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2015 (10) TMI 12 - ITAT JAIPUR

2015 (10) TMI 12 - ITAT JAIPUR - TMI - Unaccounted share transactions of the assessee company - CIT(A) deleted the addition - Held that:- The A.O. had verified the accounts maintained in the name of M/s. Sandeep Stocks Pvt. Ltd. and came to the conclusion that there was no variation in the entries/transactions carried out through this account. Therefore, at the time of filing of return, the assessee company has not disclosed any additional income on account of surrender made during the course of .....

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ni, JM And T. R. Meena, AM, JJ. For the Appellant : Shri Kailash Mangal (JCIT) For the Respondent : Shri Manish Agarwal (CA) & Shri Javed Khan ( Adv. ) ORDER Per T. R. Meena, AM. This is an appeal by revenue emanating from the order of ld. CIT (A)-I, Jaipur dated 22.05.2012 for the assessment year 2008-09. The solitary ground raised in the appeal is against deleting the addition of ₹ 80,00,000/- made by the AO wherein Directors of the assessee company categorically admitted in their st .....

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td. During the course of survey proceedings, statement of Shri Mukut Behari Agarwal, Director in the assessee company was recorded. In the statement so recorded, in answer to question nos. 41 & 42 Shri Mukut Behari Agarwal, Director stated that the assessee company's transactions for current year were done through M/s. Sandeep Stocks Pvt. Ltd. There were no transactions through this company in earlier years. During the current financial year, from these transactions approximately income .....

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d been doing trading in Future & Options (F & O) and shares in the assessee company for last 3-4 years and the assessee company had been receiving commission @ 3 paisa on very one thousand rupees transaction. Further, in the statement of Shri Mukut Behari Agarwal, Director accepted that the assessee company had earned approximately ₹ 80,00,000/- on account of trading done by Shri Sandeep Sharma, Director of M/s. Sandeep Stock Pvt. Ltd. in the name of assessee company. This amount o .....

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ssue which was replied by the assessee vide letters dated 6.10.2010 & 18.11.2010 wherein it was submitted that income was admitted without referring the books of account and further without linking and co-relating the transaction with the books of account maintained. M/s. Sandeep Stock Pvt. Ltd. is a private limited company and is a separate legal entity with independent Directors who are not related to the assessee company in any manner. All the transactions appearing in the current account .....

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est of the assessee company is limited to the brokerage income earned on such transaction. After the conclusion of survey proceedings and at the time of filing of the return, the assessee company had verified all the transactions stated in the accounts of M/s. Sandeep Stock Pvt. Ltd. and as none of the transactions is in any manner related to the assessee company, thus no income on this account was offered by the assessee company in its return of income filed. Further, the fund involved in such .....

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ake of retraction from income accepted as undisclosed and not recorded in books of account amounting to ₹ 80,00,000/- during the course of survey proceedings. He also relied on the following decisions :- Addition made on the basis of admission by assessee - justified. Hira Singh and Co. vs. CIT (HP) 230 ITR 791. Manharlal Kasturchand Chokshi vs. ACIT (ITAT, Ahd) 61 ITD 55. Hiralal Maganlal & Co. vs. DCIT (ITAT, Mum) 96 ITD 113. Ravindra D. Trivedi vs. CIT (Raj) 215 CTR 313. Thus he mad .....

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19.07.2007. During the course of assessment proceedings one of the directors of the appellant company stated that M/s. Sandeep Stock Pvt. Ltd. had for the past 3 to 4 years been dealing in F & O and trading in shares and the appellant company was taking commissions @ 3 paisa per ₹ 1,000/- from it. It was mentioned that since it was a big account the appellant company did some personal trading from this account. In response to question no. 42 it was mentioned that these kind of transac .....

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pany and apart from these statements there is no evidence by way of documents or papers to indicate or substantiate this surrender made. 3) M/s. Sandeep Stock Pvt. Ltd. is an independent company and the directors are not related to the directors and promoters of the appellant company. 4) All the transactions were conducted by M/s. Sandeep Stock Pvt. Ltd. through its bank accounts. 5) The books of accounts maintained by M/s. Sandeep Stocks Pvt. Ltd. were verified subsequently by the AO as per her .....

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f ₹ 80,00,000/- to the income of the assessee merely on the basis of the statements made by the director of the appellant company during the course of survey operations, particularly as this surrender is not substantiated by any evidence gathered during the course of survey proceedings, assessment proceedings or the verification done while preparing the remand report. Therefore, this addition of ₹ 80,00,000/- does not appear to be justified on the basis of the facts discussed above. .....

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O. 6. At the out set, the ld. A/R submitted as under :- 1) that there was no material/evidence with the ld. AO available on record which could give indication of any such trading or which could substantiate the admission so obtained, in the absence of which, no reliance could have been placed on the statements of a director of the assessee company. 2) That it is well settled law that there statements cannot be made basis for making additions in the absence of any corroborative evidence, more par .....

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details, margin account containing details of daily margin receivable/payable along with daily balance outstanding was submitted before the ld. AO. 5) That no single transaction recorded in the accounts of M/s. Sandeep Stock Pvt. Ltd. was pointed out specifically as for assessee's own trading. 6) That in the preceding assessment years (2005-06 & 2006-07), additions were made on the basis of alleged admission of director of the assessee company made during the course of survey without br .....

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s before ld. CIT (A), all these facts along with relevant evidences (already submitted before ld. AO) were again submitted who called for a report from the ld. AO directing him to make necessary verification of record in the matter. Accordingly, the ld. AO submitted a remand report dated 02.02.2012 wherein the ld. AO has admitted following facts :- 1) In compliance with the summons u/s 131, Sh. Sandeep Sharma & Smt. Sunita Sharma, directors of M/s. Sandeep Stock Pvt. Ltd.., necessary documen .....

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s. Sandeep Stock P. Ltd. in four different ledgers were tallying with the ledger account of M/s. Maverick Share Brokers P. Ltd. for the year under appeal. Thus, it can be seen that in the remand report, the ld. AO has clearly admitted that the transactions as appearing in the books of accounts of the assessee company in the ledger account of M/s. Sandeep Stocks Pvt. Ltd. are duly verifying one to one entries of debit/credit with the ledger accounts of the appellant assessee as appearing in the b .....

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