TaxTMI 
TaxTMI 
2012 (12) TMI 1231
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.... ITA No. 405/Agra/2012 (Assessment year : 2007-08) : ITA No. 406/Agra/2012 (Assessment year : 2008-09) : 3. Both the departmental appeals are filed against the common order of ld. CIT(A)-II, Agra dated 15.05.2012 for the assessment years 2007-08 and 2008-09, challenging the deletion of addition of Rs.8,50,00,000/- and Rs.5,00,00,000/- respectively made on account of unexplained cash credits u/s. 68 of the IT Act. 4. The AO has made following additions in assessment year 2007-08 and 2008- 09 on account of share application money received from following companies holding them to be non-genuine : S.No. Name of company who have given entry Name of company who have taken entry Period (A.Y.) Amount 1. M/s. KMC Portfolio (P) Ltd. Delhi M/s. Vacmet Packaging (India)Pvt. Ltd., Agra 2007-08 Rs.8.5 crore 2. M/s. Ganpati Fincap Services (P) Ltd., Delhi M/s. Vacmet Packaging (India)Pvt. Ltd., Agra 2008-09 Rs.5 crore 5. Briefly stated, the facts of the case are that a search & seizure operation was conducted by the Department on the assessee on 26th of March, 2010. Also relevant to mention here is that a survey was conducted at the premise....
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....ers to the amount of share application money given to Vacmet Packaging (India) Pvt. Ltd. for 50000 shares of face value Rs.10 per share having share premium at Rs.90 per share. On this page there are entries totaling Rs.500,00,000 (Five crores) i.e. my companies either KMC Portfolio Pvt. Ltd. or Ganpati Fincap Services Pvt. Ltd. have given share application money of Rs.5 crores to Vacmet Packaging (India) Pvt. Ltd. for 5 lakh shares of face value of Rs.10 per share having share premium at Rs.90 per share. The Modus Operandi is that one of the Directors of Vacmet Packagings (India) Pvt. Ltd. one Mr. Agarwal approached me to arrange some share application money into his company i.e. Vacmet Packaging (India) Pvt. Ltd. in lieu of certain commission that I would earn for arranging share application money in his company some cash and cheques were given to me and this cash and cheques were deposited by me in accounts held in the name of ABM Traders or Surya Enterprises and then this money was transferred into companies managed and controlled by me i.e. either KMC Portfolio Pvt. Ltd. or Ganpati Fincap Services Pvt. Ltd. and from KMC Portfolio Pvt. Ltd. / Ganpati Fincap Services Pv....
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.... accordingly he made the addition of Rs.8.5 crore and Rs.5 crore in A.Y. 2007-08 and A.Y. 2008-09 respectively. The AO also relied on the contents of the black diary which was confronted to Shri Aseem Gupta during the course of statement on 22nd of April 2010 by ADIT (Intelligence)-III, New Delhi and wherein he has stated that all these entries pertain to M/s.Vacmet Packaging (India) Pvt. Ltd. It was further elaborated by him that 50,000 shares of face value of Rs.10 per share were sold at a premium of Rs.90 per share. 6. The addition was challenged before the ld. CIT(A) and during the course of appeal proceedings, the ld. Counsel for the assessee filed his written submissions on 29.03.2012. The written submissions filed by the assessee were given to the AO for his comments. The AO was also directed to confront the assessee the contents of the black diary on which reliance has been placed in the assessment order. Also on the same day as it was contended by the ld. Counsel for the assessee that copy of statement of Shri Aseem Gupta on which reliance had been placed by the AO has not been provided to the assessee, the AO was directed to provide the same to the assessee. The AO was....
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.... 2009-10 another notice u/s 142(1) of the Act dated 02.11.2011 was issued in the name of assessee company having almost the similar queries. ii) In response to these notices written submission dated 16.11.2011 was filed giving the details of increase in share capital received during the year alongwith confirmation from the subscriber companies. Copy enclosed. In this submission for the query made by Assessing Officer as regards relationship with Shri Aseem Gupta CA it was submitted vide Para 20 -21 of the submission:- "The assessee company has neither any relationship with the person nor any transactions with person namely Shri Aseem Kumar Gupta, Chartered Accountant who is said by your goodself to be the partner of M/s Agarwal Vishwanath & Associates . The assessee company does not know any such firm named in the questionnaire as 'M/s Agarwal Vishwanath & Associates'. Directors of assessee company do not know Shri Aseem Kumar Gupta, Chartered Accountant and question of any meeting with this person does not arise". iii) That immediately after filing the written submission dated 16.11.2011 another written submission dated 23.11.2011 was filed suo-moto in c....
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....hare applicant namely M/s Ganpati Fincap Services (P) Ltd for Rs. 5,00,00,000/- received as share capital in A.Y. 2008-09 and M/s KMC Portfolio (P) Ltd for Rs. 8,50,00,000/- received as share capital in A.Y. 2007-08 to establish/substantiate the genuineness of these credits with reference to credible supporting evidence. The assessee company was further required to furnish the following by 19.12.2011 :- a) Complete details of the directors / key persons of these two companies subscribing the share capital of the assessee company........................ b) To explain as to how the share application forms were received along with supporting evidence.... c) Statutory records - Register of Shareholders, Minute Books of the AGM of the assessee company along with details in respect of the persons who represented these investing companies d) Clarification whether Shri Rajan Gupta CA, Shri Rajesh Gupta CA, Shri Sunil Kansal CA and Shri S. K. Jain CA were known to the assessee company ................ 4.6 That in response to order sheet entry dated 13.12.2011 a detailed written submission was filed on 19.12.2011 making submission on the details a....
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....ded is enclosed. On perusal of the statement your goodself will find that when it was asked regarding Shri Aseem Gupta CA it was specifically stated by Shri Dinesh Chand Agarwal that enquiries with regard to some Mr. Aseem Gupta are being made time and again not only in this statement but also on earlier occasions and therefore, Assessing Officer was specifically requested to produce Shri Aseem Gupta for my cross examination in case he has given any wrong information in respect of me or my companies in any manner whatsoever. 4.10 That written submission dated 27.12.2011 was also submitted before Assessing Officer and as per his verbal directions the same was filed in Dak on 29.12.2011 which has been taken by the Assessing Officer on record as per order sheet entry dated 29.12.2011 which is before the completion of assessment. 4.11 That the Assessing Officer brushing aside the document filed from time to time and rejecting the appellant's submission made the addition of the amount of Rs. 8,50,00,000/- received from M/s KMC Portfolio (P) Ltd as share capital u/s 68 of the Act treating the same to be unexplained investment. 4.12 Further submission before you....
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.... iii) That in the present case also during the course of assessment proceedings u/s 153A of the Act, the Assessing Officer made direct and independent enquiry from M/s KMC Portfolio (P) Ltd by issue of notice u/s 133(6) of the Act which have been duly responded by the subscriber company and the required details/documents in the form of confirmation giving the details of cheque number, amount and the name of the bank on which the cheque was drawn, share received confirmation, bank statement, copy of share certificates, income tax return, balance sheet were directly sent to the Assessing Officer . Copy of the same are enclosed for ready reference of your goodself. The same has been obtained on inspection of the assessment file on 21.03.2012. (IV) Re: Statement of Aseem Gupta [C.A.] On perusal of the Assessment Order it seems that the addition has been made by the Assessing Officer simply relying on the statement of Mr. Aseem Gupta CA forwarded to the Assessing Officer by the Department carried out survey. In this regard the appellant wish to submit as under:- a) That on enquiry from the subscriber company M/s KMC Portfolio (P) Ltd it has been informed that ....
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....saying that I do not know the person named Mr. Aseem Gupta and if the said person has given any wrong information/statement to the Department as regards my companies then the said person may kindly be called upon and I may be allowed opportunity to cross examine him. f) It is very surprising that even after the submission dated 19.12.2011 vide which specific request was made that if there is any adverse or contrary evidence against us in your possession then kindly provide us the copy of the same in case of documentary evidence so that we can rebut the same and an opportunity to cross examine may also be provided in view of natural justice in the case of personal statement of any person against the facts submitted by us and further in the statement of Shri Dinesh Chand Agarwal recorded on 21.12.2011 the Assessing Officer was again requested to provide opportunity of cross examination, even then the Assessing Office has neither shown any statement on which he has relied nor the assessee has been allowed opportunity to cross examine. g) That even after repeated request the Assessing Officer has neither confronted the assessee with the statement, as mentioned in the ....
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...., he was neither cross examined on that point, nor was he called upon to produce any documentary evidence. Consequently, the assessee was entitled to assume that the income tax authorities were satisfied with the affidavit as sufficient proof on this point. If it was not to be accepted as a sufficient proof either by the Income Tax Officer or by the Appellate Asstt. Commissioner of Income Tax or by the Income Tax Appellate Tribunal, the assessee should have been called upon to produce documentary evidence, or, at least he should have been cross examined to find out how far his assertions in the affidavit were correct". iii) Hon'ble ITAT Delhi Bench in the case of CIT vs. Pradeep Kumar Gupta reported in 207 CTR 115 (Del) "Reassessment - Validity - Reopening on the basis of third party's statements - Assessees showing agricultural income - Deposition by A that he was involvedin bogus transaction with the assessees and provided 'accomodation entries' in the form of agricultural receipts - Same would constitute reason to believe that income chargeable to tax had escaped assessment - However it was mandatory for the Revenue to produce A for cross examination by the ass....
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....g notice u/s 131 and find out truth if the assessee produces collateral evidence to show the circumstances under which creditors had resiled - Fact that onus to prove genuineness of cash credit is on the assessee does not mean that the assessee is required to win over false witness if he can show that creditors had resiled". (V) Re: Black Dairy i) The Assessing Officer in the Assessment order at page 2 has mentioned about a black dairy said to have been found and impounded from the office of Shri Aseem Gupta which has also been made one of the ground by the Assessing Officer to made addition u/s 68 of the Act. ii) As regards the black dairy, Mr. Aseem Gupta in his so called statement, though never confronted to the assessee, which has been reproduced by the Assessing Officer in the Assessment Order, he has clearly stated that:- 'The transaction pertain to F.Y. 2004-05 and more specifically February 2005 and March 2005' which does not relates to the year under consideration. Thus even the transactions as said to have been noted in the black dairy has no relevancy at all and cannot be made basis of addition for the following reasons:- a) T....
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....company Bank Account and numerous transactions appearing therein with different parties is also evidence of the independent identity and existence. • Credit worthiness and capacity The credit worthiness and capacity of the subscriber company can also not be doubted. It is evident from their Balance Sheets that the subscriber company is company with sound net worth and huge reserves. Also, the amount received from the subscriber company is through regular banking channels, details of which were filed by the assessee company and also directly by the subscriber company which shows a number of transactions with various parties • Genuineness The subscriber company has confirmed their investment in the share capital of the assessee company. Their confirmation alongwith other document which proves the genuineness of a transaction were filed by the assessee company and were also sent by them to the Assessing Officer on direct and independent enquiry. Genuineness is also proved from the fact that the shares were allotted and the share certificate were issued which the subscriber company has also confirmed. Copy of share certificate sent by them ar....
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....ed in 164 CTR 287. • Commissioner of Income Tax vs Electro Polychem Ltd. reported at (2008) 217 CTR (Mad) 371 While dismissing the appeal of the revenue the Hon'ble High Court referred to the case of CIT v. Stellar Investment Ltd. (1991)192 ITR 287(Delhi) where the increase in subscribed capital of the respondent-company, accepted by the Income Tax Officer and rejected by the Commissioner on the ground that a detailed investigation was required regarding the genuineness of subscribers to share capital, as there was a device of converting black money by issuing shares, with the help of formation of an investment, which was reversed by the Tribunal, the Delhi High Court held that even if it is to be assumed that the subscribers to the increased share capital were not genuine, under no circumstances the amount of share capital could be regarded as undisclosed income of the company. • Commissioner of Income Tax vs First Point Finance Pvt. Ltd. reported at (2006) 286 ITR 477 (Raj) Tribunal having found that the subscribers are genuinely existing persons and they have filed confirmations in respect of investments made by them and their statemen....
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....had given a clear finding after appreciation of the materials on record that the assessee had filed the details regarding the source of funds of the parties and their income tax file numbers before the AO. According to the Tribunal, the assessee had also submitted before the AO the confirmations from the creditors where full addresses income tax file numbers, etc, were given. The Tribunal was justified in deleting the addition of the sums from the income of the assessee" • "Hon'ble Allahabad High Court in the case of M/s Jaya Securituies Ltd. Vs. CIT-II, Kanpur reported in 166 Taxmann Page 7, the head note of the judgment as under: "Whether an addition u/s 68 can be made in respect of investment made by different persons in share capital of assessee company, limited by shares, whether public or private - Held no" • Hon'ble ITAT Jodhpur Bench (Third Member) in the case of Uma Polymers (P) Ltd vs. DCIT Spl Range reported in (2006) 100 ITD Page 1, the head note of the judgment as under: "Whether distinction between a public and a private limited company is not very material, as far as introduction of share capital money is concerned - Held y....
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.... the subscriber company is through clearing not cash. xii) There are various judicial pronouncement in which it has been held that to discharge the onus as required in section 68 of the Act the assessee is not required to prove the source of the source. Reliance is placed on the following judgments:- • Hon'ble Rajasthan High Court in the case of Aaravali Trading Co. vs. ITO reported in 8 DTR page 199, the headnote of the judgment as under:- "Income - Cash credit - Burden of proof - Once the existence of the creditors is proved and such persons own the credit which are found in the books of the assessee, the assessee's onus stands discharged and the latter is not further required o prove the source from which the creditors could have acquired the money deposited with him either in terms of s. 68 or on general principle - Merely because the depositor's explanation about the sources of money was not accepetable to the A.O., it cannot be presumed that the depsoits made by the creditors is money belonging to assessee itself - If the creditor's explanation about the source of deposit is not found to be acceptable, the investment owned by such persons may be....
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....ly received the said amount and happened to keep it in the bank, the said amount cannot be treated as income of the assessee from undisclosed sources". • Hon'ble Madhya Pradesh High Court in the case of CIT vs. Metachem Industries reported in 245 ITR 160 has held "Once it is established that the amount has been invested by a particular person, be he a partner or an individual, then the responsibility of the assessee is over. Whether that person is an income tax payer or not and where he had brought this money from, is not the responsibility of the firm" • Hon'ble Patna High Court in the case of Sarogi Credit Corporation vs. CIT (1976) 103 ITR 344 has held "It will not, therefore, be for the assessee to explain further as to how or in what circumstances the third party obtained the money or how or why he came to make an advance of the money as a loan to the assessee. Once such identity is established and the creditors, as in the present case, have pledged their oath that they have advanced the amounts in question to the assessee, the burden immediately shifts on to the department to show as to why the assessee's case could not be accepted". • H....
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....n it. e) Hon'ble Bombay High Court in the case of Smt. Panna Devi Chowdhary (1994) 208 ITR 849 (Bom.) has held that "Income- Income from undisclosed sources-Burden of Proof-Receipt of amount-Burden of proving that receipt constituted income of assessee is on the revenue". xiv) Though the order pronounced by the Apex Court happens to be the law of land and binding on all the authorities functioning in India still it is trite law that the order passed by the Jurisdictional Tribunal / High Courts are binding on all the tax authorities functioning under the jurisdiction of Tribunal / High Courts. In this regard, your goodself kind attention is drawn towards the following case laws wherein binding nature of the orders of the Tribunal / High Courts has been discussed: - 'K.N. Agarwal vs. CIT (1999) 100 CTR (All) 170: (1991) 189 ITR 769 (All)' "Indeed, the orders of the Tribunal and the High Court are binding upon the Assessing Officer and since he acts in a quasi -judicial capacity, the discipline of such functioning demands that he should follow the decision of the Tribunal or the High Court, as the case may be. He cannot ignore it merely on the groun....
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....tion made without confronting with the statement, mentioned referred and relied in the Assessment Order and without allowing opportunity of cross examination is bad on facts and in law. ii) Addition has been made merely on the so called satisfaction of the Department. iii) Addition being based on, as mentioned in the Assessment Order, some black dairy, the transaction noted therein which also as per Assessment Order does not pertain to the year under consideration. iv) Evidences/documents brought on record were sufficient enough to discharge the burden that lay upon the assessee in terms of deeming provision of section 68 of the Act. On the basis of such evidence the courts throughout the country as well as Hon'ble Apex Court in plethora of cases has held accordingly as referred above. v) No addition is called for as not only the identity of the subscriber company is fully proved on the basis of evidence brought on record but the creditworthiness and genuineness is also proved though not required in the case where the assessee has to discharge the onus u/s 68 of the Act in the case of receipt of share capital. It is requested that the appeal may ....
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....o the undersigned, so that compliance thereof may be made to your office for early disposal of the proceedings if any pending before your goodself. Further undersigned is the practicing Chartered Accountant and possibility of any transaction with the above groups by my any client cannot be ruled out. However, it is again sure and confirm that I have not done any transaction directly with the above groups during A.Y. 2004-05 to 2010-11. Hence, without exact details of transaction undersigned is unable to submit any information and also ther is no use to appear before your goodself without any documents, as your summons is also not contained any specific list of documents required for disposal of the above proceedings. In the light of above submission you are requested to kindly take into consideration the above submission place the same on record, either withdraw the summons issued against me or provide me the detail / documents possessed by your goodself indicating the transaction done by me with the above groups during A.Y. 2004-05 to 2010-11.' From the above submissions Shri Aseem Gupta CA at Delhi, it appears that he is avoiding appearance in this office for confrontati....
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....any transaction either of the assessee company or of its Directors with this person named Shri Aseem Gupta. ii) That vide written submission dated 19.12.2011filed before the Assessing Officer specific request was made that if there is any adverse or contrary evidence against the assessee company in the possession of the Assessing Officer then kindly provide us the copy of the same in case of documentary evidence so that we can rebut the same and an opportunity to cross examine may also be provided in view of natural justice in the case of personal statement of any person against the facts submitted by us. iii) Further Shri Dinesh Chand Agarwal Managing Director of the assessee company in his statement recorded by the Assessing Officer during the course of assessment proceedings u/s 153A of the Act on 21.12.2011 clearly stated that he does not know Shri Aseem Gupta nor he/or assessee company has any transaction with Shri Aseem Gupta and further specific request was made to provide opportunity of cross examination of Shri Aseem Gupta. iv) That before the completion of assessment u/s 153A of the Act the Assessing Officer neither provided the statement of Shr....
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....ia) Pvt. Ltd and M/s Vacmet Finance & Investment Ltd has been mentioned. c) Thus this statement is not at all relevant to the facts of the case of the assessee company and no adverse inference can be drawn from this statement. Re: Statement dated 26.03.2010 recorded at Survey proceedings u/s 133A of the Act. --------------------------------------------------------------------------------- a) Nothing adverse against the assessee can be drawn from this statement as no where in this statement name of M/s Vacmet Packagings (India) Pvt. Ltd and M/s Vacmet Finance & Investment Ltd is mentioned. Re: Statement recorded on 22.04.2010 a) In this statement Shri Aseem Gupta has stated that entry totaling Rs. 5 Crore has been given by my companies either M/s KMC Portfolio (P) Ltd or M/s Ganpati Fincap Services (P) Ltd, the details of which are given in the separate sheet provided to the assessee. b) On perusal of statement of Shri Aseem Gupta in reply to the notings mentioned in the separate sheet it is very much clear that the said statement is wrong, not applicable to the facts of the assessee's case and the question arises, for t....
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.... this fact that the transaction as noted in the impugned page relates to F.Y. 2004-05 and the addition in the year under consideration has been solely made on the basis of this page from the black dairy." 6.3 The ld. CIT(A), considering the submissions of the assessee in the light of the material on record deleted both the additions in both the assessment years and allowed the appeals of the assessee. The findings of the ld. CIT(A) in the appellate order in para 3.4 are reproduced as under : "3.4 I have gone through the assessment orders, submissions made by the ld. AR, remand report of the AO and the counter comments of the ld. AR on the remand reports of the AO. To prove the genuineness of the amounts received on account of allotment of shares to the following companies i.e. (i) M/s.KMC Portfolio Ltd. - Rs.8,50,00,000 for A.Y. 2007-08 and (ii) M/s.Ganpati Fincap Services (P) Ltd., Delhi - Rs.5 crore for A.Y. 2008-09 the assessee had filed the following documents in support of its claim during the assessment proceedings : (i) Share application forms (ii) Copies of bank account of share applicants (iii) copies of I.T. returns of the share allo....
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....er: "Vacmet Packaging (India) Pvt. Ltd. Anant Plaza, IInd Floor 4/117-2A, Civil Lines, Church Road, Agra - 282002 10 + 90 332711 - 15.02.05 - 50,00,000 332701 - 15.02.05 - 50,00,000 332710 - 11.02.05 - 50,00,000 332724 - 18.02.05 - 25,00,000 75 - - - 25,00,000 203350 - 22.02.05 - 50,00,000 332712 - 22.02.05 - 50,00,000 332726 - 25.02.05 - 25,00,000 332713 - 3.3.05 - 50,00,000 332732 - 07.03.05 - 50,00,000 332714 - 11.03.05 - 50,00,000 332738 - 14.03.05 - 25,00,000 5,00,00,000" From the above, it is clear that these entries relate to A.Y. 2005-06 and not to the years under consideration i.e. A.Y. 2007-08 & 2008-09. During the assessment proceedings u/s.153A the AO had issued notices u/s.133(6) to both these companies i.e. M/s.KMC Portfolio (P) Ltd. and M/s.Ganpati Fincap Services (P) Ltd. and in response to which both these companies had confirmed the investments made by them and they also filed share receipt c....
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....lient cannot be ruled out. However, it is again sure and confirm that I have not done any transaction directly with the above groups during A.Y. 2004-05 to 2010-11. Hence, without exact details of transaction undersigned is unable to submit any information and also there is no use to appear before your goodself without any documents, as your summons is also not contained any specific list of documents required for disposal of the above proceedings. In the light of above submission you are requested to kindly take into consideration the above submission place the same on record, either withdraw the summons issued against me or provide me the detail / documents possessed by your goodself indicating the transaction done by me with the above groups during A.Y. 2004-05 to 2010-11.' Thus, it will be seen that Shri Aseem Gupta has contradicted his own statement dated 22.04.2010 by stating that he has not entered into any transaction with the assessee. The assessee could also not be provided with the opportunity of cross-examining Shri Aseem Gupta. In the case of Kishanchand Chellaram vs. CIT (125 ITR 137 ) Mad (1) it has been held that though the proceedings before the I.T. autho....
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....ase of CIT vs. Sophia Finance Ltd. 113 CTR (Del.) FB 472, the Hon'ble Delhi High Court held that if the explanation preferred by the assessee is found not to be satisfactory, further enquiries can be made by the AO himself, both in regard to the nature and the source of the sum credited by the assessee in its books of accounts, since the wording of section 68 is very wide. The Full Bench also opined that if the shareholders exist then, possibly no further enquiry need be made. The hon'ble Supreme Court in the case of Lovely Exports (P) Ltd. 216 CTR (SC) 195 while dealing with the issue of share capital, though in brief held as under: "2. Can the amount of share money be regarded as undisclosed income under s.68 of I.T. Act, 1961? We find no merit in this Special Leave Petition for the simple reason that if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to reopen their individual assessments in accordance with law. Hence, we find no infirmity with the impugned judgement...................." Now coming to the question as to when the assessee has ....
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....has no evidenciary value. As far as contents of Annexure A-20 (black diary) are concerned they don't pertain to the assessment years under consideration as is clear from the notings which have been reproduced above that these pertain to A.Y. 2005-06 and the same cannot be made the basis for making additions in A.Yrs. 2007-08 and 2008-09. Thus keeping in view the facts of the case and the legal position as discussed above, I hold that the AO was not right in making the additions and the same are deleted." 7. The ld. DR relied upon the order of the AO and referred to the statement of Shri Aseem Gupta, Chartered Accountant recorded by the Revenue authorities, copies of which are filed in paper book to show that Shri Aseem Gupta, C.A. admitted that he controlled the management of the Companies from where accommodation entries have been given. PB-254 is the copy of the seized black diary, which has pointed out the modus operandi by referring to 10 + 90. Though Shri Aseem Gupta denied having entered into the transaction in his personal capacity, but the entire statement would reveal that the modus operandi is to provide accommodation entries. The Statement of Shri D.C. Agarwal (MD of ....
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.... decisions cited before the ld. CIT(A), copies of which are also filed in the paper book. He has referred to PB-254, which is copy of seized diary to show that no other material was found during the course of search and all the entries contained in the diary pertain prior to March, 2005. Therefore, the same would fall in assessment year 2005-06 and did not pertain anything to assessment years under appeals. Therefore, the diary is not relevant to the matter in issue. PB- 224 is the order sheet dated 29.03.2012 of the office of CIT(A) in which the CIT(A) directed the AO to confront the contents of black diary to the assessee along with statement of Shri Aseem Gupta and also directed to provide right of cross examination to the assessee, but no cross examination was allowed to the statement of Shri Aseem Gupta. PB-215 is the remand report of the AO dated 01.05.2012, in which he has explained that the diary and statement of Shri Aseem Gupta have been obtained now, which have been handed over to the assessee for confrontation. It was proved that the AO obtained the black diary and statement of Shri Aseem Gupta only in the remand proceedings so the same could not be read in evidence aga....
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....he share application money. Similar confirmations were made in the case of M/s. KMC Portfolio Ltd. u/s. 133(6) directly to the AO along with all the documents. He has, therefore, submitted that the ld. CIT(A) on proper appreciation of facts and material on record rightly deleted the addition. 9. We have considered the rival submissions, gone through the material on record. The assessee had filed all the documentary evidences before the AO in order to prove the genuine share application money, i.e., share application forms, copies of bank accounts of share applicants, copies of IT returns of share allottees along with their balance sheets, copies of share allotment certificates and copies of Board's Resolution of share applicants. Thus, the assessee proved the identity of the share applicants, which is supported by the copies of PAN as well as registration with the Registrar of Companies. The financial capacity is proved by filing the copies of bank accounts from where the share application money was transferred through banking channel to the assessee. The genuineness of the transaction has been established by filing the entire documents to the satisfaction of the AO and further ....
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....r appeals, i.e., 2007-08 and 2008-09. It is also established on record that during the assessment proceedings, the AO issued notice u/s. 133(6) to both these companies and both the companies directly confirmed the transaction with the assessee in their reply filed before the AO, which is supported by their confirmations, bank statements, Income-tax Returns and the balance sheets. No other incriminating material are found in search against the assessee. Merely because Shri DC Agarwal could not provide relevant information in his statement, would not be a ground to make addition against the assessee regarding AGM and other procedures of the assessee company. Further, in the case of sister concern M/s. Vacmet Finance and Investment Ltd., the AO passed order u/s. 143(3) on dated 29.12.2008 for the assessment year 2006-07 in which the share application money of M/s. KMC Portfolio Pvt. Ltd. have been accepted by the AO after due verification of the facts. Therefore, similar addition could not be made against the assessee. Considering the entire material on record in the light of findings of authorities below, we find that the assessee has been able to prove that both the share applicants....
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....ad considered all the relevant material before arriving at the just decision in the matter. Therefore, the findings of the ld. CIT(A) cannot be faulted with. In view of the above discussion, we do not find any merit in the departmental appeals. The same are, accordingly, dismissed. In the result, ITA No. 405 & 406/Agra/2012 are dismissed. ITA No. 404/Agra/2012 (Assessment year : 2006-07): 10. This appeal by the Revenue is directed against the order of ld. CIT(A)-II, Agra dated 11.05.2012 for the assessment year 2006-07, challenging the deletion of addition of Rs.11 crores made on account of unexplained cash credits u/s. 68 of the IT Act. 11. Both the parties stated that the issue is same as is considered in ITA Nos. 405 & 406/Agra/2012 above. The facts of the case, submissions of the parties and findings of the ld. CIT(A) are same as have already been considered in the case of M/s. Vacmet Packagings (India) Pvt. Ltd. (supra). In this case also, on the same day search and survey operation was carried out. The statement of Shri Aseem Gupta, CA was recorded. Similar black diary was impounded. The AO on the same basis concluded that since Shri Aseem Gupta, CA had admitted that....
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....an.com 235. Apart from the above submissions on merits, the ld. Counsel for the assessee also submitted that in the assessment year under appeal 2006-07, the AO made the assessment u/s. 153A of the IT Act on 30.12.2011 because the search was conducted on 26.03.2010 and on the identical issue prior to assessment order passed u/s. 153A of the IT Act, the AO scrutinized original return of the assessee for the same assessment year 2006-07 and passed the regular assessment order u/s. 143(3) on dated 29.12.2008 and after making due enquiries with regard to share capital amount, accepted the claim of the assessee. In support of his contention, he has referred to PB-69, which is the statement of Shri R.K. Raj of M/s. Rav Net Solutions Pvt. Ltd., Delhi, recorded by the AO at the original assessment stage on 14.12.2008, in which he has confirmed of making investment of Rs.2.00 crores in the assessee company out of their own sources through banking channel. He has also referred to the statement of Shri Sanjay Varshney, Director of Moderate Credit Corporation Ltd. which was also recorded on 14.12.2008 by the AO at the original assessment stage in which he has confirmed of investing Rs.6.00 cro....
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.... issue was considered on merits in the regular assessment proceedings u/s. 143(3) and the AO accepted the returned income of the assessee vide order dated 29.12.2008 u/s. 143(3). Except black diary, which was also recovered from Shri Aseem Gupta, no other incriminating material was found against the assessee. According to the ld. CIT(A) said diary did not pertain to the assessee. Section 153A of the Act provides as under : "153A. (1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as ma....
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....bal Logistics Ltd. vs. DY. CIT 137 ITD 287 (SB) considered the following two questions : "1. Whether, on the facts and in law, the scope of assessment u/s. 153A encompasses additions, not based on any incriminating material found during the course of search" ? 2. Whether, on the facts and in the circumstances of the case, the ld. CIT(Appeals) was justified in upholding the disallowance of deduction u/s. 80-IA(4) of the Act, on merits ?" The Special Bench in para 53, held as under : "The question now is - what is the scope of assessment or reassessment of total income u/s. 153A(1)(b) and the first proviso ? We are of the view that for answering this question, guidance will have to be sought from section 132(1). If any books of account or other documents relevant to the assessment had not been produced in the course of original assessment and found in the course of search in our humble opinion such books of account or other documents have to be taken into account while making assessment or reassessment of total income under the aforesaid provision. Similar position will obtain in a case where undisclosed income or undisclosed property has been found as a....