TaxTMI 
TaxTMI 
2023 (3) TMI 1097
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....ing disposed of by a common order for the sake of convenience. ITA 290 of in the order of 20 2018 for assessment year 1112 3. At the time of hearing of the instant appeal, the Learned counsel appearing for the assessee submitted before us that the appeal preferred by the assessee has already been settled under the VSV Scheme. In that view of the matter they don't want to proceed with the matter further. Taking into consideration this particular aspect of the matter and upon perusal of the documents relied upon by the assessee in support of the contention made above, we dismiss the appeal preferred by the assessee as withdrawn. ITA No. 460/IND/2019 for assessment year 2011-2012 4. The instant appeal filed by the revenue is directed against the following grounds : "Ground No. 1: Was the Ld. CIT(A) justified in deleting the addition made by the AO of Rs. 37.89,000/- as 68 of the IT Act, 1961 with respect to credit entry received from M/s Maxworth Leafin and Investment Pvt. Ltd., especially in view of the fact that the nature and character of the transaction, as well as its creditworthiness, was not established either by the assessee company of e creditor company? ....
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....der Section 143(2) of the Act dated 14.08.2013 was duly served upon the assessee. Initially issues cropped up in regard to the jurisdiction of the Learned CIT(A) in issuing orders to the assessee which was ultimately went up to the Hon'ble Madhya Pradesh High Court. In Writ Petition being W.P. No. 1609 of 2014, the Hon'ble High Court was pleased to direct the competent authority to decide the issue in regard to the jurisdiction and to pass appropriate order whereupon the Chief Commissioner of Income Tax, Indore, ultimately passed an order on the question of jurisdiction rejecting the prayers of the assessee for transfer of files to Mumbai for the reasons contained therein. 6. Ground No. 1: Deletion of addition of amount of Rs.37,89,000/- in respect of credit entry received from one M/s. Maxworth Leafin & Investment Pvt. Ltd. is the subject matter before us. 7. We have heard the rival submission made by the respective parties and we have also perused the relevant materials available on record. It appears from the records that the assessee received advance from M/s. Maxworth Leafin & Investment Pvt. Ltd. In regard to such advances received by the assessee since no evidence was ....
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....orth Leafin and Investment Private Limited. The Assessing Officer has neither shares any details received from these parties nor have asked any query in relation to advanced received from this parties. Company wise submissions of the Appellant are as under. a) Shubhmangal Traders Private Limited: As mentioned in earlier paragraphs, the submission by the Assessing Officer that Shubhmangal Traders Private Limited is not in existence is incorrect. Balance Sheet and Profit & Loss of Shubhmangal Traders Private Limited have been downloaded from MCA website by paying requisite fees. (Copy of Both Balance Sheet and Challans are attached herewith as Annexure -7 for your kind reference). Further, the Assessing Officer has issued notices u/s. 133(6) of the Act to all three parties and they have confirmed the transactions that they have given trade advances to the Appellant. These prove that the company is in existence and claim of the Assessing Officer regarding non-existence of Shubhmangal Traders Private Limited is baseless and misleading. He has again under the influence of his prejudiced mind, made an effort to give wrong picture without thinking that he has relied on the docume....
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....Private Limited. Also in case of Viksit Engineering Limited, the Assessing Officer has not given justification for addition The same is enclosed as Annexure 10. Further, the Appellant submits that, as far as provisions of Section 68 of the Act is concerned, the Appellant has already discharged its obligation through providing evidences like the details name, address, bank statement, net worth of the counterparties, etc. to prove identity, genuineness of transaction and creditworthiness of counterparties. Further, the identity of the counterparties is proved beyond doubt as the Assessing Officer has issued notices u/s. 133(6) of the Act and they have replied also. Even the Assessing Officer has relied on its letter without conflicting about their identity. As discussed above, addition u/s 68 of the Act cannot be made where the assessee has discharged its obligation through providing evidences to prove identity, genuineness of transaction and creditworthiness of counterparties. Further, it would be relevant to take note of the decision of the Hon'ble Supreme Court in the case of Lovely Exports (P) Ltd. (supra), wherein the Apex Court observed that once the assessee has g....
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....ified. On verification of the same, the financial status as well as the transaction was clearly reflected. (b) Copy of confirmations given by Shubhmangal Traders Private Limited, Maxworth Leafin & Investment Private Limited and Viksit Engineering Limited was also verified. In the confirmation, the transaction was accepted by those companies. (c) Copy of Ledger account of Shubhmangal Traders Pvt. Ltd, --- Maxworth Leafin & Investment Private Limited & Viksit Investment Engineering Limited in the books of appellant was also verified. On verification of the said documents, this transaction was clearly reflected. 5.7 During the appellate proceedings, the appellant has submitted the bank details and ledger accounts of the said companies. After verifying the same, all the advance so taken by the appellant company were found to be correct but the appellant had failed to explain the nature of transaction with the company viz Shubhmangal Traders Pvt. Ltd and Viksit Engineering Ltd on which the appellant had received the advance. Merely the amount was reflected in the bank statement and ledger account of the said company which does not mean that the advance was tak....
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....axworth Leafin & Investment Pvt. Ltd. confirming the fact of trade advances given by them to the assessee company, which was duly verified. The same is also verifiable from page 187 of the paper book filed before us. The same also contains the bank statement, Ledger account, copy of income tax return, details of the directors of the said M/s. Maxworth Leafin & Investment Pvt. Ltd. In fact, the copy of the balance sheet, profit and loss account of the said company as on 31.03.2011 and 31.03.2018 were verified wherefrom the financial status and the transactions made with the said company by the assessee were clearly reflected. The transaction in question was duly confirmed by the said company. Furthermore the trade advances received by the assessee company has been claimed to have been refunded on 31.03.2012 which was also verified by the Ld. CIT(A). In fact, the advance received by the assessee from other two companies, namely, Shubhmangal Traders Pvt. Ltd. and Viksit Engineering Ltd. were also in question. However, considering the identical set of documents the Ld. CIT(A) came to a finding of identity of the said two companies and genuineness of those transactions been proved but t....
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....ar under consideration since nothing has been produced in support of the genuineness of such entries, the deposits has been treated as non-genuine and addition to the tune of total amount of Rs.44,56,79,235/- has been made out of which the impugned addition of Rs.22,54,71,970/- under Section 68 of the Act relates to the transaction with the above-mentioned 3 companies. 14. We have heard the rival submissions made by the respective parties and we have also perused the relevant materials available on record. 15. Before the First Appellate Authority, the assessee submitted that the said companies had invested into shares of Mid India Steel & Power Ltd. through the assessee before us. These two companies are independent companies and therefore do not have any relationship with the assessee company. The assessee submitted confirmation letter, bank statement, copy of Income Tax Return, details of Director, ledger account of investment in shares to MIEL in the case of NSIL Infotech Ltd. The said document is also available before us being part of the paper book commencing from page 112 to page 117. The Ledger account of shares of MIEL is also appearing at page No. 490 of the paper bo....
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....f the Act. In this contention, reliance is placed on the following decisions wherein it has been held that section 68 of the Act was not applicable as there was no cash credit during the year under consideration: > In the case of Asst. CIT Vs. Ats Promoters & Builders (P.) Ltd. [2015], (5:7 taxmann.com 21) (All.), the Hon'ble Allahabad High Court has held that: "6. The Tribunal is correct in the view which has been taken because Section 68 of the Act permits an addition to be made where any sum is found credited in the books of account of the ' assesses for that year. In the present case, on a plain reading. Section 68 of the Act was not attracted. Hence, no substantial question of law would arise on this ground." > In the case of ACIT Vs. Golden Line Studio Pvt. Ltd. [2018] 98 taxmann.com 299 (Mumbai - Trib.), the Hon'ble Mumbai Tribunal has held that : "15. ..............Yet another point, which supports the case of the assesses is that the assessee had received funds in the earlier years and not during the year under consideration. During the year under consideration, the assessee has transferred the funds to "preference shares acc....
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....SIL Infotech Limited and NSIL Power Limited and the said transaction had taken place in A.Y. 2010-11. The said fact was also not disputed by the AO. The appellant has relied on the various case laws so discussed in its submission. The law clearly mandates that no addition can be made for this year in respect of transaction pertaining to earlier year. Hence, in light of the above facts and judicial decisions so discussed above, the addition so made by the AO is no longer sustainable and is - accordingly deleted." It is relevant to mention that the documents which were placed before the First Appellate Authority and verified by him have also been filed before us. The copy of annual return of Mid India Steel & Power Ltd. clearly shows the transfer of shares by the assessee is in the name of NSIL Infotech Ltd. and NSIL Power Ltd. There is no doubt that such transactions were related to sale of shares of Mid India Steel & Power Ltd. by the assessee to NSIL Infotech Ltd. and NSIL Power Ltd. which took place only in A.Y.2010-2011. The Ld. DR at the time of hearing of the instant appeal is also failed to controvert such fact as borne out from the records. In that view of the matter when....
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....on and the respective amount were clearly reflecting in the balance sheet and Profit and Loss account of Top Trade Mercantile Private Ltd. and Satguru Iron & Steel Co. Pvt. Ltd. From the confirmation filed by the parties, it has also been verified that the parties had accepted the transactions so done by them with the assessee company. Even from the Ledger account, the transaction of both the companies with the assessee has been found to be clearly reflected. Copy of balance sheet of the assessee company for A.Ys. 2010-11 & 2011-12 alongwith confirmation were also verified which establishes the fact of advance given and received back from the above parties as also observed by the First Appellate Authority, upon verification of the above documents placed before him. It is relevant to mention that those documents have also been verified by us and the Ld. DR has not been able to controvert such facts borne out from the records placed before us. As it is a fact that the assessee had duly accounted for the said transaction in its books of accounts and when the said parties had confirmed the same, no addition can be said to be justifiable on account of receiving back the advances so give....
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....in the case of Ruchi Agro Tech and Rs15,09,43,500/- in the case of Shubhmangal Traders has been done in one go, for which there 'is'' one bill and payment also of such huge amounts has been made in one go. The invoice submitted by both are identical, and has no supplier's reference, no buyer's order no., no dispatch document no., no delivery note date, no destination, and no other reference. The only thing mentioned is the invoice no., which is interestingly "FRO/001" in the case of Ruchi Agro Tech, and "FRO/002" in the case of Shubhmangal, which shows that these happen to be the first set of purchases made by them during the entire year, that too in the months of February and March 2011. The improbability of all this put together. where such high value sales/purchases have been made in the most callous manner with no mention of even the bare minimum details shows that the entire transaction is a sham, and only a means of providing accommodation entries and rotation of funds. A cursory search about these two companies on MCA/Zauba shown that Ruchi Agro Tech is no longer known by that name it was renamed as Middlemist Agro Tech Put Ltd yet it has submitt....
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....On verification of the same, the transaction amount was clearly reflected in the bank statements and ledger account. (c) The Profit & loss account of the appellant's company was also verified. In the said documents, this transaction was clearly reflected. 5.23 Hence, it is clear from the above documents and verification of the same that the appellant company had done transaction with the above companies. This fact is also clear from the bank statements and P&L account of the said companies. Further, as mentioned earlier, these sales have already been offered as income by the appellant in the P&L account, hence, making addition on this bank entry would be double taxation of the same amount which is not permissible in law. In light of the above facts and circumstances of the case, the addition so made by the AO is hereby deleted and accordingly, these grounds of appeal are allowed." 25. It is relevant to mention that we have also verified those documents as submitted before us by way of a paper book filed by the assessee the contents whereof has not been doubted by the Ld. Representative of the Department. Further that the sales has already been offered as in....