TaxTMI 
TaxTMI 
2025 (6) TMI 1292
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Delhi's order dated 24.03.2014 passed in case no. 400/13-14/CIT(A)- III, involving proceedings under Section 153A/143(3) of the Act. 2. 3106/Del/2014 for AY: 2009-10 M/s. Classic Lamps Industries Pvt. Ltd. DCIT, Central Circle-17, New Delhi CIT(A)-III, New Delhi' order dated 24.03.2014 passed in case no. 401/13-14/CIT(A)- III involving proceedings under Section 153A/143(3) of the Act. 3. 5205/Del/2014 for AY: 2009-10 Smt. Madhu Gupta DCIT, Central Circle-17, New Delhi CIT(A)-III, New Delhi' order dated 18.07.2014 passed in case no. 371/13-14/CIT(A)- III involving proceedings under Section 153A/143(3) of the Act. 4. 5547/Del/2014 for AY: 2009-10 ACIT, Central Circle-17, Gurugram Smt. Madhu Gupta CIT(A)-III, New Delhi' order dated 18.07.2014 passed in case no. 371/13-14/CIT(A)- III involving proceedings under Section 153A/143(3) of the Act. 5. 6258/Del/2014 for AY: 2009-10 Smt. Veena Gupta DCIT, Central Circle-17, New Delhi CIT(A)-III, New Delhi' order dated 05.09.2014 passed in case no. 381/13-14/CIT(A)- III involving proceedings under Section 153A/143(3) of the Act. 6. 6474/Del/2014 for AY: 2009-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fy and/ or withdraw any ground(s) of appeal at or before the time of hearing. 3. Learned counsel submits during the course of hearing that the assessee does not wish to press it's 1st, 2^nd, 4^th, 5^th, 7^th and 8^th substantive grounds. Rejected accordingly. 4. This leaves us with the assessee's remaining 3rd and 6th substantive grounds, wherein it challenges both the learned lower authorities' action making section 68 unexplained cash credit addition of Rs. 1,00,00,000/- i.e. reduced from Rs. 2,13,35,000/- to Rs. 1 crore only by the CIT(A) vide the following detailed adjudication: "9. I have gone through the above submissions of the appellate and have considered the facts and evidences on record. It is seen that in the instant case a ledger was seized from the premises of the director of the appellant company from which it was found that cash has been paid to one Mr. Shaleen Vajapai on various dates and cheques for the equivalent amount have been received as share capital by the appellant as well as by various group entities. 9.2 On the basis of the notings in the ledger account of Mr. Shaleen Vajapai, the AO treated the entire share capital of Rs. 2,13....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oceedings also brought to the notice the fact that during the assessment proceedings the AO have also made independent enquiries from some of the share applicants and no adverse finding have been noticed by him. Consequently vide this office letter dated 17.06.2013, the report from the AO in the matter was called for. The letter dated 17.06.2013 issued by this office reads as under :- Dated: 17.06.2013 "......F. No.CIT (A)-III/2013-14/ The Deputy Commissioner of Income-tax Central Circle-17, Jhandewalan Ext., New Delhi. Sub:- Appeal Nos. 400/2013-14 to 402/2013-14 in the case of Classic Lamps Industries Pvt. Ltd. for the Assessment Years 2008-09 to 2010- 11-regarding The appellate proceedings in the above-mentioned cases are in progress and the additions are made under Section 68, by treating share application money received by the appellant in various years on the basis of notings on page number 124 of Annexure A-28. This Annexure A-28 is a day book for one quarter starting from 01.10.2007. On the basis of notings of page no. 124 which is the account of Mr. Shaleen Vajapai, it is seen that the appellant has received cheque o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....13,35,000/- made on account of bogus capital in respect of all the entities was correct. 9.7 In response to the AO's above report, during the appellate proceedings the appellant stated that all the entities did responded to the notice under section 131 and they also filed before me the copy of letter from the 4 entities (out of 7 entities) bearing a "Speed Post" stamp of the Indian Postal authorities, alongwith with evidence that they have duly responded to the AO's summons and have filed all the documents viz. Bank statement, financial statements etc. to prove the identity, creditworthiness and genuineness of the share application transaction and no adverse finding has been recorded by the AO. The copies of the documents filed by the 4 entities were again made available to the AO by this office to the AO and he was requested to submit his report. This office letter dated 24.01.2014 reads as under:- "F. No.CIT (A)-III/Misc./2013-14/ Dated: 24.01.2014 The Asstt. Commissioner of Income-tax, Central Circle-17, Jhandewalan Ext., New Delhi. Sub :- Appeal Nos.400 and 401/2013-14 in the case of Classic Lamps Industr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....not correct by relying entirely on the notings on page 124 of Annexure A-28 (which relates to only Mr. Shaleen Vajapai and not to any of the 7 entities) and thereby coming to the conclusion that share application money received from the 7 entities is not a genuine transaction and thus the credit in the appellant's book remained unexplained. 9.9 Hence, in view of the above discussions, no addition can be made on account of unexplained credit in respect of the money of Rs. 80,00,000/- received from 7 entities and Rs. 33,35,000/- received from the director/ group entities/relatives, as nothing has been brought on record by the AO to show that the information filed by the appellant is not genuine one. 9.10 In coming to the above conclusion, I carry support from the decision of the Hon'ble Delhi High Court in the case of CIT vs. Gangour Investment Ltd. (Income Tax Act No. 34/2007) dated 30.1.2009 where it was held that Revenue can make addition under Section 68 of the Act only if the assessee is unable to explain the credits appearing in its books of accounts. In the said case the appellant has duly explained the said credit entries in the form of various docum....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... addition under Section 68 has made the following observation vide Para 10 of the said order which read as under: Thus, the assessee is under a burden to explain the nature and source of the share application money received in a given case. For discharging this, the assessee has to establish: (a) the shareholder's identity; (b) genuineness of the transaction; and (c) the creditworthiness of shareholders. In case the investor/ shareholder is an individual, some documents will have to be filed or the said shareholder will have to be produced before the Assessing Officer to prove his identity. If the creditor/subscriber is a company, the registered address or PAN identity, and other relevant details are to be furnished. Genuineness can also be proved by disclosing materials painting to receipt of the share application money from the applicant. Copies of shareholders' register, share application forms, transfer registers, etc. can be furnished. So far as the share applicants" creditworthiness is concerned, the assessee can prove it by producing bank statements. Prima facie, these may satisfy the requirement of law. The Assessing Officer has t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....japai is a director) stands confirmed on account of bogus share capital or unexplained credit under section 68. The appellant thus gets a relief of Rs. 1,13,35,000/-." 5. Learned counsel representing assessee has raised multiple arguments i.e. the impugned addition is not sustainable in law as the assessee had not commenced with its business as this sum could not have been treated as its unexplained cash credit as per CIT Vs. Bharat Engineering and Construction (1972) 83 ITR 187 (SC), no opening balance credit has been granted by the lower authorities' the very amount has already stands assessed in group entities, no telescopic opening has been granted and that the same has been wrongly sustained in its hands despite the fact that it had filed supportive evidence in the course of assessment as well as in the lower appellate proceedings, respectively. 6. Learned CIT(DR) has placed strong reliance on the CIT(A)'s foregoing partly confirming the impugned section 68 unexplained cash credit addition in assessee's hands. 7. We have given our thoughtful consideration to the foregoing rival stands and find only part merits in assessee's arguments. We wish to make it clear that alt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....14. 12. Learned CIT(DR) submits at the outset that the Revenue's instant latter cross appeal ITA No.6474/De/2014 in case of Smt. Veena Gupta involves tax effect of Rs. 51,81,117/- only which is less than the minimum tax effect prescribed of Rs. 60 lakhs in the CBDT latest circular No. 9/2024, dated 17.09.2024 made applicable with retrospective effect in pending cases as well. We thus reject the Revenue's instant appeal ITA No.6474/Del/2014 for this precise reason subject to all just exceptions. 13. We are now left with the remaining three appeals hereinafter i.e. ITA No. 5205/Del/2014 (Smt. Madhu Gupta) and ITA No. 6258/Del/2014 (Smt. Veena Gupta) with Revenue's cross appeal ITA No. 5547/Del/2014 in the former's case; respectively. 14. Learned counsel submits during the course of hearing the both these assessees do not wish to press the legal grounds herein as their only endevour to reverse the CIT(A)'s action upholding the identical addition of Rs. 1,09,89,285/- each as against that made by the Assessing Officer to the tune of Rs. 5,25,00,000/- on substantive basis in Smt. Madhu Gupta's case and protective one in Smt. Veena Gupta's hands; respectively. 15. Learned CIT(....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rusted the said property for development to one builder named Home Developers (P) Ltd. (HDPL). (ii) The builder (HDPL) carried out the development of property at their own cost and developed dwelling units on the said property consisting of basement, ground floor, 1st Floor and 2nd Floor. (iii) After the development of the said property the HDPL were to retain basement (lower ground floor) and ground floor and Mr. Prabhinder Singh was to retain 1st floor and 2nd floor (including terrace). (iv) Mr. Prabhinder Singh retained 1st floor, and sold 2nd floor (alongwith terrace) to the appellant jointly with Mrs. Veena Gupta for a sum of Rs. 1,21,00,000/- pursuant to "agreement to sell" dated 04.05.2006. (v) The appellant and Mrs. Veena Gupta being joint owners of 2nd floor of C- 324, Defence Colony, sold the terrace rights to HDPL for Rs. 20,00,000/- on 13.02.2008 under an "agreement to sell". (vi) HDPL developed the terrace of 2nd floor and built the 3rd floor on property C-324, Defence Colony at their own cost. (vii) During search a photocopy of "Receipt" on Rs. 100 stamp paper was seized from appellant's residence vide page 71 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appellant that they were not the owner of the property C-324, Defence Colony, and where not party to any transaction on sale of 2nd floor and 3rd floor deserves to be jettisoned. 10.3 The appellant's another contention that Mr. Prem Shanker Jha has given the affidavit wherein he admits that no cash component have been given on the purchase of 2nd and 3rd floor also has no legs to stand, because in my humble view, affidavit of Mr. Jha is only a self serving document given by an interested party and it is not practical to expect the purchasers of the property to depose against the seller since both of them are party to the same transaction in which on money is involved. For this preposition, I rely on the decision of Hon'ble Delhi High Court in the case of CIT vs. Sonal Constructions and Urmila Lodhi in ITA No. 1132/2007 and ITA No. 583/2010 dated 04.10.2012 that: It was held by the Hon'ble court in the above case as under: "17. As to the corroboration sought by the Tribunal in support of the seized documents, it is not an inviolable rule applicable to all situations and to all cases that every seized document should be corroborated before any ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd later on received payment of Rs. 1,69,00,000 from Mr. Prem Shankar Jha for the sale of 3rd floor. 10.7 The above letter received from HDPL (filed by the appellant) was forwarded to the AO to verify the contents thereof, vide this office letter dated 19.05.2014, which reads as under :- ".......... The Asstt. Commissioner of Income-tax, Central Circle-17 Jhandewalan Extn. New Delhi. Sub:- Appeal No. 371/2013-14 in the case of Smt. Madhu Gupta for the Assessment year 2009-10-Reg.- The appellate proceedings in the above mentioned case are in progress and during the course of hearing the appellant has stated that as per seized document No. 71 of Annexure VA-2 the AO has added Rs. 5.25 crores being 'on money' for the sale of 2nd and 3rd floor of C-324, Defence Colony, New Delhi. During the appellate proceedings the appellant pleaded that they were owner of 2nd floor only and terrace rights of 2nd floor were sold to Home Developers Pvt. Ltd. Later on Home Developers Pvt. Ltd. constructed 3rd floor out of their own resources. Subsequently, 2nd floor and 3rd floor were sold to Mr. Prem Shankar Jha on 07.07.20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1 dated 25.06.2014 for his personal attendance on 27.06.2014 at 12.30 pm for enquiry as per the issues raised in your letter. In response there to Sh. Vineet Gupta, authorized signatory of the company for property no. C-324, Defence Colony, New Delhi, appeared on 30.06.2014. He was asked to file his reply/ documents in writing on the following queries. 1. Whether M/s Home Developers Put. Ltd. has purchased terrace right of 2nd floor from Veena Gupta and Madhu Gupta for Rs. 20,00,000 on 13.02.2008. Whether 3rd floor at C-324, Defence Colony, New Delhi, was constructed. If so detail to be filed. iii. Whether 1,69,00,000 was received and if so from whom received and for what purpose and mode of payment thereof. Now a letter has been filed from M/s Home Developers Put. Ltd. on 07.07.2014 in this respect whose copy is enclosed for your ready reference. Vide the letter agreement to sale dated 13.02.2008 entered into between Sh. Prabhinder Singh through Sh. Suresh Kumar Gupta (AR) and Smt. Veena Gupta and Smt. Madhu Gupta and M/s Home Developers Put. Ltd. (copy enclosed) wherein they agreed to have purchased the entire terrace over and above second floo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ctor of Income Tax (Inv .- 1) and vide letter dated 23.10.2009 and 16.11.2009 submitted to ADI(Inv.)-V. I agree that the statement recorded under section 132(4) on oath cannot be dismissed lightly, as has been held by Hon. Supreme Court in Awadh Kishore Das v Ram Gopal AIR 1979 SC 861 that "an admission is the best evidence that an opposite can rely upon and though not conclusive could be decisive of the matter, unless successfully withdrawn or proved erroneous." Therefore, statement under section 132(4) has a very high evidentiary value and it cannot be retracted without sound reasoning and corroborative evidence. The learned Ahmedabad Bench in the case of Dy. CIT vs. Bhogilal Moolchand (2005) 98 TTJ (Ahd) 108: (2005) 96 ITD 344 (Ahd) held that "statement given under section 132(4) is not conclusive and person can retract under certain circumstances. However, time gap between statement and retraction of statement is one of the important points to be taken into account to decide as to whether the statement was given under mistaken belief of either fact or law. However when assessee retracted statement made under section 132(4) after three and a half months of disc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elated party in ITA No. 2718 & 2038/Del/2014) that the impugned addition ought to be made only in the year of sale deed only. 20. The Revenue on the other hand places strong reliance on the assessment discussion making the impugned substantive and protective additions in both these assessees' hands. 21. We have given our thoughtful consideration to the issue in hand and find only part merit in the Revenue's arguments and the assessee's stand carries no substance. We wish to make it clear first of all that the impugned addition is based on a receipt issued by both these assessees duly acknowledging the amount of Rs. 4.25 crores as on "13.05.2008". This receipt admittedly forms the seized document only. Learned counsel's vehement contention before us is that the same does not contain any date. He could not dispute the clinching fact that the back side of the receipt quotes its date as "13.05.2008" only which not only carries presumption of correctness regarding date and time but also qua contents thereof as per section 292C of the Act. The assessee's stand that the impugned addition could be made in the yar of registration has to be rejected only in light of....