ACIT, New Delhi V. M/s. Sagavi Housing & Developers Pvt. Ltd., New Delhi

ITA 1131/DEL/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6743 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 23-01-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 26-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Keywords: Gift; Accommodation entries; Reassessment proceedings
• Section: 131; 68; 27; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 1131 /DEL/201 5 A.Y. : 20 0 5 - 0 6 INCOME TAX OFFICER, WARD 22(2), NEW DELHI ROOM NO. 349, C.R. BUILDING, NEW DELHI (PAN: AAFCS5780B) VS. SAGAVI HOUSING & DEVELOPERS PVT, LTD., Q-1C, F.F. PRIVATE COLONY SRI NIWAS PURI, NEW DELHI 110 065 (PAN: AAFCS5780B) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. S.K. JAIN, SR. DR ASSESSEE BY : SH. SANDEEP SAPRA, ADV. ORDER THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 15/12/2014 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-8, NEW DELHI O N THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS I N DELETING OF RS. 45,00,000/- MADE BY THE AO U/S. 68 OF THE INCOME TAX ACT, 1961. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING ADDITION OF RS. 90,000/- MADE BY THE AO ON ACCOUNT OF 2 COMMISSION ON THE GROSS AMOUNT OF ACCOMMODATION ENTRY PROVIDED PAID FROM UNDISCLOSED SOURCES. 3. THE APPELLANT CRAVES TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. THE FACTS IN BRIEF ARE THAT IN THIS CASE, THE ASS ESSMENT WAS REOPENED ON THE BASIS OF THE INFORMATION RECEIVED FRO M DIT(INV.), NEW DELHI TO THE EFFECT THAT THE ASSESSEE HAD OBTAINED ACCOMMODATION ENTRY AMOUNTING TO RS. 30 LACS FROM THE CONCERNS FLOATED BY SH. SURENDER KUMAR JAIN. ACCORDINGLY, NOTI CE U/S. 148 OF THE I.T. ACT, 1961 DATED 28.3.2012 WAS ISSUED, AFTER RECORDING THE REASONS AND AFTER OBTAINING THE APPROVAL. IN RESPONS E THERETO, THE A.R. OF THE ASSESSEE ATTENDED AND FILED THE DETAILS FRO M TIME TO TIME. THEREAFTER, THE AO OBSERVED THAT IN THE CASE OF S URENDER KUMAR JAIN GROUP, THE INVESTIGATION WING OF THE INCOM E TAX DEPARTMENT, NEW DELHI, HAS, DURING ACTION U/S. 132 OF THE I.T. ACT AND THOROUGH POST SEARCH INQUIRIES HAVE ESTABLISHED TH AT THE CONCERNS FLOATED BY SURENDER KUMAR JAIN GROUP HAVE PROVIDED ACCOMMODATION ENTRIES TO VARIOUS BENEFICIARIES, THE NA ME OF THE ASSESSEE COMPANY APPEARS IN THE LIST OF BENEFICIARIES RECEIVED FROM THE INVESTIGATION WING. THE DIT(INV.) DURING THE COURS E OF INVESTIGATION IN THE CASE OF SURENDER KUMAR JAIN GROUP , FOUND THAT 3 THE GROUP HAVE OPERATED MULTIPLE ACCOUNTS IN VARIOUS B RANCHES TO PLOUGH BACK UNACCOUNTED BLACK MONEY FOR THE PURPOSE OF BUSINESS OR FOR PERSONAL NEEDS SUCH AS PURCHASES OF ASSETS E TC. IN THE FORM O GIFTS, SHARE APPLICATION MONEY LOANS ETC. DURING THE COURSE OF INVESTIGATION BY THE DIT(INV.) IT WAS DISCOVERED THAT TH E ASSESSEE WHO HAVE UNACCOUNTED MONEY AND WANT TO INTRODUCE THE SAME IN THE BOOKS OF ACCOUNTS WITHOUT PAYING TAX APPROACH ANOT HER PERSON (ENTRY OPERATOR) AND HAND OVER CASH (PLUS COMMISSION ) AND TAKE CHEQUE/DDS/POS. THE CASH IS DEPOSITED BY THE ENTRY OPE RATOR IN A BANK ACCOUNT EITHER IN HIS OWN NAME OR IN THE NAME OF RELATIVE/FRIENDS OR OTHER PERSON HIRED BY HIM, FOR T HE PURPOSE OF OPENING BANK ACCOUNT. THE ENTRY OPERATOR THEREAFTER IS SUES CHEQUE/DD/PO IN THE NAME OF BENEFICIARY FROM THE SAME ACCOUNT (IN WHICH THE CASH IS DEPOSITED) OR ANOTHER ACCOUNT IN WHICH FUNDS ARE TRANSFERRED THROUGH CLEARING IN TWO OR MORE STAGES . THE BENEFICIARY IN TURN DEPOSITS THESE INSTRUMENTS IN HIS BANK ACCOUNTS AND THE MONEY COMES TO HIS REGULAR BOOKS OF ACCOUNT IN THE FORM OF GIFT, SHARE APPLICATION MONEY, LOAN ETC. THROUGH BANK ING CHANNELS AND THE TRANSACTIONS LOOKS GENUINE. AS MENTIONED ABOVE , IN THIS CASE THE RELEVANT ASSESSMENT WAS MADE ON THE BASIS OF I NFORMATION RECEIVED FROM INVESTIGATION WING OF INCOME TAX DEPA RTMENT, NEW DELHI THAT THE ASSESSEE HAS BEEN THE BENEFICIARY OF ACCOMMODATION 4 ENTRIES PROVIDED BY SURENDER KUMAR JAIN GROUP OF CON CERNS. AS PER THE REASONS RECORDED, THE ASSESSEE HAS TAKEN THE ACCOM MODATION ENTRIES AMOUNTING TO RS. 30 LACS FROM THE CONCERNS FL OATED /CONTROLLED BY SURENDER KUMAR JAIN GROUP. THE ABOVE CITED ENTRY IS REFLECTED IN THE ACCOUNTS AS SHARE APPLICATION MONEY. DURING THE COURSE OF REASSESSMENT PROCEEDINGS, IT WAS SEEN THAT THE ASSESSEE HAS OBTAINED TOTAL SHARE APPLICATION MONEY AMOUNTING TO 30 LACS FROM THE COMPANY M/S STELLER INVESTMENT LTD AND RS. 1 5 LACS FROM SH. VIJENDRA THAPLIYAL. VIDE REPLY DATED 16.1.2013, THE AR OF THE ASSESSEE COMPANY HAD FILED CONFIRMATION OF M/S STEL LER INVESTMENT LTD WITH COPY OF LTR, AFFIDAVIT SWORN BY SH. VIRENDE R KUMAR JAIN AND COPY OF BANK STATEMENT. AO OBSERVED THAT IT IS NOTEWORTHY THAT SH. VIRENDER KUMAR JAIN IS VERY CLOSELY ASSOCIATED WITH SH. SURENDER KUMAR JAIN. AO VIDE HIS LETTER DATED 6TH FEB. 2013 HA S SPECIFICALLY REQUESTED THE ASSESSEE TO ESTABLISH IDENTITY OF THE PARTI ES, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS. VID E NOTE SHEET DATED 18.2.2013, THE AR OF THE ASSESSEE COMPANY WAS RE QUESTED TO PRODUCE THE SHARE APPLICANTS FOR PERSONAL DEPOSITIO N ON 22.3.2013. HOWEVER, NO COMPLIANCE WAS MADE ON 22.2.2013. THE S HARE APPLICANTS WERE NOT PRODUCED FOR PERSONAL DEPOSITION. ON 4.3.2013, NOTICE U/S 131 WERE ISSUED TO THE PRINCIPAL OFFICER OF M/S STELLER INVESTMENT LTD AND TO SH. THAPLIYAL FOR PERSONAL DEP OSITION ALONG 5 WITH THE BANK STATEMENT OF THE BANK ACCOUNT FOR THE ENTIRE FINANCIAL YEAR. IN RESPONSE TO THE SAID NOTICES, SH. THAPLIYA L SENT A CONFIRMATION BY POST ENCLOSING THERE WITH A PHOTOCOPY O F BANK STATEMENT FROM 1.2.2005 TO 9.3.2005. NO RESPONSE WAS RECEIVED FROM M/S STELLER INVESTMENT LTD. THE LETTER WAS PROPERL Y ADDRESSED AND PREPAID AND NOT RECEIVED BACK UNSERVED . THEREF ORE , AS PER THE PROVISIONS OF SECTION 27 OF GENERAL CLAUSES ACT, 1897 , IT IS PRESUMED THAT THE NOTICE U/S 131 OF THE ACT WAS SERVED UPON M/S STELLER INVESTMENT LTD. ON 18.3.2013, THE AR OF THE AS SESSEE COMPANY ATTENDED AT HIS OWN AND FILED RESPONSE TO NOTIC E U/S 131 ,ONE COPY OF CONFIRMATION AND BANK STATEMENT RECEIVED EARLIER BY POST FROM SH. THAPLIYAL. FROM THE DETAILS FILED, GENU INENESS OF TRANSACTION AND CREDIT WORTHINESS OF THE PARTIES COULD NOT BE ESTABLISHED. THE AR OF THE ASSESSEE COMPANY HAS FILE D CONFIRMATIONS FROM BOTH THE SHARE APPLICANTS. ON THE OTHER HAND, WHE N THE AO ASKS THE AR TO PRODUCE THE PARTIES FOR PERSONAL DEPOSI TION, THE AR DOES NOT PRODUCE THE PARTIES. EVEN IN RESPONSE TO THE NOTICE U/S 131 OF THE ACT ISSUED FOR PERSONAL DEPOSITION, THE SHARE APPLICANTS DO NOT APPEAR BEFORE THE AO WITH THE REQUISITE DOCUMENTS NEITHE R THE ASSESSEE PRODUCES THEM BEFORE THE AO. ON PERUSAL CO PY OF BANK STATEMENT OF SH. THAPLIYAL, IT IS SEEN THAT THERE IS HA RDLY ANY BALANCE IN HIS BANK ACCOUNT BEFORE AND AFTER GIVING S HARE APPLICATION 6 MONEY. IMMEDIATELY BEFORE, CONTRIBUTING SHARE APPLI CATION MONEY, THERE ARE OF RS. 15,50,000/-. AND, THE COMPANY M/S ST ELLER INVESTMENT LTD. IS A ESTABLISHED ENTRY PROVIDER FLOATE D BY SH. SURRENDER KUMAR / VIRENDER JAIN GROUP AS ESTABLISHE D BY DIT(INV.) IN ACTION U/S. 132 AND POST SEARCH INQUIRIES. AO FU RTHER OBSERVED THAT AS PER THE PROVISIONS OF 68 OF INCOME TAX ACT, O NUS IS ON THE ASSESSEE TO EXPLAIN THE CREDITS APPEARING IN ITS BOOKS OF ACCOUNTS TO THE SATISFACTION OF THE AO. MERE FILING OF PAPER DETA ILS DOES NOT SATISFY THE CONDITIONS LAID DOWN UNDER 68 OF INCOME TAX ACT. IN THE CASE OF CIT VS. NOVA PROMOTERS AND FINLEASE PVT. LTD. REPORTED IN 252 CTR 187 HON'BLE HIGH COURT OF DELHI HAS HELD THA T STATEMENTS OF M AND R EXPLAINING THEIR MODUS OPERANDI AFFORD SU FFICIENT MATERIAL ON THE BASIS OF WHICH THE AO CAN BE SAID TO HAVE DISC HARGE SUCH DUTY. THESE CONSTITUTE MATERIALS UPON WHICH ONE COULD REASONABLY COME TO THE CONCLUSION THAT THE MONIES EMANATED FROM THE COFFERS OF THE ASSESSEE COMPANY IT IN THE CASE OF CIT DELH I-V VERSUS NR PORTFOLIO PVT. LTD. IN ITA NO.134 OF 2012 VIDE IN ITS ORDER DATED 21.12.2012 HAS ALSO HELD THAT - 'IF THE ASSESSEE HAS ACCESS TO THE SHARE APPLICANTS. PAN, PARTICULARS OR BANK ACCOUNT S TATEMENT, SURELY ITS RELATIONSHIP IS CLOSER THAN ARMS LENGTH. ITS REQ UEST TO SUCH CONCERNS TO PARTICIPATE IN INCOME TAX PROCEEDINGS. W OULD VIEW FROM A PRAGMATIC PERSPECTIVE, BE QUITE STRONG THAT APART, THE CONCEPT OF 7 SHIFTING ONUS DOES NOT MEAN THAT ONCE CERTAIN FACTS ARE PROVIDED. THE ASSESSEE DUTY IS OVER. AO ON VERIFICATION OR DU RING PROCEEDINGS, THE AO CANNOT CONTACT THE SHARE APPLICANTS OR THAT THE I NFORMATION BECOMES UNVERIFIABLE OR THERE ARE FURTHER DOUBTS IN THE PURSUIT SUCH DETAILS, THE ONUS SHIFT BACK TO THE ASSESSEE. AT THIS STAGE, IT IF FALTERS, THE CONSEQUENCE MAY WELL BE ADDITION U/S 68 ..... '. 2.1 IN VIEW OF THE ABOVE, AO ADDED RS. 45,00,000/- IN THE HANDS OF THE ASSESSEE AND TREATED THE SAME AS UNEXPLAINED C ASH CREDIT U/S.68 OF THE I.T. ACT, 1961. AO FURTHER ADDED RS. 90,000/- BEING 1% TO 2% COMMISSION ON THE GROSS AMOUNT OF ENTRY PROVI DED AND COMPLETED THE ASSESSMENT AT RS. 45,78,950/- U/S. 143( 3) OF THE I.T. ACT, 1961. 3. AGGRIEVED WITH THE ASSESSMENT ORDER, ASSESSEE PREF ERRED AN APPEAL BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 15.12.2014 HAS DELETED BOTH THE ADDITIONS AND ALLOWED THE APPEAL OF THE ASSESSEE. 4. NOW THE REVENUE IS AGGRIEVED AGAINST THE IMPUGNED ORDER AND FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING LD. SR. DR RELIED UPON THE O RDER OF THE AO AND REITERATED THE CONTENTIONS RAISED BY THE REVENU E IN THE GROUNDS AND REQUESTED THAT APPEAL OF THE REVENUE MAY B E ALLOWED. 8 6. ON THE CONTRARY, LD. COUNSEL OF THE ASSESSEE HAS RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT LD. CIT(A) HAS PASSED A WELL REASONED ORDER WHICH NEEDS TO BE UPHELD AND AC CORDINGLY, THE APPEAL OF THE REVENUE MAY BE DISMISSED. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE REC ORDS, ESPECIALLY THE IMPUGNED ORDER PASSED BY THE LD. CIT( A). I FIND THAT LD. CIT(A) HAS ELABORATELY ADJUDICATED THE ISSUE RAIS ED IN GROUNDS NO. 1 & 2 IN DISPUTE VIDE PARA NO. 3 TO 4 FROM PAGES 8 TO 10 OF THE IMPUGNED ORDER AS UNDER:- 3. I HAVE CONSIDERED THE ASSESSMENT ORDER, WRITTEN SUBMISSION FILED BY THE A.R. OF THE APPELLANT AND ALSO PERUSED THE CASE RECORD. I AGREE WITH THE LD. AR OF THE APPELLANT THAT LD. AO MECHANICALLY BELIEVE THE REPORT FURNISHED BY THE DIT(INV.). LD. AO HAS NOT MADE ANY ENQUIRIES. EVEN DURING THE ASSESSMENT PROCEEDINGS, THE CONFIRMATION AND AFFIDAVIT WAS FILED BY SHRI VIRENDER KUMAR JAIN ON BEHALF OF M/S STELLER INVESTMENT LTD. BUT NO ENQUIRY WAS MADE. THE LD. AO REQUESTED FOR PRODUCTION OF THE PARTIES, HOWEVER, THEY WERE NOT PRODUCED BEFORE THE AO BY THE APPELLANT. IN COMPLIANCE TO NOTICES ISSUED U/S 131 TO BOTH THE PERSONS BY THE LD. AO, DETAILS HAVE BEEN FURNISHED. LD. AO HAS GIVEN THE FINDING THAT SHRI VIRENDER KUMAR JAIN IS CLOSELY ASSOCIATED TO SH. SURENDER KUMAR JAIN. 9 HOWEVER, NO SUCH REPORT IS AVAILABLE ON RECORD AND ASSESSING OFFICER HAS ALSO NOT NARRATED HOW THEY ARE CLOSELY ASSOCIATED. M/S STELLER INVESTMENT LTD. IS CONNECTED TO SH. SURENDER KUMAR JAIN WHO IS SAID TO BE HAWALA OPERATOR IS ALSO NOT CLEAR FROM THE ASSESSMENT ORDER. IN VIEW OF THESE FACTS, I FIND THAT LD. AO HAS WRONGLY DISBELIEVE SHARE APPLICATION MONEY RECEIVED FROM M/S STELLER INVESTMENT LTD. REGARDING THE SHARE APPLICATION MONEY AMOUNTING TO RS.15 LACS RECEIVED FROM SH. VIJENDRA THAPLIYAL AND LD. AO NOTICED THAT THERE WAS A BALANCE OF RS.15,50,OOO/- BEFORE ISSUING THE CHEQUE FOR SHARE APPLICATION MONEY. HOWEVER, HE HAS ADDED THIS AMOUNT ON THE GROUND THAT BEFORE ISSUING THE CHEQUE APPELLANT HAS RECEIVED SOME MONEY IN THE BANK ACCOUNT. WITHOUT INVESTIGATING WHO HAS GIVEN THE MONEY BEFORE ISSUING THE CHEQUE FOR SHARE APPLICATION, LD. AO HAS DISBELIEVED THE TRANSACTION. THERE IS NO ALLEGATION AGAINST SHRI VIJENDRA THAPLIYAL FOR PROVIDING THE ACCOMMODATION ENTRY TO THE APPELLANT, BUT LD. A.O. HAS ADDED THIS AMOUNT ALONGWITH 2% COMMISSION FOR PAYING COMMISSION TO GET ENTRIES. THE ACTION OF THE LD.AO CLEARLY INDICATES THAT HE HAS TREATED BOTH THE TRANSACTIONS SIMILAR WITHOUT ASSIGNING ANY REASON. DURING THE YEAR THE APPELLANT HAS NOT RECEIVED ANY INCOME BECAUSE BUSINESS WAS NOT CARRIED ON BY THE APPELLANT. LD. AO HAS WRONGLY TREATED THE SHARE APPLICATION MONEY AS INCOME OF THE APPELLANT. IF ANY AMOUNT IS 10 TO BE ADDED IT SHOULD BE ADDED IN THE HAND OF DIRECTORS BECAUSE ONLY THEY CAN TAKE THE ENTRY BY GIVING THE CASH FROM THEIR POCKETS. RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT V. BHARAT ENGINEERING CONSTRUCTION CO. 83 ITR 187. THE HON'BLE LORDSHIPS HAD ACCEPTED THE FINDINGS OF THE HON'BLE HIGH COURT AND TRIBUNAL THAT THE CASH CREDIT ENTRIES CANNOT BE TREATED AS INCOME OF THE APPELLANT AS UNDISCLOSED INCOME BECAUSE COMPANY HAS NOT YET STARTED ANY BUSINESS ACTIVITY. THE ADDITION MADE BY THE ASSESSING OFFICER IS HEREBY DELETED. GROUNDS OF APPEAL TAKEN BY THE APPELLANT ARE ALLOWED. (II) SINCE NO ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY IS CONFIRMED, 2% COMMISSION AMOUNTING TO RS.90,OOO/- IS ALSO DELETED BECAUSE THERE IS NO EVIDENCE THAT APPELLANT HAS TAKEN ENTRY FOR SHARE APPLICATION MONEY. THIS ADDITION IS ALSO DELETED AND THE GROUND OF THE APPEAL IS ALLOWED. 4. IN THE RESULT, APPEAL IS ALLOWED. 7.1 AFTER GOING THROUGH THE FINDINGS OF THE LD. CIT(A ), AS AFORESAID, I FIND THAT IN THIS CASE THE AO HAS NOT MADE ANY ENQUIRIES. EVEN DURING THE ASSESSMENT PROCEEDINGS, THE CONFIRMATION AND AFFIDAVIT WAS FILED BY SHRI VIREND ER KUMAR JAIN ON BEHALF OF M/S STELLER INVESTMENT LTD. BUT NO ENQUIRY WA S MADE. THE AO REQUESTED FOR PRODUCTION OF THE PARTIES, HOWEVER, THEY WERE NOT 11 PRODUCED BEFORE THE AO BY THE ASSESSEE. IN FURTHER FIND THAT IN COMPLIANCE TO NOTICES ISSUED U/S 131 OF THE I.T. ACT TO BOTH THE PERSONS BY THE AO, DETAILS HAVE BEEN FURNISHED. THE AO HAS GIVEN THE FINDING THAT SHRI VIRENDER KUMAR JAIN IS CLOSELY ASSOCIATED TO SH. SURENDER KUMAR JAIN. HOWEVER, NO SUCH REPORT IS AVA ILABLE ON RECORD AND ASSESSING OFFICER HAS ALSO NOT NARRATED HO W THEY ARE CLOSELY ASSOCIATED. M/S STELLER INVESTMENT LTD. IS CO NNECTED TO SH. SURENDER KUMAR JAIN WHO IS SAID TO BE HAWALA OPERATOR IS ALSO NOT CLEAR FROM THE ASSESSMENT ORDER. IN VIEW OF THESE FA CTS, I FIND THAT AO HAS WRONGLY DISBELIEVE SHARE APPLICATION MONEY RE CEIVED FROM M/S STELLER INVESTMENT LTD. REGARDING THE SHARE APPLI CATION MONEY AMOUNTING TO RS.15 LACS RECEIVED FROM SH. VIJENDRA T HAPLIYAL AND AO NOTICED THAT THERE WAS A BALANCE OF RS.15,50,OOO/ - BEFORE ISSUING THE CHEQUE FOR SHARE APPLICATION MONEY. HOWE VER, HE HAS ADDED THIS AMOUNT ON THE GROUND THAT BEFORE ISSUING THE CHEQUE APPELLANT HAS RECEIVED SOME MONEY IN THE BANK ACCOUNT. WITHOUT INVESTIGATING WHO HAS GIVEN THE MONEY BEFORE ISSUING THE CHEQUE FOR SHARE APPLICATION, AO HAS DISBELIEVED THE TRANSAC TION. THERE IS NO ALLEGATION AGAINST SHRI VIJENDRA THAPLIYAL FOR P ROVIDING THE ACCOMMODATION ENTRY TO THE ASSESSEE, BUT LD. A.O. HAS AD DED THIS AMOUNT ALONGWITH 2% COMMISSION FOR PAYING COMMISSION TO GET ENTRIES. THE ACTION OF THE AO CLEARLY INDICATES THAT HE HAS TREATED 12 BOTH THE TRANSACTIONS SIMILAR WITHOUT ASSIGNING ANY RE ASON. DURING THE YEAR THE ASSESSEE HAS NOT RECEIVED ANY INCOME BECA USE BUSINESS WAS NOT CARRIED ON BY THE APPELLANT. THE AO HAS WRONGLY TREATED THE SHARE APPLICATION MONEY AS INCOME OF THE A SSESSEE. IF ANY AMOUNT IS TO BE ADDED IT SHOULD BE ADDED IN THE HA ND OF DIRECTORS BECAUSE ONLY THEY CAN TAKE THE ENTRY BY GI VING THE CASH FROM THEIR POCKETS. I FURTHER FIND THAT LD. CIT(A) B Y RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT V. BHARAT ENGINEERING CONSTRUCTION CO. 83 ITR 187 WHEREIN THE HON'BLE LORDSHIPS HAD ACCEPTED THE FINDINGS OF THE HO N'BLE HIGH COURT AND TRIBUNAL THAT THE CASH CREDIT ENTRIES CANNOT B E TREATED AS INCOME OF THE ASSESSEE AS UNDISCLOSED INCOME BECAUS E COMPANY HAS NOT YET STARTED ANY BUSINESS ACTIVITY. HENCE, THE ADDITION MADE BY THE ASSESSING OFFICER WAS RIGHTLY DELETED BY THE L D. CIT(A) WHICH DOES NOT NEED ANY INTERFERENCE ON MY PART, HENCE, I UPHOLD THE SAME AND DISMISS THE GROUND NO.1 RAISED BY THE REVENU E. 7.2 WITH REGARD TO GROUND NO. 2 IS CONCERNED, SIN CE ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY WAS DELETED, AS A FORESAID, THE 2% COMMISSION AMOUNTING TO RS.90,OOO/- WAS ALSO RIG HTLY DELETED, DUE TO THE FACT THAT THERE IS NO EVIDENCE THAT ASSESSEE HAS TAKEN ENTRY FOR SHARE APPLICATION MONEY. HENCE, THIS ADDITION MADE BY THE ASSESSING OFFICER WAS RIGHTLY DELETED B Y THE LD. CIT(A) 13 WHICH DOES NOT NEED ANY INTERFERENCE ON MY PART, HENCE , I UPHOLD THE SAME AND DISMISS THE GROUND NO.2 RAISED BY THE R EVENUE. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/02/2017. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 02/02/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES