TMI Blog2015 (3) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, the appeal preferred by the appellant on this issue stands dismissed. - Decided against assessee. Penalty u/s 271AAA - CIT(A) deleting the penalty imposed on the surrender of income - Held that:- Since the penalty was imposed on an assessee who was also searched along with the appellant Smt. Uma Singal and whose penalty was also levied on the similar grounds has now been deleted by this Tribunal on the reasons afore-stated. Respectfully concurring with the view of the coordinate bench of the Tribunal and, therefore, we uphold the order of the CIT(Appeals). Therefore, the revenue’s appeal against deletion of the penalty is imposed. - Decided in favour of assessee. - ITA Nos. 2578, 2571, 2570/Del/2013 Cross Objection Nos. 187/Del/2013, 183/Del/2013 &182/Del/2013, ITA No. 2575/Del/2013 Cross Objection No. 185/Del/2013 ITA No. 2481/Del/2013, ITA Nos. 2577, 2568 & 5253/D/2013, Cross Objection No. 181/D/2013(In ITA - - - Dated:- 17-2-2015 - Shri G.D. Agarwal And Shri A. T. Varkey JJ. For the Appellant : Smt. Anuradha Misra, CIT(DR) For the Respondent : Sh. Ashwani Kumar, CA ORDER PER BENCH These are 18 appeals, 10 of the Revenue and 8 CO of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m Sh. S.K. Gupta. 4. Brief facts of the case are that search and seizure action u/s 132 of the Income Tax Act, 1961 (hereinafter the Act ) was carried out on Bhushan Group on 03/03/2010. Since assessee was also covered in the operation u/s 132 of the Act, Section 153A proceedings were initiated against the assessee and notices were issued on 24/09/2010. In response to the same the assessee filed his return of income declaring a total income of ₹ 1,72,686/- on 21/10/2010. The AO vide questionnaire dated 12/07/2011 asked the assesse to reply in respect to his name cropping up in certain documents found during a survey conducted on 20/11/2007 at the premises of Sh. S.K. Gupta, C.A. From the impounded documents/ lap top/ computer, during the said survey at shri S.K. Gupta, survey team found the ledger account maintained by him for the period from 2003-04 to 2007-08 and the name of the assessee figured in it. The said survey against Sh. S.K. Gupta finally ended in the Income Tax Settlement Commission, wherein the said Sh. S.K. Gupta has admitted that he is an entry provider and controls 38 companies which are incorporated for providing accommodation entry to various persons. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been received from M/s Sino Securities Pvt. Ltd. and the entry at serial no. 7 does not pertain to the assessee. Along with the said reply, the assessee forwarded the confirmation and bill in respect of the transaction entered between him and M/s Sino Securities Pvt. Ltd. (sharebroker) and the payments received were duly enclosed for the perusal of the AO. However, dissatisfied with the reply of the assessee, the AO proceeded to add the aforesaid amount as unexplained money of the assessee earned from unexplained sources and added the said amount of ₹ 42,18,037/- to the total income of the assessee. 6. Aggrieved by the said order of the AO the assessee preferred an appeal before the CIT(A) who was pleased to delete the said addition by holding as under: I have considered the rival submissions. The fact that Sh. S.K. Gupta is an entry operator is undisputed. The fact that the appellant/other persons of Bhushan group had transactions with companies controlled by Sh. S.K. Gupta is undisputed. In Kishinchand Chellaram vs. CIT, Bombay City II (1980) 125 ITR 713 (SC), Hon ble Apex Court held that It is true that the proceedings under the income-tax law, are not governed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion here that the securities in question were listed on the Calcutta Stock Exchange Ltd., though these may not be very well known listed companies. The AO is directed to check these aspects at the time of giving effect to this order, and act in terms of the directions given above in accordance with the law. 7. According to the ld. CITDR, the CIT(A) erred in deleting the addition made by the AO on account of the unexplained credits received by the assessee being accommodation entry provided by Sh. S.K. Gupta. According to the ld. DR, once search u/s 132 of the Act take place at the premises of the assessee, sec. 153A of the Act gets triggered and the assessment for the previous six assessment years need to be assessed/reassessed by the AO. According to the ld.DR, the mandate of sec. 153A of the Act is that the AO has to compute the total income of the assessee for the previous six assessment years. In this case also the AO has rightly taken into account the accommodation entries provided by Sh. S.K. Gupta, CA to the assessee which was exposed during the survey conducted at his premises on 20/11/2007. The said Sh. S.K. Gupta has admitted on oath before the survey team that he wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, according to the ld. DR the AO rightly made the addition while computing the total income of the assessee as mandated by section 153A of the Act. 9. On the other hand, ld. AR Sh. Ashwini Kumar, C.A, submitted that the ld. CIT(A) has rightly held that there was no evidence other than the statement of Sh. S.K. Gupta, that too which has been taken behind the back of the assessee; and further submitted that neither the copy of the said statement of Gupta which the AO has relied upon to make the impugned addition has been provided to the assessee for rebutting the same nor his request to cross examine shri. S.K. Gupta was heeded to by the AO . So the ld. CIT(A) has found merit in the ground raised by the assessee. Further according to the ld. AR, the ld. CIT(A) has examined the records/documents filed by the assessee before the AO, which included the contract notes, copies of the bills in respect to the purchase of shares made through M/s Sino Securities Pvt. Ltd. and confirmation from M/s Sino Securities; and the ld CIT(A) was satisfied that all the payments have been received by the assessee either through account payee cheques or through demand draft, which stood duly credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee to provide him an opportunity to cross examine vide his letter dated 27/10/2011 to AO. In the remand report also, the AO could not say anything about the said request made by the assessee before the AO. Therefore, the CIT(A) s finding that the statement of Sh. S.K. Gupta incriminating the assessee was not provided to him nor an opportunity was granted to cross examine the said Sh. Gupta is against natural justice and, therefore, the ld. CIT(A) was justified in coming to a conclusion that the said evidence even if incriminating the assessee, could not have been the basis for making the impugned additions. We also take note of the fact that the ld. CIT(A) had made a finding that the shares which were purchased and sold by the assessee through the said share broker was listed companies of Calcutta Stock Exchange though not well known companies. We also take note of the fact that the assessee had duly reflected in its return filed in the concerned assessment years the long term/short term capital gain it received from sale of shares through the Sino Securities Pvt. Ltd. We find that in the assessment order, there is no whisper about any incriminating material which was found during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and cash was realized. The capital gain/capital loss which arose out of such transactions was duly disclosed in the return of income. We find force in the arguments of the ld counsel. The realization of the shares into cash cannot be said to be availing of the accommodation entry especially when the purchase of those shares have not been doubted by the revenue. Further the purchase and sale of the share are duly supported by the documentary evidence and the purchase consideration paid by the assessee by cheque as well as sale consideration was received by the cheque. The AO has not found any of these documents to be fake. The only reason for treating the transactions of sale of shares as accommodation entry is the purported statement of Shri S.K. Gupta, which survey team obtained in the year 2007. Admittedly such statement was record behind the back of the assessee and the assessee was never allowed any opportunity to cross-examine him. Moreover from the statement of Shri S.K. Gupta the ld CIT DR could not point out any mention of the assessee s name in any of the statement recorded during the said survey or later on. In view of the above we do not find any justification to inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y when the bank accounts were analyzed for the purpose of filing details during the course of post-search assessment proceedings that the error was discovered and the corresponding rectification entries passed. As such, therefore, the AR contended that as such it cannot be said that the said FDRs were in the nature of unexplained credit, specially considering the fact that the same pertain to the period prior to 01.04.2003 and it was only because of the compilation of the error that the same could not be incorporated in the statement of affairs as on 31.03.2003. 13. We have heard both the parties and have perused the records and we find that the assessee during the section 153 proceedings before the AO could not produce any documents to substantiate the receipts on account of FDR receipts of ₹ 6,76,673/- in her capital account. The AO s finding that no such credit is appearing in the bank account statement provided by the assessee and since assessee could not produce any documents substantiate the same. The AO added the said amount to the total income of the assessee as unexplained credit. Before the CIT(Appeals) also the assessee had made all the contentions which has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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