TMI Blog2023 (3) TMI 1184X X X X Extracts X X X X X X X X Extracts X X X X ..... the material and to link them with the assessee. AO has not found any adverse material pursuant to the directions of the ITAT and ld. CIT (A) is correct in holding that pursuant to the remand of the ITAT, AO has not done anything but copy and paste its earlier order. No infirmity in the order of the ld. CIT (A) in complying with earlier ITAT direction that if nothing adverse is found subsequent to the remand the addition shall stand deleted. Accordingly, we uphold the same.Appeal of the Revenue stands dismissed. - ITA No.1178/Del./2021 - - - Dated:- 21-11-2022 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER and SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER For the Assessee : Shri Rakesh Gupta, Advocate Shri Somil Agarwal, Advocate For the Revenue : Shri Kanav Bali, Sr. DR ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : This appeal by the Revenue is directed against the order of the ld. CIT (Appeals)-26, New Delhi dated 05.01.2021 for the assessment year 2009-10. 2. The grounds of appeal taken by the Revenue read as under :- 1. On facts and circumstances of the case and in law the Ld. CIT (A) has erred deleting the addition of Rs.2,25,00,000/- made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of above 3 companies, it was found that these 3 companies are not doing any real business and are engaged in the business of providing accommodation entries. There is negligible profit shown by these 3 companies though their balance sheets show huge share premium reserves on one side and investment in unquoted shares on the other sides. The Assessing Officer analyzed the summary details of the balance sheets of these 3 companies as on 31.03.2009 the summary of which is as under :- Particulars As on 31.03.2009 M/s. Euro Asia Mercantile (P) Ltd. M/s. Delhi Housing Development Ltd., M/s. VIP Leasing and Finance Co. (P) Ltd. Issued subscribed and paid up capital 4,82,00,000/- 30,10,000/- 1,93,54,900/- Share premium 43,29,00,000/- 26,91,32,000/- 15,21,00,000/- Profit / ( Loss) 42,084/- (10456/-) (2357370/-) Quoted shares -- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nspector could contact the Director of M/s. Verma Buildtech Promoters (P) Ltd. at Green Park address but he was also evasive in intimating the rates at which the shares were purchased by them. He, therefore, was of the opinion that these companies are also in collision with the assessee company. In view of the above, the Assessing Officer held that this is the money of the assessee which was rotated through the accounts of the above companies and these credits in the books of accounts of the assessee, in the shape of share capital / share premium are un-explained and accordingly liable to be added to total income of the assessee. Rejecting the various explanation given by the assessee and distinguishing the various decisions cited before him, the Assessing Officer invoked the provisions of section 68 of the IT Act and made addition of Rs. 2,25,00,000/- to the total income of the assessee on account of the share premium of Rs. 2,20,50,000/- and the share capital of Rs.4,50,000/-. 5. Before the Ld. CIT (A) it was submitted that the assessee, during the course of assessment proceedings, had furnished the names and addresses of the share holders and proved their identity, credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t this shareholder had also directly responded to the notice / summon of the Assessing Officer. The assessee also filed a copy of the balance sheet of this shareholder. 8. As regards VIP Leasing Finance Private Ltd., the assessee furnished copy of current company master data of that company and submitted that this shareholder had shifted its office and the new address was submitted along with a copy of the audited balance sheet of that company filed by them in the ROC. It was also pointed out that the complete income tax particulars and bank statement of that company had already been submitted by the assessee to the learned Assessing Officer and was available on his record. 9. Various decisions were also cited before the CIT (A) to the proposition that when the assessee satisfactorily establishes the identity and credit worthiness of the share holder and the genuiness of the transaction by furnishing the full details alongwith the permanent account numbers of the share holders, copies of their bank accounts showing the credit worthiness and the genuiness of the transaction, then in that case the onus to disprove the same shifts to the revenue. It was accordingly argue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same issue in the favour of the appellant referring to the ratio of the decision of the Supreme Court in Lovely Exports. Facts of the case being the same this order of the Hon ble High Court is applicable in the case of the appellant. Further the Hon ble Delhi High Court in the case of Gangeshwari Metal Private Limited in ITA No.597/2012 dated 21.01.2013 has allowed the same issue in favour of the appellant by relying upon the Hon ble Supreme Court judgement in the case of Lovely Exports Private Limited. Facts of the case being the same this order of the Hon ble High Court is applicable in the case of the appellant. In view of the facts of the case and the legal position in the aforementioned cases I am of the opinion that the appellant has proved the creditworthiness and the genuineness of the transactions that the share capital was received from identified and existing persons who have invested said amounts out of their own bank accounts and have also filed copies of their bank accounts and balance sheets to prove their creditworthiness and genuineness of the transactions. In view of this the addition of Rs.2,25,00,000/- made to the income of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 68 of the IT Act on the ground that this is the money of the assessee which was routed through the accounts of the above companies and such share capital and share premium are unexplained. We find the Ld. CIT (A) deleted the addition, the reason for which has already been reproduced in the proceeding paragraph. It is the submission of the Ld. Counsel for the assessee that the assessee has discharged the onus cast on it and therefore, the Ld. CIT (A) was justified in deleting the addition. It is an admitted fact that the assessee, during the course of assessment proceedings, had filed the copies of the income tax returns, complete details of the names and addresses of the persons and the companies who have invested in the shares of the assessee company alongwith their bank statements and copies of balance sheet, income tax return acknowledgment, pan number etc. It is to be noted here that subsequent to the order passed by the CIT (A) a search u/s. 132 of the IT Act was conducted at the premises of the assessee. During the post search inquiries conducted by the investigation wing the four persons have filed the requisite details before the DDI (investigation) confirming invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is very clear that no adverse material was found during the course of search or post search inquiries to establish that the assessee has received any bogus share capital or share premium. However, these are all subsequent to the order passed by the CIT (A) and neither the Assessing Officer nor the CIT (A) had the benefit of all these details where in all the parties have responded to the inquiry conducted by the investigation wing as well as responded to the notice issued u/s 133 (6) by the Assessing Officer during the search assessment proceedings. Under these circumstances we deem it proper to restore the issue to the file of the Assessing Officer with the direction to go through the enquiries conducted by investigation wing of the department as well as the enquiry conducted by the Assessing Officer in the 153A proceedings in respect of the above 4 parties. In case nothing adverse has been found, the Assessing Officer shall delete the addition. Needles to say, the Assessing Officer shall give due opportunity of being heard to the assessee and decide the issue as per law in the light of our above observations. The grounds raised by the revenue are accordingly allowed for statis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. He noted that various details were provided and examined in post-search investigation and that none of these items were referred to by the AO. The order of ld. CIT (A) in this regard may be gainfully referred as under :- 5.3 On perusal of the written submissions and paper book of the appellant, it is observed as under: (i) In the copy (submitted by appellant) of questionnaire dated 21.9.2015 during the assessment proceedings u/s 153A, the AO had asked in Q No 4 as under: 4. Please furnish the original copy of P L A/c and balance sheet in the conventional form alongwith detailed schedules and tax audit reports with all annexures, as applicable. (ii) As per the copy of reply (received in the office of ACIT, CC-15 on 28.10.2020) submitted by the appellant to the AO, the appellant had filed requisite details and submitted as under: The details of share capital for the year under consideration alongwith evidence in respect of additions made during the year are as under:- .. It is submitted that the assessment of the company for the A. Y. 2009-10 was framed by you predecessor u/s 143(3) of the Act vide order dated 28.12.2011. All the det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile P Ltd. asking elaborate 15 details w.r.t these transactions. Copies of reply submitted by the appellant vide letters received in the O/o ACIT (CC)-15, Delhi on 16.11.2015 29.2.2016. (viii) The copy of reply made by Mr Rohit Mathur on 20.3.2014 vide speed post no ED747288306IN to DDIT(Inv.), Delhi in response to summons u/s 131 w.r.t these transactions. 5.3.1 In view of the above documents submitted by the appellant in the paperbook filed, it appears that the AO had incorrectly mentioned that no inquiries were made either in post search investigations or proceedings u/s 153A. 133(6) after receipt of first reply were also made by the AO. The AO had not referred to any of these inquiries made during the assessment proceedings u/s 153A. Further, in view of the evidences submitted by the appellant, the stand of the AO that no enquiries were conducted by the investigation wing on this issue also appears to be incorrect. There is no reference in the assessment order or in assessment records which points that the AO had made any efforts to verify the stand of the appellant as mentioned in 133(6) replies about the investigation made by the investigation wing w.r.t these tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.2.25 Cr made by the AO, on account of share capital including share premium, u/s 68 is not sustainable and is hereby deleted. 8. Against the above order, Revenue is in appeal before us. We have heard both the parties and perused the record. 9. Ld. DR for the Revenue relied upon the order of the AO. 10. Per contra ld. Counsel of the assessee submitted that ITAT has thoroughly gone through the matter in the first round. It had not found it appropriate to reverse the order of ld. CIT (A). Instead ITAT has taken note of the fact that there has been subsequent search and seizure action on the assessee and another order u/s 153A has been passed in which no adverse inference was taken against the assessee. ITAT referred to the order passed u/s 153A of the Act and gave a categorical finding that there was no adverse material found during the course of search or post search inquiries to establish that the assessee has received any bogus share capital or share premium. However, ITAT in its wisdom thought it appropriate to remand the matter to the file of AO to examine the subsequent developments and to go through the enquiries conducted by Investigation Wing of the department ..... X X X X Extracts X X X X X X X X Extracts X X X X
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