TMI Blog2013 (6) TMI 429X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus respectfully relying on ITO Vs. M/s Diplomate leasing and Finance Pvt. Ltd.[2013 (6) TMI 349 - ITAT DELHI] if sale consideration was bogus then the AO ought to have given reduction in the sale proceeds reflected in the books of accounts before making any addition in this regard. Against revenue. Reopening of assessment - Held that:- Since the appeal of the Revenue has been dismissed by the earlier part of this order and cross objection of the assessee are only supportive to the impugned order, therefore, no reason to interfere with the findings of the CIT (A) upholding the action of the AO for initiation of proceedings u/s 147 and 148 against the assessee. Accordingly, cross objection of the assessee being devoid of merits is also dismissed. Cross objection of the assessee are dismissed. - ITA No.4486 /DEL/ 2011 - - - Dated:- 7-6-2013 - Shri J. S. Reddy And Shri C. M. Garg,JJ. For the Petitioner : Shri Rajiv Jain, CA. For the Respondent : Shri Tarun Seem, Sr. DR. ORDER Per C. M. Garg, J M:- This appeal has been preferred by the Revenue against the order of the Commissioner of Income Tax (Appeals)-XIX, New Delhi vide dated 18.07.2011 in Appeal No- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned addition with following observations and findings: "During the year 2002-03, the appellant company has sold 100000 shares of Abhey Holdings Ltd. costing Rs. 10 lacs to M/s Servel Technology System Pvt. Ltd. for a consideration of Rs. 17 lacs. The appellant company has also sold 50000 shares of Abhey Holdings Ltd. costing Rs. 5 lacs and 5000 shares of Gravure Cils (India) Ltd. costing Rs. 50,000/- to M/s Chipset Solutions Pvt. Ltd. for an aggregate consideration of Rs. 9 lacs. The sale consideration was received through cheques from both the parties. Out of these shares, 150000 shares of Abhey Holdings Ltd. formed part of the opening stocks held by the appellant company as on 01-04- 2002. As regards the shares of Gravure Cils (India) Ltd. are concerned, the appellant compny has applied for 50000 shares of Rs. 10/- each in MIs Gravure Cils (India) Ltd. during the year 2001:02 which were allotted on 29th June, 2002. It may be mentioned here thatthe appellant company earned and declared income of Rs. 10.50 lacs on the transactions of abovementioned sale of shares. The transactions generating income of Rs. 10.50 lacs were properly reflected in the accounts of the assessee compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company which resulted into double addition of the same amount. The Id. A.O. has also observed that the identity of'one of the party M/s Servel Technology System Pvt. Ltd. remained unproved as the PAN of the party did not exist in the computer data of the department. 9. Submitted that both the parties are incorporated companies as per the records of the Registrar of Companies. Both have been allotted PAN from the income tax department and have filed income tax returns. As far as bank statements of the parties are concerned, submitted that as per the alleged information provided by the Investigation Wing itself, both had bank accounts and payment were made by them to the assessee company through banking channels. As such the identity of the parties stands duly accepted even by the Investigation Wing of the department on whose information the proceedings had been initiated u/s 147 of the Act. Bank accounts of the said parties were at the root of the initiation of the present proceedings and the Ld. A.O. could not have made the alleged belief of escapement of income of the assessee company without having the bank statement of the said parties. As such, the allegation of failure to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... augment the fmancial resources in the shape of unsecured loans through conversion of one's own unaccounted money. In the instant case, the assessee company has neither accepted any share application money nor availed any unsecured loans. The assessee company has sold shares to the alleged parties in the normal course of its business and that too at a smart profit. Had it been the intention of the assessee company to introduce its so called unaccounted money, it would have taken the simple and cost effective route of introducing it through share application money instead of showing sales thereby earning profit of Rs. 10.50 lacs. More so, even if the version of the Id. AO is accepted, no addition could have been made to the total income of the assessee company under the circumstances as the assessee has already credited the amount of Rs. 26 lacs to its profit loss account under the heading 'sales'. II. Submitted further that the assessee is an incorporated body duly registered with the Registrar of Companies as well as the Reserve Bank of India. The assessee is a regular income tax assessee and the accounts of the assessee have been duly audited under the Companies law as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2003,confirmed account copy, ITR ask for assessmentyear 2003-04. PAN No. AABCS3129, NEW PAN:AAHCS 3031M M/S Chipset Solutions Pvt. Ltd. Copies of sale bills of shares dated 15.01.2003,confirmed account copy, ITR ask for assessment year 2003-04. PAN No. AABCC6934B 23.1 The assessee company purchased 2,00,000/- share of Abhey Holdings Ltd. in F. Y. 2000-01 and 49,000 shares were sold leaving a balance of 1,50,100 as on 31.03.2001. The value of 1,50,100 shares was Rs.15,01,000 which was included in the closing stock/ current assets of Rs.25,34,992.50/-. There was no transaction in these shares in the F. Y. 2001-02 and the value of the shares was included in the closing stock/ current assets of Rs.38,91,608.76/- as on 31.03.2002. In F. Y. 2002-03 relevant for the impugned assessment year,1,50,000 shares were sold for Rs.25,50,000/- as detailed in the table mentioned at para 21 above. 23.2 It is seen that the assessee company is assessed to income tax regularly. I have gone through the returns for A. Yrs. 2001- 02 and 2002-03. All these transactions are reflected in the audited accounts. All the amounts were received through cheques and there are several tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o establish the genuineness of the transactions of sale of shares by the assessee. The DR finally contended that the impugned order may be set aside by restoring that of the AO. 10. Replying to the above, the Assessee's Representative (AR) submitted that AO ignored the vital evidence submitted before him which was rightly appreciated by the CIT (A). The AR further submitted that the CIT (A) also considered the tax returns and audited accounts of the assessee and observed that the impugned transactions are reflected in the audited accounts of the assessee and all the amounts pertaining to the impugned transactions were received through cheques and there are several transactions in the HDFC Bank Account No.1582050000177 maintained by the assessee. The AR supported the impugned order and submitted that the CIT (A) considered entire material and evidence placed before him and rightly concluded that the transactions cannot be treated as bogus. 11. On careful consideration of rival submissions and contentions and careful perusal of the records. We observe that as per AO the assesee received Rs.26 lacs as bogus entries in the garb of sale proceeds of share. On the other hand, the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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