1 ITA No. 5644/Del/2012
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: `C' NEW DELHI
BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER
AND
MS. SUCHITRA KAMBLE, JUDICIAL MEMBER
I.T.A .No.-5644/Del/2012
(ASSESSMENT YEAR-2004-05)
DCIT vs Globe Industrial Resources
Circle-12(1) Ltd.
New Delhi D-9,
(APPELLANT) Jangpura Extension
New Delhi
AABCG6924H
(RESPONDENT)
Appellant by Sh.T. Vasanthan, SR. DR
Respondent by Sh.P.C. Panwal, FCA
Date of Hearing 26.08.2015
Date of Pronouncement
31.08.2015
ORDER
PER SUCHITRA KAMBLE, JM
This appeal is filed by the Revenue against order dated 01/08/2012
passed by CIT(A) XV New Delhi. The ground of appeal raised herein, is as
follows:-
"1. On the facts and in the circumstances of the case and in law, the Ld.
CIT(A) has erred in deleting the addition of Rs.30,00,515/- made
u/s 68 of the Act in respect of alleged sale consideration of shares.
2. The assessee is a Private Limited Company and filed its return of income
of Rs.1,47,260/- for the A.Y 2004-05. The assessee showed shares for
various parties and has taken accommodation entries from entry
2 ITA No. 5644/Del/2012
operators. The details of which for the year under assessment is herein
below:-
Assessee Value Entry Date of which Name of a/c Bank a/c
Bank a/c Taken entry taken holder of from which
entry giving entry given
a/c
24585 5,00,000/- 8th May 2003 S.J. Capital SBBJ
Ltd.
24585 5,00,000/- 10th May S.J. Capital SBBJ
2003 Ltd.
24585 5,00,000/- 14th May S.J. Capital SBBJ
2003 Ltd.
24585 5,00,000/- 31st May S.J. Capital SBBJ
2003 Ltd.
24585 5,00,515/- 1st July 2003 S.J. Capital SBBJ
Ltd.
24585 5,00,000/- 20th S.J. Capital SBBJ
September Ltd.
2003
30,00,515/-
3. The Assessing Officer held that the Investigation Wing of the Department
unearthed a huge money laundering operation and sent the requisite
information to the field informations. It was alleged that the assessee
has received cheques in lieu of cash payments from the Entry Operators
providing accommodation entries. The money was received in the form of
Share Application Money or Share Capital or unsecured loans. The
unaccounted money is given to the entry operator who in turn issues the
cheque to the beneficiary. In lieu, the entry operator charges some
commission which is a certain percentage of the amount sought to be
3 ITA No. 5644/Del/2012
legitimized in the garb of cheques received as Share Application Money or
Share Capital or unsecured loan or proceeds of sale of shares of certain
non-descript companies.
4. The A.O further held that the assessee has received cheques amounting
to Rs.30,00,515/- through transactions, where in fact no real
transactions took place. As the assessee failed to discharge its onus of
proving the genuineness and creditworthiness of the person who claimed
to be the share holder of the assessee company, the AO added Rs.
30,00,515/- to the income of assessee.
3. The CIT(A) hold that though the assessee has not been able to produce
the directors, nothing prevented the AO to issue notices u/s 133(6) or
Section 131 to make the relevant enquiries. As the evidence placed on
records shows that the assessee business transaction with S.J Capital
Ltd. have duly reflected in the books of account. It is therefore held that
the addition made on account of sums received from S. J. Capital Ltd.,
has no basis at all. Further no material has been brought on record by
the AO as to under what circumstances, the business transaction by the
assessee is not a genuine transaction.
5. The CIT(A) further observed that AO has blindly relied on the information
received from the Investigation Wing and AO has not brought any
material or evidence on record which can prove that the said money was
assessee's own undisclosed income.
6. The facts and evidence available on record shows that from the very
beginning AO has shifted entire burden upon the assessee and no
material has been brought by the AO himself to prove his allegation that
the transaction of the assessee with S.J Capital is not genuine and the
impugned amount represented the assessee own undisclosed income.
Thus, the CIT(A) deleted the addition made by the A.O. The CIT(A) relied
4 ITA No. 5644/Del/2012
upon the decision of Delhi High Court in the case of CIT Vs. Pradeep
Gupta 207 CTR 115 which has also been relied upon by Delhi ITAT in
the case of Babita Gupta ITA No. 2897/2006.
7. We have gone through the records and finding of the Assessing Officer as
well as the CIT(A). We have heard both the parties. The CIT(A) correctly
given a finding that the AO has not collected any evidence and the AO
was not justified in treating the amount of share application money
received by the assessee as its undisclosed income. The assessee's
business transaction with S. J. Capital Ltd. have duly reflected in books
of accounts. The CIT(A) has correctly taken a ratio of Delhi High Court in
case of CIT Vs. Pradeep Kumar Gupta [2007] 207 CTR 115. Once Section
148 of the Income Tax Act, 1961 is resorted to, the AO must first
discharge the burden of showing that income has escaped assessment. It
is only thereafter that the assessee has to provide all the answers. We
find no reason why the initial burden of proof should not rest on the AO
even where the assessment has gone through under s. 143(3) of the Act.
The CIT(A) has, therefore, arrived at the correct conclusion.
8. In result, the appeal of the Revenue is dismissed.
The order is pronounced in the open court on 31st of August 2015.
Sd/- Sd/-
( N. K. SAINI) (SUCHITRA KAMBLE)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 31/08/2015
*R. Naheed*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5 ITA No. 5644/Del/2012
5. DR: ITAT ASSISTANT REGISTRAR
ITAT NEW DELHI
Date
1. Draft dictated on 26.08.2015 PS
2. Draft placed before author 27.08.2015 PS
3. Draft proposed & placed before JM/AM
the second member 27.08.2015
4. Draft discussed/approved by JM/AM
Second Member.
5. Approved Draft comes to the PS/PS
Sr.PS/PS 31.08.2015
6. Kept for pronouncement on PS
7. File sent to the Bench Clerk .08.2015 PS
8. Date on which file goes to the AR
9. Date on which file goes to the
Head Clerk.
10. Date of dispatch of Order.
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