TaxTMI 
TaxTMI 
2023 (3) TMI 772
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....llowing grounds of appeal:- "1. Whether on the facts and in the circumstances of the case, Ld. CIT(A) was justified in deleting the addition of Rs.5,61,00,000/- made by the Assessing Officer on account of sale of unquoted shares in the course of assessment in absence of identity, genuineness and creditworthiness of the purchaser/buyer companies. 2. Whether on the facts and in the circumstances of the case, Ld. CIT[A] was justified in deleting the addition of Rs. 5,61,00,000/- without taking into cognizance of the Remand Report sent by the Assessing Officer wherein it had been categorically stated regarding lack of genuineness and creditworthiness of the transactions in question. 3. Whether on the facts and in the circumstances of the case, Ld. CIT[A] was justified in deleting the addition of Rs.5,61,00,000/- whereas the Assessing Officer raised suspicion in the Remand Report regarding sources and sources of funds raised by the investing companies. That the Ld. CIT(A) had erred in holding that the sale of unquoted shares are not a Sham transactions even though this shares are illiquid assets and the assessee has introduced his unaccounted money in the form of sale of unquoted ....
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....d. All the other details in order to explain the alleged sum were filed by the assessee, however, the ld. Assessing Officer was not satisfied and he concluded the assessment making addition u/s 68 of the Act of Rs.5,61,00,000/- and assessed the income of the assessee at Rs.5,60,98,160/-. 5. Aggrieved the assessee preferred appeal before the ld. CIT(A) and filed various other details to explain the amount received from loan creditors against sale of investment. The ld. CIT(A) called for a remand report and the same was received on 19/09/2019. Thereafter, the ld. CIT(A) examined the details filed by the assessee in order to prove the identity, creditworthiness of the loan creditors and genuineness of the transactions, including sale bills issued by the assessee company to these parties, confirmation and copies of PAN cards. Thereafter, the ld. CIT(A) relied on the various judicial pronouncements and came to the conclusion that the alleged transaction was towards sale of equity shares and the assessee has successfully explained the source of the said sum and, therefore, no addition is called for. 6. Aggrieved the revenue is in appeal before us. 7. The ld. D/R vehemently argued refe....
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.... of Income (ii) Source of Funds (iii) bank statements (iv) PAN card (v) Computation of income & tax. (vi) Audited Financial Accounts for F.Y. 2013-14 (vii) Bill for sale of Investment. Chin Purni Agencies Pvt. Ltd. (i) Acknowledgement of Return of Income (ii) Source of Funds (iii) bank statements (iv) PAN card (v) Computation of income & tax. (vi) Audited Financial Accounts for F.Y. 2013-14 (vii) Bill for sale of Investment. Chandra Ghanta Bargain Pvt. Ltd. (i) Acknowledgement of Return of Income (ii) Source of Funds (iii) bank statements (iv) PAN card (v) Computation of income & tax. (vi) Audited Financial Accounts for F.Y. 2013-14 (vii) Bill for sale of Investment. Katyani Sales Pvt. Ltd. (i) Acknowledgement of Return of Income (ii) Source of Funds (iii) bank statements (iv) PAN card (v) Computation of income & tax. (vi) Audited Financial Accounts for F.Y. 2013-14 (vii) Bill for sale of Investment. Palanhar Merchants Pvt. Ltd. (i) Bill for sale of Investmen....
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.... & tax. (v) Audited Financial Accounts for F.Y. 2013-14 (vi) Bill for sale of Investment. 10. Further we notice that information called for by the ld. Assessing Officer u/s 133(6) of the Act were duly served upon all the creditors and even in the remand proceedings, most of the loan creditors have again confirmed the transaction and only in some cases, creditworthiness has been doubted by the ld. Assessing Officer based on the small amount of bank balance standing at the opening of the year. Assessee has filed the following details in the case of the alleged sundry creditors:- a) Identity of these parties b) Bank statement of these parties showing the transactions undertaken by the assesse with them c) Annual report of all these parties d) Copy of ITR filed by these parties with the Income Tax Department e) Computation of income filed by these parties f) Sale bill issued by the assessee company to these parties evidencing the sale of shares g) Confirmation from these parties sent by them to the AO directly h) PAN cards 11. Further, we notice that nowhere in the course of assessment proceedings, any dispute has been raised about the transactions r....
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....rance of the directors of the purchaser companies. As there was no compliance this addition u/s 68 is made. In our view this is against the proposition of law laid down by the Hon'ble Supreme Court in the case of CIT vs Orissa Corporation(P)Ltd (1986)159 ITR 78 (SC). We find that the share purchasers are all income tax assesses and they have filed return of income and the payments were made through account payee cheques and the share purchasers have confirmed purchase of the shares. There is no evidence with the revenue that the sale in question is a bogus sale. Under the circumstances the issue is whether addition can be made u/s 68 of the Act. We are of the opinion that no addition can be made u/s 68 of the Act on the facts and circumstances of this case. The assessee has discharged the burden of proof that is on it. There is no contrary evidence brought on records by the AO to disprove the claim of the assessee. Addition has been made on suspicion and surmises. 5. The Delhi 'G ' Bench of the Tribunal in ITA NO.2264/Del/2013 in the case of ITO vs M/s Srishti Fincap Pvt. Ltd. Order dated 07.10.2015 held as follows : "9. From the facts and circumstances of the case,....
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.... ITAT in I.T.A. No. 1788/Del/2007 for the Assessment Year 2000-2001 wherein the order of the Ld. CIT(A) making the similar deletion was upheld by observing in para 6 as under:- "We are of the view that the assessee had produced copies ) of accounts, bills and contract notes issued by M/s. MKM Finsec Pvt. Ltd., and had been maintaining books of account as per Companies Act. The assessee had also demonstrated the purchase and sale of shares over a period of time as seen from the balance sheet. In our opinion, the Assessing Officer has simply acted on the information received from the Investigation Wing without verifying the details furnished by the assessee. The assessee has also produced best possible evidence to support its claim. Consequently the addition made by the Assessing Officer cannot be sustained." ix) that the issue in controversy is squarely covered by the judgements: Vishal Holding and Capital Pvt. Ltd. and Jatin Investment Pvt. Ltd. (supra) as the assessee in the instant case has purchased the shares to the tune of Rs.25,10,000/- in the Assessment Year 2003-04 and then credited the receipt on account of sale of shares to the tune of Rs.25,10,000/- to its P & L acco....
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....submitted that the case of the assessee is squarely covered by the decision of this bench of the Tribunal in the case of ITO vs. M/s Vishal Holding and Capital Pvt. Ltd. in ITA no. 1788/Del/2009 order dated 17.07.2009 which has been upheld by the Hon'ble Jurisdictional High Court as reported in (2011) 200 Taxman 186 (Delhi). It was further, submitted that the issue is also covered by the order of the ITAT, Delhi Bench in the case of ITO vs. Goodwill Cresec Pvt. Ltd. in ITA No. 4151/Del./2010 order dated 25.01.2012. Reliance was also placed on the following cases laws :- 14 4325 & 4326/ Del/2009 "1. CIT vs. Sh. Udit Narain Aggarwal, ITA No. 560 of 2009, dt. 12.12.2012 2. CIT vs. Sudeep Goenka, ITA No. 468 of 2009, dt. 3.01.2013. 3. CIT vs. Anirudh Narain Aggarwal, ITA No. 195 of 2010, dt. 16.01.2013." It was pointed out that the same issue has been decided by the I.T.A.T. in assessee's own case in I.T.A.T. No. 1584/Del./2009 for the A.Y. 2002-03 vide order dated 13.11.2009, in assessee's favour (copy of the order was furnished which is placed on record) 12. We have considered the submissions of both the parties and gone through the material available on the rec....
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....ssment year 2003-04, shall apply mutatis mutandis for assessment year 2004-05. 14. We, therefore, considering the totality of the facts do not see any valid ground to interfere with the findings of the Ld. CIT(A). Accordingly, we do not see any merit in this appeal of the department. In ITA no. 4326/Del./2009 of the assessment year 2004- 05 identical issue having similar facts is involved, the only difference is in the amount of addition which was deleted by the Ld. CIT(A). Therefore, our findings given in former part of this order, in respect of 16 4325 & 4326/ Del/2009 assessment year 2003-04, shall apply mutatis mutandis for assessment year 2004-05." 7. The Hon'ble Delhi High Court in the case of Principal C.I.T. vs Jatin Investment Pvt. Ltd. [2017 ] TMI 342 (Delhi) held as follows :- "4. The ITAT agreed with the conclusions of the CIT (A) upon its independent examination of the record. It also discounted the Revenue's submissions that the investment shown in the book of accounts and reflected as assets in the side of the balance sheet, should have been properly treated and that in the absence of such treatment .Section 68 applies. The ITAT rejected this contention....
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....(A) had deleted the addition and the said deletion was contested by the revenue before the Tribunal and it was decided by the Tribunal vide order dated 17th July, 2009 in ITA No.1788/Del/2009 and the order of the CIT (A) was upheld with the following observations:- "5. We have considered rival contentions and gone through the records. In our view the order of the CIT(A) does not require any interference. First of all the assessee has produced all details in respect of its transactions. Copies of the contract notes and bills, that were issued to it, were all made available. The Assessing Officer has not verified these details and in respect of the material, which has been relied upon by him, he has not provided any findings of the investigation to the assessee. Therefore, in these circumstances, the addition made by the Assessing Officer cannot be said to be on the basis C.O. No.16/Del/2011 of some evidence that was put to the assessee in the course of assessment proceedings. The learned CIT(A) has correctly deleted the addition and we decline to interfere. Accordingly, order of CIT(A) on the issue in question is upheld. 6. In the result, revenue 's appeal is dismissed. 15....