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TMI Blog2021 (8) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... d the same should be telescoped with the income returned by the assessee for the respective assessment years. (b) in the A.Y₹ 2012-13, 2013-14 2014-15 only estimated commission @1% and investments and sales to outside companies / parties should be considered without disturbing the set off as given by the ld. AO in his assessment order as this Tribunal does not have power of enhancement. The ground Nos. 5 6 are disposed of in the above mentioned terms. Addition of income @1% on the value of increase in investments - HELD THAT:- We deem it fit and appropriate that the aforesaid chart on investments filed by the assessee requires to be re-visited by the ld. AO and we deem it fit to remand this issue to the file of the ld. AO for denovo adjudication on this aspect of the issue in accordance with law. Accordingly, ground No.7 raised by the assessee for A.Y₹ 2012-13, 2013-14 and 2014-15 is allowed for statistical purposes. Addition u/s 68 - HELD THAT:- No finding has been given by the ld. AO with regard to the fact of receipt of monies by issuance of convertible equity warrants; its treatment given by assessee in the books; prevailing law on the impugned issue; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... except with variance in figures. ITA No.3644/Mum/2019 (A.Y.2013-14) 3. At the outset, the ld. AR submitted that he would be pressing only ground Nos. 5 6 raised for A.Yrs. 2008-09 to 2014-15. Apart from this, the ld. AR stated that he would be pressing the ground No. 8 raised for A.Y.2013-14. The ld. AR also stated that ground no.7 raised by the assessee for A.Y.s 2012-13, 2013-14 and 2014-15 is only seeking rectification of the figure wrongly adopted by the ld. AO for the purpose of computing addition towards commission income. All other grounds raised by the assessee in the respective assessment years were stated to be not pressed by the ld. AR, which is reckoned as statement made from Bar and accordingly, all other grounds are dismissed as not pressed for the respective assessment years. 3.1. The ground Nos. 5-6 raised by the assessee are as under:- 5. That the Ld. C1T(A) grossly erred in facts of the case in not allowing set-off of income declared in the books of account against the assessable commission income on incorrect presumption that the assessee company had declared losses in its books of account. 6. That the Ld. CIT(A) grossly erred i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C Assessed income u/s. 143{3) r.w.s. 153C 2008-09 28.09.2008 10135 579270 31.10.14 10135 9756750 2009-10 29.09.2009 2166824 2166820 31.10.14 2166824 9970020 2010-11 14.10.2010 3966149 31.10.14 3966149 14071720 2011-12 30.09.2011 2290527 31.10.14 2290527 36350060 2012-13 28.09.2012 -7393754 31.10.14 -7393754 14585110 2013-14 28.09.2013 -2533450 31.10.14 -2533450 295448340 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tement of each of the assessment year is sham and is only a window dressing. Therefore, having admitted bogus nature of accounts, assessee cannot take advantage of any income declared in such accounts. 4.6. Aggrieved by the rejection of benefit of telescoping, the assessee is in appeal before us vide ground Nos. 5 6. We find that there is absolutely no dispute that the transactions reflected by the assessee in its books of accounts are sham and bogus and correspondingly, the book results reflected thereon would also become sham and bogus. In other words, there is absolutely no dispute that assessee is only an accommodation entry provider and that all the entries reflected in the books are merely accommodation entries and not real transactions of the assessee. That is why we find the ld. AO had rejected the book results and had resorted to determining the income of the assessee on an estimated basis by estimating commission @1%. Hence, the income returned by the assessee cannot be brought to tax. Similarly, the loss returned by the assessee cannot be allowed to be set off with estimated commission income. We find that assessee is seeking telescoping benefit of commission inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly estimated commission @1% on investments and sales to outside companies / parties should be considered and the same should be telescoped with the income returned by the assessee for the respective assessment years. (b) in the A.Yrs. 2012-13, 2013-14 2014-15 only estimated commission @1% and investments and sales to outside companies / parties should be considered without disturbing the set off of ITA No.3556/Mum/2019 and other appeals M/s. Avance Technologies Ltd., 8 returned loss already given by the ld. AO in his assessment order as this Tribunal does not have power of enhancement. The ground Nos. 5 6 are disposed of in the above mentioned terms. 5. The ground No. 7 raised by the assessee for A.Yrs. 2012-13, 2013-14 and 2014-15 with regard to addition of income @1% on the value of increase in investments are now taken up for adjudication. We find that ld. AO had considered the amount of increase in investment and computed commission income thereon as under:- A.Y. Amount wrongly taken by AO in order Commission 2012-13 63,97,82,000 63,97,820 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res to be re-visited by the ld. AO and we deem it fit to remand this issue to the file of the ld. AO for denovo adjudication on this aspect of the issue in accordance with law. Accordingly, ground No.7 raised by the assessee for A.Yrs. 2012-13, 2013-14 and 2014-15 is allowed for statistical purposes. 6. The ground No.8 raised by the assessee for A.Y.2013-14 in ITA No.3644/Mum/2019 is challenging the addition of ₹ 27,90,40,000/- on account of forfeiture of share application money. 6.1. We have heard rival submissions and perused the materials available on record. We find that the ld. AO had observed that assessee during the year had forfeited a sum of ₹ 27,90,40,000/- being the share application money received from shareholder who did not pay the balance amount of partly paid share warrants. The ld. AO sought to treat the same as income of the assessee and accordingly, issued show-cause notice to the assessee. The assessee submitted vide its letter dated 29/02/2016 that the amount forfeited towards share application money would only represent capital receipt in the hands of the assessee company and the same cannot be taxed in the hands of the company. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee company. The ld. AR argued that the forfeiture of share application money is only entry made in the books of accounts of the assessee and the same would not automatically become income in the hands of the assessee company. The ld. AR placed reliance on the decision of the Hon ble Jurisdictional High Court in the case of PCIT vs. Alag Securities Pvt. Ltd., reported in 425 ITR 658. 6.4. The ld. DR before us vehemently argued that the entry in the books of accounts representing forfeiture of share application money would only constitute cash credit liable for taxation u/s.68 of the Act when the nature and source of credit is not proved in the hands of the assessee. 6.5. We find that the ld. AO had completely ignored all the submissions made by the assessee in this regard. No finding has been given by the ld. AO with regard to the fact of receipt of monies by issuance of convertible equity warrants; its treatment given by assessee in the books; prevailing law on the impugned issue; whether the same was done in accordance with SEBI Guidelines as pointed out by the assessee in its annual report etc. We find that the ld. AO directly concludes the issue that the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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