TMI Blog2013 (9) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... cer set back on his query and merely asking some non-specific sketchy questions at the fag end of the assessment order, it cannot be held that proper inquiries were instituted - Following decision of Commissioner of Income-tax Versus Gangeshwari Metal Pvt Ltd. [2013 (1) TMI 624 - DELHI HIGH COURT] - Decided against Revenue. - ITA No.4839/Del/2009 - - - Dated:- 14-6-2013 - R P Tolani And J S Reddy, JJ. For the Appellant : Smt Shumana Sen, Sr. (DR) For the Respondents : Shri Rajeev Saxena, Jagjeet Singh Advs. ORDER:- PER : R P Tolani The Revenue is in appeal and the assessee in cross-objection against the CIT(A) s order dated 29-10-2009 relating to A.Y. 2004-05. 2. Sole effective ground raised by the Revenue is as under: On the facts and in the circumstances of the case and in law, the learned CIT(Appeals) ha erred in deleting the addition of Rs. 71,00,000/- and Rs. 1,42,000/- made by A.O. u/s 68 of the I.T. Act being the bogus cash credit and on account of unaccounted commission paid for obtaining accommodation entries respectively. 3. Following cross-objections are raised by the assessee: 1. On the facts and in the circumstance soft case Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence filed; genuineness of the transaction being through banking channels, supported by Board s resolutions and recorded with Registrar of Companies; and the creditworthiness as the amount of share application was from respective bank accounts consequent to Board s resolution. All these facts were demonstrated by confirmations and other documents of the transactions. Assessing officer, however, rejected the assessee s explanation by drawing following adverse inference: (i) Mere payment of a/c payee cheque is not sacrosanct.; (ii) Bank account revealed a uniform pattern of cash deposit of equal amount by cash or cheque in respective accounts. (iii) Assessee failed to produce the directors of the companies from whom the share application money was received. (iv) Summons u/s 131 of the Act were issued, but some of the summons were received unserved with postal remarks left/ no such person ; none appeared in response to served summons. 4.2. It was thus held by assessing officer that the onus was not discharged by the assessee as information was supplied by the Investigation Wing of the Department on the basis of inquiries conducted, therefore, the amount was ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e s case there is no difference in record and this is case of share application money and not the loans. 4.6. The assessee further relied on Hon ble Supreme Court judgment in the case of Lovely Exports Pvt. Ltd. 192 CTR 216; Hon ble Delhi High Court in the case of Divine Leasing and Finance Ltd. 299 ITR 268 and other cases. The CIT(A) after considering the submissions available on record deleted these additions by following observations: 3.1. I have considered the written submission on behalf of the appellant, the findings of the Assessing Officer in the assessment order and the facts on record. During the course of assessment as well as appellate proceedings, all the particulars / details such as confirmation, copies of acknowledgement for filing of ITR of the subscribers with PAN, copies of share application forms, copies of resolution of Board of Directors of the share applicants were filed. There is also no dispute that all the above documents were filed before the Assessing Officer. It is now well settled that where the assessee had furnished (i) the names and addresses of the share applicants (ii) the GIR Nos,/P.A.N. Nos. (iii) the Ward Nos. where assessed (iv) the mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the addition of Rs. 71,00,000/- can not be sustained and accordingly, the same is directed to beeleted. As the addition on account of accommodation entry has been deleted, the consequential addition on account of commission of Rs. 1,42,000/- for obtaining the said accommodation entries is also directed to be deleted. As a result, grounds of appeal Nos. 1, 2 and 3 are allowed Aggrieved, Revenue is before us: 5. Ld. DR contends that the assessee failed to discharge its onus on following: (i) mere filing of confirmatory documents did not discharge the burden of the assessee. (ii) Assessing officer issued summons u/s 131, some of which were not served and in case of served summons, nobody responded. (iii) There was a uniform pattern of depositing similar amount of cash or cheque in the share applicant s account qua the share application money. (iv) The assessee failed to produce the directors for physical examination. 5.1. Reliance is placed on Hon ble Delhi High Court judgment in the case CIT Vs. Nova Promoters Finlease (P) Ltd. (2012) 342 ITR 169 (Del.); and CIT Vs. N.R. Portfolio P. Ltd. (ITA no. 134/2012 order dated 21- 12-2012 Hon ble Delhi High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orce attendance of any person to physically bring him before any income-tax authority. The assessee has neither the powers nor the ability to convince the parties to come with it to attend before the assessing officer. On 22-12-2008 assessee was only intimated that some 131 summons were issued 5 days prior to the framing of the assessment. It was intimated by assessing officer that summons u/s 131 have been issued to some of the parties and some of the summons have been received back, and for others none of them appeared. The assessee was never made aware which were the some parties to whom summons were issued; which were the some parties whose summons came back and who were some parties for which non-appeared. On 23-12-2008 assessee in all humbleness expressed his inability to produce the parties in short period. The additions were made without conducting any inquiry and assessing officer sitting in his chamber held that assessee did not discharge its burden. Thus, the entire edifies of the assessing officer drawing the adverse inference is on wrong premise i.e. without conducting any inquiry, verification of income-tax record and without any confrontation to the assessee. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6-HC-DEL-IT), in which the scope of Nova Promoter s case has been explained and distinguished. The Hon ble Court decided the case in favour of the assessee by following observations: 8. Mr. Sabharwal, appearing on behalf of the revenue/ appellant sought to place reliance on a Division Bench decision of this Court in CIT v. Nova Promoters and Finlease (P) Ltd. (2012) 342 ITR 169 (Del). However, on going through the said decision in Nova Promoters and Finlease (P) Ltd. (supra) itself this Court has observed, in the context of Lovely Exports (P) Ltd. (supra), as under:- "The ratio of a decision is to be understood and appreciated in the background of the facts of that case. So understood, it will be seen that where the complete particulars of the share applicants such as their names and addresses, income tax file numbers, their creditworthiness, share application forms and share holders' register, share transfer register etc. are furnished to the Assessing Officer and the Assessing Officer has not conducted any enquiry into the same or has no material in his possession to show that those particulars are false and cannot be acted upon, then no addition can be made in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be apparent from the observations of the assessing officer in the assessment order to the following effect:- Investigation made by the Investigation Wing of the Department clearly showed that this was nothing but a sham transaction of accommodation entry. The assessee was asked to explain as to why the said amount of Rs.l,11,50,000/- may not be added to its income. In response, the assessee has submitted that there is no such credit in the books of the assessee. Rather, the assessee company has received the share application money for allotment of its share. It was stated that the actual amount received was Rs.55,50,000/- and not Rs.l,11.,50,000/- as mentioned in the notice. The assessee has furnished details of such receipts and the contention of the assessee in respect of the amount is found correct. As such the unexplained amount is to be taken at Rs.55,50,000/-. The assessee has further tried to explain the source of this amount of Rs.55,50,000/- by furnishing copies of share application money, balance sheet, etc. of the parties mentioned above and asserted that the question of addition in the income of the assessee does not arise. This explanation of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee to accompany him to the proceedings before the assessing officer. In our view, adverse inference drawn on these issues is unjustified. 7.1. No adverse material was confronted to the assessee by the assessing officer. Thus, the addition cannot be sustained on the ground of canon of natural justice i.e. audi altem partem. The assessing officer set back on his query and merely asking some non-specific sketchy questions at the fag end of the assessment order, it cannot be held that proper inquiries were instituted. Thus, it is case which suffers from lack of enquiries as referred to by Hon ble Delhi High Court in the case of Gangeshwari Metal Pvt. Ltd. Which we have to respectfully follow. 7.2. In view of these facts, we see no infirmity in the order of CIT(A) deleting the addition which is upheld. In the result, revenue s appeal is dismissed. 7.3. Coming to assessee s cross-objections, since we have deleted the additions on merits, we do not go into the merits of the cross-objections, which becomes academic and thus infructuous. Accordingly, assessee s cross-objection stands dismissed being infructuous. 8. In the result, revenue s appeal as well as assessee s cross-ob ..... X X X X Extracts X X X X X X X X Extracts X X X X
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