9911796707
TMI Blog2018 (1) TMI 1529X X X X Extracts X X X X X X X X Extracts X X X X ..... s legal ground, the other grounds being academic in nature are not being adjudicated. Appeal filed by the assessee is allowed. - ITA No. 4129/Del/2017 - - - Dated:- 19-1-2018 - SHRI R. K. PANDA, ACCOUNTANT MEMBER For the Appellant : Shri Anil Kumar Jain, CA For the Respondent : Shri Amit Jain, Sr.DR ORDER PER R. K. PANDA, AM : This appeal filed by the assessee is directed against the order dated 06.04.2017 of CIT(A)- 38, Delhi relating to assessment year 2007-08. 2. Facts of the case, in brief, are that the assessee is a company and filed its original return of income on 28.10.2007 declaring total income of ₹ 4,624/-. The Assessing Officer received information from the Investigation Wing that a search operation u/s 132 was conducted in the premises of Shri Tarun Goyal, a Chartered Accountant. It was found during the search and post search enquiries that he had created a number of private limited companies and firms for providing accommodation entries. The Directors of these companies were his employees who worked in his office as peons, receptionists etc. A number of bank accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer, the assessee did not produce the Directors of the above companies. Since the assessee failed to produce the Directors of the above two companies, the Assessing Officer came to the conclusion that the documents so produced before him do not fulfill the criteria regarding the creditworthiness of the above two companies. He further observed that the assessee company is not doing any substantial business so as to command such high premium on the share issued by it. Further, out of the share capital and premium received by it during the year a sum of ₹ 1,79,525/- has been given as advances against the properties and the balance amount has been retained in the bank account. He, therefore, came to the conclusion that neither the assessee company was in need of any further share capital nor its financial position was so strong that any prudent investor would purchase its shares at a premium. In view of the above and relying on various decisions including the decisions in the case of M/s Nova Promoters Finlease Pvt. Ltd., M/s N.R. Portfolio Pvt. Ltd., M/s Nlpun Builders Pvt. Ltd. and M/s Neelkanth Ispat Udyog Pvt. Ltd., the Assessing Officer made addition of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication of mind to material furnished to the AO by Investigation Wing. These grounds of appeal are dismissed. 7. So far as addition of ₹ 9,00,000/- from M/s Moderate Credit Corporation Pvt. Ltd. is concerned, ld. CIT(A) deleted the same and the Revenue is not in appeal before the Tribunal. Therefore, I am not concerned with the same. However, the ld. CIT(A) sustained the addition of ₹ 5,00,000/- made by the Assessing Officer on the ground that the information was received from the Investigation Wing of the Department in respect of the accommodation entries of ₹ 5,00,000/- from M/s Thar Steels Pvt. Ltd., a company managed and controlled by Shri Tarun Goyal, who was identified to be engaged in the business of providing accommodation entries and also admitted the same on oath. The Assessing Officer has conducted extensive enquiries in order to substantiate the finding of the Investigation Wing that the share capital of ₹ 5,00,000/- allegedly received from M/s Thar Steels Pvt. Ltd. is a paper company controlled and managed by Shri Tarun Goyal for the purpose of providing accommodation entries and is a sham transaction. Relying on the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisions filed in the Paper Book, he submitted that the reopening on the basis of report of Investigation Wing without application of mind by the Assessing Officer is not valid. 10. So far as the merit of the case is concerned, he submitted that the assessee has filed all the relevant details before the Assessing Officer to substantiate the identify and creditworthiness of the share applicant company and the genuineness of the transaction. The payment was received by account payee cheque. The company has replied to the notice issued u/s 133(6) of the I.T. Act. Merely because the assessee has not produced the Director, the same cannot be a ground to disbelieve the creditworthiness of the share applicant company. Referring to the decision of the Hon ble Delhi High Court in the case of CIT vs. Victor Electrodes reported in 329 ITR 271, ld. counsel for the assessee drew the attention of the Bench to para 9 of the order which reads as under :- 9. There was no legal obligation on the assessee to produce some Director or other representative of the applicant companies before the Assessing Officer. Therefore, failure of assessee to produce them could not, by its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal for low tax effect. He accordingly submitted that the order of the ld. CIT(A) be setaside and the grounds raised by the assessee be allowed. 13. Ld. DR on the other hand strongly relied on the order of the ld. CIT(A). He submitted that the Tribunal in the case of Tarun Goyal and batch of other appeals vide consolidated order dated 18.10.2013 has restored the issue to the file of the Assessing Officer for fresh adjudication. The share applicant company M/s Thar Steels Pvt. Ltd. also appears in the said list. Therefore, the issue may be restored to the file of the Assessing Officer for fresh adjudication. 14. So far as validity of the re-assessment proceedings are concerned, he submitted that the Assessing Officer on the basis of the report of the Investigation Wing has reopened the assessment u/s 147 and notice u/s 148 has been issued after apply of mind properly before such reopening. Therefore, the reopening being valid, the ground raised by the assessee on this issue should be dismissed. 15. I have considered the rival arguments made by both the sides, perused the orders of the authorities below and the Paper Book filed on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
