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TMI Blog2010 (1) TMI 936X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the assessee and the assessment has been completed on 14.12.2007. Thus, it cannot be said that the mandatory provision for natural justice being a minimum of 15 days has been given to the assessee in respect of the summons issued u/s 131. Thus, a procedural lapse has taken place in the assessment. In these circumstances, these issues must be restored to the file of the A.O. for providing the assessee adequate opportunity to produce the share applicants as also the purchasers of the shares from the assessee. - ITA No. 1927, 1928 and 1929/Del/2009, - - - Dated:- 29-1-2010 - K.D. Ranjan, George Mathan, JJ. H.K. Lal, Sr(DR) for the Appellant Ravi Gupta, Adv. for the Respondent ORDER George Mathan 1. I.T.A. No. 1927/Del/2009 is the appeal of the revenue preferred against the order of Ld. CIT(A) XVI, New Delhi in appeal No.93/2007-08 dated 6.02.2009 for the Assessment Year 2001-02, I.T.A. No. 1928/Del/2009 is the appeal by the revenue against the order of Ld. CIT(A) XVI, New Delhi in appeal no.92/2007-08 dated 06.02.2009 for the Assessment Year 2003-04 and I.T.A. No. 1929/del/2009 is the appeal by the revenue against the order of CIT(A) XVI New Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information available with the A.O. that the company which had made the share application were controlled by the entry operators' the A.O. had given the assessee the copies of the statements recorded by the investigation wing from the said three persons. It was the submission that as the assessee was unable to produce the share applicants for confirmation, the A.O. added the share application money received by the assessee as the unexplained cash credit. It was the submission that the Ld. CIT(A) had deleted the addition made by the A.O. holding that the identity of the share applicants were known and the amount had been received by cheque. It was the submission that the CIT(A) had relied upon the decision of Hon'ble Supreme Court in the case of Lovely Exports Pvt. Ltd. reported in 299 ITR 268 and deleted the addition. It was the submission by the Ld. D.R. that the decision of Hon'ble Supreme Court in the case of Lovely xports Pvt. Ltd. did not apply in so far as the very identity of the share applicants were disputed. It was the further submission that in respect of the sale of shares, the assessee had been asked to produce the purchasers of the shares, which had also not been done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Hon'ble Supreme Court in the case of Lovely Exports Pvt. Ltd. squarely applies. He has placed reliance upon the decision of the Hon'ble High Court of Delhi in the case of Gangour Investments Ltd. reported in 179 Taxman 01(Del.) to support his contentions that the CIT(A) had considered the evidence on record and had held that the assessee had discharged its onus and satisfied the requirements of Section 68 and there was no evidence on record to support the findings of the A.O. and consequently he had decided the addition and the tribunal had also confirmed the order of the CIT(A). It was thus the submission that on the basis of the facts available, the assessee had discharged its onus and the order of the CIT(A) was liable to be upheld. He further placed reliance on the decision of Hon'ble High Court of Delhi in the case of Bawa Shakti Steels manufacturers Pvt. Ltd. 179 Taxman 25 (Del.) wherein it had been held that the Ld. CIT(A) not only found that the identity of each of the share holders stood established but had also examined the fact that each of them were income tax assessee and had disclosed the share application money in their accounts which was duly reflected in thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was the copy of the details of investment in shares as on 31.03.2001. It was the further submission that the share application money received by the assessee had been accepted and the shares had also been allotted to the share applicants and even as on today, the shares were held in the name of the applicants. It was the further submission that in respect of the shares, which have been held as investment and which have been sold by the assessee, the assessee did not have any information as to whether the shares have been transferred in the name of the purchasers. It was the submission that the CIT(A) had correctly appreciated the evidences and had deleted the additions. 5. On being asked by the bench to the Ld. D.R. as to whether any proceedings have been initiated in the name of Shri Tilak Chand Bansal, Mukesh Gupta and Shri Rajan Jassal and the companies in which they were directors and which they themselves had claimed to be used for giving bogus entries or whether any proceedings u/s 281B has been initiated for attaching the shares held by them and their company in any of the alleged bogus share transaction for recovery of the dues in respect of any proceedings pending aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered to be a law declared which has a binding precedent under Article 141 of the Constitution of India. Such observations are purely on the facts of the respective case and cannot be applied across the board even when the facts in other cases are altogether different. The Court while deciding the appeal will not put blinker in its sight and merely believe what is written on paper but also consider concerning circumstances and ground reality as observed by the Hon'ble Supreme Court in the cases of CIT vs. Durga Prasad More, 82 ITR 540 (SC) and Sumati Dayal, 214 ITR 801. In the present case in spite of all the efforts where the A.O. could not even locate the respective socalled applicants, the assessee could file undated confirmations and affidavits. Therefore, it is a case where all the papers are manufactured at the instance of assessee and not the real transaction. We, therefore, merely on the basis of such papers cannot hold that the amount received by way of share capital is explained within the meaning of section 68 of the Act. The Full Bench of Delhi High Court in the case of Sophia Finance Ltd. (supra) have held that provision of section 68 shall equally apply even in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arketing has disclosed PAN much before the receipt of communication from the department of PAN. The registered office of the assessee is one whereas the assessee is declaring another address in the return of income. The address given by the assessee to the A.O. in respect of share applications is the registered office address to which summons had been sent and the same have not been complied with. Enquiries made through the inspector of the department showed that the company was not operating at the addresses given. It is noticed that the A.O. had also verified the address as given in the return of income and even here the company was not existing. Now, coming to the statement recorded which have been given to the assessee, it is clearly understood that the same have no evidentiary value in so far as the opportunity to cross examine has not been given to the assessee. Therefore, these statements cannot be relied upon for the purpose of assessment. However, Ld. A.R. has made categorical statement that the statement has been recorded from the correct persons i.e. in the case of M V Marketing, the correct person identified is Shri Mukesh Gupta. The copy of the return filed along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iced that the specified shares, which have been allegedly sold by the assessee had been removed from the list. However, it is noticed that the A.O. had asked the assessee to produce the purchaser of the shares but the assessee has only provided the addresses of the purchasers of the shares. The A.O. after verification of the addresses found that the purchasers of the shares were not available at the addresses furnished by the assessee. Further the assessee was also asked by the A.O. to give a copy of the share certificates and the transfer certificates and the deed of confirmation from the purchasing company. Even this had not been produced. In short all that the assessee has produced is the list of the purchasers acknowledging the receipt of share certificates and nothing more has been done. If we consider the evidences, which have been produced more specifically in respect of the SGC Publishing Pvt. Ltd., it is noticed that the assessee has filed a copy of the return of income of SGC Publishing P. Ltd. for the Assessment Year 2005-06. But again the same is without the enclosures or the schedules to the balance sheet and the P and L account. The same also is in respect of the Fair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led by the share applicants as also the purchasers of the shares after obtaining the relevant return copies from the concerned A.Os on the basis of the PAN provided. The A.O. may also call for the shareholders register from the company whose shares have been sold by the assessee to verify as to whether the shares as have been identified by the specific identification number have been transferred from hands of the assessee company to the purchasers. The A.O. shall in the set aside proceedings give a copy of all such evidences, which he proposes to use against the assessee for the assessee's rebuttal. No statement shall be used against the assessee without giving the assessee adequate opportunity to cross-examine. 8. In respect of the additions made by the A.O. on account of alleged commission paid by the assessee for obtaining the alleged entries this issue is also restored to the file of the A.O. for re-adjudication as the issue of the share application money and the sale of shares held as investment by the assessee has to be restored to the file of the A.O. for re-adjudication. With these directions, these issues are restored to the file of the A.O. for re-adjudication and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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