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TMI Blog2018 (7) TMI 820X X X X Extracts X X X X X X X X Extracts X X X X ..... essee has appeared on 30-03-2016 the date on which assessment has been finalized, explaining all the evidences. Considering that the so called enquiry report is inconclusive and reliance on the so called statements of Shri Monohar Lal Nangalia taken in 2008 and 2014 have not been linked with the present investments of the above five companies, we are unable to rely on the evidence now placed on record by the Revenue in the form of Paper Book, that too without any prayer for admission of additional evidence. Surprisingly, Revenue has raised a ground that Ld. CIT(A) has violated Rule 46A, but when it came to their turn Revenue placed some unconnected statements which are not before AO or confronted to assessee at any point of time, before us to justify the stand of AO. It is also to be noted that this information has not been furnished to assessee either during the assessment proceedings or during the appellate proceedings. Therefore, no reliance can be placed on that. As pointed out by the Ld. Counsel, the provisions of Section 292C does not help the Revenue and the principles laid down by the Hon'ble Supreme Court in the case of CIT Vs. Sunita Dhadda (2018 (3) TMI 1610 - SUPREM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived through banking channels, shares were allotted and those companies were existing companies and reiterated on the evidence furnished before the AO to prove the identity and creditworthiness of the company. Ld.CIT(A) in the order has listed the evidences furnished and extracted the copies of the PAN, ITRs and statements [though not legible], to come to a conclusion that assessee has established the genuineness of the amount. The conclusions by CIT(A) are as under: 6.1. The Assessing Officer has concluded an addition on the basis of the following points: a) Creditworthiness of Subscriber Companies has not proved through financials: Before me, the appellant submitted the subscriber company financials and also details of share application money to show that there is money in their account. b) Confession of Shri Manohar Lal Nangia: Before me, confession of Shri Manohar Lal Nangia was not confronted by the appellant. c) Bank transactions is not fully proved to show it is a genuine transaction: The Assessing Officer has denounced banking transactions, however, this cannot be proved and cannot be an issue of renounced a transaction is null a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 016 dated 25.11.2016, I allow the appeal. Addition made by the Assessing Officer is dismissed . 4. Aggrieved, Revenue has raised the following grounds: ( i) The learned CIT(Appeals) erred in deleting the addition of ₹ 5 crores made by the Assessing Officer u/s 68 of the IT act on account of unexplained share application money holding that there is no doubt regarding the genuineness of share application money and the amounts were received through banking channels. ( ii) The learned CIT(Appeals) ought to have considered that the subscribers who are stated to have subscribed to share application money are only shell companies and these companies are only providing accommodation entries through their bank accounts after receiving cash from beneficiaries including assessee. ( iii) The learned CIT(Appeals) ought to have further appreciated that the entry operator who controlled and managed said Shell companies has admitted on oath before the DDIT(inv.) Kolkata that he was providing accommodation entries through Shell Companies which clearly proves that the undisclosed money of the assessee was introduced as Share Application Money in the name of such Shell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record a Paper Book containing 85 pages, out of which, page Nos. 1 to 11 are copy of the assessment order. Page Nos. 12 to 85 are - letters and statements. The Index of which, is as under: S No Description Page No. 1 Assessment rder under sec. 143(3) dt. 30.03.2016 1 2 Letter from DDIT (Inv) Unit 1(3) Kolkata dtd. 28.3.2016 12 3 Letter of Assessing Officer to DDIT (Inv) Unit 1(3) Kolkatta dtd. 7.3.2016 19 4 Letter from the assessee dtd. 5.3.2016 along with enclosures 21 5 Statement of Shri Manohar Lal Nangalia dt. 14.11.2014 recorded by the ADIT (Inv) Kolkata u/sec. 131 of the IT Act 58 6 Summons dt. 14.11.2014 to Sri manohar Lal Nangalia issued by the ADIT (Inv) Unit II(2) Kolkata 66 7 Statement of Shri Manohar Lal Nangalia recorded under sec. 131 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments of the so called persons were confronted to assessee and no cross examination was provided. Following the principles laid down by the Hon'ble Supreme Court in the case of CIT Vs. Sunita Dhadda in SLP (Civil) Diary No. 9432/2018, the presumption u/s. 292C against assessee is not available and since principles of natural justice are violated, the secondary evidence cannot be relied upon. It was submitted that the investment was reflected in the books of account of the investors, they had source as reflected in their balance sheets and there is no violation of Rule 46A by the CIT(A). 7. We have considered the rival contentions and perused the evidence placed on record. There is no dispute that assessee has received moneys from the above companies in the course of Financial Year 2012-13 and assessee also allotted shares to the respective parties. The enquiry from the DDIT(Inv.) was initiated on 07-03-2016 and letter from DDIT Unit-1(3), Kolkata was dt. 28-03-2016. The report of the DDIT is as under: Sub: M/s. Cauvery Iron Steel India Ltd [PAN: AABCC3576F] Commission u/s. 131(1)(d) of the IT Act, 1961 Request for enquiries Regarding Ref: DCIT-1(2)/AABCC357 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above letter, the enquiries conducted through ITI were not part of the report. What the Revenue has placed on record now in the form of paper book are stated to be statements of Shri Monohar Lal Nangalia dt. 15-02-2008, 09-04-2008, 17-01-2014 and 14-11-2014, much before the present enquiry has started. In what connection the enquiries were conducted with Shri Monohar Lal Nangalia is not specified in the report of DDIT. Moreover, the department also placed on record the statements recorded from Shri Monohar Lal Nangalia as early as 09-04-2008 and 14-02-2008 and also statement of Mr. Satish Shah dt. 14-02- 2008. It is to be noted that the companies being enquired have invested in assessee-company in the Financial Year 2012-13 and how the statements of Shri Monohar Lal Nangalia and the so called statement of Shri Satish Shah, dt. 14-02- 2008 are relevant has not been explained either by the AO or by the Ld.CIT-DR. In fact as seen from the assessment order, except relying on the report received from DDIT, there is no further evidence available with AO to hold that such companies are bogus. It is also true that the report from DDIT was received on 28-03-2016 and assessment has been com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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