TMI Blog2014 (11) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... here is a specific ground raised before the CIT(A), there can be no question of taking recourse to the Rule 27. No material has been placed on record to demonstrate that the validity of search was challenged before the ld. CIT(A) on all the issues now sought to be taken up - The reason for the ‘no discussion’ of such issues in the order is that these were not at all raised before the CIT(A) - If such issues had actually been raised before the CIT(A), then the least to be expected of the assessee was the moving of a rectification application u/s 154 pointing out his failure in dealing with such issues - the assessee’s application under Rule 27 of the ITAT Rules, 1963 is not maintainable because there is no adverse decision of the CIT(A) on the issues which are now sought to be raised through the application. Deletion of unconfirmed, unexplained and unverified share capital in the books of the assessee – Held that:- The assessee did not furnish complete details during the course of assessment proceedings in support of the genuineness of the share applicants - When the assessee furnished documentary evidence before the CIT(A) in support of the genuineness of the credits, the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in Surendra Boveja Vs CWT (2006) 287 ITR 52 (Delhi) in which one of the appeals was filed late by one year and 154 days. The appellant s request for the condonation of delay was turned down by the Hon ble High Court. In this judgment, their Lordships have held that want of due care, ignorance of law or failure to seek legal advice are not sufficient grounds for condonation of delay. Similar view has been taken by the Hon ble Madras High Court in Madhu Dadha Vs ACIT (2009) 317 ITR 458 (Madras). A third member decision of the Tribunal in JCIT Vs TFE Ltd. (2007) 104 ITD 149 (Chennai) (TM) also supports the same view. 5. Adverting to the facts of the instant case, we find that except for a bald submission, there is nothing on record to substantiate that the earlier counsel did not properly guide the assessee. The theory of mistake of counsel propounded by the assessee is absolutely without any foundation. The assertion so made in the application for condonation of delay is a mere self serving statement. The further argument that the appellant was ignorant of the legal provisions also does not stand in view of the fact that it is a private limited company regularly filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue files appeal against the deletion of addition on merits, then the assessee can take recourse to rule 27 to support the order of the CIT(A) in deleting the addition by arguing that he ought to have decided the question of initiation of reassessment also in favour of the assessee. This adverse decision against the respondent constitutes the basis for application under rule 27. We want to clarify that such application will also embrace no decision on an issue raised before the first appellate authority. The crux of the matter is that either there should be some ground decided against the respondent or some ground taken up before the ld. CIT(A) which would have remained undisposed off. The natural corollary which, therefore, follows is that the assessee must have raised a particular ground before the ld. CIT(A) which should have been either been decided against it or had remained undecided. Unless there is a specific ground raised before the ld. CIT(A), there can be no question of taking recourse to the Rule 27. 9. Adverting to the facts of the instant case, it is seen that the assessee in its application under Rule 27 has questioned the validity of the assessment orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the ld. CIT(A). If such issues had actually been raised before the ld. CIT(A), then the least to be expected of the assessee was the moving of a rectification application u/s 154 pointing out his failure in dealing with such issues. Nothing of the sort has been done in the instant case. As such we hold that the assessee s application under Rule 27 of the ITAT Rules, 1963 is not maintainable because there is no adverse decision of the ld. CIT(A) on the issues which are now sought to be raised before us through the application. 12. Now we take up the Revenue s appeal having five grounds. All these grounds are against the deletion of addition of ₹ 50,00,000/- made by the A.O on account of unconfirmed, unexplained and unverified share capital in the books of the assessee. 13. Briefly stated the facts of case are that a search action u/s 132 was taken on the assessee on 9.12.2005. Notice u/s 153A was issued. The assessee filed return declaring Nil income. It was observed that the assessee had shown Advances from Body Corporate amounting to ₹ 50,00,000/-. The assessee was requested vide point 4 of the questionnaire dated 27.11.2007 to furnish complete details in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing summons to all the six parties. The Inspector reported that he visited premises no. F-6, Vijay Chowk, Laxmi Nagar, New Delhi for serving the summons on parties at serial no. 1, 2, 3 and 6 of the above Table. On verification, it was noticed that none of the above named companies existed at the given address for last so many years. This was reported on the basis of inquiry conducted from one Shri Ashok Tyagi, a Chartered Accountant running profession in the name of M/s Tyagi and Tyagi. As regards company at serial no. 4 of the Table, the Inspector reported that he visited premises no. 304 E35, Ganesh Complex, Jawahar Park, Laxmi Nagar, New Delhi for serving the summons u/s 131 of the Act. One Shri Mahesh Sharma, running office of a Chartered Accountant, intimated that no company with this name ever existed at the given address. In the like manner, when the Inspector visited the premises of a company at serial no. 5 of the Table above, it was found that the address was incomplete inasmuch as there were sub-blocks in the colony and he visited many sub-blocks like B- 3/63, B-1/63 but found no company with this name on the given address. The A.O s remand report was given to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Through this letter it has been submitted that the Investigation Wing, New Delhi carried out investigation in respect of accommodation entries and found a list of beneficiaries who had taken such accommodation entries. A CD containing such list is also appended along with this letter. It has been mentioned that the name of the assessee appears in the list of beneficiaries at serial no. 2889 to 2906. The said CD is also stated to contain the statement of Manoj Gupta and his associates, who provided accommodation entries, inter alia, to the assessee company. We want to make it clear that this letter though placed in the present appeal folder has been written in respect of the proceedings for the assessment year 2004-05 in which year again the assessee allegedly received share application money. 18. Coming back to the facts of the instant case it is seen that apart from placing on record some documentary evidence in support of the genuineness of the transaction of receipt of share application money, the assessee failed to prove the very first ingredient of sec. 68, being the identity of the creditors. The addresses of these corporate entities turned out to be fake or not availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uiry and simply makes the addition by relying on the report of the Investigation wing about the accommodation entries, then no addition can be sustained. This view has been taken by the Hon ble Delhi High Court in CIT Vs Fair Finvest Ltd. (2013) 357 ITR 146 (Delhi) and CIT Vs Oasis Hospitalities Pvt. Ltd. (2011) 333 ITR 119 (Delhi). 20. When we consider the two sets of cases, one in which addition has been upheld and the other in which the addition has been deleted, the line of distinction becomes quite bright. Where the Assessing Officer failed to conduct any inquiry and simply made the addition on the basis of information received from Investigation Wing, then such addition cannot be sustained. On the other hand, where the Assessing Officer conducted proper inquiry and proved that the so called share applicants were non-existing entities, the addition is rightly called for. We find that the present case falls in the second category inasmuch as the Assessing Officer conducted due and proper inquiry which transpired that these six companies were non-existent and further the assessee took no steps to prove the existence of such companies. We, therefore, set aside the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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