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TMI Blog2023 (3) TMI 1097X X X X Extracts X X X X X X X X Extracts X X X X ..... e documents have also been verified by us and the Ld. DR has not been able to controvert such facts borne out from the records placed before us. As it is a fact that the assessee had duly accounted for the said transaction in its books of accounts and when the said parties had confirmed the same, no addition can be said to be justifiable on account of receiving back the advances so given in earlier year in the present facts and circumstances of the case as observed by the Ld. CIT(A) is found to be proper, without any ambiguity so as to warrant interference. We confirm the same. The grounds of appeal preferred by Revenue, is therefore, found to be devoid of any merit and, thus, dismissed. Short term capital gain - same amount treated as income under business head - HELD THAT:- Shares as investment has also been shown in its balance sheet and the assessee has offered the same as short term capital gain under the head income from capital gain . The entire set of details have also been filed before us by the assessee. As the said income has been offered in its return by the assessee, the addition made by the Ld.AO on the same amount treating the same as income under business h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion related to AY 2010-11- when the credit entries had been received in FY 2010-11, and the assessee company as well as the creditor entities failed to produce evidences for establishing the identity, genuineness and creditworthiness of the transactions? Ground No. 3: Was the Ld. CITIA) justified in deleting the addition made by the AO of Rs. 62.30,000/- us 68 of the IT Act, 1961 by accepting the assessee's claim that it represented return of advance given, in view of the fact that both the creditor companies as well as the assessee company failed to produce the nature and character of the transactions, as well as failed to submit evidences for establishing the identity, genuineness and creditworthiness of the transactions? Ground No. 4: Was the Ld. CIT(A) justified in deleting the addition made by the AO of Rs. 18,84,23,265/- us 68 of the IT Act in view of the fact that the both the assessee company as well as the creditors failed to submit evidences in support of their claims that the payments made were in lieu of sale purchase transactions, and also failed to show the sale purchase nature of the transaction? Ground No. 5: Was the Ld. CIT(A) justified in de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidences whereupon remand report was called for. In the remand report the Ld. AO submitted as follows in regard to the issue in question: Advance Received: According to the assessee, this amount represents advances/loans received from various parties. Rs. 37,80,000/- each was received from Shubhmangal Traders Pvt. Ltd. and Viksit Engineering Ltd., while Rs.37,89,000/- was received from Maxworth Leafin and Invt. Pvt. Ltd. Notice u/s 133/6) were also issued to these parties. All 3 parties shared the same premises as par their IIR during the concerned year, and all 3 have claimed that they have issued cheques to the assessee company as trade advances. However, none of them have submitted copies of invoice/bill, and have not stated what the advance was for i.e. what was being traded. They have not given details of the nature of their business/trade relationship with the assessee and based on their responses, the following observations are being made. That these advances given were of exactly the same amount from three entirely different parties (almost in one case), and that too on the same date (07.03.2011) also shows the suspect, pre-planned nature of the transactions. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of trade advances with the said party is genuine and addition u/s. 68 of the Act ought to be deleted. b) Viksit Engineering Limited: The Assessing Officer has not given any comments in relation to Viksit Engineering Limited. But he has commented that addition made is not justified. This once again shows that the Assessing Officer has given his comments without verifying / understanding the facts based on his suspicions/ assumptions. Further, the Assessing Officer has issued notices u/s. 133(6) of the Act to all three parties and they have confirmed the transactions that they have given trade advances to the Appellant. Hence, the Appellant submits that the transaction of trade advances with the said party is genuine and addition u/s. 68 of the Act ought to be deleted. c) Maxworth Leafin Investments Private Limited: The Assessing Officer has given his opinion about limited financial standing of this company without disclosing any figures or justification for the same. The below mentioned figures are more than enough to prove financial capacity of this company. (Kindly find attached herewith copy of Balance Sheet received from party as Annexure 9). Also, this trade aduan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no addition can be made in the hands of the assessee, Therefore, the Appellant submits that the said transactions are genuine and addition u/s 68 of the Act ought to be deleted. Further, the Appellant draws Your Honour kind attention that in the similar facts in the case of Parametric Trading Put. Ltd. (Formerly known as Aspirants Mercantiles Private Limited) for A. Y. 2011-12 Appeal No. IT-464/14-15/664 order dated 07.03.2018, the same Assessing Officer has given his remand report positive and Your Honour has accepted the same in that case and deleted the addition made u/s. 68 of the Act. Copy of the CIT(A) order of Parametric Trading Pvt. Ltd. is enclosed as Annexure Extract of the order is reproduced as under: 9. Upon perusal of the entire aspect of the matter, the Ld.CIT(A) deleted the impugned order with the following observation: 5.5 The appellant had received advance from Maxworth Leafin Investment Pvt. Ltd. The AO had taken stand in its remand report about the limited financial standing of this company without disclosing any figures or justification for the same. The appellant has submitted the balance sheet of the said company. The appellant has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is required to prove the identity, creditworthiness and genuineness of the said transaction so done by the company. The appellant has submitted the confirmation of all the three companies wherein it is clearly mentioned that the said companies had given advances to the appellant company. The appellant has submitted the relevant documents i.e. ledger account of the said three companies, bank statements, copy of balance sheet for A.Y. 2010-11 2011-12. In the instant case, the appellant had proved the identity of the said companies and genuineness of the transactions that was also cleared from the documents so submitted by the appellant. But on the issue of the creditworthiness, the appellant company had failed to prove the same on the part of the Shubhmangal Traders Pvt. Ltd. and Viksit Engineering Ltd. The AO in its remand report had also raised the issue in respect of what being traded with the companies namely ubhmangal Traders Pvt. Ltd and Viksit Engineering Ltd. The appellant had submitted the quantitative details in respect of Maxworth Leafin Investment Pvt. Ltd and the said amount was also repaid by that company 31.03.2012 i.e. before completion of assessment proceedings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titative details in respect of the M/s. Maxworth Leafin Investment Pvt. Ltd. and the amount squared up by the assessee company on 31.03.2012 i.e. before the completion of the assessment order, the Learned CIT(A) came to a finding that the assessee truly discharged its onus by submitting all the details in respect of the name, address, bank statement, network of the counterparties etc. in order to prove the identity, genuineness and creditworthiness of the said party being M/s. Maxworth Leafin Investment Pvt. Ltd. In that view of the matter, the Learned CIT(A) finally allowed this ground of appeal preferred by the assessee in respect of the advance received to the tune of ₹37,89,000/-from M/s. Maxworth Leafin Investment Pvt. Ltd. 11. Having regard to the facts and circumstances of the case, we do not find any infirmity in such deletion of addition made by the Learned CIT(A), keeping in view of this particular fact that the three limbs of Section 68 of the Act has duly been discharged by the assessee. We, therefore, do not find any reason to interfere with the said order passed by the Learned CIT(A). Hence, the same is hereby confirmed. The appeal preferred by the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e schedule and breakup of investment, Mid India Steel Power Ltd. in the books of the assessee, for F.Y. 2009-10 which was downloaded from MCA website reflecting transfer of shares held by the assessee company in the name of NSIL Infotech Ltd. and NSIL Power Ltd. has been filed before the First Appellate Authority in support of the contention made by the assessee. The assessee further submitted the confirmation letter received under section 133(6) of the Act, the bank statement, copy of ITR, details of Director, Ledger account of investment in share and Ledger account of shares of MIEL in the case of measures and M/s. NSIL Power Limited before the First Appellate Authority. The same is also made available before us being part of the paper book commencing from page 103 to 107 and page 490. The assessee company made transaction with Satguru Iron Steel Co. Pvt. Ltd. The assessee company had received trade advance in the F.Y. 2009-10 from the said party in support of which the balance sheet and P L Account as on 31.03.2011, confirmation letter under section 133(6) of the Act, bank statement, Ledger account, copy of ITR, the details of Director and Ledger account in assessee s book w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .68 shall apply only in the year in which the cash credit was found. 16. In view of the foregoing discussions, we are of the view that there is no justification in assessing the alleged excess premium as income of the assessee. Accordingly we are of the view that the Ld CIT(A) was justified in deleting the impugned addition and accordingly we uphold his decision. In the case of Perfect Paradise Emporium Pvt. Ltd. Vs. ITO (ITA No. 159/Del/2Oll) (Del. - Trib.), the Hon'ble Delhi Tribunal has held that: 8. .................It is trite law that an addition under Section 68 can be made only in the year in which credit was made to the account of the creditors in the books of account maintained. Kindly refer to the Hon'ble Supreme Court in the case of Damodar Hansraj Vs. CIT, (1969) 71 ITR 427 (SC). admittedly, in this case the credit to the account of creditors was made in the earlier years and therefore the amount even cannot be brought to tax under Section 68 in the year under appeal................. 17. Considering the entire aspect of the matter, the Ld. CIT(A) while deleting the addition made by the Ld. AO observed as follows: 5.14 The appellant ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT(A) is, according to us, found to be just and proper so as to warrant interference. The same is therefore uphold. This ground of appeal preferred by Revenue is, therefore, found to be devoid of any merit and thus dismissed. 18. The deletion of addition in respect of advance received to the tune of Rs.1,62,30,000/- from the 2 parties, namely, TOP Trade mercantile Pvt. Ltd. and Satguru Iron Steel Co. Pvt. Ltd. is under challenge before us by the Revenue. 19. We have heard the rival submissions made by the respective parties and we have also perused the relevant materials available on record. 20. Before the First Appellate Authority, it was placed by the assessee that the advances were given to those parties earlier and the impugned amount has been received against such advances. In support of such contention made by the assessee, the balance sheet, P L Account as on 31.03.2011, confirmation letter obtained under section 133(6) of the Act, bank statement, Ledger account, copy of ITR, details of Director, Ledger account in assessee s books and invoices in respect of Top Trade mercantile Pvt. Ltd. were duly submitted. Similarly documents in respect of the other party, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above documents placed before him. It is relevant to mention that those documents have also been verified by us and the Ld. DR has not been able to controvert such facts borne out from the records placed before us. As it is a fact that the assessee had duly accounted for the said transaction in its books of accounts and when the said parties had confirmed the same, no addition can be said to be justifiable on account of receiving back the advances so given in earlier year in the present facts and circumstances of the case as observed by the Ld. CIT(A) is found to be proper, without any ambiguity so as to warrant interference. In that view of the matter, we confirm the same. The grounds of appeal preferred by Revenue, is therefore, found to be devoid of any merit and, thus, dismissed. 21. The impugned addition of Rs.18,84,23,265/- has been claimed to have been received against the sale of yellow peas made to Subhamangal Traders Pvt. Ltd. and Ruchi Agro Tech Pvt. Ltd. 22. Before the First appellate Authority, the following documents were filed which have also been filed before us. The details of the said documents is mentioned hereinbelow: In case of Shubhmangal Trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one go, for which there 'is'' one bill and payment also of such huge amounts has been made in one go. The invoice submitted by both are identical, and has no supplier's reference, no buyer's order no., no dispatch document no., no delivery note date, no destination, and no other reference. The only thing mentioned is the invoice no., which is interestingly FRO/001 in the case of Ruchi Agro Tech, and FRO/002 in the case of Shubhmangal, which shows that these happen to be the first set of purchases made by them during the entire year, that too in the months of February and March 2011. The improbability of all this put together. where such high value sales/purchases have been made in the most callous manner with no mention of even the bare minimum details shows that the entire transaction is a sham, and only a means of providing accommodation entries and rotation of funds. A cursory search about these two companies on MCA/Zauba shown that Ruchi Agro Tech is no longer known by that name it was renamed as Middlemist Agro Tech Put Ltd yet it has submitted its repon.se on the letter head of Ruchi Agro Tech Put Ltd similarly shubhmangal Traders Put Ltd also no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. (c) The Profit loss account of the appellant's company was also verified. In the said documents, this transaction was clearly reflected. 5.23 Hence, it is clear from the above documents and verification of the same that the appellant company had done transaction with the above companies. This fact is also clear from the bank statements and P L account of the said companies. Further, as mentioned earlier, these sales have already been offered as income by the appellant in the P L account, hence, making addition on this bank entry would be double taxation of the same amount which is not permissible in law. In light of the above facts and circumstances of the case, the addition so made by the AO is hereby deleted and accordingly, these grounds of appeal are allowed. 25. It is relevant to mention that we have also verified those documents as submitted before us by way of a paper book filed by the assessee the contents whereof has not been doubted by the Ld. Representative of the Department. Further that the sales has already been offered as income by the assessee in its P L account and therefore the addition on the bank entry tantamount to double taxation of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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