TaxTMI 
TaxTMI 
2018 (10) TMI 1633
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....ings and consequent reassessment framed under section 147 r.w.s. 143(3) of the Act. For this the Revenue has raised two grounds, which are on the issue of jurisdiction as well as on merits and the grounds are as under: - "1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in quashing the proceedings u/s 148 of the Income-tax Act; 1961 without appreciating that the information that M/s Alka Diamond Industries P. Ltd. was providing accommodation entries; was revealed during the course of search in the case of Praveen Kumar Jain and this particular information was not disclosed by the assessee either in the return of income or during the course of assessment proceedings under section 143(3) of the Income-tax Act, 1961 and the CIT(A) did not appreciate the ratio of the decision of Hon'ble Supreme Court in the case of Yogendra Kumar Gupta 51 taxmann.com 383 (SC)" 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 1 Cr. Being unexplained share application money without appreciating that the assessee as well as M/s Alka Diamond Industries P. Ltd. failed to establish the gen....
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....e material and evidences during the original assessment proceeding u/s. 143(3) completed on 28.10.2009. It is very evident from the original assessment that the then Ld. Assessing Officer has mentioned that all the details required by notice u/s.142(1) was submitted by the A.R. of the Appellant. The Ld. Assessing Officer has also admitted the fact that the Assessee was engaged in the business of investment, loans & advances. The company invests in shares and securities for a long-term perspective and gives loans & advances for earning income. Thus, after completion of regular assessment proceeding on 28.10.2009, the present Assessing Officer had not got any specific information that MIs. Alka Diamond Industries Ltd. is a benami concern or a shell company. Further, it is pertinent to mention that the Ld. Assessing Officer has only referred the general statement of Mr. Praveen Jain given under section 132(4) without revealing that the investor company is not existing company. It is to be also noted that in response to the notice uis.133(6), MIs. Alka Diamond Industries Ltd. had furnished all the evidences by letter dated 30.01.2015 submitting the complete set of Income-tax return of ....
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..... 6035/Mum/2011 for A.Y. 2008-09), wherein addition were made based on the statement of the said Shri Pravin Kumar Jam, the Hon'ble ITAT, Mumbai deleted the addition making the following observation: "It is also a fact that while examining the sales made' by the assessee company, the AO issued notice u/s 133(6) of the Act to the parties who con finned the transaction made with the assessee. Admittedly, no incriminating material from any of the parties having dealings with the assessee company were either brought on record or were available to substantiate the allegation of providing accommodation bills, only because one Shri Pratnn Kumar Jain in his statement has accepted of providing accommodation bills cannot ipso facto make the assessee company also to be engaged in the same kind of the business." The above view has further been followed by the Hon'ble ITAT, Mumbai in the following cases wherein additions were made again based on the statement of the said Shri Pravin Kumar Jam: (i) DCIT CC-1, Mumbai vs Easy Mercantile Pvt. Ltd., (ITa No. 921/Mum/2013). (ii) DCIT CC-1, Mumbai vs. M/s Sumukh Commercial Pvt. Ltd (ITA No. 922/Mum/2013)....
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.... Order dated 30.06.2016, the escapement assessment made by the Assessing Officer is disapproved and addition of Rs. 1 Crore made u/s.68 is deleted." Aggrieved, Revenue came in appeal before Tribunal. 5. We have heard the rival contentions and gone through the facts and circumstances of the case. We find from the facts of the case that the assessee filed original return of income on 17.10.2007 and the same was assessed under section 143(3) vide order dated 28.11.2009. Subsequently, a search was conducted on the Praven Jain Group of cases on 01.10.2013, in which Shri Praven Jain admitted of giving accommodation entries of share application money to various parties. Alka Industries Ltd. was one of the group companies. We find from the facts of the case that the completed assessment was reopened after expiry of 4 years from the end of the relevant assessment year. From the reasons recorded, which are reproduced in Para 2 of the assessment order. Nowhere clarifies that what was the failure of the assessee not to disclose this transaction of 1 crore receiving share application money from Alka Diamond Industries Ltd. It is a fact that the assessee has disclosed the transaction in th....
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....ties, their share application forms, allotment letters and share certificates, so also the books of account. The balance sheet and profit and loss account of these persons discloses that these persons had sufficient funds in their accounts for investing in the shares of the Assessee. In view of these voluminous documentary evidence, only because those persons had not appeared before the Assessing Officer would not negate the case of the Assessee. The judgment in case of Gagandeep Infrastructure (P.) Ltd. (supra) would be applicable in the facts and circumstances of the present case." 7. Respectfully following the ratio of Hon'ble Bombay High court in the case of Orchid Industries Pvt. Ltd. (supra) and the facts of the present case, we are of the view that the CIT(A) has rightly deleted the addition on merits and even the re-assessment was quashed. We confirm the order of CIT(A) and this issue of Revenue's appeal is dismissed. 8. Coming to assessee's appeal in ITA No. 2090/Mum/2018 for AY 2008-09, the issue is against the order of CIT(A) confirming the action of the AO in making addition of share application money of Rs. 1,62,50,000/- and consequently addition of adhoc expendi....
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....,62,50,000 187,500 10. We find that exactly identical issue has been dealt with by us in the group cases in the case of Diwali Capital & Finance Pvt. Ltd. vs. DCIT in ITA No. 2091/Mum/2018 for AY 2008-09 wherein, we have held as under: - "11. We have heard rival contentions and gone through the facts and circumstances of the case. We find from the facts of the case that during the assessment proceedings, the assessee has submitted the following details: - During assessment proceedings the assessee had submitted copy of income tax return along with audit report of share applicants i.e. investing companies. Copy of form no.2 of Diwali Capital & Finance Pvt. Ltd. Copies of bank accounts of the assessee which inter alia depicts the credit entries by way of transfer of the amounts given to the assessee company by cheque. Confirmation of the investing company has also been filed. Further during the course of assessment proceeding the assessee also informed that the share application form received from the investor companies and some of the other documents i.e. copy of the resolution passed by the Board of Directors of assessee c....