TMI Blog2008 (10) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the course of reassessment proceedings, the copies of bank account of the assessee company and M/s Suma Finance and Investment Ltd. were directly obtained by the AO from the concerned banks viz. J and K Bank and Corporation Bank respectively. It was revealed from the copies of bank accounts of the assessee company obtained from J and K Bank that a total sum of ₹ 95 lakhs was credited in the said account. In this regard, it was explained on behalf of the assessee company that a sum of ₹ 84 lakhs was received by it from M/s Suma Finance and Investment Ltd. for sale of shares of M/s Bagpat Industries Ltd. In order to verify this explanation of the assessee company, it was required by the AO to produce the purchaser of the said shares viz. M/s Suma Finance and Investment Ltd. through its representative alongwith all the relevant documents. The assessee, however, failed to comply with the said requirement of the AO by the date given in this regard. The assessee company, therefore, was gain offered one more opportunity by the AO to comply with the said requirement and as the assessee company failed to avail the same, the credit entries appearing in its bank account amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the balance sheet of the assessee company and the relevant transaction was also confirmed by M/s Suma Finance and Investment Ltd. A copy of share application form submitted by M/s Suma Finance and Investment Ltd. was also filed by the assessee as additional evidence before the learned CIT(A). This entire documentary evidence filed by the assessee company for the first time before him was forwarded by the learned CIT(A) to the AO in order to give him an opportunity to examine the same. The AO was also directed by the learned CIT(A) to submit his remand report after verification of the said documents. In the remand report submitted to the learned CIT(A) vide a letter dated 29.8.2007, the AO strongly objected to the admission of the additional evidence sought to be filed by the assessee company before the learned CIT(A) on the ground that it had failed to file the same during the course of assessment proceedings despite sufficient opportunity having been afforded in this regard. No comments, however, were given by the AO on merits of the submissions made on behalf of the assessee company before the learned CIT(A) relying on the said additional evidence. The remand report submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion entries. It is not known as to whether the AO received any reply of this letter or not. However, from this it appears clearly that apart from the initial information received from Inv. Wing about the alleged accommodation entry havala transactions, there is no specific material or any other evidence to prove that the transaction between the two companies was in the form of accommodation entry. Whereas the information was sufficient for forming prima facie belief about escapement of income, it cannot be treated as sufficient to conclude that the entries were havala transactions. On the other hand the appellant has duly explained all the financial transactions with Suma with supporting evidence. Therefore there was no justification to hold the entries as unexplained and treat them as income u/s 68. Accordingly the entire addition of ₹ 95 lacs is deleted. Since the addition of alleged accommodation entry has been deleted, there is no justification for the so called commission at the rate of 0.5% for obtaining such entries. Therefore the addition of ₹ 47,500 is also deleted. 5. The learned CIT(A) thus deleted both the additions of ₹ 95 lakhs and ₹ 47,500 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee the facility of bringing the declared income into account. In the cases of the interveners who are all declarants under the VDIS, 1997, this condition has been satisfied and there is no dispute about the same. The immunity given by section 68 of the Finance Act, 1997, is limited to this, that the declared income will not be assessed again as the income of the declarant for any assessment year under the Income-tax Act. Obviously the only provision, which the Assessing Officer can invoke for assessing the amount credited in the books of account, is section 68 of the Income-tax Act, but by virtue of section 68 of the Finance Act, 1997, the applicability of section 68 of the Income-tax Act to the amount declared under the VDIS is ruled out. But the immunity stops there. When the asset representing the declared income or acquired out of the declared income is later sold, the powers of the Assessing Officer to examine the question whether there has been a real sale of the asset is not curtailed in any manner by any of the provisions of the VDIS, 1997. Supposing, to give an example, an assessee files a declaration under the VDIS that he had acquired gold bars for ₹ 5 lacs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold. Such proof may include details of the purchaser, his credentials, evidence in the form of bills, etc. It is also open to the income-tax authorities to examine such proof in the manner authorized by law and come to the conclusion whether the sale is genuine or not. While doing so, the Assessing Officer may rely on section 68 of the Income-tax Act. 7. Respectfully following the above decision of the ITAT in the case of Bishan Chand Mukesh Kumar (supra), we hold that the provisions of Section 68 were applicable even to the cash credits representing sale of shares and the learned CIT(A) was not justified in deleting the addition made by the AO u/s 68 on this ground. 8. As regards the relief allowed by the learned CTT(A) to the assessee by deleting entirely both the additions of ₹ 95 lakhs and ₹ 47,500/- made by the AO, it is observed that the said relief was allowed by the learned CIT(A) relying mainly on the additional evidence filed by the assessee company for the first time during the course of appellate proceedings before him. In this regard, the learned DR has contended before us that proper and sufficient opportunity was not afforded by the learned CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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