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TMI Blog2013 (6) TMI 429X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case and in law the Ld. CIT (A) has erred in deleting the addition of Rs.2,60,000/- as commission which must have been paid by the assessee company for obtaining entries and whitening its undisclosed income of Rs.26 lacs. 3. On the facts and in the circumstances of the case and in law the Ld. CIT (A) has erred in treating receipt of Rs.26,00,000/- as sale of shares without appreciating that the assessee company never produced any representative of the companies from whom the amounts were allegedly received for verification regarding the genuineness of the transactions of sale of Shares." 3. The sole Cross-Objection of the assessee reads as under:- "1. That on the facts of the case, the Ld. CIT (A)-XIX, New Delhi erred in upholding the action of the AO for initiating proceedings u/s 147 of the I. T. Act, 1961 for A. Y. - 2003-04." 4. The brief facts giving rise to appeal of the Revenue as well as Cross- Objection of the assessee are that the assessment was reopened by the assessee u/s 147 and 148 of the Income Tax Act, 1961 (For short "the Act") and the AO observed that the assessee non-banking Finance Company registered with RBI to carry on business of general Financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the cheques received from the parties represented consideration for sale of shares and that the transaction of sale of shares by the appellant was actual and genuine transactions entered in the normal course of business of the appellant company. The allegation against the appellant company to have channelised undisclosed income of Rs 26,00,000/- was baseless and as such no addition could have been made in the hands of the appellant. It was submitted that in the present case, it is only the case of conversion of one asset appearing in the books of the appellant i.e. asset represented by shares into bank balance. As a proof of the genuineness of the transaction, complete details of opening/closing stock as well as purchase/sale of shares was provided to the Id. AO. Copy of the bank account of the appellant, sale bills, copy of ITR as well as confirmations of the above parties were submitted. Copy of balance sheet of M/s Abhey Holdings Ltd. was also submitted alongwith its confirmation regarding transfer of shares in the name of the abovementioned two parties. 8. However, while completing the assessment, the Id. AO added the whole amount of Rs 26,00,000/- to the total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : CIT vs. Victor Electrodes Ltd. (DEL) ITA NO.-586/2010 CIT vs. Winstral Petrochemicals Pvt. Ltd. (DEL) ITA NO.-592/2010 CIT vs. Oasis Hospitalities Pvt. Ltd. (DEL) ITA NO.-2093/2010 In all these decisions, law relating to section 68 has been discussed in great detail explaining almost all important judgements of various courts delivered recently on the subject including that of the Hon'ble apex court. As regards non matching of PAN of M/s Servel Technology System Pvt. Ltd., submitted that this fact was never brought to the notice of the assessee company by the Id. AO during the assessment proceedings. However, later on it was explained by one of the former directors of M/s Servel Technology System Pvt. Ltd. that their company was holding two PAN inadvertently at the relevant time and the PAN mentioned on the ITR acknowledgement for the year 2003-04 was later on surrendered by the company. Nevertheless, the PAN held by the party as at present is AAHCS303lM (copy of PAN detail form part of paper book) proving the identity of the party beyond doubt. 10.Moreover, while rejecting the case of the assessee company, the Id. AO has held that 'neither the assessee had held any shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntry @ 1% thereof on pure presumptions, surmises and conjectures without bringing any cogent material on record which is also required to be deleted." 7. The CIT (A) decided the issue with following observations and findings in favour of the assessee: "20. I have gone through the assessment order and the detailed written submissions filed by the AR. 21. The issue to be decided is the receipt of Rs.26,00,000/- towards shares is genuine receipt or accommodation entries. The following are the details of shares sold and the amounts received: Name of the Purchaser of the shares Amount (Rs.) Cheque No. Remarks M/s Servel Technology system Pvt. Ltd. 217, Chanakya Complex, B-10, Subhas Chowk, Laxmi Nagar, Delhi-110092 8,00,000/- 707851 1,00,000/- shares of Abhey Holdings Ltd. were sold by the assessee company @ 17/- share of face value of Rs.10. Distt. Nos. 415601-465600 535001-585000 M/s Chipset Solutions Pvt. Ltd. B-30, Chander Gupt Complex, Subhasg Chowk, Laxmi Nagar, Delhi- 110092 9,00,000/- 708408 (i) 50,000 shares of Abhey Holdings Ltd. were sold by the assessee company for Rs.8,50,000/- @ 17/- per Distt. Nos:315601-355600 385001-395000 (ii) 5,000 shares of Gravure Cil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.2002. During the F. Y. 2002-03 relevant to the impugned assessment year 2003-04, the assessee company sold 5,000/- to M/s Chipset Solutions Pvt. Ltd. and received Rs.50,000/- . The AO has not disputed the acquisition and sale of shares for the detailed discussion made in the earlier paras, the transaction cannot be treated as bogus one. Hence, the receipt of Rs.50,000/- stands explained. 23.6 Since the main addition is deleted, there is no case for addition of Rs.2,60,000/- towards alleged commission payment. Relief: Rs.26,00,000 + 2,60,000/- Accordingly, Ground No. 2 is allowed. 8. Apropos ground nos.1, 2 and 3 the DR supported the assessment order and submitted that CIT (A) has erred in deleting the addition of Rs.26,00,000/- which was rightly deemed income of the assessee u/s 68 of the Act treating credit to the books of the assessee as unexplained. The DR further contended that the CIT (A) has also erred in deleting the addition of Rs.2,60,000/- as commission paid by the assessee to said entry operators which must have been paid by the assessee company for obtaining entries and whitening undisclosed income of the assessee. 9. The DR also submitted that the CIT (A) has ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ITAT, Delhi- 'B' Bench in ITA No.5929/ Del/2010 for the A. Y.-2002-03 ITO Vs. M/s Diplomate leasing and Finance Pvt. Ltd. vide dated 09.12.2011, we hold that 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. Therefore, we finally hold that the ground no.1, 2 and 3 of the Revenue are devoid of merits and deserve to be dismissed and we dismiss the same. 13. Apropos cross objections of the assessee, we are of the view that during the arguments, the AR fairly conceded that the cross objection filed by the assessee are only to support the impugned order and the AR did not make any further submissions to support cross objection. The Ld. DR submitted that the CIT (A) rightly uphold the action of the AO for initiating proceedings u/s 147 of the Act, for the year under consideration. 14. 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, we hold that we have no reason to interfere with the findings of the CIT (A) upholding the action of the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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