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D.C.I.T., Central Circle-11, New Delhi Versus Winsome Finance Pvt. Ltd.

2015 (11) TMI 1275 - ITAT DELHI

Addition under section 68 - CIT(A) deleted the addition - Held that:- the amount received in the bank account of the assesseerespondent as proceeds of sale of shares held as stock-in-trade and investment, cannot be held or treated as unexplained income of the assessee, which would attract addition u/s. 68 of the Act. Especially when these revenue receipts which were received against sale of stock in trade had already been credited to the P & L account and reduced from the investments, then there .....

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nd any reason to interfere with the order of CIT(A) and we uphold the same - Decided against revenue. - ITA Nos. 6457 & 6458/Del./2013, ITA No. 6459/Del./2013, ITA Nos. 6453 & 6454/Del./2013, ITA Nos. 6453 & 6454/Del./2013 - Dated:- 30-9-2015 - D.C.I.T.,Central Circle-11, New Delhi Versus Winsome Finance Pvt. Ltd. SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER For The Appellant by : Shri Aliq Ahmed, Sr. D.R. For The Respondents by : None ORDER Per Bench: These appeals hav .....

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he Commissioner of Income Tax (A) has erred in law and on facts in deleting the addition of ₹ 7,01,07,808/- made by AO under section 68 of the I T Act on protective basis. ITA No. 6457/Del./2013(A.Y. 2007-08): 3. Briefly stated, the facts giving rise to this appeal, are that the Assessing Officer completed the assessment u/s. 143(3) read with section 153A of the Income-tax Act, 1961 (for short the Act ) making addition of ₹ 7,01,07,808/- u/s. 68 of the Act. The aggrieved assessee fil .....

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red income. Therefore, the additions u/s. 68 of the Act on protective basis in the hands of the respective assessees are not sustainable. Now, the aggrieved Revenue is before this Tribunal in the second appeal with the sole ground as reproduced here above. 4. When the appeals were called for hearing, neither the assessee nor his representative appeared before us nor any application for adjournment has been filed on behalf of the assessee-respondent. On careful and vigilant perusal of the relevan .....

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the relevant material placed on record. 6. The learned Departmental Representative (Capital DR), supporting the action of the AO, submitted that from the description mentioned on various seized documents, it was evident that Shri N.K. Jain was an entry operator and the modus operandi adopted by Shiv Vani group was very much clear. The learned Departmental Representative further contended that unaccounted cash was being transferred to Shri N.K. Jain, who in turn is ploughing back the same in the .....

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basis u/s. 68 of the Act by the AO. The learned Departmental Representative vehemently contended that the CIT(A) granted relief to the assessee without any basis mainly holding that even if the AO had a doubt that the amount is something related to the entry business then he [CIT(A)] did not find any evidence brought on record which would say so. The leaned Departmental Representative finally contended that the addition made u/s. 68 of the Act on protective basis in the hands of the assessee can .....

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ng facts came in notice which emerge that Sh. N K Jain is an entry operator. i. Page no. 70 of annexure A-4, seized from office of Shiv Vani group at NBC Plaza, Saket, contains the summary account of Sh. N K Jain wherein details of payment received and transferred by N K Jain wherein details of payment received and transferred by N K Jain has been mentioned. On the basis of noting a sum of ₹ 14.83 crores has been surrendered as additional income in the hands of assessee in the assessment y .....

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ansaction has been offered for taxation by Sh. R K Somani & Sh. Hiralal Rathi in their hands in the relevant Assessment Year. iv. The description on page no. 26 of annexure A-18, shows noting as Account of NK Jain and commission has been mentioned @5.5% on capital, @ 3.5% on entry and @ 5% on bills. Such a high rate of commission is not possible in normal course of business which also indicates the involvement of Sh. N K Jain for providing of accommodation entry. v. The substantial cash paym .....

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pital/application money, bills & loans etc. by charging his commission to the various concerns of M/s. Shiv Vani group. It is seen that the transaction of page 56 of Annexure A-14, is reflected on the same page as other transaction of Mr. Jain who is involved n giving entries to various group concern of Shiv Vani group as discussed above and this fact is proved from description on various pages of seized material. Hence, these transactions through Mr. Jain are held to be entry transaction fi .....

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; 70107808 pertaining to this assessment year is treated as unexplained transaction materialized through banking channel whose source is not explained. Hence, this amount is added in the hands of the assessee on protective basis u/s. 68 of the IT Act. I am satisfied that the assessee has concealed the particulars of its income. Therefore, provision of section 271(1)(c) of the IT Act are attracted. 8. From the bare reading of the impugned order, we further observe that the CIT(A) demolished the p .....

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e top of the page. However, the amounts written against various names of the companies are not cash transactions but bank transactions duly reflected in the books and explained to the AO with all supporting documents during the assessment proceedings. 4.2.6 I find that none of the credit entries relate to any cash deposits. They are all either bank-to-bank transfers or cheque deposits. The narrations in the bank account give the details of the account nos. from where the amount has been received .....

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ete books of accounts, bank statements & transactions were explained to the AO and no adverse inference was drawn by the AO on the books of accounts & transactions mentioned therein. 4.2.8 It has been explained that the amounts have been received towards sale of shares held as stock-in-trade. It is seen that financial statements of the company do establish that the appellant had sold shares which were held by it as stock-in-trade. The profit and loss account of the year ending 31.03.2007 .....

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nt companies (listed therein). Merely because Mr. Jain s name appears on the top of the table, it should not be inferred that the transactions are unaccounted. 4.2.9 I am of the view that there is no merit in holding that the amounts mentioned in the seized document relates to any deposits into the bank account the source of which is unexplained. The fact that the AO has found Mr. Jain to be a entry operator, in itself, cannot make every entry in the bank account as unexplained. The AO has ignor .....

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ure. This has been reproduced at page 2 of the assessment order by the AO. In the submission made before the AO it was explained that the said page is a bank summary prepared by staff for internal control purpose and reconciliation of bank account. The appellant had also submitted the confirmation of amount received/paid for verification of the AO. The same has also been duly reproduced by the AO in the assessment order. Hence it is incorrect to say the source of the deposits in the bank is unex .....

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e very outset, we note that the Assessing Officer himself noted the fact that Shri N.K. Jain was proved to be the alleged entry operator on the basis of noting at page No. 70 of Annexure A-4, seized from the office of Shiv Vani Group at NBC Plaza, Saket, which contains the summary account of Shri N.K. Jain wherein details of payment received and transferred by N.K. Jain has been mentioned and on the basis of noting, a sum of ₹ 14.83 crores has been surrendered as additional income in the h .....

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as added to the income of the assessee-respondent on substantive basis for A.Y. 2009-10. 11. The CIT(A) while granting relief to the assessee also observed that the amounts represented the amount received on sale of stock and investment and also inter-corporate loans. The CIT(A) also considered the submissions of the assessee that the assessee submitted confirmation of amount received/paid for verification before the AO which was duly reproduced by the AO in the assessment order. Hence, it was i .....

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