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2016 (8) TMI 1517 - AT - Income TaxBogus LTCG - A.O. following the information received from the DDIT (Inv,.) Unit VI(2), Delhi on the issue that the company had introduced share application money from the accommodation entry providers - CIT-A deleted the addition - HELD THAT - No infirmity in this finding of the First Appellate Authority. AO has made the addition in question on the premise that, this amount of ₹ 35 lakhs was taken to accommodate book entries in the shape of share capital and whereas the actual fact is that these amounts were loans taken by the assessee company. Revenue s appeal is dismissed.
Issues:
1. Addition of &8377; 35,00,000 made by AO based on information received from DDIT. 2. Deletion of the above addition by CIT(A) based on submissions and documents provided by the assessee. 3. Cross Objection by assessee challenging the initiation of proceedings u/s 147 and framing of assessment. 4. Dismissal of Revenue's appeal by ITAT. 5. Dismissal of Cross Objection due to the dismissal of Revenue's appeal. Issue 1: Addition of &8377; 35,00,000 The Revenue appealed against the CIT(A)'s order deleting the addition of &8377; 35,00,000 made by the AO. The AO had added this amount based on information from the DDIT regarding share application money from accommodation entry providers. However, the CIT(A) found that the transactions were made through banking channels and all documents related to share transactions were produced by the assessee. The CIT(A) concluded that in the absence of evidence against the companies making the investment, the addition was unwarranted and deleted it. Issue 2: Cross Objection on Reopening of Assessment The assessee filed a Cross Objection challenging the initiation of proceedings u/s 147 and framing of assessment without satisfying statutory provisions. The Cross Objection argued that there was no tangible material to suggest income escapement, rendering the proceedings invalid. It also contended that the notice u/s 148 was not valid without complying with s.151 of the Act. However, since the Revenue's appeal was dismissed, the adjudication of the Cross Objection was considered academic and subsequently dismissed. Issue 3: Dismissal of Revenue's Appeal The ITAT dismissed the Revenue's appeal as no representative from the Revenue was present, and adjournment requests were rejected due to the unavailability of the Senior D.R. The ITAT upheld the CIT(A)'s decision to delete the addition of &8377; 35,00,000, emphasizing that the amount was taken as loans by the assessee company, not as share capital. The ITAT found no fault in the CIT(A)'s reasoning and concluded that the addition was unjustified, leading to the dismissal of the Revenue's appeal. Issue 4: Dismissal of Cross Objection As the Revenue's appeal was dismissed, the Cross Objection filed by the assessee challenging the reopening of assessment was also dismissed. The ITAT deemed the adjudication of the Cross Objection unnecessary due to the outcome of the Revenue's appeal, resulting in the dismissal of the Cross Objection. In conclusion, the ITAT upheld the CIT(A)'s decision to delete the addition of &8377; 35,00,000, dismissed the Revenue's appeal, and consequently dismissed the Cross Objection. The judgment highlighted the importance of providing evidence and following statutory provisions in assessment proceedings to ensure the validity of additions or deletions made by tax authorities.
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