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TMI Blog2017 (5) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT-DR ORDER Per Waseem Ahmed, Accountant Member:- Both appeal by the assessee are directed against the different orders of Commissioner of Income Tax (Appeals)-II, Kolkata of even dated i.e. on 25.09.2014. Assessments were framed by DCIT, Central Circle-XVIII, Kolkata u/s 147/143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) vide his orders dated 26.03.2014 for assessment years 2009-10 2010- 11 respectively. Shri S.K. Tulsiyan, Ld. Advocate appeared on behalf of assessee and Shri Saurav Kumar, Ld. Departmental Representative represented on behalf of Revenue. 2. Both the appeals are heard together and are being disposed of by way of consolidate order for the sake of brevity. We first take up the appeal of assessee in ITA No.2154/Kol/2014 relating to A.Y. 09-10. 3. The issue raised in ground number 2 by the assessee in this appeal is that learned CIT-A erred in upholding the order of AO by sustaining the disallowance of ₹ 18 lakh on account of share and application money. 4. The facts in brief are that the assessee is a private Limited company where a survey operation u/s 133A of the Act was conducted in the business premi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tunity to cross examine Sri Rajendra Bubna if he so likes. Ans: I do not want to ask him any question. The AO also called upon the assessee to explain the above facts of the case who has refuted to have taken such accommodation entries of ₹ 18 Lacs and submitted various documents in support of genuineness of the transactions. It is also important to note that Shri Rajendra Bubna managing director of BPPL retracted from the statement given at the time of survey vide letter dated 18th March 2014 along with the affidavit duly notarized. However the AO disregarded the contention of the assessee by observing that Shri Rajendra Bubna retracted from the statement after such a long time. Moreover the retracted statement was given after the completion of assessment of BPPL. The AO finally treated the sum of ₹ 18 Lacs as undisclosed income and added to the total income of the assessee. 5. Aggrieved, assessee preferred an appeal before Ld. CIT(A). The assessee before Ld. CIT(A) submitted that the addition made by Assessing Officer was solely on the basis of the statement given by Mr. Rajendra Bubna, Director of M/s Bubna Properties Pvt. Ltd. (BPPL for short) whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication money was bogus transactions. In view of the above, Ld. CIT(A) disregarded the contention of assessee by observing as under:- 7.7 In view of the above facts, I am of the opinion that the AO was justified in making the addition of ₹ 18,00,000 u/s 68 of the Act as undisclosed income of the appellant for the year under consideration. The shareholder/share subscriber through its Managing Director had given very specific statement that during the financial year 2008-09 relevant to the assessment year 2009-10 the company M/s Bubna Properties Pvt. Ltd had given an accommodation entry of ₹ 18 lakh to the appellant company by receiving the equivalent amount of cash and the commission of ₹ 36,000/- from the director of the appellant company Shri Alok Agarwal. The director Shri Alok Agarwal kept his silence when the opportunity to cross examination was allowed to him. He could not rebut the statement given by Shri Rajendra Bubna against the appellant company. Hence, the addition of ₹ 18 lakhs made by the AO is confirmed. In support the reliance is placed on the decision in the case of CIT vs. Neva Promoters Finlease Pvt. Ltd., 342 ITR 169 (Delhi) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given by Rajendra Arora which was taken under the coercion. Therefore, same cannot be relied upon. Ld. AR also submitted that the retraction statement was field in the course of assessment proceedings. Thus, no addition on account of share application money is warranted. On the other hand, Ld. DR submitted that an opportunity was given to assessee for cross-examination wherein the assessee remained silent which proves beyond doubt that the impugned entry was accommodation entry and therefore liable for addition. He heavily relied on the order of Authorities Below. 7. We have heard the rival contentions of both the parties and perused the materials available on record. The grievance of the assessee is that the AO has made the addition of ₹ 18 lacs on account of bogus share capital merely on the basis of statement furnished by the 3rd party which was subsequently confirmed by the learned CIT(A). Admittedly the survey operations were conducted on the assessee as well as on the BPPL and GLFPL dated 01.08-2011 and 03.08.2011 respectively. At the time of survey operation, a statement u/s 131 of Shri Rajendra Bubna Managing Director of the BPPL was recorded wherein it was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the awe. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. We further rely in the judgment of Hon'ble Delhi High Court in the case of CIT vs. Smc. Share Brokers Lt. (2007) 288 ITR 345 (Del) in this case the Hon'ble High Court held as follows:- We are of the opinion that the Tribunal was right in its view that in the absence of Manoj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instructions issued vide F. No. 286/98/2013-IT(Inv.II) dated 18th of December 2014 reads as under:- Instances/complaints of undue influence/coercion have come to notice of the CBDT that some assessees were coerced to admit undisclosed income during Searches/Surveys conducted by the Department. It is also seen that many such admissions are retracted in the subsequent proceedings since the same are not backed by credible evidence. Such actions defeat the very purpose of Search/Survey operations as they fail to bring the undisclosed income to tax in a sustainable manner leave alone levy of penalty or launching of prosecution. Further, such actions show the Department as a whole and officers concerned in poor light. 2. I am further directed to invite your attention to the Instructions/Guidelines issued by CBDT from time to time, as referred above, through which the Boards has emphasized upon the need to focus on gathering evidences during Search/Survey and to strictly avoid obtaining admission of undisclosed income under coercion/undue influence. 3. In view of the above, while reiterating the aforesaid guidelines of the Board, I am directed to convey that any instance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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