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2016 (2) TMI 490 - ITAT DELHI

2016 (2) TMI 490 - ITAT DELHI - TMI - Addition u/s 68 for unexplained cash credit for want of non-compliance - Held that:- Respectfully following the judgment of CIT vs Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT ] wherein it has been held that "Since no incriminating material was unearthed during the search, no additions could have been made to the income already assesseed", we hold that the completed assessments can be interfered with by the Assessing Officer only on the basis of some inc .....

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r the Respondent : Shri A C Mohanty, DR ORDER Per L P Sahu, AM This appeal by the assessee has been filed against the order of the CIT(A)-XXXIII, New Delhi dated 2.7.2013 with the following grounds of appeal:- 1. On the facts and circumstances of the case and in law, Ld. CIT (A) erred in sustaining addition of ₹ 10,00,000/- being the share application money. 2. On the facts and circumstances of the case and in law, Ld. CIT (A) erred in relying on the finding of the Assessing Officer in the .....

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12.2007 while using the same in the present assessment proceedings. 4. On the facts and circumstances of the case and in law, Ld. CIT (A) erred in sustaining the addition in respect of share application money when no such addition can be made in a completed assessment in absence of any incriminating material found in the search. 5. On the facts and circumstances of the case and in law, Ld. CIT (A) erred in giving a finding that the Ld. A.O. need not restrict the addition on the basis of seized d .....

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ors (P) Ltd. and commission of ₹ 5000/- was paid to the entry provider. Consequent upon the search, a notice u/s 153A was issued. In compliance of this, return was filed at NIL income and on the basis of this return, scrutiny assessment was made with an addition of ₹ 10,00,000/- for share application money received from Jai Shiv Fabricators (P) Ltd. and ₹ 5000/- paid to entry provider. During the course of assessment proceedings, the assessee company was asked to furnish necess .....

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68. 3. In this regard, the assessee furnished new address of Jai Shiv Fabricators (P) Ltd. vide letter dated 12.12.07. An Inspector was deputed along with the summons but upon making local inquiry, he came to know that no such company is in existence. In view of this, ld. Assessing Officer held that the share capital received from Jai Shiv Fabricators (P) Ltd. is nothing but unexplained cash credit in the books of accounts of assessee company and made an addition on that account u/s 68. Ld. Asse .....

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nsequent upon search, a notice u/s 153A of the Income Tax Act, 1961 was issued on 18.11.2009 and accordingly, return was filed with NIL income on 18.12.2009. Subsequently, return was taken up for scrutiny and assessment was completed on 30.12.2010 with the addition in the following manner. 5. He disallowed the above expenses of ₹ 318956 only on the basis of like mandated information is not contained in the bills like telephone no., bill no. etc. whereas the appellant had deducted TDS as wh .....

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confirmed by the CIT(A). The ld. Assessing Officer has heavily relied on the list of persons involved in the business of providing accommodation entries, however, no such list along with relevant material has been provided or shown to the assessee during the course of earlier or present assessment proceedings. Therefore, addition is being made without providing and confronting any specific adverse material to the appellant at all, accordingly, the addition so made is against the well laid princ .....

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to exercise the powers vested in him u/s 131 to the hilt and in the event of his failure to do so, the blame cannot lie at the door of the assessee, as held by the Hon'ble Apex Court in the case of CIT vs Orissa Corporation P. Ltd. (1986) 159 ITR 78 and reply dated 12.12.07. Regarding Inspector's report, it is submitted that the same had never been confronted to the appellant assessee. He submitted that the invoking of deeming provision u/s 68 is uncalled for due to the following reason .....

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the above that my client has discharged his liability. Once the identity of the investor is established, which has been done in the instant case in ample measure, no further probe is called for and the issue like creditworthiness of the depositors is an alien matter. Ld. AR relied on the judgment of Hon'ble Jurisdictional High Court in the case of CIT vs Sophia Finance & Inv. Ltd. (1994) 205 ITR 98 (Del) (FB) and he also relied on another judgment in the case of CIT vs Stellar Investmen .....

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