M/s Smriti Netcom (P) Ltd, Bhopal V. The ITO, Vidisha

ITA 255/IND/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66714 (ITAT-INDORE)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 03-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KESHAV SAXENA
• Keywords: Unexplained cash credit; Bogus Share capital; Source of fund
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AAFCS5193Q I.T.A.NO. 255 /IND/201 2 . A.Y. : 2008 - 09 M/S.SMRITI NETCOM INCOME - TAX OFFICER, (P) LIMITED, ZONE-I, M.P.NAGAR, BHOPAL. VS VIDISHA APPELLANT RESPONDENT APPELLANT BY : SHRI PRAKASH JAIN, C. A. RESPONDENT BY : SHRI KESHAV SAXENA, CIT DR DATE OF HEARING : 27 . 08 .2012 DATE OF PRONOUNCEMENT : 25 . 10 .201 2 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 29.2.2012 FOR THE ASSESSMENT YEAR 2008-09 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME -TAX ACT, 1961. -: 2: - 2 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE I N THIS APPEAL :- 1. THAT IMPUGNED ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL) IS BAD IN LAW AS WELL AS ON TH E FACTS. IT IS BASED ON INCORRECT INTERPRETATION OF L AW AND THE FACTS HAVE ALSO BEEN INCORRECTLY CONSTRUED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD.CIT(A) ERRED IN CONFIRMING THE ACTION OF THE LD. A.O. FOR MAKING ADDITION OF RS. L,50,00,000/- ON ACCOUNT OF ALLEGED UNEXPLAINED SHARE CAPITAL/UNSECURED LOAN IN RESPECT OF FOLLOWING PARTIES WITHOUT APPRECIATING T HE FACTS OF THE CASE AND SUBMISSION MADE BEFORE HIM-: M/S FOREST FIBERS INDIA LTD 18.01.2007 60,00,000 RAMESH KUMAR KHANNA FEB & MARCH, 2007 40,00,000 M/S. BHAWANI ADVISORY SERVICE (P) LIMITED 14,05,2007 25,00,000 MAJOR K. C. DHAWAN ( CONTRA ENTRY OF BHAWANI ADVISORY) 25,00,000 TOTAL 1,50,00,000 -: 3: - 3 WITHOUT PREJUDICE TO THE ABOVE 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) ERRED IN UPHOLDING THE A.O'S ACTION IN RESPECT OF ADDITION MADE OF RS. 1,00,00,000/- EVEN WHEN THE SAID AMOUNT WAS RECEIVED IN THE EARLIER YEAR AN D NOT IN THE YEAR UNDER CONSIDERATION. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. THE FACTS OF THE ISSUE IN BRIEF ARE THAT T HE ASSESSEE IS ENGAGED IN TRADING OF COMPUTER HARDWARE AND SOFTWAR E. THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAD NOT DE DUCTED TDS ON SECURITY CHARGES AT RS. 93,248/-, ADVERTISING AG ENCY FEE AT RS. 2,47,319/- AND FBT PAID AT RS. 22,457/-. HE MAD E DISALLOWANCE, THEREFORE, OF RS. 3,63,024/- U/S 40(A )(IA). 4. THE ASSESSING OFFICER ALSO MADE ADDITION OF RS. 1,50,00,000/- U/S 68 OF THE ACT AFTER HAVING THE FO LLOWING OBSERVATIONS :- ON PERUSAL OF DETAILS AVAILABLE OR RECORD, IT IS SEEN THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESS -: 4: - 4 COMPANY HAS CONVERTED 'UNSECURED LOANS' INTO SHARE APPLICATION MONEY PENDING ISSUE OF SHARE FROM THE FOLLOWING PERSONS: S. NO. NAME AND ADDRESS OF THE AMOUNT BORROWED (RS) 1. M / S . FOREST FIBERS INDIA. 60 , 00 , 000/ - 2 RAMESH KUMAR KHANNA 40,00.000/ - 3. M / S BHAWANI ADVISORY SERVICES 25,00.0001- PVT. LTD. 4 MAJOR K . C. DHAWAN 25,00,000/ - IN THIS REGARD, IT IS FURTHER SEEN THAT: A. THE ASSESSEE HAD FURNISHED ONLY CONFIRMATION LETTER S FROM THE LENDERS CONTAINING DETAILS OF CHEQUES ISSU ED IN FAVOUR OF THE ASSESSEE COMPANY AND THEIR PAN; B. COPIES OF RETURN OF INCOME AND BANK ACCOUNT OF THE LENDERS WERE NOT FURNISHED TO ESTABLISH THEIR' CREDITWORTHINESS' C. THE ASSESSEE WAS ASKED TO FURNISH SUFFICIENT PROOF ABOUT CREDITWORTHINESS OF THE LENDERS. THE ASSESSEE FURNISHED JUST A CERTIFICATE FROM THE LENDERS CONFI RMING THAT THE LOAN AMOUNT HAS BEEN PAID BY THEM. NO FURT HER DOCUMENTS I.E. COPY OF CHEQUE ISSUED, BANK STATEMEN T OF THE LENDER, I. T. RETURN ALONG WITH CAPITAL A/C AND BALANCE SHEET FOR THE RELEVANT YEAR, ETC, WERE FILE D BY -: 5: - 5 THE ASSESSEE TO FULLY SUBSTANTIATE HIS CLAIM. THUS, THE ASSESSEE HAD FAILED TO DISCHARGE ITS ONUS TO ESTABL ISH 'CREDIT WORTHINESS' OF THE LENDERS BEING ONE OF THE INGREDIENT REQUIRED U/S 68 OF THE INCOME TAX ACT, 1961. IN VIEW OF THE ABOVE FACTS, A SUM OF RS. 1,50,00,00 0/- IS TREATED AS UNEXPLAINED CREDIT THE EXTENT OF RS. 1,50,00,000/-. 5. AGAINST THE ABOVE ORDER OF THE ASSESSING OFFICER , THE ASSESSEE APPROACHED TO THE CIT(A), WHEREIN ADDITION S MADE U/S 68 WAS CONFIRMED AND THE CIT(A) DELETED THE ADD ITION OF RS. 3,63,024/- MADE U/S 40(A)(IA). HOWEVER, THE DEP ARTMENT IS NOT IN APPEAL AGAINST THIS DELETION BY THE LD.CIT(A ). THE ASSESSEE HAS FILED THE APPEAL BEFORE THE TRIBUNAL W ITH RESPECT TO THE ADDITION OF RS. 1.50 LAKHS RETAINED U/S 68 O F THE INCOME-TAX ACT, 1961. 6. SHRI PRAKASH JAIN, C. A., APPEARED ON BEHALF OF THE ASSESSEE, SUBMITTED THAT THE ASSESSEE HAS DULY EXPL AINED THE UNSECURED LOAN AND SHARE APPLICATION MONEY RECEIVED DURING THE YEAR. HE SUBMITTED THAT NOT ONLY IDENTITY AND G ENUINENESS OF TRANSACTION WAS PROVED, BUT THE CREDITWORTHINESS OF THE LOAN -: 6: - 6 CREDITOR WAS DULY PROVED AS PER THE DOCUMENTARY EVI DENCE FILED BEFORE THE LOWER AUTHORITIES. WITH RESPECT TO SHARE APPLICATION MONEY RECEIVED FROM FOREST FIBERS INDIA LIMITED, BHOPAL, OUR ATTENTION WAS INVITED TO STATEMENT OF A CCOUNT WITH BANK OF INDIA PLACED AT PAGE 64-66 OF THE PAPER BOO K. AS PER ENTRY IN THE CURRENT ACCOUNT OF BANK STATEMENT AS P LACED AT PAGE 65, THERE WERE SEVEN CREDITS OF MATURITY VALUE OF FDRS AMOUNTING TO RS. 74,54,041.11. OUT OF THIS AMOUNT, M/S. FOREST FIBERS INDIA LIMITED, BHOPAL, HAS ISSUED CHE QUE OF RS. 74 LAKHS TO THE ASSESSEE THROUGH ACCOUNT PAYEE CHEQ UE. THUS, NOT ONLY GENUINENESS OF TRANSACTION BUT THE CREDITW ORTHINESS AS ON THE DATE OF ISSUE OF CHEQUE WAS DULY EXPLAINE D. HE FURTHER INVITED OUR ATTENTION TO THE SOURCE OF FDR, WHICH WAS OUT OF REPAYMENT OF LOAN GIVEN TO M/S. VAISHNAV FIB ERS LIMITED (IN SHORT VFL). OUR ATTENTION WAS ALSO DRAW N TO THE MOU BETWEEN THE VAISHNAV FIBERS INDIA LIMITED, BHOP AL, AND M/S. S.J.AJMERA AS PLACED AT PAGE 53 TO 56 OF THE P APER BOOK. THE LD. AUTHORIZED REPRESENTATIVE FURTHER SUBMITTE D THAT OUT OF THE SAID RS. 74 LAKHS RECEIVED FROM M/S. FOREST FIBERS INDIA LIMITED, AN AMOUNT OF RS. 60 LAKHS WAS TRANSFERRED BY -: 7: - 7 ASSESSEE COMPANY TO SHARE APPLICATION MONEY AND OUR ATTENTION WAS INVITED TO PAGE 71 OF THE PAPER BOOK, INDICATING COPY OF THE ACCOUNT OF FOREST FIBERS INDIA LIMITED IN THE BOOKS OF THE ASSESSEE COMPANY. THE LD. AUTHORIZED REPRESE NTATIVE FURTHER SUBMITTED THAT BOTH ASSESSING OFFICER AND C IT(A) HAVE ACCEPTED THE PART CREDIT APPEARING IN THE NAME OF T HE SAID COMPANY. 7. WITH RESPECT TO AMOUNT RECEIVED FROM RAMESH KUMAR KHANNA, THE LD. AUTHORIZED REPRESENTATIVE SUBMITTE D THAT MR. KHANNA IS AN AMERICAN CITIZEN, WHICH IS CLEAR FROM THE CERTIFICATE OF CITIZENSHIP AS PLACED AT PAGE 50 OF THE PAPER BOOK, WHO DEPOSITED RS. 40 LAKHS WITH THE COMPANY T HROUGH CHEQUE OF AXIS BANK LIMITED, M.P. NAGAR, BHOPAL. TH E COPY OF BANK STATEMENT OF AXIS BANK WAS ALSO PLACED AT PAGE 51 OF THE PAPER BOOK. OUR ATTENTION WAS ALSO INVITED TO THE S UM OF RS. 40 LAKHS IN THE BANK STATEMENT, WHICH WAS RECEIVED BY SHRI RAMESH KUMAR KHANNA, WHICH WAS RECEIVED THROUGH TWO SEPARATE CHEQUES OF RS. 21,72,000/- AND RS. 20,45,4 74/-. TO EXPLAIN THE SOURCE OF CREDIT IN THE AXIS BANK ACCOU NT OF RAMESH KUMAR KHANNA, OUR ATTENTION WAS INVITED TO T HE COPY -: 8: - 8 OF BALANCE SHEET OF VAISHNAV FIBERS LIMITED WHICH F OUND AT PAGE 52 INDICATING LOAN TAKEN BY VFL FROM SHRI RAME SH KUMAR KHANNA. IT WAS SUBMITTED THAT ON 21.3.2006, A SUM OF RS. 41,17,474/- WAS DUE TO RAMESH KUMAR KHANNA FROM VAISHNAV FIBERS LIMITED AND WHICH WAS REPAID BY VAI SHNAV FIBERS LIMITED. OUR ATTENTION WAS ALSO DRAWN TO TH E RECEIPT OF RS. 10,49,351/- BY RAMESH KUMAR KHANNA FROM VAISHNA V FIBERS LIMITED ON ACCOUNT OF SALE OF EQUITY SHARES AND COPY OF MOU BETWEEN VFL AND A.J.AJMERA WAS ALSO PLACED IN T HE PAPER BOOK AT P. 52 56. THE LD. AUTHORIZED REPRES ENTATIVE ALSO CONTENDED THAT THIS AMOUNT WAS RECEIVED IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2007-08, THUS, THE RE WAS NO JUSTIFICATION FOR MAKING ADDITION IN THE ASSESSMENT YEAR IN QUESTION I.E. 2008-09. 8. WITH RESPECT TO THE AMOUNT RECEIVED FROM BHAWANI ADVISORY SERVICES PRIVATE LIMITED, OUR ATTENTION WA S DRAWN TO BANK STATEMENT OF M/S. BHAWANI ADVISORY SERVICES PR IVATE LIMITED, AS PLACED AT PAGE 87 OF THE PAPER BOOK, WH ICH INDICATED ISSUE OF CHEQUE OF RS. 25 LAKHS IN FAVOUR OF THE ASSESSEE AND ALSO INDICATED CREDIT IN THE BANK ACCO UNT -: 9: - 9 THROUGH THREE CHEQUES OF RS. 9,80,000/-, RS. 9,48,0 00/- AND RS. 9,80,000/-, WHICH WERE DEPOSITED IN THE SAID BA NK ACCOUNT WITH SYNDICATE BANK. THIS AMOUNT WAS RECEIV ED BY M/S. BHAWANI ADVISORY SERVICES PRIVATE LIMITED THRO UGH SALE OF RS. 1,45,000 EQUITY SHARES OF VAISHNAV FIBERS LI MITED, WHICH WERE SOLD BY IT TO A. S. AJMERA FOR A CONSIDE RATION OF RS. 29,08,000/-. COPY OF MOU BETWEEN PROMOTERS OF VAISH NAV FIBERS LIMITED AND A.S.AJMERA WAS ALSO PLACED AT PA GE 53-56 OF THE PAPER BOOK . THUS, IT WAS SUBMITTED THAT NOT ONLY SOURCE OF FUND BUT THE SOURCE OF SOURCE WAS ALSO EX PLAINED THROUGH BANK ACCOUNT. AS M/S. BHAWANI ADVISORY SERV ICES LIMITED WAS HAVING SUFFICIENT CREDIT BALANCE IN ITS BANK ACCOUNT, THE CHEQUE OF RS. 25 LAKHS WAS ISSUED IN F AVOUR OF THE ASSESSEE, WHICH ESTABLISHES GENUINENESS OF TRAN SACTION AS WELL AS ITS CREDITWORTHINESS. 9. WITH RESPECT TO THE SHARE APPLICATION ADDED IN THE CASE OF MAJ. K. C. DHAWAN, IT WAS SUBMITTED THAT ACTUAL AMOUNT WAS RECEIVED FROM M/S. BHAWANI ADVISORY SERVICES LI MITED BUT THROUGH OVERSIGHT OF THE ACCOUNTANT, THE AMOUNT WAS CREDITED IN THE NAME OF MAJ. K. C. DHAWAN AND THE ENTRY WAS -: 10: - 10 SUBSEQUENTLY RECTIFIED BY DEBITING THE AMOUNT OF MA J. K. C. DHAWAN AND CREDITING THE ACCOUNT OF SHARE APPLICATI ON MONEY. OUR ATTENTION WAS INVITED TO COPY OF SHARE APPLICAT ION ACCOUNT PLACED AT PAGE 74 OF THE COMPILATION AND ANNEXURE P ART A OF THE TAX AUDIT REPORT, WHICH IS AT PAGE 14 OF THE CO MPILATION AND SCHEDULE I AND AUDITED BALANCE SHEET OF THE COM PANY PLACED AT PAGE 25 OF THE PAPER BOOK. 10. IN VIEW OF THE ABOVE CONTENTION, THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS DUL Y PROVED NOT ONLY GENUINENESS OF TRANSACTION BUT CREDITWORTH INESS OF THE SHARE APPLICANTS. ACCORDINGLY, THE ASSESSING OF FICER WAS NOT JUSTIFIED IN MAKING ADDITION OF THE SAME AND CI T(A) WAS NOT JUSTIFIED IN CONFIRMING THE ORDER OF CIT(A). 11. ON THE OTHER HAND, IT WAS CONTENDED BY THE LD. CIT DR THAT THE ASSESSEE COULD NOT EXPLAIN THE CREDITWORTH INESS OF SHARE APPLICANT AS WELL AS THE GENUINENESS OF TRANS ACTION, THEREFORE, THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMI NG THE ADDITION. FURTHER RELIANCE WAS PLACED ON THE OBSERV ATIONS MADE BY THE ASSESSING OFFICER AND THE CIT(A) IN THE IR RESPECTIVE ORDERS. -: 11: - 11 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT THE ASSESSEE COMPANY IS ENGAGED IN TRADING OF COMPUTER HARDWARE AND SOFTWARE. DURING THE COURS E OF SCRUTINY ASSESSMENT, THE ASSESSING OFFICER MADE AN ADDITION OF RS. 1,50,00,000/- IN RESPECT OF THE AMOUNT RECEI VED FROM FIVE APPLICANTS. THE ASSESSING OFFICER OBSERVED THA T THE ASSESSEE HAS ONLY FURNISHED CONFIRMATION LETTERS FR OM THE LENDERS CONTAINING DETAILS OF CHEQUES ISSUED IN FAV OUR OF THE ASSESSEE COMPANY AND THEIR PAN NUMBERS. AS PER THE ASSESSING OFFICER, THE ASSESSEE COULD NOT ESTABLISH CREDITWORTHINESS OF THE LENDERS, THEREFORE, HE MADE ADDITION U/S 68. THE ASSESSING OFFICER HAS ALSO OBSERVED THA T DURING THE YEAR, THE ASSESSEE COMPANY HAS CONVERTED UNSEC URED LOAN INTO SHARE APPLICATION MONEY, PENDING ISSUE O F SHARES. FROM THE RECORD, WE FOUND THAT TO SUBSTANTIATE THE CREDIT OF SHARE APPLICATION MONEY, THE ASSESSEE HAS NOT ONLY FURNISHED THE CONFIRMATION OF SHARE APPLICANTS BUT ALSO BANK STATEMENT OF SHARE APPLICANT COMPANY TO SUBSTANTIATE THEIR CREDITWORTHINESS. THE ASSESSEE HAS FURNISHED THE BA NK -: 12: - 12 ACCOUNT OF THE RESPECTIVE SHARE APPLICANTS INDICATI NG NOT ONLY SUFFICIENT BALANCE IN THEIR ACCOUNT BUT ALSO SOURCE OF THE FUNDS SO CREDITED. THUS, NOT ONLY SOURCE OF FUND WAS EXPL AINED BUT THE SOURCE OF SOURCE WAS ALSO EXPLAINED THROUGH THE DOCUMENTARY EVIDENCE IN THE FORM OF MOU OF VAISHNAV FIBERS LIMITED, THE CERTIFICATE ISSUED BY THE BANK OF IND IA FOR CREDITING THE AMOUNT OF MATURITY OF FDR IN THE CURR ENT ACCOUNT OF FOREST FIBERS LIMITED. THE CONFIRMATION LETTERS FROM FOREST FIBERS INDIA, RAMESH KUMAR KHANNA AND M/S. BHAWANI ADVISORY SERVICES PRIVATE LIMITED WERE ALSO FILED BEFORE THE ASSESSING OFFICER. COPIES OF ACCOUNTS OF THESE APPLICANTS IN THE BOOKS OF THE ASSESSEE WAS ALSO FU RNISHED ALONGWITH COPY OF SHARE APPLICATION ACCOUNT. COMPLE TE COPY OF ACCOUNT OF SHRI RAMESH KUMAR KHANNA FOR THE FINANCI AL YEAR 2006-07 WAS ALSO FILED BEFORE THE LOWER AUTHORITIES WHICH ALSO FIND PLACED IN THE PAPER BOOK. COPY OF THE BANK ACC OUNT OF M/S. BHAWANI ADVISORY SERVICES PRIVATE LIMITED WAS ALSO FILED BEFORE THE ASSESSING OFFICER WHICH ALSO FIND PLACED IN THE PAPER BOOK. WE HAD CAREFULLY PERUSED ALL THE DOCUME NTARY EVIDENCES PLACED IN THE PAPER BOOK, WHICH HAVE BEEN CERTIFIED -: 13: - 13 AS FILED BEFORE THE LOWER AUTHORITIES. WE FOUND THA T THE AMOUNT OF RS. 74 LAKHS WAS RECEIVED FROM M/S. FOREST FIBER S INDIA. FOR ISSUE OF CHEQUE OF RS. 74 LAKHS DEBITED IN THE ACCOUNT OF FOREST FIBERS INDIA WAS OUT OF MATURITY VALUE OF 7 FDRS CREDITING A SUM OF RS. 74,54,031-11 IN ITS CURRENT ACCOUNT. THE ASSESSEE HAS ALSO EXPLAINED THE SOURCE OF FDRS IN THE HANDS OF FOREST FIBERS INDIA, WHICH WAS OUT OF MONE Y RETURNED BY M/S. VAISHNAV FIBERS LIMITED OUT OF THE LOAN GIV EN BY THE SAID COMPANY. OUT OF THE SAID RS. 74 LAKHS, AN AMOU NT OF RS. 60 LAKHS WAS TRANSFERRED BY ASSESSEE COMPANY TO SHA RE APPLICATION MONEY. THUS, THE CREDITWORTHINESS OF SH ARE APPLICANT AS WELL AS GENUINENESS OF TRANSACTION IS DULY ESTABLISHED. 13. THERE IS NO DISPUTE TO THE WELL SETTLED LEGAL PROPO SITION THAT WHENEVER AN ADDITION IS MADE U/S 68, THE ONUS IS ON THE ASSESSEE TO PROVE NOT ONLY THE IDENTITY BUT THE GEN UINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE LENDER. IN THE INSTANT CASE BEFORE US, THE ASSESSEE HAS FULFILLED ALL THESE CREDITIONS IN THE CASE OF FOREST FIBERS INDIA, RAME SH KUMAR KHANNA AND M/S. BHAWANI ADVISORY SERVICES LIMITED. -: 14: - 14 14. IN RESPECT OF AMOUNT OF RS. 40 LAKHS RECEIVED FROM RAMESH KUMAR KHANNA, WE FOUND THAT TWO CHEQUES WERE ISSUED OUT OF AXIS BANKS ACCOUNT, M.P.NAGAR, BHOPA L, ON 19.2.2007, RS. 20 LAKHS AND ON 3.3.2007 RS. 20 LAKH S. WE ALSO FOUND THAT THE SAID AMOUNT OF RS. 40 LAKHS WAS AVAILABLE IN THE BANK ACCOUNT OUT OF TWO SEPARATE CHEQUES REC EIVED FROM VAISHNAV FIBERS LIMITED TO WHOM SHRI RAMESH KUMAR KHANNA HAD GIVEN LOAN IN THE PAST. ONE CHEQUE WAS O F RS. 21,72,000/- AND ANOTHER CHEQUE OF RS. 20,45,474/-. WE ALSO FOUND THAT BALANCE SHEET OF M/S. VAISHNAV FIBERS LI MITED WAS FILED INDICATING AMOUNT DUE TO MR. RAMESH KUMAR KHA NNA FROM VAISHNAV FIBERS LIMITED AMOUNTING TO RS. 41,17 ,474/-. WE ALSO FOUND THAT SUM OF RS. 40 LAKHS WAS RECEIVED BY THE ASSESSEE COMPANY IN THE IMMEDIATELY PRECEDING FINAN CIAL YEAR IN 2006-07 RELEVANT TO THE ASSESSMENT YEAR 2007-08, WHEREAS THE ASSESSING OFFICER HAS ADDED THE AMOUNT IN THE A SSESSMENT YEAR IN QUESTION I.E. 2008-09, WHICH IS NOT JUSTIFI ED. 15. IN RESPECT OF AMOUNT RECEIVED FROM BHAWANI ADVISORY SERVICES PRIVATE LIMITED, WE FOUND THAT THIS COMPAN Y WAS HOLDING 1,45,000 EQUITY SHARES OF VISHNAV FIBERS LI MITED, -: 15: - 15 WHICH WERE SOLD TO MR. A. S. AJMERA FOR RS. 29,08,0 00/-. COPY OF MOU BETWEEN PROMOTER VAISHNAV FIBERS LIMITED AND MR. A.S.AJMERA WAS ALSO PLACED ON RECORD. THE SALE CONS IDERATION OF SHARES WAS RECEIVED THROUGH THREE CHEQUES OF RS. 9.80 LAKHS, RS. 9.48 LAKHS AND RS. 9.80 LAKHS, WHICH WER E DEPOSITED BY BHAWANI ADVISORY SERVICES LIMITED IN I TS BANK ACCOUNT WITH SYNDICATE BANK OUT OF WHICH A CHEQUE O F RS. 25 LAKHS WAS GIVEN TO THE ASSESSEE COMPANY. ALL THESE ENTRIES ARE PROVED THROUGH THE BANK ACCOUNT OF BHAWANI ADVISORY SERVICES LIMITED AND OTHER DOCUMENTARY EVIDENCES FI LED BEFORE THE LOWER AUTHORITIES AND WHICH ALSO PLACED AT PAGE 87 OF THE PAPER BOOK. IN VIEW OF THE OVERWHELMING DOCUMENTARY EVIDENCES FILED BEFORE THE LOWER AUTHORITIES AS DIS CUSSED HEREINABOVE, WE DO NOT FIND ANY JUSTIFICATION FOR T HE ABOVE ADDITIONS. 16. WITH RESPECT TO THE AMOUNT OF RS. 25.00 LACS ADDED IN THE HANDS OF MAJ. K. C. DHAWAN, CONTENTION OF THE A SSESSEE WAS THAT MONEY WAS RECEIVED FROM M/S. BHAWANI ADVIS ORY SERVICES LIMITED BUT THROUGH OVERSIGHT OF ACCOUNTAN T, IT WAS WRONGLY CREDITED IN THE ACCOUNT OF MAJ. K. C. DHAWA N. HOWEVER, THIS POSITION IS NOT CLEAR FROM THE SHARE APPLICATION -: 16: - 16 ACCOUNT PLACED AT PAGE 74 OF THE PAPER BOOK. AS THE CONTENTION OF THE ASSESSEE WAS NOT PROVED AND THERE IS A CONTRADICTION IN THE FINDING OF THE ASSESSING OFFIC ER AND CIT(A), WE RESTORE THIS ISSUE BACK TO THE FILE OF ASSESSIN G OFFICER FOR DECIDING AFRESH AND THE ASSESSEE IS DIRECTED TO FIL E CONFIRMATION FROM BHAWANI ADVISORY SERVICES PRIVATE LIMITED AS WELL AS MAJ. K. C. DHAWAN TO SUPPORT THE CONTENT ION OF THE ASSESSEE THAT AMOUNT WAS ACTUALLY RECEIVED FROM M/S . BHAWANI ADVISORY SERVICES PRIVATE LIMITED. CREDITWO RTHINESS FOR ADVANCING THE SAID AMOUNT IS ALSO REQUIRED TO B E PROVED THROUGH DOCUMENTARY EVIDENCES. NEEDLESS TO SAY THAT DUE OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE BEFORE DECIDING AFRESH. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D IN PART, IN TERMS INDICATED HEREINABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 25 TH OCTOBER, 2012. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 25 TH OCTOBER, 2012. CPU* 2325