9911796707
TMI Blog2007 (1) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... ained share capital." 4. The learned Departmental Representative supported the assessment order and reliance was placed on the judgment of Hon ble Delhi High Court rendered in the case of CIT v. Sophia Finance Ltd. [1994] 205 ITR 98 (Delhi)(FB). It was submitted that as per this judgment of Hon ble Delhi High Court, the Assessing Officer is empowered to make addition under section 68 of the Income-tax Act with regard to issue of share capital. It was submitted that the judgment of Hon ble Delhi High Court rendered the case of CIT v. Steller Investment Ltd. [1991] 192 ITR 287 (Delhi) which has been affirmed by the Apex Court as per judgment in Sophia Finance Ltd. s case ( supra ) is no more a good law because as per judgment of the Full Bench of the Hon ble Delhi High Court rendered in the case of Sophia Finance Ltd. ( supra ), this judgment of Hon ble Delhi High Court in the case of Steller Investment Ltd. ( supra ) was distinguished and it was held that the Assessing Officer can make addition under section 68 with regard to the share capital also if it is found that shareholders are not existing. 5. As against this, the learned Authorised Representative of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holders except 25 persons has been established. The learned CIT(A) has upheld the addition on account of those 25 persons whose identity has not been established and hence, fact remains that for the additions deleted by the learned CIT(A), identity of the shareholders is not in doubt. As per judgment of Hon ble Delhi High Court rendered in the case of Sophia Finance Ltd. ( supra ), the ITO would be entitled to enquire and it would indeed be his duty to do so as to whether the shareholders do in fact exist or not. If the shareholders exist then, possibly, no further enquiry be made and it is also held that the addition may be made by the Assessing Officer if the shareholders do not exist. In the present case, existence of shareholders is not in doubt with regard to those shareholders, addition on whose account has been deleted. We are of the considered opinion that the learned CIT(A) has examined the issue in detail and decided the issue in question correctly and we find no reason to interfere in his order on this issue. We, therefore, uphold his order on this issue and therefore this ground of the Revenue is rejected. 7. In the result, the appeal of the Revenue stands dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f business and the allowability of these expenses is not prohibited by section 37(1) or any other provisions of Income-tax Act. The addition of Rs. 1,23,750 is deleted." 14. The learned Departmental Representative could not point out any specific defect in the order of the learned CIT(A) on this issue and under the facts and circumstances of the case, we find no reason to interfere in the order of the learned CIT(A) on this issue and hence we uphold the same. This ground of the Revenue is rejected. 15. Ground No. 2 reads as under : "On the facts and in the circumstances of the case as well as in law, the learned CIT(A) erred in deleting the addition of Rs. 4,43,350 made by the Assessing Officer in respect of sales-tax expenses on unaccounted sales." 16. The learned Departmental Representative supported the assessment order whereas the learned Authorised Representative supported the order of the learned CIT(A). 17. We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below. We find that the learned CIT(A) has deleted this disallowance on the basis that this liability was set off against sales-tax r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer under section 131 on 21-3-2002. In this statement it is stated by Shri Mullick, Joint Managing Director, that there is no sale of sludge after the survey on 5-2-1999. It is also stated by him in this statement that when the survey was done, the officers could not find anything after a long period of survey and then after meeting with the officers of survey, he had disclosed voluntarily this amount of Rs. 3 crores and used the "income from sale of sludge" as a vehicle to declare the said income voluntarily. The Assessing Officer did not accept this contention of the assessee that there was no sale of sludge upto the date of survey and thereafter and he made addition of Rs. 50 lakhs on this account for the period 6-2-1999 to 31-3-1999. On appeal, learned CIT(A) deleted this addition by holding that there is no evidence of sale outside the books of account in the post-survey period and the action of the Assessing Officer of making presumptive addition cannot be sustained. Now, the Revenue is in appeal before us. 20. The learned Departmental Representative supported the assessment order. It is submitted by him that the learned CIT (A) has deleted this addition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention, reliance was placed on the following Tribunal judgments : 1. Pushpa Vihar v. Asstt. CIT [1994] 48 TTJ (Bom.) 389. 2. India Seed House v. Asstt. CIT [2001] 116 Taxman 40 (Delhi)(TM) (Mag.). 23. We have considered the rival submissions, perused the material on record and have gone through the orders of the authorities below and also the judgments cited by the learned Authorised Representative of the assessee. We find that it is noted by the Assessing Officer himself that during the course of survey, a small writing pad was found from the premises of the assessee in which, cash receipt of Rs. 2.90 crores was written. This is not the case of the Assessing Officer that any document or noting which was found suggests that such cash receipt was for sale of sludge. It is only in the statement of joint managing director recorded during survey, he has stated that this amount plus another Rs. 10 lakhs were received on account of cash sale of scrap and unused oil Known as sludge. In the light of this factual position, we find force in the contention of the learned Authorised Representative that no incriminating document was found by survey party showing income for sale ..... X X X X Extracts X X X X X X X X Extracts X X X X
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