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TMI Blog2020 (4) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... tion). Grounds of appeal No.2 and 3 filed by the assessee are accordingly partly allowed. Addition u/s 68 - assessee could not substantiate the amount received from three different parties on account of share application money - HELD THAT:- Since the ld.CIT(A) has sustained the addition to the tune of ₹ 57 lakhs on the ground that no confirmation was filed by the assessee and considering the fact that there is a running account between the assessee and M/s Rama Ply Board Industries Ltd., therefore, considering the totality of the facts of the case, we deem it proper to restore the issue to the file of the AO with a direction to grant one final opportunity to the assessee to substantiate the nature of transaction to his satisfaction and decide the issue as per fact and law. - ITA No.3126/Del/2016 - - - Dated:- 18-2-2020 - Shri R.K. Panda, Accountant Member And Shri K. Narasimha Chary, Judicial Member For the Assessee : Shri P.C. Yadav, Advocate For the Revenue : Shri V.K. Chadha, Sr. DR ORDER PER R.K. PANDA, AM: This appeal filed by the assessee is directed against the order dated 31.03.2016 of the CIT(A)-20, New Delhi, relating to assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while filing the return of income electronically. 5. However, the AO was not satisfied with the argument advanced by the assessee. According to him, after an expenditure was incurred during the year, the same should have been booked as on date of incurring the expenditure and not in the opening stock as coming forward from the previous year. Rejecting the various explanations given by the assessee, the AO made an addition of ₹ 77,08,967/- to the total income of the assessee. 6. Since there was difference in the figure of share application money received and opening stock and closing stock, the AO held that the books of account are not reliable. He, therefore, invoked the provisions of section 145 of the IT Act and estimated the net income of the assessee at ₹ 11,17,600/- being 8% of gross receipt of ₹ 1,39,70,000/- declared in the ITR form. Since the assessee company has declared the net profit of ₹ 1,15,812/-, the AO made an addition of ₹ 10,01,788/- to the total income of the assessee being the difference. The AO, accordingly, completed the assessment at a total income of ₹ 1,96,55,650/- as against the returned income of ₹ 2,44,892/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in confirming the addition of ₹ 10,01,788/-being the estimated business income of the assessee at 8% of the total sales for the year under consideration and upholding the rejection of Books of Accounts by AO . 4. That the Ld. CIT (Appeal) has erred in law and on facts in confirming the addition of ₹ 57,00,000/- on account of fresh share application money. 5. That the impugned appellate order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence. 6. That the Appellant craves leave to add/alter any/all grounds of appeal before or at the time of hearing of the Appeal. 10. Grounds of appeal No.1, 5 and 6 being general in nature are dismissed. 11. So far as ground of appeal No.2 is concerned, the ld. Counsel for the assessee submitted that both the authorities have failed to appreciate that the assessee was following revenue recognition method and the difference has happened due to the format of ITR in which the return of income has to be submitted. He submitted that the books of account of the assessee are audited which reflect the correct figure of the opening and closing stock. Referring to page 36 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A). He submitted that the books of account maintained by the assessee are not at all reliable. The AO has rightly rejected the book results and has gone for estimation of profit at 8%. So far as the addition of ₹ 77,08,967/- is concerned, he submitted that there is difference in the closing stock of the preceding year vis- -vis the opening stock of the current year which the assessee could not reconcile. Therefore, the ld. CIT(A) was justified in sustaining the addition made by the AO. 14. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the AO, in the instant case, completed the assessment u/s 144 of the IT Act wherein, apart from making the addition u/s 68 of the Act, made addition of ₹ 77,08,967/- being the difference in the closing stock of the preceding year and opening stock of the current year and made further addition of ₹ 10,01,788/- being the difference in the net profit adopted by him at 8% of the total receipts and the net profit declared by the assessee. We f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO to recompute the addition by considering the net profit at ₹ 6,50,369/- less net profit already disclosed by the assessee at ₹ 1,15,812/- (subject to verification). Grounds of appeal No.2 and 3 filed by the assessee are accordingly partly allowed. 16. Ground of appeal No.4 relates to the order of the CIT(A) in confirming the addition of ₹ 57 lakhs. 17. The ld. Counsel for the assessee submitted that during the year, the assessee has received fresh share application money to the tune of ₹ 1,07,00,000/-. In support of the same, the assessee filed a few documents with the AO and certain other documents before the CIT(A) with an application for accepting the additional evidences. On the basis of such additional evidences, the CIT(A) called for a remand report from the AO. After considering the remand report, the ld.CIT(A) deleted ₹ 50 lakhs and sustained ₹ 57,00,000/-. The ld. Counsel for the assessee submitted that although the assessee has filed various details during assessment proceedings as well as remand proceedings, however, the same were completely ignored and the addition sustained by the CIT(A) to the extent of ₹ 57 lakhs is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and statements filed by the assessee has observed that M/s AAA Paper has ultimately got a shop in Senior Mall developed by the assessee against their advance and it is not an advance from Nilkamal to AAA Paper. He accordingly submitted that the addition made by the AO and sustained by the CIT(A) should be deleted. In his alternate contention, he submitted that the matter should be restored to the file of the AO or the CIT(A) with a direction to adjudicate the issue afresh in the light of the submissions now made that the amount has already been refunded in the subsequent years through sale of shop. 19. The ld. DR, on the other hand, heavily relied on the order of the CIT(A). 20. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions relied on by the parties. We find, the AO, in the instant case, made addition of ₹ 1,07,00,000/- u/s 68 on the ground that the assessee could not substantiate the amount received from three different parties on account of share application money. We find, in appeal, the ld.CIT(A) deleted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year, he had purchased tire commercial property situated at Shoppers' Pride Mali Shakti Chowk, Civil Lines, Bijnor and the consideration of the property was credited in the account of M/s Neelkamal Cineplex Pvt Ltd. There had not been any banking transaction with the party. Appellant submitted confirmation of account, copy of balance sheet, copy of ITR and sale deed of the said, property. 6.3 Remand report was called for from the concerned AO with direction to go through the contents of said submission and send the report vide letter dated 03.07.2017. The AO sent his report vide his letter dated 21.08.2017. In which, the AO mentioned that a notice u/s 133(6) was issued to lender M/s Neel Kamal Cineplax Pvt Ltd to furnish the supportive documents. A reply was received from the lender which was as follows: We sold the property situates at Shoppers Pride Mall Shakti Chowk, Civil Lines, Bijnor bearing Shop no. 1-8 LGF and Shop no. 1 SF to M/s AAA Paper Marketing Pvt. Ltd. during F.Y. 2013-14 and since the above said transaction had been in the nature of selling properties against their investment in M/s Rant Ply Board Industries Ltd (Now merged with M/s AAA paper marketin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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