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TMI Blog2015 (5) TMI 761X X X X Extracts X X X X X X X X Extracts X X X X ..... or during the course of hearing of the appeal." The only effective ground in the revenue's appeal is against deleting the addition of Rs. 9 lacs out of the addition of Rs. 30 lacs made by the AO on account of the share capital received by the company during the year. 3. The assessee has also filed cross objection and the grounds of cross objection are as under:- "1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] under Section 153A/143(3) is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, the proceedings initiated under Section 153A are bad in law as no valid search was carried on the assessee. 3. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of assessee that the proceedings initiated under Section 153A against the appellant are in violation of the statutory conditions and procedure prescribed under the law and as such the same is bad in law and likely to be quashed. 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred revenue expenses. 10. That the respondent craves leave to add, amend or alter any of the grounds of appeal." 4. During the course of the hearing, the ld. AR for the assessee has not raised and argued on the legal and general grounds of cross objection nos.1 to 6 and 9 and 10, hence the same are dismissed as not pressed. 5. Ground no.2 in the Revenue appeal and Ground no.7 of the cross objection are on the issue of addition of Rs. 30 lakh made by the AO and the relief of Rs. 9 lacs was allowed by the CIT(A) and confirmed the addition of Rs. 21 lacs. 6. The brief facts to the present controversy are that a search and seizure operation under section 132 of the Income-tax Act, 1961 was carried out in the Swastik Pipe Group of Companies on 28th August, 2008, which included the assessee company as well. In the course of the proceedings initiated under section 153A, the Assessing Officer noted from the balance sheet that assessee company has received share capital from the following companies :- S. No. Name of investor Amount-Rs. 1. A.C. Steels & Holdings Pvt. Ltd. 5,00,000/- 2. Grewal Steels & Holdings Pvt. Ltd. 10,00,000/- 3. Sumit Credit Co. Pvt. Ltd. 5,00,000/- 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awn by the Assessing Officer is by misinterpreting the facts of the case. It was submitted that assessee company has received a sum of Rs. 20 lacs from the following three companies:- S. No. Name of investor Amount-Rs. 1. A.C. Steels & Holdings Pvt. Ltd. 5,00,000/- 2. Grewal Steels & Holdings Pvt. Ltd. 10,00,000/- 3. Sumit Credit Co. Pvt. Ltd. 5,00,000/- Total 20,00,000/- 12.1 The adverse inference has been drawn on the basis of the inspector report quoted by the Assessing Officer on para 4.4 and 4.5 as under:- "4.4 The results of these inquiries the Inspector of Income Tax was received in this office vide letter dated 24.10.2010. The contents of the inquiry report are reproduced below:- "As directed by the Asstt. Director of Income Tax (Inv.), Unit-III(3), Kolkata, I went to 6, Clive Row on 22.11.2010 at 4:30 PM. I went to inspect were three companies viz. steel & holding Pvt. Ltd., Grewal Steel & Holding Pvt. Ltd. Sumit Credit Co. Ltd. exist at room No.6/7 4th Floor, Clive Row or not. I did not find any name place of the above mentioned companies at the very particulars address. At the time of my inspection the door of Room No.6/7 on 4th floor of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddhadeb Das 30/1, Mahesh Paul Lane, Santragachi, Howrah." 12.4 As regards the balance cheque of Rs. 5 lakh received from Sofed Comtrade Pvt. Ltd., there is absolutely no adverse material. There is no inspector report. The Assessing Officer has simply stated that the genuineness of the transaction is in doubt as can be seen from the observation of the Assessing Officer in para 8.1 and 8.2 which read as under:- "8.1 The assessee vide its letter dated 16.11.2010 submitted the confirmation alongwith a copy of the income tax return acknowledgement and an extract of the bank statement. A perusal of the income tax return shows that M/s SofedComtrade Pvt. Ltd. has shown a total income of Rs. 5,150/- only during assessment year 2005-06. 8.2 In view of the factors mentioned above, the creditworthiness of M/s Sofed Comtrade Pvt. Ltd. and the genuineness of the transaction are in doubt. In this context, it further relevant to note the shares held by M/s Sofed Comtrade Pvt. Ltd., were transferred to Smt. Anupama Bansal the daughter-in-law of the Director of the assessee company Smt. Geeta Devi Aggarwal for a total consideration of only Rs. 1,50,000/- on 30.06.2006 i.e. at 1/3rd of the cost o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g at 4.30 PM. The inspector has confirmed that there was an office with a name plate, AS Grewal & Co. The inspector has further stated that the registered office of these companies belongs to a tax consultant. On the basis of these findings, the Assessing Officer has drawn adverse inference and made the addition. We are of the view that the Assessing Officer is not justified on the basis of this inspector report to hold that the identity of the shareholder company has not been established. On the contrary, as rightly pointed out, the common surname "Grewal" is good enough to indicate that the office of these companies were at that premises. The inspector did not make any effort to make any further enquiry about these companies and also Assessing Officer did not make any effort to carry the investigation further. The sole basis for making addition about these companies is the inspector report. No doubts have been raised by the Assessing Officer about the documents filed by the assessee company. The inspector report as alleged above cannot be a basis for disbelieving the assessee's version. 13.2 Further in the case of Sofed Comtrade Pvt. Ltd. we note that no enquiry whatsoever has b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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