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DCIT Circle-12(1) New Delhi Vs. Globe Industrial Resources Ltd. D-9, Jangpura Extension New Delhi
September, 01st 2015
                                      1                          ITA No. 5644/Del/2012

                      DELHI BENCH: `C' NEW DELHI
                          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


                 Appellant by       Sh.T. Vasanthan, SR. DR
                 Respondent by      Sh.P.C. Panwal, FCA

                      Date of Hearing               26.08.2015
                   Date of Pronouncement


      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
      "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

     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

     24585         5,00,000/-      8th May 2003    S.J. Capital SBBJ

     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

     24585         5,00,000/-      20th            S.J. Capital SBBJ
                                   September       Ltd.


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


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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