals Ltd. 2015 (5) TMI 217 and Pr. Commissioner of Income Tax vs. N.C. Cables Ltd. (ITA No. 335/2015), for the principle that where the authority to grant/sanction merely recorded "Yes, I am satisfied", such an appr....