TMI Blog2016 (10) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 8.5.2002 to 31.3.2003 needs to be taxed in the similar way. We deem it fit and appropriate to direct the ld AO accordingly to meet the ends of justice. - Decided partly in favour of assessee - I.T.A No. 1719/Kol/2013 - - - Dated:- 24-8-2016 - Shri M. Balaganesh, AM and Shri K. Narasimha Chary, JM For The Appellant: Shri Ravi Tulsiyan, FCA For The Respondent: Shri Rabin Choudhary, JCIT, Sr. DR ORDER Per Shri M. Balaganesh, AM: This appeal by assessee is arising out of order of CIT(A), Central-III, Kolkata 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause the ultimate beneficiary is finally the UIC group. This was observed in Para 26 of the said block assessment order by the ld AO. The ld AO further observed that the entire purpose and rigmarole of share sale and purchase by the two to three layers of share transactions undertaken by the companies controlled by Mr. S. Singhi and Mr. Rajesh Jajodia is a clear, covert and 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 considered in the block assessment of the UIC Group. Hence, this amount is taxed on a protective basis in the hands of the assessee company. Accordingly, the ld AO added a sum of ₹ 2,65,30,000/- on protective basis and gave a finding that the assessee was only in receipt of commission income @ 1% on the entire bank transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hirawat for recording their statements. In its reply, the director of the assessee company Mr. Ashok Jha stated as under :- The account of the aforesaid persons mentioned in your letter 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 comment upon the observation made by you in respect of the aforesaid accounts. The copies of the bills evidencing the sale of the shares duly credited in the Profit Loss Account could be seen enclosed. As regards non-appearance / non-availability by / of the aforesaid parties, undersigned would like to submit that we owes no responsibility under the law to produce them. You have all the plenary powers to conduct enquiry at your end in connection with these persons for fastening any liability on them . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us on the following ground no. 2:- 2(a). On the facts and in the circumstances of the case, the learned CIT(A) erred in upholding the addition of the sum of ₹ 38,00,000/- u/s 68 of the Income-tax Act, 1961, by considering the receipt of the said amount as unexplained in spite of there being ample evidences about the genuineness of the said receipt of money by the appellant by way of sale of shares. 2(b).Without any prejudice to above, the learned CIT(A) erred in upholding the addition of the sum of ₹ 38,00,000/- separately u/s 68 of the Act, neglecting to take into account the fact 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 available on record. We find that the ld AR had placed a copy of the block assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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