2020 (7) TMI 300

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....the additions of Rs. 25,200 /- by deeming commission as unexplained cash credit u/ s 68 of the Income Tax Act, 1961 during the year by recording incorrect facts and making irrelevant observations. Therefore, the additions made as such may be liable to be deleted. 3. That having regards to the facts and circumstances of the case, Ld. CIT( A) has grossly erred in law and on facts, in confirming the orders framed by the Ld. AO u/ s. 143 ( 3)/ 147 in spite of the fact that the Ld. AO passed orders without considering the fact that detail found by DIT (Inv. ) was not belonging to the appellant. Without considering the bank statement of appellant and of share applicant. Therefore, the assessment completed as such may be held ab-initio invalid. 4. That having regards to the facts and circumstances of the case, Ld. CIT-(A) has grossly erred in law and on facts, in confirming the orders framed by the Ld. AO u/s. 143(3 )/ 147 and that too without considering the material on record; therefore, the additions made as such per Ground of Appeals No. 3 may be liable to be deleted. 5. That having regards to the facts and circumstances of the case, Ld. CIT-(A) has grossly ....

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....Tax, as the same is absent in the file having no comment and seal of the Hon' ble Joint Commissioner of Income Tax. As such, the orders passed in the absence of these statutory requirements may be liable to be quashed." 3. Broadly, the issues are two. 1. Reopening u/s 148 2. Addition u/s 68 4. The assessee company was incorporated on 07 .06.1983. The company filed its Return of Income for A.Y. 2009- 10 on 29 09.2009 declaring income at Rs. 3,94,360 /-. Thereafter the return was processed u/s 143(1 ) under the regular proceedings of the I.T. Act. No assessment u/s 143(3 ) was made in this case hitherto. 5. Information received from Investigation Wing as per the Assessment Order: The DIT (Investigation)-II, New Delhi vide letter F.No. DIT(Inv)-II/U/ s148/2012-13 /195 dated 12 .03 .2013 intimated that Sh. Surinder Kumar Jain had been providing accommodation entries through a large number of dummy companies floated by him or his associates. The Investigation Wing has compiled a report & date of the beneficiaries of such entries. The name of the assessee company- i.e. M/ s. Adarsh Food Products Pvt. Ltd. figures in the list of beneficiaries of Share Capital....

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....3,00,000 Satish Garg A-25  43 21/3/09 Virgin Capital Services Pvt . Ltd. Adarsh Food Products Pvt . Ltd. AXIS Ch. No. 012111 dated 21/3/09 4,00,000 Satish Garg A-25 43 Independent Enquiries Conducted pursuant to information received from Investigation Wing 9. Analysis of ITR by the AO: The return of income of Assesses Company has been downloaded from the ITD system and the same was examined in the light of information received from Investigation Wing. On comparative examination of return of income of the S. No. Particulars A.Y. 2008-09 A.Y. 2009-10 Increase (+) /Decrease ( -) Assessed company for A.Y. 2008-09 & 2009-10, the following has been observed with regard to the share capital and share premium of the assesses company : 1. Authorized Share Capital Rs. 70,00,000 Rs. 2,00,00,000 Rs. 1,30,00,000(+) 2. Issued Subscribed and Paid up capital Rs. 57,79,700 Rs. 1,56,79,700 Rs. 99,00,000 (+) From the above, it is evident that the assessee company has increased its share capital/share premium by total amount of Rs. 90,00, 000/-. Thus the information received from the Investigation Wing wa....

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....ed assessment.... Keeping in view all the above, there was reason to believe that income had escaped assessment in case of M/ s. Adarsh Food Products Pvt. Ltd. for the A.Y. 2009-10 within the meaning of Section 147/148 of income Tax Act. 1961 . 12. On receipt of the information and reply of the assessee, the Assessing Officer, from page no. 5 (para 6.1 ) to page no. 20 (para 7.3 ) referred to the modus operandi of the entry operation by the Sh. S. K. Jain and Sh. V.K. Jain and orders of the ld. CIT ( A) and ITAT in the case of entry operators. At para no. 7.4, the AO held as under: " The assessee has submitted that no such amounts have been received by it. A perusal of the extract of diary reveals that the following accommodation entries have been provided by M/ s Manimala Delhi Pro Pvt. Ltd. and M/s Virgin Capital Services Pvt. Ltd. to the assessee and M/s Jindal Dal Mills Pvt. Ltd. both having Sh. Anil Kumar Jindal as common Director. Date Name of Company Beneficiary Company Amount 21.03.2009 M/s Manimala Delhi Pro Pvt.Ltd. M/ s Adarsh Food Products Pvt.Ltd. 3,00,000 21.03.2009 M/s Manimala Delhi Pro Pvt.Ltd. M/ s Jindal Dal Mills P....

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....indal HUF - Rs. 42,00,000 /- b. Anil Kumar Jindal HUF - Rs. 37,00,000 /- c. Anil Kumar Jindal - Rs. 14,00,000 /- d. Bhaibhav Jindal - Rs. 4,00,000 /- e. Ekta Jindal - Rs. 2,00,000 /- 17. Thus, we find that the reasons recorded by the AO that the assessee company received share capital from the entry operator proved to be incorrect based on the facts. Attributing the entry of Rs. 7,00,000 /- to the share capital of the company by the AO to the increased share capital of Rs. 99,00,000 /- found to be incorrect based on the details of the share capital received by the company from the five entities above. 18. Further, we find that the information available with the Assessing Officer pertains to receipt of Rs. 7,00,000/- from two entities namely, Manimala and Virgin Capital whereas the AO made addition of Rs. 14,00,000/- u/ s 68 of the Act. As per the information mentioned at para 7. 4 an amount of Rs. 7,00,000 /- has been received by another entity namely, M/s Jindal Dal Mills Pvt. Ltd. Sh. Anil Kumar Jindal is the common Director in the assessee company as well as Jindal Dal Mills Pvt. Ltd. No reasons given by the AO as to why the addition ....