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2016 (5) TMI 364

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..... of source U/s 68 of the Act. Primary burden lies on the assessee has been discharged by filing the requisite evidences before the Assessing Officer and shifted on the Assessing Officer to disprove the cash creditors’ transactions are not genuine or bogus. The share application money was received by the appellant and subsequently returned though banking channel. In case of 7 companies, the notices were served on it on given addresses. There is no evidence directly or indirectly with the Assessing Officer that the assessee had routed undisclosed money in the guise of share application money or loan. The ld DR’s argument have also not convinced us that these parties were in accommodation entries in form of loan and share application money after charging certain commission as such no survey/search has been carried out on the creditors to prove that these companies are habitual to provide loan/share application money even there is no evidence with the ld DR for making such allegation during the course of written submissions - Decided against revenue - ITA No. 1103/JP/2011 - - - Dated:- 21-3-2016 - SHRI T.R.MEENA, AM and SHRI LALIET KUMAR, JM For The Revenue : Shri P.R. Meena .....

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..... capital as per Assessing Officer is as under:- Companies which are not traceable: S.No. Name of the concerns Postal remarks by ADIT Amount Receipt in Dhanlaxmi 1. M/s Rajdeep Marchandise Pvt. Ltd., 6, Waterloo Street, Kolkata. Not known ₹ 25,00,000/- 2. M/s Pushpak Advisory Pvt. Ltd., 28, Vivekanand Road, Kolkata -Do- ₹ 9,00,000/- 3. Divine Tie Up Pvt. Ltd., 14A, Madhu Roy Lane, Kolkata-700006 No such company Divine Tie Up Ltd. in this address 14A Madhu Roy Lane, Kolkata-6, hence not known ₹ 45,00,000/- 4. M/s Lake View Vinimoy Pvt. Ltd., 13, Mother Tala Lane, Howrah-711106 Not Known ₹ 4,50,000/- 5. M/s Shibpujan Agencies Pvt. Ltd., 50B, Gariahat Road, Ground Floor, Kolkata 700019 Left ₹ 13,50,000/- 6. Nischay Distri .....

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..... mpanies, which are not traceable. She further held that in case of some companies, investment fund was unexplained. The creditworthiness of the creditors had not been proved. She also considered the case laws cited by the assessee but which were found distinguishable. Accordingly, the ld Assessing Officer made addition of ₹ 2.16 crores U/s 68 of the Act. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had allowed the appeal by observing as under:- 2.3. I have carefully examined contents of the Interim Report dated 14/12/2010, of ADI (Inv.) Kolkata, which has formed the sole basis of the given by the AO in the impugned assessment order, viz. the issues under consideration and also the detailed counter submissions made by the Ld. AR in this regard. From the assessment order, it is evident that mainly the AO has made the additions u/s. 68 of the IT Act, i.r.o., the part of share application money record and also towards the unsecured loans, received by the appellant, during the relevant period. Here, it is also relevant to mentioned that as per the provisions of Sec. 68 of the Act, to prove the genuine .....

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..... ons, I tent to agree with the Ld. AR that as far as appellant is concerned they have discharge their legal obligation u/s. 68 by filing all the possible evidences and statutory documents, as discussed above. The AO has simply followed the Interim Report of the ADI, which itself is found of non conclusive and half cooked in nature, being not a final report as such. Moreover,- the non availability aspect, i.r.o,, to cash creditors is concerned, in my opinion the ADI report is not very clear about the exact reason and the follow-up action taken in this regard, specially when theses parties are not only assessed to tax but filed the returns for the relevant period also. In the light of the voluminous documentary evidences, it would be rather difficult to understand and appreciate the findings given by the ADI in this regard. Moreover in the case of M/s. -Garu Kripa Projects P. Ltd., since the concerned person as appeared and submitted the relevant documents and confirm the loans transaction, in the light of settled legal position they are not supported to explain the source of the source and the onus lied on the appellant got discharge, as such. The above views have been expressed by .....

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..... Trade Com P Ltd. Rs.5,00,000/- iv. Brajal Sati Tracom P. Ltd. Rs.5,00,000/- The undisputed facts i.r.o. of the above share capital/application money received by the AO are that the investors/creditors of such transactions are Private Limited Companies only. Accordingly while deciding the issue under consideration, the above vital aspect has to be kept in mind. In this regard, the appellant has submitted confirmations, affidavits, PAN No., copy of relevant returns of income, bank statements of relevant period and complete address of such companies alongwith the R.O.C. papers also. Here the ratios upheld by various courts, including the Hon ble Supreme Court in the case of M/s. Lovely Export Pvt. Ltd. 216 CTR 195 and M/s. Stellar Investment Ltd. 251 ITR 463, are found quite relevant and applicable, as found dealt with the issue, similar to the present appellate proceedings also. In the above decision, the Hon ble Apex Court has categorically held that even if the share application money has been received from so- called bogus share holders, whose identity have been given and proved, und .....

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..... are capital/application money of ₹ 1.36 crores, by providing all possible documentary/statutory evidences, as discussed above. It is also found that the AO has disapproved or disbelieved the above transactions, simply on the basis of a half cooked and inconclusive observations of the ADI (Inv.) Kolkota, discussed in his interim report. In the light of the various court s decisions, including of the Apex Court and the Jurisdictional High Court and Tribunal as relied upon by the appellant also, it is evident that the AO has failed to make out any reasonable and proper case u/s. 68 of the Act towards share capital money and cash credits received by the appellant, by refuting the documentary evidences submitted in these regards. On the other hand, it is felt that the AO has also simply rejected the voluminous supporting evidences of the appellant in a cryptic and summary manner in the impugned assessment order, which cannot be upheld, under the given circumstances. Accordingly the entire addition of ₹ 2.16 crores made u/s. 68 of IT Act is hereby deleted. Consequently this ground of appeal is upheld. 4. Now the revenue is in appeal before us. The ld DR has vehemently su .....

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..... ya International Ltd. 214 CTR 437 (Del). iii. CIT Vs. Prateek Finance Investment Co. Ltd. 215 ITR 272 (Del). iv. CIT Vs. Nivedan Vanijya Niyojan Ltd. 263 ITR 623 (Cal) v. Hidusthan Tea Trading Co. Ltd. Vs. CIT 263 ITR 289 (Cal) vi. CIT Vs. Dhar Ispat (P) Ltd. 180 CTR 491 (MP). vii. CIT Vs. Biju Patnaik (SC) 160 ITR 674 viii. Roshan De Hatti Vs. CIT (SC) 107 ITR 938 ix. Sumati Dayal Vs. CIT (SC) 214 ITR 801 x. Vasantibai N. Shah Vs. CIT (Bom) 213 ITR 805 xi. Sreelekha Banarjee Ors. Vs. CIT (SC) 49 ITR 112 xii. CIT Vs. Precision Finance P. Ltd. (Cal) 208 ITR 465 xiii. K.C.N. Chandrasekhar Vs. ACIT (ITAT, Bang) 66 TTJ 355 xiv. CIT Vs. United Commercial Industrial Co. (P) Ltd. (Cal) 187 ITR 596. xv. CIT Vs. Sophia Finance Limited (Del) 205 ITR 98 xvi. CIT Vs. Active Traders P. Ltd. (Cal) 214 ITR 583 xvii CIT Vs. Nivedan Vaniya Niyojan Ltd. (Cal) 263 ITR 623 xviii. CIT Vs. Bhagwati Jewels Ltd. (Del) 201 ITR 461 xix. CIT Vs. Rathi Finlease Ltd. (MP) 215 CTR 429 xx. ACIT Vs. Dhanlaxmi Steel Re-rolling Mills (ITAT, Hyd) 57 ITD 361. xxi. Pradip Kumar Loyalka Vs. ITO (ITAT, Pat-TM) 63 ITD 87. Therefore, order of the Assessing .....

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..... ise Pvt. Ltd. 6, Waterloo Street, Kolkata 700069 266 7. M/s Pushpak Advisory Pvt. Ltd. 28, Vivekanand Road, Kolkata 700007 266 There is no evidence with the Assessing Officer directly or indirectly that the assessee s unaccounted money had been routed through these deposits. In absence of this finding, no addition can be made in the income of the assessee merely on suspicion. Since the identity of the cash creditors had been established by the assessee company. The ld Assessing Officer at best could have assessed such amount in the hands of those companies. There is also no allegation by the ld Assessing Officer or in the interim report by ADIT Kolkata that these companies were part of any racket or were entry operators. The ld Assessing Officer made routine enquiry to ADIT, Kolkata. There is also no information on which these cases were assessed by reopening. He further relied on the following case laws:- (i) CIT Vs Vacmet Packaging (India) (P) Ltd. (2014) 367 ITR 217 (All). (ii) CIT Vs Pranav Foundations Ltd. (2014) 51 Taxmann.com 198 (Mad). (iii) CI .....

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..... the assessee through ADIT, Kolkata, who had sent interim report, which was received on 14/12/2010 whereas assessment was completed on 30/12/2010. In interim report, as per Assessing Officer in 9 cases, notices were returned back but it was not informed to the assessee about the conclusion of the enquiry by the ADIT, Kolkata or Assessing Officer of the assessee. The ld Assessing Officer heavily relied on the Inspector s report in confirming the addition but result of the enquiry of the Inspector has not been communicated to the assessee, which is against the principles of natural justice. As per Assessing Officer, in case of 5 companies, the source of fund was not found explained. The ld Assessing Officer again gave show cause notice on 23/12/2010. The assessee filed reply on 27/12/2010 and it was claimed before the Assessing Officer that no enquiry has been made by the Assessing Officer on changed addresses. The ld Assessing Officer had not considered the evidence filed by the assessee during the course of assessment proceedings i.e. affidavits confirming the transaction, PAN number, complete addresses of creditors, copy of balance sheet, ITR for A.Y. 2008-09, bank statement and f .....

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