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2016 (7) TMI 950 - ITAT DELHI

2016 (7) TMI 950 - ITAT DELHI - TMI - Addition u/s 68 - addition based on report of investigation wing - Held that:- AO has made addition merely based on the investigation carried out by the investigation wing from the order of the Ld. assessing officer without bringing out any material evidence against the assessee and not confronting assessee with that material. Contrarily evidences produced by the assessee of stalwart Realtors Limited of loan given of ₹ 46 lakhs, which is supported by t .....

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ction 68 of the Income Tax Act, 1961. On the above factual aspects, we delete the addition made by the Ld. assessing officer. - Decided in favour of assessee. - ITA No. 2464/Del/2013 - Dated:- 13-6-2016 - SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Assessee : Sh. V.N. Marwah, FCA For The Revenue : Sh. Shravan Gotru, Sr. DR ORDER PER PRASHANT MAHARISHI, A. M. 1. This is appeal filed by the assessee against the order of the LD. CIT (A)-II, New Delhi dat .....

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2004, trading business is stated to be carried out and thereafter no business was carried out by this company. One Sh. Avinash Setia in FY 2005 - 06, acquired the shares of this company. It filed its return of income, declaring total loss of ₹ 31870/- on 26/09/2009. This company along with three other companies of the group is presently involved in the development and construction of housing project and information Technology Park in sector 37 - Gurgaon. 3. During the year, company has rec .....

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a chartered accountant, had created a web of more than 200 companies to build up artificial capital for use by the group companies. It was also found that shareholders in such companies were dummies and just name lenders and all such persons were of no means. During the course of search statement of some persons were recorded and they stated that they are just name lenders. One Shri Pradeep Sharma later acquired this company. During survey under section 133A of the act on 20/10/2008 some pay in .....

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reditworthiness of the Stalwart Realtors private limited and also the genuineness of the loan having not been proved this amount of ₹ 46 lakhs was added to the total income of the assessee applying the provisions of section 68 of the Income Tax Act, 1961. Against this, appellant company preferred an appeal before the CIT (A) who in turn vide his order dated 20 March 2013 confirmed the addition under section 68 of the Income Tax Act of ₹ 46,00,000/-. Though companies financial stateme .....

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representative of the assessee submitted that Stalwart Realtors private Ltd is regularly assessed to income tax and during the course of assessment proceedings, submitted following documents:- a. The copy of assessment order under section 143 (3) of the act for assessment year 1990 -91 passed on 18/11/1992 of appellant. b. Copy of Sales tax assessment order of appellant. c. Copy of bank account maintained with South Indian bank of the assessee in respect of business carried on by the assessee. .....

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er. It was further submitted that that this company has huge accumulated surplus in reserve and surplus of the company of ₹ 3.59 crores. Therefore, the creditworthiness of the party is not in doubt. He stated that the revenue has not taken any action against Stalwart Realtors arbitrators private Ltd, despite having observed that this company has allegedly having generated fictitious capital. Further lender company is assessed to income tax and filing its return of income year to year. He s .....

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t the same lender Starwood realtors private limited has also advanced loans to Mr. Avinash Setia of ₹ 19 lakhs and to M/s prime Infoways private limited of ₹ 90 lakhs in assessment year 2008 - 09, which is accepted by the assessing officer. During the course of assessment proceedings, the Ld. assessing officer has relied on so many observations, which are based on the observation of investigation wing and the statement of so many persons. However, none of the statements or cross-exam .....

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the appellant wrongly makes the addition and further, the Ld. Commissioner of Income Tax (appeals) has erred in confirming the action of the Ld. AO. 6. The Ld. departmental representative relied on the orders of lower authorities and submitted that the investigation wing of the Income Tax Dept has carried on investigation, which shows that this company belong to the Pradeep Sharma group, and B K Dhingra who are engaged in the business of providing accommodation entries to various parties and th .....

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which was cleared in the bank account of stalwarts realtors private limited on 13/12/2008 and for the satisfaction of the assessing officer, assessee submitted confirmation showing address, as well as the permanent account number of the lender. It also submitted a copy of the income tax return filed by Stalwarts Realtors private limited for assessment year 2008 - 09, along with copy of the bank account of stalwarts realtors private limited with Corp bank from 1st December 2008 to 31st December .....

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which was cleared into the bank account of the lender on 13/12/2008 . Even after the issue of this cheque, there was an outstanding balance in the bank account of the lender of ₹ 2567771/-. Assessee has also submitted the copy of the balance sheet of the lender for the year ended 31st of March 2009 wherein though company has issued share capital‟ of ₹ 1 lakh, however, reserve and surplus of the company were ₹ 33311037/-and in the immediately preceding year such reserve an .....

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fact has not been controverted by the lower authorities. Furthermore it is apparent that the Ld. assessing officer has stated that based on the enquiries conducted by investigation wing it was found that Shri B K Dhingra who is one of the director of the Thapar homes group companies and was also chartered accountant has created a vast Web of more than 200 companies to built-up artificial capital for use by the other group companies. It was further stated by the Ld. AO that the investigation wing .....

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ws that the amount received from various bogus companies floated by Shri B K Dhingra into M/s Starwood realtors private limited as proceeds from sale and such sales were not the actual sales. 8. We failed to understand that when ld. AO has so much of the information why the assessee was not confronted by this evidence by providing the copies of such statements, copies of inquiry report and giving assessee an opportunity to rebut theses evidences. Ld AO has not done this basic exercise. Further, .....

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e us did not controverted that profits of Stalwarts Realtors from the bogus sales have been assessed and despite having evidences against that company , no actions have been initiated against that lender. It was not also denied that stalwart realtors private Ltd is a company which is regularly filing its return of income and has an accumulated reserve and surplus of ₹ 3.59 crores which is been accumulated from year-on-year. It is also apparent from the balance sheet filed by the assessee o .....

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received this loan and also proved the source of such loan and further the documents submitted by the assessee were not at all proved to be false or fabricated, we are of the view that assessee has discharged its onus cast upon him, under the provisions of section 68 of the Income Tax Act with respect to above loan of ₹ 46 lakhs from Stalwarts Realtors private Limited. Further, based on the investigation done by the investigation wing of the income tax Dept Ld. AO has not examined any of t .....

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