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TMI Blog2023 (3) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... and inconsistent in itself and given without any grounds of appeal. 3. On the facts and circumstances of the cases, the Ld. CIT(A) is not justified in facts as well in law in deleting the addition/disallowance of Rs.2,31,35,000/- claimed by the assessee. 4. The Ld. CIT(A) was not justified in quashing the order and deleting the addition, while she herself is of the view that assessee is a bogus entity, without any actual assets, which implies that so called assets sold by the assessee and amount received itself is a paper transaction 5. The Ld. CIT(A) was not justified in quashing the order, despite the fact the assessee has received Es. 2.31 Crore, from S.S.Securities, and assessee failed to prove its identity, credit worthiness and genuineness and assessee has failed to submit details as called for like contract notes, share certificates, demat account etc for purported sale of shares. 6. The Ld. CIT(A) was not justified in considering the self-made bills of assessee for sale of shares, amount received in bank account and 2012 letter issued by Guwahati exchange to S.S>Securities for closure of operation as sufficient for proving identity, credit worthiness and genuineness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Securities is a non existent/paper entity and the amount Rs.2,31,35,000/- received from M/s. S.S. Securities was an undisclosed income of the assessee company. On the basis of findings, enquiries made during the assessment proceeding, addition of Rs. 2,31,35,000/- was made to the total income of the assessee as accommodation entry. Accordingly, income of the assessee assessed at Rs. 2,31,35,000/-. 4. Aggrieved, the assessee preferred appeal before ld. CIT(A) and submitted various documentary evidences which included the letter posted by ld. AO to the appellant, bills of sale in respect of sale of M/s. S.S. Securities, the letter of the Guwahati Stock Exchange Ltd. addressed to Security and Exchange Board of India (in short 'SEBI') in respect of Mr. Sanjay Kumar Sarawgi, proprietor of M/s. S.S. Securities which is a broking firm through whom the equity shares held by the assessee were sold. It was also stated that the assessee held the equity shares for more than a year and they are duly reflected in the audited balance sheet, statement of preceding financial year. Reference was also made to the details showing the existence, identity and genuineness of the broker M/s. S.S. Securit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d transaction took place M/s. S.S. Securities was duly registered with the Guwahati Stock Exchange Ltd. which is a Govt. regulatory authority. Ld. CIT(A), considering the documents filed by the assessee, genuineness of the business carried out by M/s. S.S. Securities in the capacity of a broker, transactions being carried out through banking channel, the facts of the case and the documentary evidences filed by the assessee as well as lack of complete enquiry being conducted by ld. AO and also placing reliance on plethora of judicial pronouncements, decided in favour of the assessee deleting the alleged addition giving a detailed finding, of which the relevant extract is reproduced below: "According to the aforesaid report of the Deputy Director (Investigation), Unit 3(3), Kolkatta, the entity M/s. Ashoka Securities and related entities M/s. Bharati Traders, M/s. Haresh Enterprises, M/s. Maruti International and M/s. S.S. Securities were conducting huge bank transactions vide RTGS and high valued cheques in certain bank accounts in the Indusind Bank Limited. According to the report, the firms M/s. Bharati Traders, M/s. Haresh Enterprises and M/s. Maruti International were Mumbai b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther routed to the account of M/s. S.S. Securities (i.e. the broker of the Appellant) and finally the said amount was paid by M/s. S.S. Securities to the Appellant in the form of sale consideration of shares sold by the Appellant to M/s. S.S. Securities. It is also noted that, as per the contention of the Appellant, the Appellant company sold 76800 shares of Dayal Power & Mining Ltd. and 39350 shares of Om Energy Ltd. to M/s S.S. Securities (i.e. broker of the Appellant at the relevant time) for sale considerations of Rs. 1,92,00,000/- and Rs. 39,35,000/- respectively, both amounts aggregating to Rs. 2,31,35,000/- (Rs. 1,92,00,000/- + Rs. 39,35,000/-), which is the amount of the impugned addition. No Enquiries Conducted As stated supra, during the course of appellate proceedings, the Appellant submitted various documentary evidences (i.e. evidences - which, except for the postal receipts, were also submitted during the assessment proceedings) in the form of postal receipts of speed post pertaining to various notices and letters posted by the AO to the Appellant, bills of sale in respect of sale of aforesaid shares by the Appellant to M/s. S.S. Securities, a letter of the Guha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5. The AO could have verified the genuineness of the tax audit report of the Tax Auditor or various figures of the Tax Audit Report especially those pertaining to Schedule D (Investment at Cost) from the Tax Auditor by finding his current address from the Institute of Chartered Accountants of India (ICAI). No enquiries at all were conducted by the AO during the long course of assessment proceedings, to repel or assail any of the documentary evidence furnished by the Appellant, except writing a letter to M/s. S.S. Securities (i.e. the broker of the Appellant) at his old address and the Tax Auditor at the Kolkatta address. There were no efforts on the part of the AO to conduct enquiries either from the Appellant or from the Registrar of Companies (ROC) or from the broker (M/s. S.S. Securities) or from SEBI or from the banks or from Guwahati Stock Exchange Limited or the ICAI, even during the remand proceedings. Thus, again during the remand proceedings, no enquiries were conducted. The aforesaid report of the Deputy Director (Investigation), Unit 3(3), Kolkatta, was available with the AO at the time of the assessment proceedings and it was on the basis of this report that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant cannot be sustained." 9. From perusal of the above finding and the details placed before us and also on going through the Schedule-D of investments appearing in the audited financial statements of the company, we notice that the equity shares in question sold by the assessee are duly reflected in the audited financial statements for FY 2008-09 and the said equity shares have been sold during the FY 2009-10. It is not the case of the Revenue that the alleged equity shares sold by the assessee falls under the category of penny stock companies. It is also discernible from the financial statements that the assessee company has investments in other equity shares also which have been held in the preceding financial year. Further, we notice that the transaction has been carried out through a broking firm M/s. S.S. Securities which is registered with the Guwahati Stock Exchange Ltd. and at page 38 to 39 of the impugned order the letter of the Guwahati Stock Exchange Ltd. is reproduced which is dated 25.01.2012 and the subject of the said letter issued by the Guwahati Stock Exchange Ltd. and is addressed to SEBI is regarding "surrender of registration certificate" and issue of "no du ..... X X X X Extracts X X X X X X X X Extracts X X X X
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