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TMI Blog2015 (5) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... Per N.K.Saini, A. M. : These appeals by the department are directed against the order dated 16/09/2009 of CIT(A)- VII New Delhi. 2. First we will deal with the appeal of the department in ITA No. 4325/Del/2009. Following grounds has been raised in this appeal :- 1. The order of the Ld. CIT (Appeals) is erroneous contrary to facts law. 2. On the facts and in the circumstances of the case and in law, the learned CIT (Appeals) has erred in deleting the addition of ₹ 93,45,000/- made u/s 68 of the I.T.Act being the unaccounted sale proceeds of shares and ₹ 1,86,900/- on account of unaccounted commission. 2.1. Ld. CIT(A) has ignored the fact that the assessee failed to discharge the onus of proving the creditworthiness of the creditors and genuineness of the transaction. 2.3. The Ld. CIT(A) has ignored the material finding of the A.O. and investigation made during assessment proceedings. 3. The applicant craves leave to add, to alter, or amend any grounds of the appeal raised above at the time of hearing. 3. From the above grounds, it would be clear that the grievance of the department relates to the deletion of the addition of ₹ 93,45 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,40,000 21. Polo Leasing Finance P. Ltd. 50,000 5. The AO issued notices u/s 131 of the Act to the above parties for the verification of the identity of the person and the genuineness of the transactions but the summons were received unserved with the remarks of the postal authorities as no such party . The assessee submitted to the AO that there was no increase in the share capital of the assessee and unsecured loans during the year under consideration. The assessee also furnished confirmation, bank statements and copies of the income tax returns of the parties from whom transactions had been made. The AO asked the assessee to produce the parties/ persons for verification of the genuineness of amount in question. The AO mentioned that the assessee failed to produce parties for cross-verification, therefore, the genuineness of the transaction was not ascertained and that the assessee routed its unaccounted money in its books with the help of entry operator and there was systematic plan followed by the assessee in which cash was given to the entry provider who in turn issued cheques of equal amount an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese all transactions are duly recorded in the books of accounts. Balance sheet copy as on 31/03/2003 with previous year figures is attached. It shows investments as on 31/03/2002 at ₹ 1,45,01,800/- and at 1,63,78,774.77 as on 31/03/2003. It means that some of the investments have been disposed off and some new investments have been made in this year. The surplus on sale has been shown as income in P L a/c and assessed as declared by the ITO. The money listed in asst. order is out these aggregate to ₹ 93,45,000/- encashed by sale for which entry to entry details were filed before the ITO. So, these deposits are neither loan nor share application money as alleged mindlessly by the ITO in his order. Sec 68 is focused on loans and shares capital. It does not include sale proceeds of goods. When opening stock and new acquisition of goods stands accepted and closing stock at the year end is also accepted, the sale proceeds can not be doubted where the payment received is by cheque from tax paying entity. The third party might not appear for confirmation, the ITO had other sources of direct verification. The one asset has converted into other shape and no new deposit is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding to the Ld. CIT(A), the information might have been a sufficient ground to initiate re-assessment proceedings of a case but to make an addition, the AO has to establish the fact of fraudulent nature of such transaction and that purely on surmises and conjectures no transaction could have been held as bogus unless the same was proved on the basis of sound reasoning and evidence on the part of the AO before making the addition. The Ld. CIT(A) further, observed that the assessee furnished all necessary proofs in support of its claim. It was all the more necessary to rebut such evidence with cogent and credible evidence on the part of the AO before making the addition. The Ld. CIT(A) pointed out that the amount of ₹ 93,45,000/- had been received during the year under consideration by the assessee from 21 persons listed in the assessment order, however, the balance sheet as on 31st March, 2003 revealed that no new money had been introduced during the year under consideration which also implied that there had neither been fresh loan nor fresh share capital introduced in the accounts of the assessee company during the year under consideration. the Ld. CIT(A) also pointed out th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessment year 2003-04 the sale was of ₹ 20,90,309/- only therefore, finding given by the Ld. CIT(A) was erroneous. It was stated that even if it is presumed that amounts received on account of sale of shares had been directly credited to investments Account in Schedule 3 of the Balance Sheet, the figures did not match. It was further, stated that the opening balance of the investment as on 1.4.2003 was ₹ 1,45,01,800/- and the closing balance as on 31st March, 2003 was ₹ 1,63,78,774.47. and if shares worth ₹ 93,45,000/- have been sold at no loss no profit basis , only the composition of investments will change but opening and closing would remain the same and if there was some gain or loss in sale of shares the same is not reflected in the P L account. It was also stated that schedule 3 of the audited balance sheet also revealed that in all cases the investment had increased except for last line items others which had reduced from ₹ 1,31,24,800/- to ₹ 67,11,774/-. Therefore, it would be logical to presume that sale of shares had taken place in respect of this item only which came to ₹ 64,13,023/-whereas the figures of receipts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 25.01.2012. Reliance was also placed on the following cases laws :- 1. CIT vs. Sh. Udit Narain Aggarwal, ITA No. 560 of 2009, dt. 12.12.2012 2. CIT vs. Sudeep Goenka, ITA No. 468 of 2009, dt. 3.01.2013. 3. CIT vs. Anirudh Narain Aggarwal, ITA No. 195 of 2010, dt. 16.01.2013. It was pointed out that the same issue has been decided by the I.T.A.T. in assessee s own case in I.T.A.T. No. 1584/Del./2009 for the A.Y. 2002-03 vide order dated 13.11.2009, in assessee s favour (copy of the order was furnished which is placed on record) 12. We have considered the submissions of both the parties and gone through the material available on the record. In the present case, it is noticed that the assessee purchased the shares in earlier years which were shown as investment in the books of accounts and reflected in the Asset Side of the Balance Sheet , out of those investments (copy which is placed at page no. 23 and 24 of the assessee s paper book), the assessee sold certain investments and accounted for the profit / loss and offered the same for taxation. In the present case, the amount in question was neither a loan or the deposit , it was also not on account of sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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