TaxTMI 
TaxTMI 
2018 (4) TMI 1938
X X X X Extracts X X X X
X X X X Extracts X X X X
..... In all these appeals, the facts and issue involved are common and, therefore, for the sake of convenience, they are being disposed off together as under: 3. In all these appeals, common grounds of appeal are taken by the assessees except for change in figures. We, therefore, quote the grounds of appeal in the case of Sadhana Dalmia in IT)ss) A No.38/CTK/2018, which read as under: "1. On the facts and circumstances of the case, the order passed by the CIT(A) is arbitrary, excessive and bad in law. 2. On the facts and circumstances of the case, the CIT(A) has erred in confirming the order of the AO in considering the advance received against sale of shares amounting to Rs.62,000/- as unexplained cash credit and made addition u/s.68 of the Income tax Act, 1961. 3. On the facts and circumstances of the case, the CIT(A) is not justified in considering the impugned transaction of advance received against sale of unexplained ignoring the fact that the same has been considered as income and necessary tax on the same income has been paid under the head "long term capital gain" in subsequent assessment year." 4. The brief facts of the case are that the Asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....shareholding to the other group @Rs. 31/- per share aggregating to a value of Rs. 15.50 Cr. 15. Due to some technical issue on the part Sri Dindayal Agarwal group, replaced the cheque issued to M/s. Ahinsa Vinimay Pvt. Ltd. from M/s. Flexir Impex Pvt. Ltd. amounting to Rs.335,15,000. The same fact is mentioned in the minutes of meeting held between both the groups on 15.04.2008, a copy of which is enclosed as Annexure - 3. 16. On 14.02.2008 Sri Dindayal Agarwal Group gave a demand draft bearing No. 021341 dated 23.01.2008 drawn on UTI bank Ltd. for Rs. 275,15,000 in favour of Ahinsa Vinimay Pvt. Ltd. towards security deposit against the collateral security offered by Sri S.K. Dalmia Group. In support of the above, a letter issued by Sri Dindayal Agarwal is enclosed as Annexure - 4. 17. Because of non fulfillment of the terms and conditions of the MOU dt. 28.11.2007 another MOU was made on 14.02.2008 extending the date of replacing the security to 15.05.2008 and thereafter completing the share transfer. A copy of the MOU dated 14.02.2008 is enclosed as Annexure - 5. 18. On the basis of the above MOUs, a Terms of Settlement was signed between both ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rather it is payment against sale of shares in toto in stead of in part. The justification alongwith court citations for non applicability of the Prov. Of See. 68 to the group is enclosed as Annexure -10." 5. The Assessing Officer was not convinced with the submission of the assessee and made the addition for the above amounts in the hands of the recipient assessees by invoking the provisions of section 68 of the Act on the ground that assessee failed to prove the identity, genuineness and creditworthiness of the creditors. 6. Being aggrieved by the said order of the Assessing Officer, the assessee carried the matter in appeal before the CIT(A) and filed the following common written submissions as under: " 1. Gangol Vincom Pvt. Ltd. During the course of survey proceedings, no books of accounts of M/s. Aim Credit Capital Pvt. Ltd were found. Even no employee of the company was available there. 2. Ahinsa Vinimay Pvt. Ltd. Smt. Anju Agarwal, one of the director of M/s. Flexir Impex Pvt. Ltd. ( the buyer from whom the amount were received and laying as advance received as on the balance sheet date) in response to summon issued u/s 131 of the In....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... In this regard, the appellant has already filed before your honour its submissions on various dates. However, the following is a summary of all the submissions justifying the stand of the appellant that the Id. A.O. is not correct in his contention. 1. Suryaa Sponge Iron Ltd. is a company owning Odisha's first small scale industrial unit of Sponge Iron Plant located at Budhakendua, Jajpur, Odisha. 2. The company was incorporated on 30.05.1996 and its plant started commercial operation on 01.03.1999. A copy of Memorandum & Articles of Association is enclosed as Annexure- 1. 3. The registered office of the company was situated at the business premises of Sri Dalmia located at B-40, Saheed Nagar, Bhubaneswar. 4. The shareholding pattern of the company was as follows: SI. No. Name of the Group No. of Shares Share Holdings % a) S.K. Dalmia Group (i) Ahinsha Vinimay Pvt.Ltd. 15,65,000 15.65 (ii) Gangol Vincom Pvt. Ltd. 15,65,000 15.65 (iii) Sadhna Dalmia 2,000 0.02 (iv) S.K. Dalmia 1,01,900 1.02 (v) Dewdrop Merchants Pvt. Ltd. 15,65,0....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le of shares took place as per an MoU signed by the two promoter groups, namely, DDA group and SKD group, copy of which was filed before the CLB and RoC, the transactions cannot be questioned from the point of view of identity and creditworthiness of the party M/s. N. R. International Ltd. The assessee perhaps intends to argue that since M/s. N. R. International Ltd. belongs to DDA group and as per MoU, the DDA group has purchased shares of M/s. Surya Sponge Iron Ltd. from SKD group, it is the responsibility of the DDA group to explain the source of the advance given for purchase of shares and the SKD group cannot be asked to prove the genuineness of the amount received for sale of shares. I do not agree with this view of the assessee. The onus squarely lies on the assessee to prove the identity and creditworthiness of the party and also the genuineness of the transactions. The law in this regard is well ^settled. The assessee has failed to discharge this onus. In the written submission, the assessee has referred to certain case laws which are found ^not to be applicable to the case of the assessee since the facts in those cases are totally different. In the case of CIT v. Devi Pra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ine. On the facts of the case, the addition made by the AO u/s.68 of Rs.62,000/- is found to be in order and hence, confirmed. 8. Similar findings are given by the CIT(A) in case of other assessees. 9. The submissions of the ld A.R. of the assessee before us are that the additions made by the Assessing Officer and confirmed by the CIT(A) u/s.68 of the Act is mis-placed and not correct. It is his argument that the amounts were received by the assessees towards sale consideration of the shares held by the assessee in M/s. Surya Sponge Iron ltd., and not as share application or loans. It was his submission that in the immediately succeeding assessment year i.e. 2009-2010, the shares against which sale consideration was received by the assessee during the year were transferred to the payers of the amount and the capital gain earned by the assessee was offered to tax in the return of income filed for assessment year 2009-2010 as under: Name of the assessee Capital Gains(Amount Sadhana Dalmia Rs.23,846/- Gangol Vincom (P) ltd., Rs.33,334,224 Ahinsa Vinimay Pvt Ltd. Rs.40 066,964 Surendra Kumar Dalmia Rs.28,12,242 Dewdrops Merchants P.ltd. Rs.29,373,....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Sadhana Dalmia 22.9.2008 30.9.2009 Gangol Vincom (P) ltd., 20.9.2008 30.9.2009 Ahinsa Vinimay Pvt Ltd. 20.9.2008 30.9.2009 Surendra Kumar Dalmia 22.9.2008 30.9.2009 Dewdrops Merchants P.ltd. 20.9.2008 30.9.2009 14. Thus, it is observed that in none of the above assessee's case, assessment proceedings for the assessment year 2008-09 was abated in pursuance to the search. In other words, all the cases are of un-abated assessment. It is settled position of law that in case of un-abated assessment, addition can be made in an assessment made u/s.153A of the Act only on the basis of incriminating materials found during the course of search. The above proposition of law is well settled in the following decisions: 1) Pr..CIT Vs. Meeta Gutgutia Prop. M/s.Fems "N" Petals [2017) 395 ITR 526 (Del). 2) All Cargo Global Logistics Ltd. (2015) 374 1TR 645 (Bom) 3) Pr. CIT-2, Kolkata vs M/s. Salasar Stock Broking Ltd., G.A.No.1929 of 2016(Kol) 4) Pr. CIT vs. Somaya Construction Pvt ltd., 387 ITR 529 (Guj) 5) CIT vs. IBC Knowledge Park Pvt Ltd., 385 ITR 346 (Kar) 6) CIT vs. Gurinder Singh Bawa, 386 ITR 14....