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2015 (6) TMI 1023 - ITAT MUMBAI

2015 (6) TMI 1023 - ITAT MUMBAI - TMI - Addition u/s 68 - undisclosed cash credit - Held tht:- We do not find any strength in the allegation made by the AO. Allegations are baseless and without any supportive evidence. On the contrary, these two companies have paid share application money from their bank accounts through account payee cheque, therefore the transaction cannot be treated as bogus. Since the AO has not made any further enquiry, merely because of the false allegation, a genuine tran .....

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SAL, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER For the Appellant: Shri S.M. Bandi For the Respondent: Shri Asghar Zain O R D E R PER N.K. BILLAIYA, AM: These are cross appeals by the Revenue and the assessee against the very same order of the Ld. CIT(A)-1, Thane dt. 28.9.2012 pertaining to assessment year 2009-10. As common issues are involved, both these appeals were heard together and are disposed of by this common order for the sake of convenience and brevity. 2. Facts of the .....

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#8377; 9,60,30,000/- i.e.( 87,300 shares X ₹ 1100) is to various companies and remaining ₹ 59,40,000/- i.e. (5400 X 1100) is to family members of the Directors. The details of the share capital subscribed by the company are as under: S. No. Name Qty. Amount Introduced (in Rs) 1. M/s. Alliance Intermediateries & Network Pvt. Ltd., 5900 64,90,000 2. M/s. Mahasagar Securities Pvt. Ltd., 5900 64,90,000 3. M/s. Mihir Agencies Pvt. Ltd. 5000 55,00,000 4. M/s. Kaycee share Broking Pvt. .....

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ty, credit worthiness and genuineness of the above companies. The assessee could file confirmations in respect of following companies: 1) M/s. Kaycee share Broking Pvt. Ltd. 2) M/s. Mihir Agencies Pvt. Ltd. 3) M/s. Alliance Intermediateries & Network Pvt. Ltd., 4) M/s. Mahasagar Securities Pvt. Ltd., 2.2. No confirmation was filed by the assessee. The assessee could file only profit and loss account and balance sheet of these companies for the financial year 2008-09. The AO observed that in .....

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kesh Choksi. The AO further found that M/s. Mahasagar Securities Pvt. Ltd., and its group concerns were engaged in fraudulent billing activities and in the business of providing bogus speculation profit/loss, short term/long term capital gain/loss, commodities profit/loss on commodity trading (through MCX) and bogus share capital introduction. 2.3. The AO further observed that during the course of search, the sworn statement of Shri Mukesh Choksi was recorded in the office of DDIT who had confir .....

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g the share application made by: (5) Pranik Shipping & Services Ltd., (6) M/s. Jasnil Finance & Trading Pvt. Ltd., (7) M/s. Nilpur Vanijya Pvt. Ltd (8) M/s. WAH Foods Pvt. Ltd (9) M/s. KKSS Builders Pvt. Ltd (10) M/s. Keystone Stock Finance Pvt. Ltd (11) M/s. Premier Soya Ltd (12) M/s. Indo Con Core Pvt. Ltd., 2.5. The AO treated the share application money from these companies as unexplained income u/s. 68 of the Act and made an addition of ₹ 9,60,30,000/-. 3. Aggrieved, the asses .....

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Premier Soya Ltd.,(2) M/s. Indo Con Core Pvt. Ltd., and confirmed the addition respect of other six companies. 4. Aggrieved by this both Revenue and the assessee are in appeal before us. 5. First we will take up Revenue s appeal in ITA No. 546/M/2013. 6. We have heard the rival submissions and given a thoughtful consideration to the orders of the authorities below and with the assistance of the Ld. Counsel, we have considered the relevant documentary evidences brought on record and referred to .....

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nothing on record brought by the AO to justify the addition. It is also an undisputed fact that transactions with these companies have been done through account payee cheque, respective bank statement have been brought on record before us. Even if we consider the statement of Shri Mukesh Choksi recorded u/s. 132(4) of the Act and also subsequently u/s. 131 of the Act, we do not find any reference to the assessee company, nowhere Shri Mukesh Choksi has said that he has arranged share capital for .....

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s received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the department is free to proceed to reopen their individual assessments in accordance with law, but it cannot be regarded as undisclosed income of the assessee company. 6.1. In respect of other two companies viz., (1)M/s. Premier Soya Ltd.,(2) M/s. Indo Con Core Pvt. Ltd., the AO at page-19 of his order has observed that on verification of the details submitted by the assessee it is seen th .....

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r bank accounts through account payee cheque, therefore the transaction cannot be treated as bogus. Since the AO has not made any further enquiry, merely because of the false allegation, a genuine transaction cannot become non genuine transaction. 6.3. The First Appellate Authority has considered the facts in the light of the provisions of Sec. 68 of the Act and have deleted the additions in respect of these six companies. On the basis of same documentary evidences brought on record before us, w .....

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S Builders Pvt. Ltd. 39,87,500/- 6) M/s. WAH Foods Pvt. Ltd. 1,49,87,500/- 8. We have given a thoughtful consideration to the orders of the authorities below. The additions have been made by the AO in respect of the above named companies for the following reasons: i) Prior to issue of cheque to the assessee company these companies have received monies from their sister concerns and their sister concerns have deposited cash before giving cheque to these companies. ii) The Director of the Company .....

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the same set of reasoning as given by the AO confirmed the additions. The Ld. CIT(A) agreed with the AO that in place of Directors, Chartered Accountant of these companies have appeared who were not authorized to make any statement on behalf of these companies. 9. Before us, the Ld. Counsel for the assessee reiterated what has been submitted before the lower authorities. The ld. Counsel drew our attention to the relevant documents brought on record before us in the form of a paper book. Referrin .....

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uce evidences in support of the share application money given by the respective companies. Therefore, the Revenue authorities have grossly erred in rejecting their submissions made during the remand proceedings. 10. The Ld. DR strongly supported the assessment order and the order of the Ld. CIT(A). 11. The undisputed fact is that the additions have been made only because the Directors did not appear before the AO but the companies were represented by their respective Chartered Accountants. This .....

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