TMI Blog2020 (6) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... A) in this respect. Ground of the appeal of the Revenue are, therefore, dismissed. Addition on account of difference in balances - AO observed that assessee had paid huge amounts to various parties under the head Loans and Advances, however, there were discrepancies in the amounts when compared with the balance sheet of the other parties - HELD THAT:- Assessing Officer could not point out any specific discrepancy in the submission / explanation given by the assessee. Even, we could not understand how the mismatch, if any, in figures in the balance sheet when compared with the balance sheet of other parties, can automatically be assumed as unexplained income of the assessee. The Assessing Officer has neither doubted nor made any inquiries regarding the source of funds of the payments received by the assessee nor of other parties from whom the assessee received payments.- Decided in favour of assessee. Addition on account of 'difference in balances' - CIT(A) considering the above submissions and after verifying the evidences furnished by the assessee deleted the additions - HELD THAT:- CIT(A) has duly examined and reconciled the accounts. The source of the payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition. Addition on account of commission income - AO then estimated the Commission income from business of entry providing @ 0. 50% of the gross receipts - CIT-A deleted the addition - HELD THAT:- addition has been made by the AO merely on the basis of suspicion only without any evidence on the file that the assessee was an entry provider only. The AO did not make any effort to verify the veracity of the business transactions by summoning the concerned parties, whereas, the assessee duly explained its nature and manner of business and the same being accepted in the earlier years by the AO. We, therefore do not find any infirmity in the order of the CIT(A) Addition on account of the sum shown as payable in the name of M/s. Metro Synthetics u/s 68 - CIT-A deleted the addition - HELD THAT:- CIT(A) has duly verified the accounts of the assessee and other concerns. The Ld CIT(A) has noted that no adverse inference was drawn by the same AO while completing the assessment in the case of Sh. Rajinder Kumar Prop. M/s. Metro Synthetics for assessment year 2013-14 in respect of the outstanding balances in the name of the assessee. The books of account of the assessee were duly aud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The CIT(A) has accepted the reconciliation without confronting the same to the AO in violation of Rule 46 A. Without prejudice no independent enquiry was made through Banks to reconcile the accounts of the parties. 4. The Appellant craves leave to add or amend the grounds of appeal on or before is heard and disposed off. 3. Grounds No. 1 2: The Revenue through Ground No. 1 of the appeal has agitated the action of the CIT(A) in deleting the addition of ₹ 1,09, 35, 518/- made by the AO as commission income. The assessee, an individual, has been engaged in the business of trading of knitted cloth and fabric in the name of M/s Vasu Trading Co. The AO noted that the assessee had shown low net profit as compared to large gross receipts. The AO doubted the transactions of sale and purchases made by the assessee. The AO observed that the assessee was not engaged in the actual sale and purchase of goods and that it was merely an entry provider. That the books of accounts of the assessee were not reliable. He therefore, rejected the books of accounts of the assessee and estimated the commission income of the assessee from business of entry providing @ 0. 50% o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties and no defects found or pointed out to the assessee. Therefore, going by the facts of the case there is considerable force in the claim of the appellant that the transactions done by the appellant are on principal basis and not on principal to agent basis AII the transactions for sale and purchase have been done through banking channels. All the vendors with whom assessee has done sales/ purchase transaction are regular income tax assessee and have already paid the tax on their income after duly accounting for the income earned from the assessee. The addition made by the assessing officer has been made solely relying on the assessee statement of small margin ignoring the factual evidence placed on records and without proper application of his mind. 3.6 In view of all the facts it is apparent beyond any doubt that the appellant has produced sufficient material justifying its claim and as it has repelled the contentions advanced by the Assessing Officer with cogent material and evidence, I am of the considered view that on the facts and in the circumstances of the case, the Assessing Officer was not justified in making the addition of ₹ 1, 09, 63, 992 /- on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his respect has relied upon the copy of the statement of Shri Akhil Malhotra, Director of M/s Shiva Tax Fab Ltd and copy of statement of Shri Ajay Gupta, Director M/s Supreme Taxmart Ltd. The Ld. counsel has further while relying upon the assessment order passed in the case of other parties had submitted that even no adverse inference has been taken in any of the companies with whom the assessee had made sale and purchase transactions. He, in this respect has relied upon the assessment orders / appellate orders in the case of M/s Shiv Specialty Yarns Ltd, M/s Metro Synthetics, M/s Shiva Spin Knit Ltd and M/s Yogindra Worsted Ltd. It was duly explained to the Assessing Officer that the assessee was working on a very less margin which was added in the sale bill. The assessee duly explained the modus operandi of its business. That it was duly explained that the reason for non-availability of the stock in the premises of the assessee at the time of survey proceedings was because that the stock was directly sent from the premises of the supplier and the same was not kept in the premises of the assessee. The Ld. counsel for the assessee has further submitted that the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 95754700 ₹ 263319500 Shiva Spin Fab Pvt. Ltd ₹ 311305000 ₹ 297294000 ₹ 14011000 Total ₹ 380650000 The Assessing Officer mentioned that since there were differences in the amounts shown in the balance sheet of the respective parties in the name of the assessee and the amounts shown by the assessee in his Balance Sheet in the name of the these parties, hence, the difference was taken as undisclosed income of the assessee. The Assessing Officer accordingly made addition of ₹ 38, 06, 50, 000/- (₹ 10,33, 19, 500 + ₹ 26,33, 19, 500 + ₹ 1,40, 11, 000) to the returned income of the assessee. 9. Being aggrieved by the above action of the Assessing Officer, the assessee preferred appeal before the CIT(A) and pleaded that there were no differences or mismatch of figures as alleged by the AO. The assessee reconciled the accounts/ figures before the CIT(A). The Ld. CIT(A) after going through the accounts of the assessee and that of the other parties got satis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appearing in their books in the name of Sh. Vasu Kalia the assessee. Thus as per AR the principal of natural justice have been violated. On merits the AR submitted that the amounts were duly reflected in the balance sheet of the assessee and some of them are old balances appearing in the balance sheets of the preceding years., Regarding the current year investment it was submitted that these were made out of the bank account of the assessee. The submission filed by the AR was sent to the AO for comments and the AO has given his report without specifically pointing out any discrepancy in the submission. Thereafter to verify the source of the payments during the current year as well as during the preceding years, the AR was requested to file the bank account statement from which the payments were made as well as the balance sheet of the preceding year of the assessee to verify the balances appearing in the preceding years. The Balance Sheets of the three concerns/parties have also been called for to verify the balances appearing the balance sheet in the preceding year. The party wise position discussed below: (a) Balances with M/s. Balmukhi Textiles Pvt. Ltd. The AR submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce no addition can be made during the year. As regard Share Application Money of ₹ 5, 83, 19, 500/-, the amount has been given during the year out of the bank account of the assessee with Allahabad Bank which is regularly appearing in the Balance Sheet of the assessee. The amount is duly appearing in the Balance Sheet of M/s. Balmukhi Textiles Pvt. Ltd. also under the head Share Application Money received during the year. A perusal of the documents filed shows that no addition of this amount is called for. (b) Balances with M/. s Brijeshwari Textiles Pvt. Ltd. The AR submitted that in the books of account of the assessee Shri Vasu Kalia an amount of ₹ 35,90, 74, 200/- has been shown as Loan Advances to M/s. Brijeshwari Textiles Pvt. Ltd. which in the books of M/s. Brijweshwari Textiles Pvt. Ltd. is shown under three heads as 107500 Share allotted, Share Application Money received and Sundry Payable amounting to ₹ 21, 50, 00, 000/-, ₹ 4, 83, 19, 500/- and ₹ 9,57, 54, 700/- respectively. As per AR, the AO has considered only ₹ 9, 57, 54, 700/- shown as Sundry payable and ignored the Share Application Money ₹ 4, 83, 19, 500/- given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ab Pvt. Ltd. The AR submitted that in the books of accounts of the assessee Sh. Vasu Kalia an amount of ₹ 31,13, 05, 000/- has been shown as Loan Advances to M/s. Shiva Spinfab Pvt. Ltd. which in the books of M/s. Shiva Spinfab Pvt. Ltd. is shown under two heads as Share Application Money received and Sundry Payable amounting to ₹ 1, 40, 11, 000/- and ₹ 29,72, 94, 000/- respectively. (The AR submitted that in the written submission the figures have been crossed and the Share Application Money is mentioned as ₹ 29,72, 94, 000/- and Current Liability mentioned as ₹ 1, 40, 11, 000 and the correct figures are that as mentioned in the assessment order that the sundry payable is ₹ 29,72, 94, 000/- and the balance ₹ 1, 40, 11, 000 /- is Share Application Money) As per AR, the AO has considered only ₹ 29, 72, 94, 000/- shown as Sundry payable and ignored the Share Application Money ₹ 1, 40, 11, 000/- given to M/s. Shiva Spinfab Pvt. Ltd. The AR has argued that the Share application money of ₹ 1,40, 11, 000/- given during the financial year under consideration was out of the bank account of the assessee with Allahabad Bank. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chd/2018, wherein, following grounds have been raised by the Revenue :- 1. Whether on the facts and in circumstances of the case, the Ld. CIT(A) is correct in deleting the addition of ₹ 37,52,94,000/- on account of 'differences in balance under the head of Sundry Payables and Loan Advances received from M/s Brijeshwari Textiles Pvt. Ltd., M/s Metro Synthetics, M/s Balmukhi Textiles Pvt. Ltd. And M/s Vasu Trading Company not appearing in their Audited Balance Sheets. 2. Whether on the facts and in circumstances of the case, the Ld. CIT(A) s correct in deleting the addition of ₹ 12,99,48,100/- on account of Sundry Payables to M/s Metro Synthetics. 3. Whether on the facts and in circumstances of the case, the Ld. CIT(A) is correct in deleting the addition of ₹ 5,83,00,000/- on account of Share Applications Money received by the assessee company from M/s Vasu Trading Company. 4. Whether on the facts and in circumstances of the case, the Ld. CIT(A) is correct in deleting the addition of ₹ 20,592/- on account of Commission Income despite the fact that assessee is an entry provider and assessee's books are not reliable resulting in reje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the returned income of the assessee as undisclosed income u/s 68 being part of overall addition of ₹ 58, 47,42, 100 /-. 14. Being aggrieved by the above action of the AO, the assessee preferred appeal before the CIT(A) and pleaded that there were no differences or mismatch in the figures as alleged by the AO. The assessee reconciled the accounts/figures before the CIT(A). The CIT(A) after going through the accounts of the assessee and that of the other parties got satisfied that there was no mismatch. Further, the assessee also filed evidences proving the source of the funds. The assessee also explained that some of the balances appearing in the balance Sheet were of earlier years and that all the transaction carried during the relevant assessment year were done through banking channel. The concerned parties were assessed to income tax. Assessment in their case carried u/s 143(3) of the Act and their capacity to make the advances/investment not doubted in their case. The Ld. CIT(A) considering the above submissions and after verifying the evidences furnished by the assessee deleted the additions so made by the AO observing as under:- The facts of the case, the bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le the Bank Account statement from which the payments were made as well as the balance sheet of the preceding year of the assessee to verify the balances appearing in the preceding years. The Balance Sheets of the concerns/parties have also been called for to verify the balances appearing in their balance sheet in the preceding year in the name of the assessee. The party wise position is discussed below: (a) Balances with M/s. Vasu Trading Co. :- The AR submitted that in the books of accounts of the assessee, an amount of ₹ 7, 91, 71, 500/- has been shown as Payables to M/s. Vasu Trading Co. whereas in the books of M/s. Vasu Trading Co. an amount of ₹ 18, 24, 91,000/- is shown under the head Loan Advances. It is submitted that in the books of the assessee the amount received from M/s. Vasu Trading Co. is reflected under three different heads as Share allotted (22500), Share Application Money received and Sundry Payable amounting to ₹ 4, 50,00, 000/-, ₹ 5, 83, 19, 500/- and ₹ 7, 91, 71, 500 /- respectively. As per AR, the AO has considered only ₹ 7, 91,71, 500 /- shown as Sundry payable and ignored the Share Application Money of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no addition on this account is called for. (b) Balances with M/s. Metro Synthetics:- The AR submitted that in the books of accounts of the assessee an amount of ₹ 12, 99, 48,100/- has been shown as Sundry Payables in the name of M/s. Metro Synthetics. In the books of the account of M/s. Metro Synthetics the amount appearing is ₹ 40,19, 22, 600/. This amount of ₹ 40, 19, 22, 600/- is shown in the books of the assessee M/s. Balmukhi Textiles Pvt. Ltd. under three different heads as Share Allotted (125477), Share Application Money received and Sundry payables amounting to ₹ 25,09, 54, 000/-, ₹ 2, 10, 20, 500/- and ₹ 12,99, 48, 100/- respectively. As per AR, the AO has considered only ₹ 12, 99, 48, 100/- shown as Sundry payables but ignored the Share Application Money of ₹ 2, 10, 20, 500/- received by the assessee from M/s. Metro Synthetics and the 125477 Shares already allotted, valuing ₹ 25, 09, 54, 000/-. The AR has argued that the shares numbering 125477 were allotted by the assessee to M/s. Metro Synthetics Prop. Rajinder Kumar in the year 2010-11 and the amount was appearing in the balance sheet of that party as on 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces with M/s. Brijeshwari Textiles Pvt. Ltd.:- The AR submitted that in the books of accounts of the assessee company, an amount of ₹ 2, 12, 00, 000 /- has been shown under the head Loan advances given to M/s. Brijeshwari Textiles Pvt. Ltd. whereas in the books of M/s. Brijeshwari Textiles Pvt. Ltd., this amount of ₹ 2, 12, 00,000/- is shown under the head Share Application Money. As per AR, the AO has considered the amount of ₹ 2, 12, 00, 000 /- shown as Loans Advances appearing in the books of the assessee outstanding in the name of M/s. Brijeshwari Textiles Pvt. Ltd. but did not considered the share application money of ₹ 10,01, 77, 000/- appearing in the books of M/s. Brijeshwar Textiles Pvt. Ltd. which includes ₹ 2, 12, 00, 000 /- received from the assesses M/s. Balmukhi Textiles Pvt. Ltd. The AR has argued that the Share application money of ₹ 2, 12, 00, 000/- was given during the financial year 2011-12 by the assessee out of its the bank account with Allahabad Bank and credited in the bank account of M/s. Brijeshwari Textiles Pvt. Ltd. also with the Allahabad Bank. The AR has filed the copy of the Bank Statements to substantiate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined and reconciled the accounts. The source of the payments being from bank accounts of the respective parties has been duly proved. The ld. CIT(A) has duly and elaborately discussed the details of the entries as noted above and has also found that in the case of first two parties, there were old balances outstanding and that the addition to that extent cannot be made in the assessment carried in the subsequent year and further that the share application money received during the year was transferred from the bank accounts of the respective parties. In the case of the third party, no amount was advanced during the year and that the same was an old balance given out of the regular sources and appearing in the balance sheet of the preceding years. The Ld. DR could not point out any distinguishing fact justifying our interference in the above well-reasoned order of the CIT(A). We, therefore, do not find any infirmity in the order of the CIT(A) on this issue. This ground of appeal is, therefore, dismissed. 16. Ground No. 2 : Vide Ground No. 2 of the Appeal, the revenue has agitated the action of the CIT(A) in deleting the addition made by the AO of ₹ 12, 99,48, 100/- on accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d reflected in the relevant balance sheets. Under the facts and the circumstances of the case, the arguments of the AR appear acceptable and the addition of ₹ 12, 99, 48, 100/-, as sundry payable to M/s. Metro Synthetics, is not found sustainable and hence deleted. 17. We have heard the rival contentions of both the representatives of the parties. As discussed by the Ld. CIT(A), the impugned additions had been made by the AO on mere suspicion without bringing on file as how the continuous and regular balances outstanding since assessment year 2010-11 onwards and reflected in the relevant balance sheets can be treated as unaccounted income of the assessee for the year under consideration. Even in the assessment carried out in the case of the creditor, no doubt as to the source of the amount has been made by the AO. Without bringing any adverse evidence on the file or pointing any discrepancy in the explanations submitted by the assessee, the AO was not justified in making the impugned additions. We therefore do not find any infirmity in the order of the AO on this issue also. This ground of the appeal is accordingly dismissed. 18. Ground No. 3: Vide Ground No. 3 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment was made under Section 143(3) in the case of Sh. Vasu Kalia Prop. M/s. Vasu Trading Co. by ITO Ward-6(3), Ludhiana, it cannot be said that it is merely Entry provider because in the case of Sh. Vasu Kalia Prop. M/s. Vasu Trading Co., the CIT(A)-3, Ludhiana decided the appeal in favour of the appellant (M/s. Vasu Trading Co.) and the addition made by the AO was deleted. It was also submitted by the AR that the addition has been made without any conclusive evidence with the AO. As per AR, the accommodation entry provider is the person who provides money to the tax payer through cheque against receipt of cash but there is no such instance in this case. It is also submitted that the share applicant is regularly Income Tax assessee and assessed to tax with the same Assessing Officer. Moreover, M/s. Vasu Trading Co. is an old share holder of the assessing company and during the year applied for more shares in the assessee company by providing 'share application money'. Regarding the fresh share application money of ₹ 5, 83, 00, 000/- from M/s. Vasu Trading Co., it was submitted by the AR that the amounts have been received through cheques only and addition on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the AO was only on the basis of mere doubt or suspicion which was not sustainable as per law. The Ld. CIT(A) has, therefore, rightly deleted the addition made by the AO on this issue. This ground of the revenue is, therefore, dismissed. 21. Ground No.4: Vide Ground No. 4 of the appeal, the Revenue has contested the action of the CIT(A) in deleting the addition made by the AO of ₹ 20, 592/- on account of commission income. The AO observed that from the facts it was clear that assessee was merely an entry provider. As per AO the books of accounts of the assessee were not reliable and hence rejected the same. The AO then estimated the Commission income from business of entry providing @ 0. 50% of the gross receipts of ₹ 41,18, 400 /- and computed the commission income at ₹ 20,592/-. 22. The Ld. CIT(A), however, deleted the addition so made by the AO, observing as under: The facts of the case, the basis of addition made by the A. O. and the arguments of the AR during the appellate proceedings have been considered. The AR has argued that full details were provided in response to the letters issued by the AO. The AR argued that the assessee is in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of the assessee himself the nature of business of the assessee has been accepted, the AO was not justified in holding during the year that the assessee was an entry provider since the nature of business has remained the same and no new facts have been brought on record. The AO was therefore, not justified in making the addition of ₹ 20, 592/- on account of Commission income without bringing any adverse material on record. The addition of ₹ 20,592/- is therefore, not found sustainable and hence directed to be deleted. The Ld. CIT(A) has given a categorical observation that the AO could not find any such discrepancy in the accounts of the assessee warranting rejection of the same. The addition has been made by the AO merely on the basis of suspicion only without any evidence on the file that the assessee was an entry provider only. The AO did not make any effort to verify the veracity of the business transactions by summoning the concerned parties, whereas, the assessee duly explained its nature and manner of business and the same being accepted in the earlier years by the AO. We, therefore do not find any infirmity in the order of the CIT(A) on this iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The facts of the case, the basis of addition made by the A. O. and the arguments of the AR during the appellate proceedings have been considered. The AR has argued that the concern M/s. Metro Synthetics Prop. Sh. Rajinder Kumar is a regular Income Tax assessee from last many years and has filed the copies of Income Tax Returns for assessment year 2010-11 onwards. The AR further submitted that it is carrying the same business since so many years and the returned income has been accepted by the department in all these previous years. The AR argued that assessment of M/s. Metro Synthetics Prop. Sh. Rajinder Kumar for assessment year 2012-13 was completed u/s 143(3) by DCIT, CC-III, Ludhiana vide order dated 30. 01. 2015, where the income of the concern M/s. Metro Synthetics has been assessed at ₹ 10, 37, 675/- after making an agreed addition of ₹ 4, 00, 000/- to the net profit ₹ 6, 37, 665/- declared on Gross receipts of ₹ 4,79,19, 36, 840/-. Based upon the documents filed by the AR and looking to the past history of the concern where assessments were made under Section 143(3) by the same AO, (viz the DCIT CC-III, Ludhiana) it cannot be said that it is merely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of the Income Tax Act. 29. The Ld CIT(A), however, deleted the addition so made by the AO observing as under:- The facts of the case, the basis of addition made by the A. O. and the arguments of the AR during the appellate proceedings have been considered. The AR has argued that the concern M/s. Vasu Trading Co. Prop. Sh. Vasu Kalia is a regular Income Tax assessee from last many years and has filed the copies of Income Tax Returns for assessment year 2010-11 onwards. The AR further submitted that it is carrying the same business since so many years and the returned income has been accepted by the department in all these previous years. The AR has argued that assessment of Sh. Vasu Kalia for assessment year 2012-13 was completed u/s 143(3) by ITO Ward-6(3), Ludhiana at an income of ₹ 1, 14, 90, 962 /- against the returned income of ₹ 5, 27, 670/- by making an addition of ₹ 1, 09, 63, 292 /- in the proprietary concern M/s. Vasu Trading Co., however in appeal, the CIT(A)- 3, Ludhiana vide order dated 27. 09. 2016 deleted the addition of ₹ 1, 09, 63, 292/- by holding that transaction were done by the appellant (M/s. Vasu Trading Co.) on principal to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n balances'. The AO has mentioned that assessee received huge amount from the various parties shown under the head Current Liabilities. As per AO, when compared with the balance sheets of those parties, there were discrepancies noticed in the amounts. As per AO, the balances in the assessee's books of account did not match with the balance shown as payable/ receivable to the assessee by those parties/concerns in their balance sheets. The AO mentioned that since there were differences in the amounts shown in the balance sheet of the respective parties in the name of the assessee viz-a-viz the amounts shown by the assessee in its Balance Sheet in the name of the these parties, hence the difference was taken as undisclosed income of the assessee. The AO accordingly made addition of ₹ 2, 40, 11,000/- (₹ 1, 00, 00, 000 + ₹ 1,40, 11, 000/-) to the returned income of the assessee as undisclosed income u/s 68 being part of overall addition of ₹ 69,70, 18, 800/-. 32. The Ld CIT(A), however, deleted the additions so made by the AO observing as under:- The facts of the case, the basis of addition made by the A. O. and the arguments of the AR during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balance sheet of the preceding year of the assessee to verify the balances appearing in the preceding years. The Balance Sheets of the concerns/ parties have also been called for to verify the balances appearing in their balance sheet in the preceding year in the name of the assessee. The party wise position is discussed below: (a) Balances with M/s. Vasu Trading Co.:- The AR submitted that in the books of accounts of the Sh. Vasu Kalia an amount of ₹ 31,13, 05, 000/- has been shown as Loan Advances to M/s. Shiva Spinfab Pvt. Ltd. which in the books of the assessee M/s. Shiva Spinfab Pvt. Ltd. is shown under two heads as 'Share Application Money received and 'Sundry Payable amounting to ₹ 1,40, 11, 000/- and ₹ 29, 72, 94, 000/-respectively. As per AR, the AO has considered only ₹ 29, 72, 94, 000/- shown as Sundry payable and ignored the Share Application Money of ₹ 1, 40,11, 000/- receipt by the assessee M/s. Shiva Spinfab Pvt. Ltd. from Sh. Vasu Kalia. The AR has argued that the Share application money of ₹ 1, 40, 11, 000/- given during the financial year under consideration was out of the bank account of the Sh. Vasu Kali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Money of ₹ 1, 00, 00, 000/- has been received during the year in the bank account of the assessee with Allahabad Bank which is regularly appearing in the Balance Sheet of the assessee. The amount is duly appearing in the Balance Sheet of the assessee M/s. Shiva Spinfab Pvt. Ltd. under the head Share Application Money received during the year. A perusal of the documents filed shows that no addition on this account is therefore called for. Hence, under the facts and the circumstances of the case, no addition on account of differences of Balances is called for as all the amounts are duly reflected in the Balance sheet of the assessee as well as the Balance sheets of the concerned party. The amounts were paid out of the bank accounts of the parties regularly reflected in their balance sheet under different heads. The arguments of the AR that the AO failed to reconcile the same, is found acceptable and the addition made by the AO is deleted . 33. We have heard the rival contentions and have also gone through the record. The facts and issue involved are identical as discussed above in the case of Vasu Kalia vide Ground No. 3 of the ITA No. 1118/ Chd/ 2017. Since the dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the grounds of appeal on or before is heard and disposed off. 37. Ground Nos. 1 2: The Revenue vide Ground Nos. 1 2 has agitated the action of the CIT(A) in deleting the addition of ₹ 4, 41, 47, 622 /- made by the AO as Commission Income. The AO has mentioned that from the facts it was clear that assessee is merely an entry provider. As per AO the books of accounts of the assessee were not reliable and hence rejected the same. The AO then estimated the Commission income from business of entry providing @ 0. 50% of the gross receipts of ₹ 882, 95,24, 543/- and computed the commission income at ₹ 4, 41, 47, 622/-. 38. The Ld CIT(A), however, deleted the addition so made by the AO observing as under:- The facts of the case, the basis of addition made by the A. O. and the arguments of the AR during the appellate proceedings have been considered. The AR has argued that full details were provided in response to the letters issued by the AO. The AR argued that the assessee is in the business of trading of goods and no godown has been maintained by the assessee as the goods purchase from supplier directly deliver to the parties without bringing the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment of Sh. Vasu Kalia for A.Y. 2012-13 and the addition made has been deleted by CIT(A)-3, Ludhiana in appeal No. 1007/ IT/CIT(A)- 3/LDH/2014-15 vide order dated 27.09. 2016. The facts of the case under consideration are similar to the facts of the case, decided by the Ld. CIT(A)-3, Ludhiana vide order dated 27. 09.2016 in Appeal No. 1007/IT/CIT(A)- 3/LDH/2014-15. Thus for the reasons mentioned in the above order and the fact that for A.Y. 2012- 13 in the case of the assessee himself the nature of business of the assessee has been accepted by the same AO, she was not justified in holding during the year that the assessee was an entry provider since the nature of business has remained the same and no new facts have been brought on record. The AO was therefore, not justified in making the addition of ₹ 4, 41, 47, 622/- on account of Commission income without bringing any adverse material on record that the business of the assessee during the year was different from the preceding years. The addition of ₹ 4, 41,47, 622 /- is therefore, not found sustainable and hence directed to be deleted . 39. We have heard the rival contentions. The facts and issue involved ..... X X X X Extracts X X X X X X X X Extracts X X X X
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