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Assistant Commissioner of Income Tax, Circle 1 (1) , New Delhi Versus M/s Adroit Financial Services (P) Ltd.

2015 (10) TMI 1495 - ITAT DELHI

Addition on account of share capital receipts - whether the assessee failed to establish the identity, credit worthiness and genuineness of the transaction despite adequate opportunity - CIT(A) deleted the addition - Held that:- In the present case, it appears that the AO wrongly presumed that the deposit of ₹ 20,00,000/- made by M/s D.N. Kansal Securities Pvt. Ltd. who was a regular client of the assessee, was received as a share application money. The said amount was received by the asse .....

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justified and the ld. CIT(A) rightly deleted the same. We do not see any valid ground to interfere with the findings given by the ld. CIT(A) - Decided in favour of assessee. - ITA No. 2918/Del/2013 - Dated:- 6-5-2015 - N K Saini, AM And A T Varkey, JM,JJ. For the Appellant : Shri Rajesh Jain, CA For the Respondent : Shri B R R Kumar, Sr. DR ORDER Per: N K Saini, AM. This is an appeal by the department against the order dated 28.02.2013 of the ld. CIT(A)-IV, New Delhi. 2. The only effective groun .....

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ssee filed the return of income on 29.10.2005 declaring an income of ₹ 3,95,03,633/-. Subsequently, the AO received information from Investigation Wing that the assessee had received accommodation entry of ₹ 20,00,000/-. He, therefore, issued notice u/s 148 of the Income Tax Act, 1961 (hereinafter referred to as the Act) on 30.03.2011 after recording the reasons. In response the assessee submitted that the original return furnished u/s 139(1) of the Act may be treated as the return f .....

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regular share trading business. It was further stated that if the AO had any doubt regarding the genuineness of the regular share transaction, he could have issued the notice u/s 133(6)/131 of the Act to the clients to verify the genuineness of the transaction. It was contended that the AO was not correct in observing that the details of transaction were not submitted before him, as can be seen from the reply of the assessee reproduced by the AO himself in the assessment order on page nos. 3 &a .....

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e nos. 5 to 8 of the impugned order, for the cost of repetition the same is not reproduced herein. 5. The ld. CIT(A) after considering the submissions of the assessee observed that the AO at page no. 3 of the assessment order mentioned that the assessee in its submission dated 22.11.2011, submitted that M/s D.N. Kansal Securities Pvt. Ltd. was a regular client who executed business in the Stock Market through the assessee and deposited a sum of ₹ 20,00,000/- as margin money through cheque .....

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e had not been controverted by the AO who proceeded on the assumption that it was a share application money. The ld. CIT(A) was of the view that it was expected from the AO that he should have established that the assessee received any share application money which the AO had not done. Therefore, a mere observation that the assessee had received accommodation entries through the route of share capital which was not supported by any evidence material on record, was not a sufficient ground for mak .....

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s placed on the judgment of the Hon ble Jurisdictional High Court in the case of CIT Vs Vishal Holding & Capital Pvt. Ltd. (2011) 12 Taxman.com 150 . 6. Now the department is in appeal. The ld. DR strongly supported the order of the AO and reiterated the observations made in the assessment order dated 21.12.2011. It was further submitted that the issue may be sent back to the AO for verification as to whether the amount received by the assessee was on account of share capital or it was relat .....

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