TMI Blog2023 (4) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, details of which are already extracted above - we are not inclined to interfere with the finding given by the Ld. CIT(A) on the merit of the case whereby the addition made by the Ld. AO has been directed to be deleted. Accordingly, grounds taken by the revenue in its appeal are dismissed. - ITA No.64/Kol/2021 And Cross Objection No. 09/Kol/2022 In ITA No.64/Kol/2021 - - - Dated:- 18-1-2023 - Shri Sanjay Garg, Judicial Member And Shri Girish Agrawal, Accountant Member For the Revenue : Shri Vijay Kumar, Addl. CIT, Sr. DR For the Assessee/Cross Objector : Shri A. K. Tibrewal, FCA Shri Amit Agarwal, Advocate ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: Appeal filed by the revenue and Cross Objection filed by the assessee are against the order of Ld. CIT(A)-4, Kolkata vide Appeal No. 150/CIT(A)-4/2018-19 dated 10.07.2017 passed against the assessment order by ITO, Ward-10 (2), Kolkata u/s.143(3)/147 of the Income-tax Act, 1961 (hereinafter referred to as the Act ), dated 21.12.2017. 2. Revenue has raised as many as six grounds of appeal, all of which relate to deletion of addition of Rs.1,75,32,772/- made by the Ld. AO on account of sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 011. In this case information has been received that Shri Ajay Kumar Bajpei as a director/authorized signatory opened account in ING Vysya Bank. Different accounts were opened by him. The aggregate transaction in six accounts including Eastern Financial Consultants Pvt. Ltd. (Bank A/c No.51801147525) and Pearl Financial Consultants Pvt. Ltd. (Bank A/c No.518011047887) during F. Y. 2009-10 has been reported to be Rs.86.76 crores. However, the average balance in the said accounts was Rs.3.27 Lakhs. These funds were transferred to different firms and were moved out on many occasions. The transactions in the accounts were hot commensurate with the average balances maintained and it appeared that the person had opened account just to carry out transfer of funds. These fund transfers had no business rationale or logical explanation. Summon u/s 131 was issued to Shri Ajay Kumar Bajpei by Investigation Wing but it returned unserved. It transpires from the bank account of Shri Ajay Kumar Bajpei and the above mentioned six concerns that funds have been credited in these accounts by transfer/clearing. And after many inter transfers finally fund had been debited by RTGS/Trf to variou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings, Ld. AO sought details in respect of shares held by the assessee, details relating to buyers to whom the shares were sold by the assessee along with bank accounts and details relating to utilisation of loan funds. Ld. AO while concluding the assessment observed that assessee had not furnished the required details in respect of shares sold and the persons who had bought the shares and thus treated the amount of Rs.1,75,32,772/- as unexplained receipt and made the addition. Ld. AO also observed that assessee is not engaged in any business activities and it managed to garner share capital with high premium and the fund so raised was invested in unlisted company with high premium which were also not engaged in any business activity. Aggrieved, assessee went in appeal before the Ld. CIT(A). 6.4. Before the Ld. CIT(A), assessee strongly contended the reopening of assessment and submitted that the reasons to believe recorded by the Ld. AO before issuing the notice u/s. 148 of the Act are merely on the basis of Investigations Wing s report without any application of mind by the Ld. AO, thus tantamounting to a borrowed satisfaction. It was also contended that the reasons to believe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at inspite of having all the documentary evidence, ld. AO did not submit any comments on the evidence filed by the assessee when the remand report was called from him. Upon carefully analyising the facts and corroborating the same with material on record, ld. CIT(A) noted that the amount of Rs.1,75,32,772/- is already considered in the P L Account and offered for taxation. He also noted that the stock-in-trade has been accepted by the Ld. AO and, therefore, by making such addition, it is leading to taxation of same income twice, in the hands of the assessee. He thus directed to delete the addition so made by the Ld. AO. Aggrieved, the revenue is in appeal before the Tribunal challenging the merits and the assessee in Cross Objection challenging the legality of the reassessment. 7. Before us, the fact and observations were reiterated by the Ld. Counsel and Ld. Sr. DR which are not repeated for the sake of brevity as already narrated in above paragraph. Before us, Ld. Sr. DR contended that the order passed by Ld. CIT(A) is not a speaking order and has not taken into cognizance the observations made by the Ld. AO in the remand report called for. He also submitted that assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration was duly entered in the books of account. Ld. Counsel also pointed to the order sheet entries of the re-assessment proceeding placed in the paper book and referred to the entries wherein furnishing of various details were recorded. 10. We have heard the rival contentions and perused the material available on record and given our thoughtful consideration to the submissions made before us. Since the assessee has challenged the legality and validity of reassessment proceedings through its cross objection, we would first delve on this issue. For this, on perusal of the reasons to believe recorded by the Ld. AO as extracted above, makes us to understand that ld. AO has formed his belief merely on the basis of information received from DDIT (Inv.) Wing-3(1), Kolkata without applying his independent mind. It is a fact that the amount of Rs. 25 lakh as recorded in the reason to believe, received from the two parties, has already been offered as income by the assessee which forms part of the total sale consideration of shares of Rs.1.95 Cr reported in its audited P L Account. Thus, there is complete absence of live nexus for the formation of belief by the Ld. AO with the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the remand report as produced in the order of Ld. CIT(A), we note that the main issue raised was in respect of details not furnished for the persons who had bought the shares from the assessee. In the rejoinder, assessee has asserted its fact that the addition made by the Ld. AO is leading to double addition since this amount has already been reflected as sales in the P L Account on its credit side. Further, all the details relating to the parties who purchased the shares was placed on record. 12.1. We also take note of the fact that shares sold by the assessee during the year for which the addition has been made were purchased in the preceding year and formed part of the closing stock of shares as on 31.03.2009, duly reported and reflected in the audited Balance Sheet of the assessee, details of which are already extracted above. Considering the facts narrated and the observations made above, we are not inclined to interfere with the finding given by the Ld. CIT(A) on the merit of the case whereby the addition made by the Ld. AO has been directed to be deleted. Accordingly, grounds taken by the revenue in its appeal are dismissed. 13. In the result, appeal of the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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