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2016 (10) TMI 418 - ITAT KOLKATA

2016 (10) TMI 418 - ITAT KOLKATA - TM - Block assessment proceedings u/s 158BD - addition u/s 68 - double additions - Held that:- We find that the entire credits of ₹ 2,65,30,000/- in the bank accounts of four persons have already been added in the block assessment proceedings u/s 158BD of the Act dated 30.11.2006 in the hands of the assessee, in addition to adding the commission income thereon @ 1% amounting to ₹ 2,65,300/-. We also find that in the said block assessment order, the .....

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me up to 07.05.2002 in the regular assessment proceedings for the Asst Year 2003-04 as it would only result in double addition. Hence, the addition u/s 68 of the Act is directed to be deleted. Accordingly, the ground No. 2 raised by the assessee is allowed. However, since the bank transactions upto the date of search i.e 7.5.2002 have been considered in the block assessment proceedings u/s 158BD of the Act and commission income thereon is taxed in the block assessment, the commission income from .....

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olkata vide appeal No. 41/CC-XXIV/CIT(A)C-III/2006-07/Kol dated 26.03.2013. Assessment was framed by ACIT, CC-XXIV, Kolkata u/s. 143(3) of the Income tax Act, 1961 (hereinafter referred to as the Act ) for AY 2003-04 vide his order dated 24.03.2006. 2. We find that the assessee had raised some additional grounds before us which were withdrawn by it vide letter dated 30.6.2016. Hence, the same are not admitted for adjudication. 3. The first regular ground raised by the assessee is general in natu .....

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block assessment for the block period ending 7.5.2002 was completed u/s 158BD of the Act in the hands of the assessee on 30.11.2006 by making the following observations :- 28. But at the same time, one cannot overlook the fact that the assessee was acting as a name lender or merely acting as facilitators for the UIC Group to channel their unaccounted money through itself for which it was paid a commission amount which is evident from the complicit relationship of Mr. S. Singhi and Mr. Rajesh Jaj .....

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ted to have been received b7 the assessee company from the UIC group which works out to ₹ 2,65,300/- and this amount is added back to the income of the assessee for the block period and this amount is assessed in the hands of the assessee on substantive basis. In the said block assessment, the ld AO observed that the funds transferred from the bank accounts of four persons namely Shankar Lal (A/c No. 4934); Surendra (A/c No. 4933); Sunil (A/c No. 4914) and Rajendra (A/c No. 4886) to the ba .....

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nd conniving operation to channelize the UIC group s own unaccounted money back to itself through this maze of cash deposits and share transactions when there were no actual share transactions but only accommodating book entries of the respective intermediary companies. Therefore, the amounts in question should be rather taxed on protective basis in the hands of the assessee company and on substantive basis in the hands of the UIC Group since the amount of ₹ 2,65,30,000/- was not considere .....

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03 disclosing loss of ₹ 3,428/- . This regular return was selected for scrutiny and during the course of regular assessment proceedings, the ld AO observed that on verification of bank accounts maintained by Sunil Kr Jain , Rajendra Kr Surana, Shankar Lal Godh and S.K.Hirawat in Federal Bank, Burrabazar Branch, that huge cash were deposited in their respective accounts and then transferred from their accounts to the account of the assessee company during the relevant financial year as well .....

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0/- CA 4886 Rajendra Kumar Surana 19.04.02 20.04.02 22.04.02 06.05.02 3,00,000/- 3,01,000/- 4,50,000/- 4,60,000/- 19.04.02 22.04.02 07.05.02 3,00,000/- 7,50,000/- 3,50,000/- 14,00,000/- CA 4933 Surendra Kumar Hirawat 17.04.02 04.05.02 06.05.02 07.05.02 4,50,000/- 5,01,000/- 1,50,000/- 1,60,000/- 18.04.02 19.04.02 06.05.02 07.05.02 3,00,000/- 1,50,000/- 5,00,000/- 1,00,000/- 10,50,000/- 4.3. Since the sources of such cash deposits and creditworthiness of the persons could not be proved ; summons .....

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ter does not belong to our company. We have only sold our investments to these persons. In consideration thereof, the payment received has been accounted for on revenue account and shown as 'sale proceeds'. Thus, it is only substitution of one asset for other. It is not a case where assessee has obtained any cash credit. We having already accounted for these amounts as its income in its Profit & Loss Account, we have nothing more to explain. Undersigned therefore, is unable to commen .....

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them". 4.4. The ld AO observed that since proceedings u/s 158BD of the Act have already been initiated in the name of the assessee and all the above deposits were within 7.5.2002 i.e the period covered under such proceedings , the above amount of ₹ 38,00,000/- was added on protective basis as unexplained cash credit u/s 68 of the Act in the regular assessment proceedings completed u/s 143(3) of the Act on 24.3.2006. 4.5. Before the ld CITA , it was argued that it is an accepted positi .....

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session of the assessee, which is duly evidenced by the balance sheet filed by the assessee for the relevant year. It was further argued that the ld AO had not doubted that the investment had gone out of the possession of the assessee. Since the assessee was no longer in possession of the said investment, the question of unexplained credit u/s 68 of the Act does not arise at all. In view of the above, the amount of ₹ 38,00,000/- was nothing but conversion of investment into cash and hence .....

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ersons. In this regard, it was submitted that the said persons had sufficient bank balance and the amount was received from them by account payee cheques and accordingly it was argued that the creditworthiness of the said persons have been proved. The ld CITA however not convinced with the arguments of the assessee confirmed the addition made by the ld AO. Aggrieved, the assessee is in appeal before us on the following ground no. 2:- 2(a). On the facts and in the circumstances of the case, the l .....

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act that the amount had already been credited to the accounts of the appellant as 'sale proceeds of shares' thus leading to a position of double addition of the same amount. 5. The ld AR reiterated the submissions made before the lower authorities and placed a copy of the block assessment order u/s 158BD of the Act dated 30.11.2006. In response to this, the ld DR vehemently relied on the orders of the lower authorities. 6. We have heard the rival submissions and perused the materials ava .....

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