TMI Blog2014 (7) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... which the AO ‘sits back with folded hands’ till the assessee exhausts all the evidence or material in his possession and then comes forward to merely reject the same on the presumptions. The assessee’s case falls in the second category as the AO has not made any investigation with regard to the verification of the documents submitted by the assessee before him - there was a clear lack of enquiry on the part of the AO - no addition can be sustained u/s 68 of the Act - the assessee has adduced adequate evidence/material which are sufficient to discharge the prima facie burden casted upon it by section 68 of the Act – thus, the CIT (A) was not justified to sustain the addition – Decided in favour of assessee. - ITA No.3473/Del./2013 - - - Dated:- 30-6-2014 - B C Meena And A T Varkey, JJ. For the Appellant : Shri R S Ahuja, CA For the Respondent : Shri G H Sema, Sr. DR ORDER:- PER : B C Meena This appeal filed by the assessee emanates from the order of CIT (Appeals)- VIII, New Delhi dated 25.03.2013 for the assessment year 2003-04. 2. The return of income was filed declaring income at nil on 28.11.2013. The return was processed u/s 143(1) of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dd, alter or amend the grounds of appeal at or before the hearing. 4. While pleading on behalf of the assessee, the ld. AR submitted that during the course of assessment proceedings, assessee submitted the following documents of each share applicants :- (i) Share Application Form (ii) Confirmation of share applicant (iii) Bank statement showing relevant transaction (iv) Copy of Cheques/drafts from which payment received (v) Copy of Income Tax Return filed by share applicant (vi) PAN of each share applicant and (vii) In some cases other documents such as Affidavit, Copy of Board Resolution, etc. On an enquiry from the Bench, the assessee was able to submit the share allotment letters issued to all the shareholders and also return of allotment of shares filed with the Registrar of Companies on 26.03.2013. Copy of balance sheet and profit loss account for the Assessment Year 2003-04 and reconciliation of the share application and share premium money is also submitted. The assessee has discharged the onus casted upon him by law by submitting all relevant documents. The Assessing Officer has neither done any exercise to scrutiniz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. In the assessee s case, no document produced by the assessee has been investigated or scrutinized upon and no doubt was casted during the investigation. Therefore, after submitting documents as mentioned above, the assessee satisfactorily discharged the onus casts upon him. He further submitted that in the case of CIT vs. Rock Fort Metal Minerals Ltd reported in [2011] 198 Taxman 497 (Delhi)/ 9 Taxmann.com 305 (Delhi), the Hon'ble Delhi High Court has held that when the assessee has submitted list of all shareholders giving their full names, addresses, details of payment made by cheque and had also submitted confirmations from all shareholders giving complete particulars in form of address, cheque numbers and name of bank, PAN and place of assessment, etc. and also submitted copies of bank statements showing deposit of all these receipts, then assessee had discharged its primary onus as per law in proving identities of all shareholders and accordingly, addition made under section 68 was deleted. Ld. AR also relied on the decision of CIT vs. Divine Leasing and Finance Ltd - [2008] 299 ITR 268 where the Hon'ble Supreme Court had rejected the SLP. Ld. AR also submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the share applicant and assessee showed its inability to produce the parties. Assessing Officer observed that cash was deposited just before issuing cheques and share applicants belong to Mahesh Garg Group of entry operators. But, in assessee s case, the facts are completely different. He further submitted that the CIT (A) was not justified in confirming the addition on the basis of non-production of share holders and directors of the assessee company. As held by Hon'ble Delhi High Court in the case of CIT vs. Victor Electrodes Ltd reported in 329 ITR 271 (Delhi), there was no legal obligation on the assessee to produce some director or other representative of the applicant-companies before the Assessing Officer. Therefore, failure of the assessee to produce them cannot justify the additions made by the Assessing Officer, when the assessee has furnished all the relevant documents, on the basis of which, the Assessing Officer, if he so wanted, could have summoned them for verification. In assessee s case, no such attempt was made by the Assessing Officer to summon the directors of the applicant-companies. The addresses of these companies were made available to the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o assessee copies of those documents, reassessment was vitiated and liable to be set aside. He also submitted that similar view has been upheld by the ITAT, Delhi in case of ITO vs. Pawan Kumar Gupta reported in 131 TTJ 92 (Delhi) and ITAT, Ahmedabad in the case of Vijaybhai H. Shah vs. DCIT reported in [2006] 6 SOT 75 (Ahd). He specifically submitted that Assessing Officer and CIT (A) has erred by not giving any opportunity to cross examine the persons whose statements have been recorded and used against the assessee during the assessment proceedings. The Assessing Officer has communicated to the assessee that whenever the third party statement is used against the assessee then only copy will be provided. This statement has been used against the assessee but no copy was provided. Finally, the Assessing Officer passed the order without giving copies of statement recorded under search and opportunity of cross examination of persons whose statements have been used against the assessee. The revenue has also eared by making assessment by not giving any opportunity to assessee to cross examine the persons whose statements have been recorded and used during the assessment proceedings. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a. Ld. AR pleaded that in this case, no inquiry was made with regard to the veracity of documents submitted by assessee. Now, revenue cannot be given a second round of investigation when they have failed to do so. 5. Ld. DR relied on the order of the authorities below and also the case laws relied upon by the lower authorities and also the decision of Hon'ble Delhi High Court in the case of Onassis Axles Private Ltd. vs. CIT in ITA No.31/2013 dated 13.02.2014 and also CIT vs. Ultra Modern Exports Pvt. Ltd. in ITA No.262/2002 dated 11.12.2012. He pleaded to sustain the addition made by Assessing Officer and pleaded to dismiss the assessee s appeal. 6. We have heard both the sides. We have considered the case laws relied upon by both the sides. We have also gone through the paper book filed in this case. The case was reopened u/s 148 of the Act on the basis of information from Investigation Wing that assessee is a beneficiary of accommodation entry providers. The assessee submitted the documents in respect of each of the share applicants like share application form, confirmation of share application, bank statement showing relevant transaction, copy of cheques/drafts of whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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