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TMI Blog2016 (5) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and circumstances of this case, the addition made by the Assessing Officer is not sustainable as per the law and the same is directed to be deleted. - Decided in favour of assessee - I. T. A. No. 680/Mum/2012 - - - Dated:- 30-11-2015 - Sanjay Garg (Judicial Member) And Ashwani Taneja (Accountant Member) For the Petitioner : Sanjiv M. Shah For the Respondent : Arvind Kumar ORDER Ashwani Taneja (Accountant Member) 1. The present appeal has been filed by the assessee against the order of the learned Commissioner of Income-tax (Appeals)-9, Mumbai ((in short CIT(A) ), dated November 8, 2011 for the assessment year 2007-08, decided against the assessment order passed by the Assessing Officer (in short AO ) under section 143(3) read with section 147 of the Act, on the following grounds : 1. On the facts and in law, the learned Commissioner of Income- tax (Appeals) erred in confirming the addition of share application money of ₹ 55,25,000 as unexplained cash credit under section 68 of the Income-tax Act, 1961, on the ground that genuineness of the transaction could not be established and the amount received was not fully explained to the satis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'statement' of one of the directors of the investing company which is a general 'statement' and not a specific 'statement' and also that on the basis of the 'statement' it cannot be presumed that accommodation entry has been given after accepting cash, especially when the whole transaction was made through proper banking channels. The assessee has further submitted that the identity of the investor has been proved by furnishing Income-tax acknowledgment, the genuineness of the transaction is proved by the entries reflected in the bank accounts and the credit worthiness of the investor has been proved from the balance-sheet and therefore, no addition can be made on the basis of information received from the Director of Income-tax-2(3), Ahmedabad. 7. In addition to the above, the assessee submitted further submissions vide letter dated December 9, 2010 and the relevant abstract of the same is reproduced herein : 2. In this regard we submit that this fact does not establish that the said company has not invested in the shares of the assessee- company especially when the payments for share application were made from their banks accounts and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;ble Supreme Court in the case of CIT v. Lovely Exports P. Ltd. [2009] 319 ITR (St.) 5 (SC) ; [2008] 216 CTR (SC) 195. 8. It is noted that the Assessing Officer preferred to rely upon the statement of Mr. Mukesh Choksi and disregarded all the evidences filed by the assessee as well as the evidences collected by him directly from the shareholder company which confirmed the claim of the assessee, and accordingly treated the amount of share capital as unexplained cash credit under section 68 of the Act, and added the same to the income of the assessee. 9. Being aggrieved, the assessee carried the matter before the learned Commissioner of Income-tax (Appeals), wherein the assessee filed detailed submissions and relied upon the evidences filed by it before the Assessing Officer for the purpose of discharging its burden under section 68, but the learned Commissioner of Income-tax (Appeals) was not satisfied with the submission and evidences of the assessee, and endorsing the observations of the Assessing Officer, he confirmed the addition made by the Assessing Officer. 10. Being aggrieved the assessee has filed an appeal before the Tribunal. 11. During the course of hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities and placed reliance on the decision of the Tribunal in the case of Deputy CIT v. Pratiksha Mercantile P. Ltd. I. T. A. No. 2096/Mum/2011 dated August 10, 2012 wherein the judgment of the hon'ble Supreme Court in the case of CIT v. Lovely Exports P. Ltd. (supra) has been discussed and distinguished the same on facts. It was requested that the orders of the lower authorities should be upheld. 13. We have gone through the submission made by both sides, orders of the lower authorities, the material placed before us for our consideration as well as judgments relied on before us. While making the factual analysis of this case, it was noted by us that following evidences has been placed by the assessee on record to substantiate this transactions. (i) Confirmed copy of action from M/s. Buniyaad Chemicals Ltd. confirming cheque-wise detail of the payments by the said company to the assessee during the year under consideration for an amount aggregating to ₹ 55,25,000. (ii) Copy of Income-tax return of the said company. (iii) Copy of the bank statement of the said company showing payment to the assessee-company by cheque, it was also shown therein that no a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer with the following observations : We have heard the rival submissions and given a thoughtful consideration to the orders of the authorities below and with the assistance of learned counsel, we have considered the relevant documentary evidences brought on record and referred to before us. The undisputed facts are that out of six companies, viz., M/s. Kaycee Share Broking Pvt. Ltd., M/s. Mihir Agencies Pvt. Ltd., M/s. Alliance Intermediateries and Network Pvt. Ltd., M/s. Mahasagar Securities Pvt. Ltd., belong to Shri Mukesh Choksi group. The only reason for making the addition was that during the course of search operation Shri Mukesh Choksi admitted that he is a name lendor and arranging profits/loss/share application money to various persons. Except for this, there is nothing on record brought by the Assessing Officer to justify the addition. It is also an undisputed fact that transactions with these companies have been done through account payee cheque, respective bank 'statement' have been brought on record before us. Even if we consider the 'statement' of Shri Mukesh Choksi recorded under section 132(4) of the Act and also subsequently under section 131 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.4. In the result, the appeal filed by the Revenue is dismissed. 16. In another case, a similar view has been taken by the co-ordinate Bench in the case of Yamuna Estate P. Ltd. v. ITO in I.T.A. No. 2672/M/ 2012 dated September 9, 2015 [2016] 45 ITR (Trib) 517 (Mum). We find it appropriate to reproduce hereunder the relevant observations by the hon'ble Bench (page 528) : In the case of the assessee before us, the Assessing Officer has not pointed out about any direct or material evidence against the assessee to hold that the share transactions were not genuine. The assessee had furnished before the Assessing Officer all the necessary details and evidences relating to the share transactions in question. The Assessing Officer did not raise any query or doubt about the genuineness of the details and evidences submitted by the assessee. The Assessing Officer has made additions on the basis of general statement of Mr. Chokshi made before the Investigation Wing. The name of the assessee did not appear specifically in any of the statements of Mr. Chokshi. The assessee was not provided opportunity to confront Mr. Chokshi in relation to transactions related to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore doing so, the Assessing Officer neither provided an opportunity of cross- examination of his witness, as was demanded by the assessee, nor he brought on record any other adverse material to controvert the evidences placed on record by the assessee. It is worth noting here that the Assessing Officer had made direct inquiries with M/s. Buniyaad Chemicals under section 133(6), in response to which confirmation was filed by the said company. But the learned Assessing Officer preferred to rely upon the statement of Mr. Mukesh Choksi and disregarded all the evidences filed by the assessee as well as evidences collected by him directly from the shareholder company which confirmed the claim of the assessee. Thus, respectfully following the aforesaid decisions of the co-ordinate Bench, we find that in the peculiar facts and circumstances of this case, the addition made by the Assessing Officer is not sustainable as per the law and the same is directed to be deleted. 18. Since we have given the relief on the merits, we refrain ourselves from deciding other grounds. 19. In the result, the appeal of the assessee is partly allowed. 20. The order pronounced in the open court on N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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