TMI Blog2023 (3) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... nking channel via registered broker and, therefore, we do not find any reason to dispute the genuineness, identity and creditworthiness of the share broker at the point of time when transaction was carried out. Thus, no infirmity is called for in the finding of ld. CIT(A) deleting the alleged addition made u/s 68 of the Act. Therefore, all the grounds raised by the Revenue are dismissed. - I.T.A. No. 247/GTY/2019 - - - Dated:- 3-3-2023 - SRI RAJPAL YADAV, VICE PRESIDENT (KZ) And DR. MANISH BORAD, ACCOUNTANT MEMBER Sh. Amit Kumar Pandey, JCIT, appeared on behalf of the Revenue Sh. Sidharth Agarwal, Adv., appeared on behalf of the Assessee ORDER Per Manish Borad, Accountant Member: This appeal filed by the Revenue pertaining to the Assessment Year (in short AY ) 2010-11 is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the Act ) by ld. Commissioner of Income-tax (Appeals)-1, Guwahati [in short ld. CIT(A) ] dated 29.03.2019 arising out of the assessment order framed u/s 144/147 of the Act dated 29.12.2017. 2. The Revenue is in appeal before this Tribunal raising the following grounds: Assessment Year: 2011-12: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30/03/2017 and 07/08/2017 u/s 148 of the I. T. Act, 1961 has been issued to the assessee and further notice u/s 143(3) and 142(2) with questionnaire also served upon the assessee. On 22/11/2017 authorized representative of the assessee appeared and requested certified copy of the reason recorded. After receiving recorded reason, the assessee raised objection on reason recorded and also furnished copy of Bills raised on sale of share holding, bank statement, Financial Statement of the company. On 14/12/2017 a notice u/s 133(6) of the I. T. Act, 1961 issued to M/s S.S. Securities which returned undelivered. Further vide letter dated 18/12/2017 objection of the assessee for issuing notice u/s 148 of the I. T. Act has been rejected by the A.O. On 18/12/2017, an inspector attached to this office was deputed for enquiry regarding the existence of given two addresses (as shown in his ITR) of the assessee company but failed to locate the assessee. 3.2. Subsequently, a show cause notice has been issued to the assessee on 20/12/2017 by speed post as well as by e-mail, But no response has been received from the assessee. On the basis of findings and enquiry made by the DDIT (Inv) Unit -3(3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have heard rival contentions and perused the records placed before us. The Revenue is aggrieved with the finding of ld. CIT(A) deleting the addition made by ld. AO towards unexplained credit for the amount received from M/s. S.S. Securities at Rs. 2,31,35,000/-. We notice that ld. AO, based on the report of Dy. Director (Inv.), Kolkata, observed that M/s. S.S. Securities is carrying out huge bank transactions vide RTGS and high value cheques and based on the pattern of the transactions, location of business, source of funds and further utilization of funds by these group of entities including M/s. S.S. Securities it was observed that these entities did not appear to commensurate with the activities of the said company. 8. As far as the case in hand is concerned, the assessee held equity shares in Dayal Power Mining Ltd. and Om Energy Ltd. and the said investment is held by the assessee company from past many years duly reflected in the audited financial statement. During the year the assessee company sold 76,800 equity shares of Dayal Power Mining Ltd. for a sale consideration of Rs. 1.92 Cr and also sole 39,350 equity shares of Om Energy Ltd. for a sale consideration of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ascertained in Mumbai. Therefore, enquiries were conducted in Kolkatta at the above address i.e. 202, Amrit Dham, Nityanand Nagar, Bakultala, Danesh Sheikh Lane, Howrah - 711009 but the existence of these firms could not be ascertained at the above address even in Kolkatta. It was also stated in the report of the Deputy Director (Investigation), Unit 3(3), Kolkattathat M/s. S.S. Securities (i.e. the broker of the Appellant) also was only a paper entity as established from the report of the Investigation Wing, Mumbai. As per the report of the Deputy Director (Investigation), Unit 3(3), Kolkatta, M/s. S.S. Securities (i.e. the broker of the Appellant) also stated its address as 202, Amrit Dham, Nityanand Nagar, Bakultala, Danesh Sheikh Lane, Howrah - 711009 . However, the enquiry by the Investigation Wing at Kolkatta could not prove the existence of M/s. S.S. Securities at Kolkatta. Finally, in the said report of Deputy Director (Investigation), Unit 3(3), Kolkatta, the amount transferred to the Appellant by the M/s. S.S. Securities (i.e. the broker of the Appellant) was stated as Rs. 2,31,35,000/- (i.e. the impugned addition amount). Thus, as per the report of the Deputy D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- received by the Appellant vide banking channels from the broker, the genuineness of the sale bills raised by the Appellant on the broker (M/s. S.S. Securities), various figures verified by the Tax Auditor in the Tax Audit Report especially those pertaining to Schedule D (Investment at Cost) etc. The AO had the opportunity, even at the stage of remand proceedings, to undertake the following activities: 1. The AO could have verified the existence, identity and genuineness of the Appellant company from the Registrar of Companies (ROC) from where relevant proof of the present addresses of the Appellant or the Balance Sheets filed by the Appellant or the details of Directors of the Appellant could have been easily discovered. 2. The AO could have verified the existence, identity and genuineness of the broker (M/s. S.S. Securities) from the Guhati Stock Exchange Limited of which the said broker was a member. Similarly, the AO could have verified the transactions of the Appellant in the shares of Dayal Power Mining Ltd. and Om Energy Ltd. from the annual returns of the Appellant filed with ROC. 3. The AO could have verified the payments of Rs. 2,31,35,000/- rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also noted that all the aforesaid transactions pertaining to the impugned amount of Rs. 2,31,35,000/- took place during the FY 2009-10 and enquiry by the Investigation Wing, Kolkatta took place long after that, i.e. in the year 2017. The enquiry by the Inspector of the AO about the existence of the Appellant at the aforesaid addresses of the Appellant were also conducted during the FY 2017. Thus, both enquiries i.e. by the Investigation Wing, Kolkatta and the Inspector of the AO were conducted more than 7 years after the impugned transactions took place. If an enquiry about the existence of a particular entity being located at a particular address is conducted 7-8 years after the relevant date, it is a very high probability that the entity may not be present on that address at the time of the enquiry. In that sense, the report of the enquiry, which took place long after the transactions had taken place, cannot be accepted as a clinching evidence to conclude and prove that the entity (i.e. the Appellant) was a bogus entity on the reason that the said entity (i.e. the Appellant) was not found to be present at the particular addresses on the date of enquiry. This kind of evidence d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d already surrendered the registration and not carrying out business activity. It is also not the case of the Revenue that the purchases of the assessee are bogus or non-genuine. 10. We, therefore, considering the facts and circumstances of the case and observing that the assessee made legitimate purchases in the preceding year and the said purchases were held as investments and their genuineness is not doubted by the Revenue authorities and during the year under consideration some of the investments have been sold through a broker registered with the Guwahati Stock Exchange Ltd. and the said transaction has been carried out through stock exchange and sale consideration has been received through banking channel via registered broker and, therefore, we do not find any reason to dispute the genuineness, identity and creditworthiness of the share broker at the point of time when transaction was carried out. Thus, no infirmity is called for in the finding of ld. CIT(A) deleting the alleged addition made u/s 68 of the Act. Therefore, all the grounds raised by the Revenue are dismissed. 11. In the result, the appeal filed by the Revenue is dismissed. Kolkata, the 3rd March , 202 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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