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TMI Blog2022 (10) TMI 1047X X X X Extracts X X X X X X X X Extracts X X X X ..... deleted because the addition has been confirmed in the hands of Shree Global Tradefin Limited. 02. In case of Vidisha properties Limited ,ITA No. 466/Mum/2018 is filed by the Dy. Commissioner of Income Tax, Central Circle 5(1), Mumbai (the learned Assessing Officer) for A.Y. 2007-08 against the order passed by the Commissioner of Income-tax (Appeals)-53, Mumbai [the learned CIT (A)] raising following grounds of appeal: - "1. Whether on the facts and in the circumstances of the case and in law, the learned CIT (A) has justified in deleting the protective additions in this case considering that the issue of substantive addition in the case of Shree Global Tradefin Limited has not reached finality?" 03. The only ground of appeal is that the learned CIT (A) has deleted the addition in the hands of the assessee considering that the issue of substantive addition in the case of Shree Global Tradefin Limited has not reached the finality. 04. Identical issue is also there in the appeal of Revenue for A.Y. 2008-09 in case of Vidisha properties Limited and for AY 2007-08 and 2008-09 in case of Jogia Properties Limited as captioned above. 05. Assessee has raised cross objection for both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y who filed its return of income on 22ndOctober 2007 declaring nil income from its alleged business of property development. Search was conducted by the investigation wing in Jogia group on 4thMarch 2010. Therefore, notice under Section 153A of the Act was issued to the assessee wherein the return of income was filed on 26thFebruary 2011 declared nil income. Subsequently, on 26thDecember 2011 the assessment order under Section 153A read with section 143(3) of the Act was passed on determining the total income of the assessee at Rs.2 crores. Subsequently, on the basis of information received from the investigation wing the case of the assessee was reopened and notice under Section 148 of the Act was issued on 21stMarch 2014. Vide letter dated 2ndApril 2014, the assessee reiterated the income filed on 26thFebruary 2011. 08. The fact shows that a survey under Section 133A of the Act was conducted in the loyalty group and Jogia group on 19thDecember 2012 by the Investigation Wing. Assessee was found to have invested of Rs.2 crores as share application money in Shree Global Trade fin Limited. The source of the above money was said to be receipt by the assessee from 26 different compani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as protective addition. Therefore, the learned CIT (A) was of the view that the addition must be made only in the hands of the Shree Global Tradefin Pvt. Ltd. since the Jogia group entities are merely conduit entities and the money was raised and brought in for Shree Global Tradefin Pvt. Ltd. Similarly, the appellate orders are passed in those appeals also holding the same. The same view has taken in the case of Shree Global Tradefin Limited by the learned CIT (A). Accordingly, he deleted the addition under Section 68 of the Act of Rs.2 crores in the hands of the assessee. The learned Assessing Officer aggrieved and is in appeal before us. 010. The learned Departmental Representative vehemently submitted that it is not an addition made on protective basis as nothing is mentioned in the assessment order. He reiterated that the provision of Section 68 of the Act clearly applies in the case of the assessee. Therefore, the learned CIT (A) clearly to fall into error in deleting theaddition. 011. The learned Authorized Representative vehemently relied upon the order of the co-ordinate Bench in case of Cikura Properties Ltd. in ITA No.457/Mum/2018 and CO No.181/Mum/2018 dated 6thAugust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate orders are passed in those appeals also holding the same. The same view has been taken in the appellate orders of even date in the case of the appeals in SGTL before me." 016. In the next paragraph, he held that the amounts received as share application money at a premium during the year fails the test of creditworthiness and genuineness. Despite holding so, he deleted the addition in the hands of the assessee. 017. The identical issue arose in the case of Cikura Properties Ltd. in ITA No.457/Mum/2018 for A.Y. 2009-10 dated 6thAugust, 2020, wherein in paragraph no. 3.2 it is stated that the Tribunal deleted the addition in the hands of Shree Global Tradefin Limited in ITA No.7310 to 7313/Mum/2017 dated 15th October, 2018 where there is no finding by the co-ordinate Bench that the income is belonging to the present assessee i.e. Cikura Properties Ltd. Thereafter, in paragraph no.9 the co-ordinate Bench held that in their considered opinion protective addition has to go as the substantive addition was deleted on merits. Therefore, they did not find any merit in the appeal of the learned Assessing Officer. 018. We find that as recorded in paragraph no.3.2 that in case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of ld AO quoted by ld AR in 024. We find that Section 68 of the Act does not talk about any beneficiaries but is added in the hands of each and every person where Assessee fails to prove identity, creditworthiness and genuineness of the transaction to the satisfaction of the learned Assessing Officer. It is deemed income in the hands of the assessee who fails to explain nature and source of the same before the AO. Deeming fiction applies in the hands of the person in whose book's sums are credited. There it ends, such deeming fiction cannot travel to other assessee for satisfying ingredients of section 68 of the Act as held by ld. CIT [A] in this case. Therefore, this addition needs to be tested u/s 68 in the hands of the assessee irrespective of the fact whether the sum is added in the hands of other assessee or not or beneficiaries are different. There is no concept of beneficial ownership of income u/s 68 of the act. Importing the same in section 68 is in clear violation of simple provisions of that section. 025. In view of this, we set aside the whole issue in the appeal of the learned Assessing Officer back to the file of the learned Assessing Officer with a direction to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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