2013 (6) TMI 349

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..... the CIT(Appeals). In favour of assessee.
Diva Singh And Shri K. G. Bansal,JJ. For the Appellant : Shri Rohit Garg, Sr. DR For the Respondent : Shri R. S. Singhvi, C.A. ORDER Per K. G. Bansal : AM. The revenue has taken up two substantive grounds as under:- (i) "On the facts and in the circumstances of the case, the ld. CIT(A) has erred in deleting the addition made u/s 68 of the I.T.Act, 1961 amounting to Rs. 39,53,000/- being bogus accommodation entry received in the garb of sale of shares to the parties who were found to be an entry operator. (ii) On the facts and in the circumstances of the case, the ld. CIT(A) has erred in relying on the decision of the Hon'ble Supreme Court in the case of M/s Lovely Exports Pvt. Ltd. to .....

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..... the assessee. The assessee may take the plea that by inflating its sale consideration, it had only increased its business profits and there is no loss to the exchequer. This may though look quite innocuous but unacceptable as the valuation of the shares of M/s Mordi Textile & Processors for the F.Y. 2000-01 comes to Rs. 6.91 for which it paid Rs. 10/- per share. It is thus apparent that the assessee company had chosen the sale and purchase of unquoted shares as a medium of not only accepting but providing accommodation entries. In view of the foregoing, assessee's sales transactions of shares of M/s Mordi Textile but unacceptable as the valuation of the shares of M/s Mordi Textile & Processors for the F.Y. 2000-01 comes to Rs. 6.91 for whi .....

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..... he difference between ostensible sale consideration and the value determined as unaccounted income of the assessee. 5. The case of the ld. counsel is simple. It is submitted that the shares were held as stock-in-trade. The whole of the sale proceeds had been shown as business profits. Thus, the whole of the sale proceeds stood accounted for in the books of account. Assuming that the sale price was inflated and in fact it was Rs. 6.98 per share, the AO should have reduced the balance amount worked out @ Rs. 3.02 per share from the sale consideration and thereafter added an equivalent amount as undisclosed income. This would have resulted into no addition. However, it is stressed that the shares were purchase @ Rs. 10/- per share and also so .....

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