TaxTMI 
TaxTMI 
2018 (7) TMI 1555
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....ng addition of Rs. 1,23,50,000/- on substantive basis in the total income of the assessee in spite of the fact that the addition has already been made in the hands of the ultimate beneficiary. 3. That the impugned appellate order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence. 4. That the Appellant craves leave to add/alter any /all grounds of appeal before or at the time of hearing of the Appeal. ITA No. 6072/DEL/2017 1. "That on facts and circumstances of the case, the order passed by the Ld. CIT (Appeal) is bad both in the eyes of law and on facts. 2. That the Ld. CIT (Appeal) has erred on facts and in law by considering the share application money/ share premium of Rs. 10,39,00,000/- as unexplained cash credit u/s.68 of the Income Tax Act, 1961. 3. That the Ld. CIT (Appeal) has erred on facts and in law by making addition of Rs. 10,39,00,000/- on substantive basis in the total income of the assessee in spite of the fact that the addition has already been made in the hands of the ultimate beneficiary. 4. That the impugned appellate order is arbitrary, illegal, bad....
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....kland Hotel P Ltd. and Rockland Hospitals (P) Ltd., it cannot be again added substantially in the hands of the assessee. In view of this, the Assessing Officer concluded that the amount of Rs. 1,23,50,000/- was being taxed in the hands of the assessee on protective basis and would get converted to substantive addition if same is not confirmed / upheld in the hands of ultimate beneficiary. Though the aforesaid addition was made by the Assessing Officer on protective basis but while computing the total income, the Assessing Officer did not include this amount in the total income of the assessee. The Assessing Officer added the commission @ 2% on the total income of Rs. 1,23,50,000, amounting to Rs. 2,47,000/- holding that the assessee has earned commission by providing accommodation entries to other entities. The Assessing Officer further observed that the total amount of Rs. 1,23,50,000/- received by assessee from different entities includes share application money @ 10/- per share and premium of Rs. 40/- per share. It was further observed by the Assessing Officer that the provisions of Section 56(2)(viib) of the Act are attracted in the case of assessee as it has received considera....
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.... Rs. 90,57,490/- u/s 56(vii)(b) of the Act on the ground that assessee received premium on its shares without having net worth and hence the premium is separately taxable in the hands of the assessee u/s 56(vii)(b) of the Act. The Assessing Officer also made an addition of Rs. 2,47,000/- on account of notional commission received. The Ld. AR submitted that before the CIT (A), the assessee challenged the order of the Assessing Officer. The CIT(A) held that additions were wrongly made on protective basis they ought to have been made on substantive basis and converted the entire addition on substantive basis. 8. The Ld. AR further submitted that the CIT (A) while converting protective addition into substantive additions has failed to appreciate that in the case of Rockland Hospital, the Assessing Officer has categorically held that money which ultimately comes from the present assessee and other four persons was the Money of Rockland and not of the investors who had invested in the shares of present assessee. However, the CIT (A) held that provisions of section 56(vii)(b) are not applicable and hence he deleted the addition of premium against which the revenue has not filed any app....
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....ifferent assessees vis-a-vis same transaction. The Ld. AR relied upon the decision of Crain Uk 359 ITR 268(Del). 11. The Ld. AR submitted that it is an admitted fact that M/s Rockland Hospital has admitted that its own undisclosed income had been routed through these companies, and nothing has been brought on record by the revenue to say that the money received by the assessee is somewhat different and the money which Rock Land owns is different. The Ld. AR submitted that Hon'ble Apex Court in the case of Sumati Dayal vs. CIT 214 ITR 801 very categorically held that while taxing an income under section 68 revenue cannot act unreasonably. The Ld. AR submitted that Hon'ble Allahabad High Court in the case of CIT Vs Abdul Hasib (ITA No. 213/2007 order dated 05.09.2014) after taking note of Hon'ble Apex Court in Sumati Dayal (Supra) held that total impact of an entry is to be seen while making an addition under section 68 of the Act, Hon'ble High Court has held that credit includes debits and hence benefit of debit entries should not be denied. The Ld. AR submitted that so far as the notional addition of commission of Rs. 2,47,000 is considered it is submitted that in the case of Ro....
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....0 u/s 68 on the ground that this amount had already been added substantively in the hands of beneficiary i.e. Rockland Hotels P Ltd. and Rockland Hospitals Ltd. The Assessing Officer also made an addition of Rs. 6,28,17,940 u/s 56(2)(viib) on account of excess share premium received. The CIT(A), after giving due opportunity to the assessee, held that entire share capital and share premium received of Rs. 10,39,00,000 was to be taxed as cash credit in the hands of the assessee on a substantive basis since it had failed to prove identity, genuineness of the transaction as well as creditworthiness. The Ld. DR submitted that the CIT(A) has relied upon proviso to section 68 introduced w.e.f 01.04.2013. The Ld. DR further submitted that during the course of assessment, vide notesheet dated 2.08.2016, the assessee was requested to produce the share applicants along with their books of account and bank statements. No details were furnished. It was simply stated that proceedings/inquiries were underway in Rockland Group where the money had been invested. The CIT(A) stated that notices u/s 133(6) were issued to 22 persons in the case of Rockland Hotels P Ltd. and to 27 persons in the case of....
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....13] 214 Taxman 408 (Delhi)/(2013) 263 CTR 456 (Delhi) 11. CIT Vs Empire Bulltech (P.) Ltd (366 ITR 110) 12. CIT Vs Focus Exports (P.) Ltd (51 taxmann.com 46 (Delhi)/[2015] 228 Taxman 88) 13. PCIT Vs Bikram Singh I1TA No.55/20171 (Delhi) 15. We have heard both the parties and perused all the records. Ground No. 1 and 5 are general in nature in both the appeals hence dismissed. As regards to Ground No. 2 to 4, the same are relating to the protective addition made in the hands of the assessee. The amount received was received on behalf of M/s Rock Land Group and has been invested in shares of Rock Land Hospital and in fact the entity M/s Rock Land Hospital (RLH) is the ultimate beneficiary of this amount. This fact was admitted by the Assessing Officer in the Assessment Order itself, therefore, he made protective additions. The issue to prove identity, genuineness of the transaction as well as creditworthiness does not arise in the present case as both the assessees established that the amount was that of M/s Rock Land Hospital which was admitted by the said group in their assessment proceedings on which substantive addition was made and taxes has been pa....