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Income Tax Officer, Ward-8 (1) , Delhi Versus M/s. Shakti Securities Pvt. Ltd. And Vica-Versa

2015 (9) TMI 903 - ITAT DELHI

Addition u/s. 68 - CIT(A) deleted addition - Held that:- All the transactions have been carried out through account payee cheque and confirmations, share application forms, written acknowledgement of these parties have been filed. The AO rejected the said explanation merely on the ground that the summons issued by him was not responded to. Since the concerned parties were assessed to tax and their return acknowledgements were submitted, the facts could have been verified from their assessment re .....

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i) four years have elapsed on date of instant reopening (23.3.2009) and (iii) in reasons recorded allegation was made for income escaping assessment of ₹ 24.50 lacs as mentioned of the impugned order also whereas income escaping assessment was found to be ₹ 16 lacs in the very same order. On these reasons merely based on investigation wing information without surveillance of substantiation and without any statement being mentioned therein and without nature of transaction being narra .....

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vidence or material in respect of any undisclosed income and recording of requisite satisfaction in respect of any such undisclosed income. See Signature Hotels P. Ltd. vs. Income Tax Officer [2011 (7) TMI 361 - Delhi High Court] - Decided in favour of assessee. - I.T.A. No. 3475/DEL/2009, I.T.A. No. 3129/DEL/2010 - Dated:- 10-9-2015 - Shri H. S. Sidhu And Shri O. P. Kant, JJ. For the Petitioner : Shri Kapil Goel, Advocate For the Respondent : Sh. Sujit Kumar, Sr. DR ORDER Per H. S. Sidhu : JM T .....

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. year 2001-02. 1. Ld. CIT(A) erred, in law and on the facts circumstance of the case, in deleting the addition of ₹ 17,00,000/- made by the AO u/s. 68 of the I.T. Act, 1961. 2. The appellant craves to amend, modify, alter, add or forego any ground of appeal at any time before or during the hearing of this appeal. 3. The assessee has raised the following grounds in its Appeal for the asstt. year 2002-03 1. Whether the CIT(A) has failed to appreciate that the reassessment proceedings for th .....

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, reasons of satisfaction recorded for reopening, and the reassessment order passed by A.O. are all not connected with each other. 4. Whether the assessee having discharged obligations and filed all necessary documents, confirmations at the time of original assessment sufficient to meet the satisfaction under section 148 proceedings when the assessing officer having accepted those confirmation and information in original assessment proceedings. 5. Whether in the reassessment proceedings the enti .....

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/- was filed on 31.10.2011. The return was processed u/s. 143(1) but no scrutiny assessment was made. Subsequently on the basis of information received from the office of DIT(Inv.) a notice u/s. 148 was issued after recording of reasons and served on the assessee on 26.3.2008. In response to that the assessee requested to treat the original return as the return in response to notice u/s. 148. The assessment was made u/s. 147 by order dated 5.12.2008 determining the total income of ₹ 26,16, .....

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the assessee relied upon the order of the Ld. CIT(A) and requested that impugned order may be upheld. 9. We have heard both the counsel and perused the relevant records available with us, especially the orders passed by the Revenue Authority. We find that the Ld. CIT(A) has considered the Written Submissions of the assessee as well as the documentary evidence filed by the assessee and decided the issue in dispute in favour of the assessee. The relevant paragraph i.e. para no. 3.1 to 3.3 at page .....

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a Fincap Securities Pvt Ltd, M V Marketing Pvt Ltd, Polo Leasing & Finance Pvt Ltd. The appellant's AR filed confirmation, copy of accounts, share application & some other documents with various letters before the AO. The AO required the appellant to produce the parties for examination. A show cause notice was also issued as to why these amounts should not be treated as income of the appellant in absence of further explanation. The appellant replied to the AO by letter dated 12/11/08 .....

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Onyx Exim & Sales Pvt Ltd., Krishna Cinema (India), Aay Kay Investment, M V Marketing Pvt Ltd and Polo Leasing & Finance P Ltd as unexplained credit u/s 68. 3.2 In the appeal proceedings the appellant's AR furnished the details of payments which the AO had noted in the order two reasons recorded by him for reopening as under:- S. No. Party Name Amount Cheque No. Date 1 Onyx Exim & Sales Pvt. Ltd. 300000 61786 05/05/00 2 Onyx Exim & Sales Pvt. Ltd. 300000 61786 05/05/00 3 Swas .....

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1 It was submitted that all the payment except for Sr No 5, 10 & 11 have been considered by the AO twice which amounts to double addition. The appellant had in fact not received the amount of ₹ 26 lacs as alleged by the AO but only 17 lacs if the double entries are ignored. As about the individual payments received from difference parties following explanation was filed:- Onyx Exim The sum of ₹ 1,50,000 was received against sale of 15000 shares of a company Eexpressly Oriental Ex .....

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payment of ₹ 1 lac was received against the sale of these shares. Confirmation and copy of account was enclosed. AAY KAY INVESTMENT The payment of ₹ 2 lacs against sale of shares of another company KSB holding Pvt Ltd. Shares of this company were also reflected in the balance sheet of the appellant as on 31.3.00 which were sold during the year. Confirmation & copy of account was enclosed. Maa Shakumbari Stone, M V Marketing Pvt Ltd & Polo Leasing The amount of ₹ 4 lacs .....

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so mentioned in the confirmation letter. It was submitted that the relevant documents in support of the transaction were filed before the AO during the assessment proceedings. The appellant's AR contended that the AO's observation that the appellant failed to comply with the notice u/s 142(1) was in correct because the details required by the AO were duly filed before him. On the other hand it was contended that the AO has mentioned in the names of Sujjit Husain Mallick, Krishna 'Cin .....

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uch material or evidence. However the AO did not confront the appellant with any evidence or material which could show that the appellant company had received accommodation entries. To sum up it was contended that a part of the payment was towards sale of assets which were reflected in the balance sheet of the appellant company in the earlier years and some part was towards share application money for which necessary evidence was filed. The amounts were received by account payee cheques and were .....

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ent Nos have been repeated twice by the AO. The AO has not mentioned specific amounts against the parties or the instruments Nos according to which they have been received. The appellant has tabulated this information which is shown in para 3.2 above. It is very clear that in respect of four parties at S No 1, 3, 6 & 8 of the table, the amounts have been considered twice. Since the instrument No is same it is obvious that the entries has been repeated by the AO. Therefore I agree with the ap .....

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ant, section 68 was not applicable to these receipts. The balance amount was received towards share application money from different parties to one of the parties it was returned in subsequent years. I agree with the appellant's contention that in 147 proceedings primary onus was upon the AO to confront the appellant with evidence or material on the basis of which allegation about escapement of income is made. The appellant has to give opportunity to rebut or counter the said material. This .....

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ent of these parties have been filed. The AO rejected the said explanation merely on the ground that the summons issued by him was not responded to. Since the concerned parties were assessed to tax and their return acknowledgements were submitted, the facts could have been verified from their assessment records. The appellant has furnished sufficient documents to prove the identity of the parties and therefore in view of the decision of Supreme Court in the case of Lovely Exports no additions in .....

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, hence, we uphold the order on the issue in dispute by dismissing the appeal filed by the Revenue. 10. In the result, the Appeal filed by the Revenue stands dismissed. ASSESSEE S APPEAL NO. 3129/Del/2010 (A.Y. 2002-03)- SHAKTI SECURITIES P LTD. 11. The brief facts of the case are that the assessee company was incorporated on 2.5.1996 and has been engaged in the business of sale and purchase of shares as stock in trade and also as investments. The return of income was filed on 11.11.02 declaring .....

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ct on 30.12.2009 computing total income at ₹ 16,04,000/- as against returned income of ₹ 4000/-. The only addition include ₹ 16,00,000/- received from 9 person (including 3 Pvt. Ltd. company and 1 Ltd. Company and 5 individuals) u/s. 68 of the Act as share application money, which resulted a demand of ₹ 11,30,940/-. 12. Aggrieved with the same, assessee filed the Appeal before the Ld. CIT(A) who vide impugned order dated 12.5.2010 dismissed the appeal of the assessee. 13. .....

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le in the facts and circumstances to confirm the order of A.O. even when it is pointed out that it is a case of "Change of Opinion on the information already submitted; the order passed by the authorities below is passed without appreciation of information already on record, reasons of satisfaction recorded for reopening, and the reassessment order passed by A.O. are all not connected with each other. He further submitted that assessee had discharged obligations and filed all necessary docu .....

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the similar facts and circumstances the issue in dispute has been dealt by the Tribunal in the case of Shri Govind Kripa Builders and Promoters vs. ITO passed in ITA No. 304/Del/2013 (AY 2008-09) vide order dated 19.12.2014 in which Hotel Signatures Pvt. Ltd. decision (supra) was followed. Later the Department went in Appeal before the Delhi High Court, in ITA No. 486/2015 in the case of Pr. CIT vs. Sh. Govind Kripa Builders Pvt. Ltd. which was dismissed on 4.8.2015 by the Hon ble High Court of .....

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₹ 4,000/- was filed on 11.11.2002. The assessment was completed u/s. 143(3) on 28.2.2005 in the income declared accepted. However, an information was received from DIT(Inv.) that the assessee was a beneficiary of in respect of ₹ 34.50 lacs received from various parties which were in the nature of accommodation entries. A copy of the extract of information is enclosed for ready reference. I have, therefore, reasons to believe that the income to the extent of ₹ 24.50 lacs has esc .....

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s vs. ITO, decided by the C Bench, ITAT, New Delhi in ITA No. 304/Del/2013 (AY 2008-09) vide order dated 19.12.2014 (in which one of the Judicial Member was the Party), wherein the Hotel Signatures Pvt. Ltd. (Supra) decision of the Delhi High Court was followed. Against the order dated 19.12.2014 of the Tribunal, the Department went in Appeal before the Hon ble Delhi High Court, in ITA No. 486/2015 in the case of Pr. CIT vs. Sh. Govind Kripa Builders Pvt. Ltd. and the Hon ble High Court of Delhi .....

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oming to the above conclusion. In the facts and circumstances of the present case, no substantial question of law arises for determination by the Court. 16.2 We also find from the records that earlier scrutiny assessment u/s. 143(3) was completed vide order dated 28.2.2005 and (ii) four years have elapsed on date of instant reopening (23.3.2009) and (iii) in reasons recorded allegation was made for income escaping assessment of ₹ 24.50 lacs as mentioned on page no. 1 of the impugned order .....

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ound of the aforesaid discussions, we are of the considered view that only effective ground in this appeal is reassessment proceedings u/s. 148 of the I.T. Act, the Assessee has reiterated that reassessment proceedings are illegal and without jurisdiction in the absence of any tangible evidence or material in respect of any undisclosed income and recording of requisite satisfaction in respect of any such undisclosed income. After hearing both the parties on the issue in dispute as well as after .....

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