ITO, New Delhi V. M/s. Goodwill Cresec Pvt. Ltd., Delhi

ITA 4151/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58539 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-01-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 08-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRA
• Assessee Lawyers: A K JAIN
• Keywords: Share purchase agreement; Principle of natural justice; Accommodation entries; Onus to prove; Set aside
• Section: 234B; 143(1); 131; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : C : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.4151/DEL/2010 ASSESSMENT YEAR : 2002-03 ITO, WARD 12 (2), ROOM NO.337, CR BUILDING, NEW DELHI. VS. GOODWILL CRESEC PVT. LTD., C-2/101, WEST ENCLAVE, PITAMPURA, DELHI. PAN : AAACG3756G C.O. NO.16/DEL/2011 (ITA NO.4151/DEL/2010) ASSESSMENT YEAR : 2002-03 GOODWILL CRESEC PVT. LTD., C-2/101, WEST ENCLAVE, PITAMPURA, DELHI. PAN : AAACG3756G VS. ITO, WARD 12 (2), ROOM NO.337, CR BUILDING, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.K. JAIN, CA REVENUE BY : SHRI SALIL MISHRA, SR.DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THE APPEAL IS FILED BY THE REVENUE AND THE C.O. BY THE ASSESSEE. THEY ARE DIRECTED AGAINST THE ORDER PASSED BY THE CIT (A) DATED 28 TH JULY, 2010 IN RESPECT OF ASSESSMENT YEAR 2002-03. THE G ROUNDS OF APPEAL READ AS UNDER:- ITA NO.4151/DEL/2010 C.O. NO.16/DEL/2011 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A ) HAS ERRED IN DELETING THE ADDITION OF RS.45,00,000/- ON AC COUNT OF BOGUS CREDIT U/S 68 OF THE IT ACT RECEIVED BY THE ASSES SEE DURING THE YEAR. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A ) HAS ERRED IN DELETING THE ADDITION OF RS.45,00,000/- MADE U/S 68 OF THE IT ACT IGNORING THE FACT THAT THE ASSESSEE HAD FAILED TO PROVE CREDIT WORTHINESS AND GENUINENESS OF TRANSACTION THEREBY NOT DISCHARGING THE ONUS CAST ON IT BY LAW. 3. THE APPELLANT CRAVES TO ADD, ALTER, AMEND, DELETE OR WITHDRAW ANY GROUND OF APPEAL DURING THE COURSE OF AP PELLATE PROCEEDINGS. 1.1 THE GROUNDS OF CROSS OBJECTIONS READ AS UNDER:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE VALIDITY OF R EOPENING OF THE ASSESSMENT U/S 148 OF IT ACT. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE VERY BASIS OF RE-INITIATION OF ASSESSMENT PROCEEDIN G IS ERRONEOUS AND IT VITIATE THE ENTIRE ASSESSMENT PROCEEDING S AB- INITIO HENCE THE ASSESSMENT IS BAD IN LAW. 3. THAT THE IMPUGNED ASSESSMENT ORDER PASSED BY THE LEA RNED ASSESSING OFFICER IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND HAS BEEN PASSED WITHOUT AFFORDING OPPORTUNITY TO CROSS E XAMINE MR. MAHESH CHAND BATRA, DIRECTOR OF M/S MKM FINSEC PV T. LTD. AND WITHOUT CONFRONTING THE ADVERSE MATERIAL, IF ANY IN HIS POSSESSION. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE ASSESSING OFFICER HAS ERRED IN CHARGING INTEREST O F RS.15,65,114/- U/S 234B OF INCOME TAX ACT, 1961. 2. THE ORIGINAL RETURN OF INCOME WAS FILED BY THE ASSE SSEE ON 24 TH SEPTEMBER, 2002 DECLARING INCOME OF ` 842/- AND IT WAS PROCESSED U/S 143(1) ON 23 RD DECEMBER, 2002. 3. NOTICE U/S 148 WAS ISSUED ON 27 TH MARCH, 2009 ON THE BASIS OF INFORMATION RECEIVED BY THE ASSESSING OFFICER FROM INVE STIGATION WING OF THE DEPARTMENT VIDE LETTER NO.1322 AND LETTER NO .1356 DATED 5 TH ITA NO.4151/DEL/2010 C.O. NO.16/DEL/2011 3 FEBRUARY, 2007 IN WHICH IT WAS MENTIONED THAT THAT T HE ASSESSEE COMPANY WAS BENEFICIARY OF ACCOMMODATION ENTRIES WHI CH HAD CHANNELISED ITS UNACCOUNTED MONEY IN THE GARB OF SALE OF SHARES INVESTED IN UNQUOTED COMPANY IN LIEU OF CASH PAID. T HE ACCOMMODATION ENTRIES REPORTED TO THE ASSESSING OFFICER BY THE INVESTIGATION WING WERE AS UNDER:- VALUE OF ENTRY TAKEN DATE OF ENTRY FROM WHOM TAKEN INSTRUMENT NO. RS.10,00,000/- 12.12.2001 MKM FINSC PVT. LTD. (A/C NO.6712 WITH SB MYSORE, KAROL BAGH, NEW DELHI.) 215449 RS.5,00,000 14.12.2001 MKM FINSC PVT. LTD. (A/C NO.6712 WITH SB MYSORE, KAROL BAGH, NEW DELHI.) 215448 RS.10,00,000 31.12.2001 MKM FINSC PVT. LTD. (A/C NO.40 WITH RATNAKAR, KAROL BAGH, NEW DELHI. 2818 RS.10,00,000 27.11.2001 MKM FINSC PVT. LTD. (A/C NO.6712 WITH SB MYSORE, KAROL BAGH, NEW DELHI. 217444 RS.5,00,000 28.11.2001 MKM FINSC PVT. LTD. (A/C NO.6712 WITH SB MYSORE, KAROL BAGH, NEW DELHI. 215445 RS.5,00,000 05.12.2001 MKM FINSC PVT. LTD. (A/C NO.6712 WITH SB MYSORE, KAROL BAGH, NEW DELHI. 215447 4. THE AFOREMENTIONED AMOUNT WAS CREDITED IN THE BAN K ACCOUNT OF THE ASSESSEE MAINTAINED WITH OBC BANK, PITAM PURA, DELH I. THE ASSESSEE SOUGHT COPY OF REASONS WHICH WERE COMMUNICATED TO HIM ON 7 TH SEPTEMBER, 2009. THE OBJECTIONS WERE FILED ON 12 TH NOVEMBER, 2009. A SPEAKING ORDER REJECTING THE OBJECTIONS WAS P ASSED BY THE ASSESSING OFFICER ON 4 TH DECEMBER, 2009 AND COMMUNICATION WAS SENT TO THE ASSESSEE BY SPEED POST ON 5 TH DECEMBER, 2009. AS THE CORRECTNESS OF THE INITIATION OF RE-ASSESSMENT PROCEEDING S WAS UPHELD BY THE ASSESSING OFFICER BY REJECTING THE OBJECTION FIL ED BY THE ASSESSEE, LD. ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAI N THE TRANSACTION. VIDE LETTER DATED 23 RD NOVEMBER, 2009, IT WAS SUBMITTED ITA NO.4151/DEL/2010 C.O. NO.16/DEL/2011 4 THAT THE ASSESSEE SOLD SHARES OF M/S YOUTH CONSTRUCTION PVT. LTD. AND YOUTH BUILDERS PVT. LTD. OF ` 45 LAC TO M/S MKM FINSEC PVT. LTD. AND RECEIVED VARIOUS CHEQUES DRAWN ON BANK OF MYSORE, KARO L BAGH, NEW DELHI AND THE RATNAKAR BANK LTD., KAROL BAGH, NEW D ELHI. LD. ASSESSING OFFICER REFERRED TO THE STATEMENT OF SHRI MAHE SH BATRA, DIRECTOR OF M/S MKM FINSEC. PVT. LTD. RECORDED U/S 131 OF THE ACT ON 23 RD JANUARY, 2004 AND HAS REPRODUCED RELEVANT PORTION O F THE STATEMENT OF SHRI MAHESH BATRA IN WHICH HE ADMITTED T HAT HE IS THE DIRECTOR OF M/S MKM FINSEC PVT. LTD. AND MAINTAINING BANK ACCOUNTS WITH VARIOUS BANKS LISTED IN ANSWER TO QUESTION NO.6. I T WAS STATED THAT THE COMPANY IS GIVING ACCOMMODATION ENTRIES FOR PURCH ASE AND SALE OF SHARES. THE MODUS OPERANDI WAS REPLIED IN ANSWER NO.8 B Y STATING THAT IT USED TO GET CASH RECEIVED FROM CLIENTS EITHER DIRECTLY IN THEIR BANK ACCOUNT OR THROUGH THEIR ASSOCIATES. THE AMOUNT DEPOSITED IN THE ASSOCIATES ACCOUNTS ARE THEREAFTER TRANSFERRED TO T HE MAIN ACCOUNT OF THE COMPANY AND CHEQUES WERE ISSUED TO THE PERSON WH O GAVE THE CASH AFTER DEDUCTING THE COMMISSION. IN ANSWER TO QUEST ION NO.9, NAMES OF ASSOCIATE CONCERNS WERE STATED AND IN ANSWER TO QUESTION NO.10 IT WAS STATED THAT NO REAL BUSINESS HAS TAKEN PLACE EXCEPT ACCOMMODATION ENTRIES IN MKM FINSEC PVT. LTD. AND OTH ER ASSOCIATES BUSINESS. REFERRING TO THESE SUBMISSIONS, THE ASSESSING OFFICE R OBSERVED THAT THE STATEMENT ITSELF IS SELF-EXPLANATORY, THEREFORE, THE AMOUNT RECEIVED BY THE ASSESSEE IS IN THE NATURE OF ACCO MMODATION ENTRY AND THE SAME IS ADDED BACK TO THE INCOME OF THE ASSESSEE. IT IS IN THIS MANNER THE ASSESSING OFFICER HAS ADDED THE SAID AM OUNT TO THE RETURNED INCOME AND THE INCOME OF THE ASSESSEE HAS BEEN ASSESSED AT ` 45,00,842/- VIDE IMPUGNED ASSESSMENT ORDER DATED 9 TH DECEMBER, 2009 PASSED U/S 147/143(3) OF THE ACT. 5. THE ADDITION WAS CHALLENGED BEFORE THE CIT (A). FIRSTLY, THE ASSESSEE OBJECTED TO THE VALIDITY OF INITIATION OF RE-A SSESSMENT ITA NO.4151/DEL/2010 C.O. NO.16/DEL/2011 5 PROCEEDINGS WHICH HAS BEEN UPHELD BY THE CIT (A) ON T HE BASIS OF DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. HIGHGAIN FINVEST PVT. LTD. 304 ITR 325 (DEL) ON THE GROUND THAT THE INFORMATION RECEIVED BY THE ASSESSING OFFICER FROM INVE STIGATION WING OF THE DEPARTMENT IS A SPECIFIC INFORMATION AVAILABLE WITH THE ASSESSING OFFICER UPON WHICH THE RE-ASSESSMENT PROCEEDINGS COULD B E INITIATED. 6. COMING TO THE MERITS, IT WAS SUBMITTED THAT THE ASSESSE E COMPANY HAD FILED FOLLOWING DOCUMENTS TO PROVE THE I DENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION ENTERED I NTO BY IT WITH M/S MKM FINSEC. PVT. LTD.:- (A) COPY OF CONTRACT NOTE AND BILLS ISSUED BY MKM FINS EC PVT. LTD.. (B) COPY OF THE SHARE CERTIFICATE SOLD THROUGH M/S MKM FINSEC PVT. LTD. (C) COPY OF CONFIRMATION LETTER FROM M/S MKM FINSEC PV T. LTD. (D) COPY OF CHEQUES ISSUED BY THE MKM FINSEC PVT. LTD. (E) COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURN M/S MKM FINSEC PVT. LTD FOR A/Y. 2002/03 ALONGWITH COPY OF AUDITED ANNUAL ACCOUNTS (BALANCE SHEET, PROFIT & LOSS ACCOUNT W ITH AUDITOR REPORT). (F) COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURN M/S MKM FINSEC PVT. LTD FOR A/Y. 2007/08 ALONGWITH COPY OF AUD ITED ANNUAL ACCOUNTS (BALANCE SHEET, PROFIT & LOSS ACCOUNT W ITH AUDITOR REPORT). (G) CERTIFICATE FROM M/S. YOUNG BUILDERS PVT. LTD. FOR SHAREHOLDING OF THE ASSESSEE SINCE F.Y 1999/2000 AND ITS SUBSEQUENT SALE. (H) CERTIFICATE FROM M/S YOUTH CONSTRUCTION PVT. LTD. FOR SHAREHOLDING OF THE ASSESSEE SINCE F.Y 1999/2000 AND ITS SUBSEQUENT SALE. (I) COPY OF AUDITED BALANCE SHEET OF THE ASSESSEE COMP ANY FOR THE FINANCIAL YEAR 1999-00 TO 2001-02. 7. IT WAS FURTHER SUBMITTED THAT THE AFOREMENTIONED E VIDENCE CLEARLY PROVES THE FOLLOWING FACTS:- ITA NO.4151/DEL/2010 C.O. NO.16/DEL/2011 6 IT HAS BEEN FURTHER SUBMITTED THAT EVIDENCE FURNISHED BY THE ASSESSEE PROVES THE FOLLOWING FACTS:- (I) THAT THE M/S. MKM FINSEC PRIVATE LIMITED (A MEMBER/ BROKER OF DELHI STOCK EXCHANGE) WAS DULY INCORPORATED AND RE GISTERED WITH THE REGISTRAR OF COMPANIES, NCT OF DELHI & HARYAN A. (II) THAT M/S. MKM FINSEC PRIVATE LIMITED HAS BEEN ALL OTTED PAN BY THE I.T. DEPARTMENT AFTER GETTING VARIOUS PROOF LIKE REGISTRATION NUMBER, ADDRESS PROOF ETC. (III) THAT M/S. MKM FINSEC PRIVATE LIMITED IS REGULARL Y FILING ITS RETURN OF INCOME WITH ITO, WARD-6(1), NEW DELHI. (IV) THAT THE BOOKS OF ACCOUNT OF M/S. MKM FINSEC PRIV ATE LIMITED WERE DULY STATUTORY AUDITED BY PRACTICING CHARTERE D ACCOUNTANT UNDER THE COMPANIES ACT 1956. (V) THAT M/S. MKM FINSEC PRIVATE LIMITED HAS FILED THE COPY OF ITS AUDITED BALANCE SHEET & PROFIT & LOSS ACCOUNT WITH RESPE CTIVE ROC & INCOME TAX OFFICE. (VI) THAT M/S. MKM FINSEC PRIVATE LIMITED WAS MAINTAINI NG BANK ACCOUNT WHERE BEFORE OPENING OF SUCH BANK ACCOUNT, DE TAIL IDENTITY OF THE M/S. MKM FINSEC PRIVATE LIMITED HAVE BEE N VERIFIED BY THE BANKERS AND OPERATION IN THE BANK ACCO UNT OF A BODY CORPORATE, SUCH AS COMPANY REGISTERED UNDER THE I NDIAN COMPANY ACT, 1956 IS ALLOWED ONLY TO THE AUTHORIZED PER SONS. (VII) THAT THE TRANSACTIONS OF THE ASSESSEE WITH M/S. MKM FINSEC PRIVATE LIMITED WERE THROUGH PROPER BANKING CHANNEL. (VIII) THAT THE ASSESSEE COMPANY HAD MADE INVESTMENT IN SHARES OF M/S. YOUNG BUILDERS PRIVATE LIMITED AND M/S. YOUTH CONSTRUCTION PRIVATE LIMITED DURING THE FINANCIAL YEAR 1 999/2000 AND WAS ORIGINAL ALLOTEE OF THESE SHARES (IX) THE AFORESAID INVESTMENT HAS BEEN ACCEPTED BY THE INCOME TAX DEPT. IN THE AY. 2000/01 & 2001/02 AND THERE IS NO DISPUTE IN THIS REGARD. (X) THAT INVESTMENT OF THE ASSESSEE COMPANY AND ITS SUBSEQUENT SALES HAS BEEN CONFIRMED BY THE RESPECTIVE COMPANIES IN WHICH INVESTMENT WAS MADE BY THE ASSESSEE AND ITA NO.4151/DEL/2010 C.O. NO.16/DEL/2011 7 A CONFIRMATION LETTER WAS FILED BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDING. (XI) THAT PART OF THE AFORESAID INVESTMENT HAS BEEN SOLD BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AT COST PR ICE THROUGH M/S. MKM FINSEC PRIVATE LIMITED. (XII) THAT BALANCE PART OF THE INVESTMENT OF THE ASSESSEE IN M/S YOUTH CONSTRUCTION PRIVATE LIMITED HAS BEEN SOLD THROUGH M/S. RAJ & CO., SHARE BROKER AND AT SAME PRICE AT WHICH SO LD THROUGH M/S MKM FINSEC PRIVATE LIMITED I.E.@ 1,000/- PER SHAR E. THE AO. HAS NOT DISPUTED SUCH SALES TRANSACTION OF THE ASSESSEE THROUGH M/S. RAJ & CO. ACCEPTED THE SAME AS GENUINE. (XIII) THAT THE SHAREHOLDING WITH THE ASSESSEE OF THESE TWO COMPANIES AVAILABLE IN THE OPENING STOCK UNDER THE HEA D 'INVESTMENT' FOR THIS YEAR ARE NOT SHOWN TO THE EXTENT SALE S CLAIMED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS AS CL OSING STOCK AT THE END OF THE YEAR. THE INVESTMENT TO THE EXTENT OF SALE S HAS BEEN EXTINGUISHED FROM THE BOOKS OF THE ASSESSEE. (XIV) THAT THE INVESTMENT OF THE ASSESSEE COMPANY IN THE AFORESAID SHARES OF M/S. YOUNG BUILDERS PRIVATE LIMI TED AND M/S. YOUTH CONSTRUCTION PRIVATE LIMITED ARE NOT REFLECTED IN THE AUDITED BALANCE SHEET OF THE ASSESSEE AS ON 31/03/2002 . (REFER PAPER BOOK PAGE NO. 59 TO 64), WHICH IMPLIEDLY PROVE THAT THE SAID INVESTMENT HAS BEEN SOLD BY THE ASSESSEE DURING TH E YEAR UNDER CONSIDERATION AND THE SAME HAS NOT BEEN DISPUTED BY THE AO. 8. REFERRING TO THE AFOREMENTIONED ARGUMENTS, IT WAS CONTENDED THAT THE ASSESSEE HAS FULFILLED ALL THE THREE REQUIREMEN TS TO PROVE THE GENUINENESS OF THE CASH CREDIT, NAMELY, IDENTITY OF TH E CREDITOR; CREDIT WORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSA CTION. FURTHER, TO ESTABLISH THE IDENTITY OF THE SHARE BROKER, NAMELY, M/S MKM FINSEC. PVT. LTD., THE ASSESSEE HAS PLACED RELIANCE ON THE FOLLO WING EVIDENCES/FACTS:- (I) REGISTRATION WITH REGISTRAR OF COMPANIES, NCT OF D ELHI & HARYANA, NEW DELHI ITA NO.4151/DEL/2010 C.O. NO.16/DEL/2011 8 (II) PAN NUMBER (III) AUDITORS REPORT WITH AUDITED ANNUAL ACCOUNTS. (IV) COPY OF ITR (V) CONFIRMATION LETTER. 9. THE BALANCE SHEET OF THE SAID COMPANY AS ON 31 ST MARCH, 2002 AND 31 ST MARCH, 2007 WAS ALSO FILED. REFERRING TO ALL THESE I T WAS SUBMITTED THAT THE ASSESSING OFFICER DID NOT GIVE ANY CR EDENCE TO THE EVIDENCE FILED BEFORE HIM AS THE CLOSE LOOK OF THE BA LANCE SHEET WILL INDICATE THAT THE SAID COMPANY HAS SHAREHOLDER FUNDS OF MORE THAN 76 LAC WHICH IS SUFFICIENT TO PAY ` 45 LAC TO PURCHASE SHA RES FROM THE ASSESSEE COMPANY AND THE BROKERAGE INCOME OF THE SAID CO MPANY WAS MORE THAN ` 13 LAC. IT WAS CONTENDED THAT THE PAYME NTS HAVE BEEN RECEIVED THROUGH CHEQUES. THE SHARES WHICH WERE SOLD BY THE ASSESSEE WERE PURCHASED BY THE ASSESSEE IN FINANCIAL YEAR 19 99-2000 AND ARE DULY REFLECTED IN THE INCOME-TAX RECORD OF THE ASSESSEE AND IS DULY DEPICTED IN BALANCE SHEET AS ON 31 ST MARCH, 2000 AND 31 ST MARCH, 2001. THE CONFIRMATION FROM M/S MKM FINSEC PVT. LTD. WAS ALSO FURNISHED ALONG WITH THE CERTIFICATES FROM M/S YOUTH B UILDERS PVT. LTD. AND M/S YOUTH CONSTRUCTIONS PVT. LTD. AS THIRD PARTY EV IDENCE. IN THESE CERTIFICATES, THESE PARTIES HAVE CONFIRMED THE ALLOTME NT OF THE SHARES TO THE ASSESSEE COMPANY DURING FINANCIAL YEAR 1999-2000 AND HAVE ALSO CONFIRMED THE TRANSFER OF SUCH SHARES TO THIRD PART Y DURING THE YEAR 2002 AND IT WAS CERTIFIED THAT THOSE TRANSACTIONS HAVE BEEN DULY REFLECTED IN THEIR STATUTORY RECORDS. IT WAS FURTHER CONTENDED THAT NO SPADE WORK WAS DONE BY THE ASSESSING OFFICER TO FIND OUT ANY TANGIBLE EVIDENCE TO FALSIFY VARIOUS EVIDENCES FILED BY THE ASSESSE E AND REFERENCE WAS MADE TO THE WELL SETTLED LAW THAT SUSPIC ION HOWEVER STRONG CANNOT TAKE PLACE OF THE LEGAL PROOF AS PER DE CISION OF HONBLE SUPREME COURT IN THE CASE OF UMA CHARAN SHAW & BROS. VS. CIT 37 ITR 271 AND VARIOUS OTHER LEGAL PRONOUNCEMENTS WERE RELIE D UPON TO ITA NO.4151/DEL/2010 C.O. NO.16/DEL/2011 9 CONTEND THAT ALL THE DETAILS HAVING BEEN FILED THE A SSESSEE SHOULD BE CONSIDERED TO HAVE DISCHARGED ITS ONUS TO PROVE THE CASH CREDIT. 10. REFERENCE WAS ALSO MADE TO THE DECISION IN OTHER C ASES WHERE SIMILAR TRANSACTIONS OF MKM FINSEC PVT. LTD. WERE DOUBT ED AND ADDITIONS WERE MADE BY THE DEPARTMENT AND THE TRIBUN AL AFTER CONSIDERING ALL THE FACTS WHICH ARE SIMILAR TO THE CASE OF THE ASSESSEE HAS DELETED THE ADDITION AND SPECIFIC REFERENCE WAS MA DE TO THE DECISION OF THE TRIBUNAL DATED 11 TH DECEMBER, 2009 IN THE CASE ITO VS. M/S VAISHALI FINANCIAL SERVICES PVT. LTD., ITA NO.138/ DEL/2009, ASSESSMENT YEAR 2002-03. LD. CIT (A) AFTER CONSIDERING ALL THESE SUBMISSIONS AND REFERRING TO THE EVIDENCE FILED BY THE ASSESSEE HAS GIVEN A FINDING THAT THE ASSESSEE HAD FILED CONFIRMATIO N LETTER DATED 8 TH APRIL, 2002 FROM M/S MKM FINSEC PVT. LTD. CONFIRMING THE TRANSACTION OF SALE OF SHARES. THE CONFIRMATION WAS ALSO FILED BY M/S Y OUNG BUILDERS PVT. LTD. AND M/S YOUTH CONSTRUCTION PVT. LTD. CONFIR MING THE SALE OF SHARES HELD BY THE ASSESSEE COMPANY DURING FINANCIAL YEAR 2001-02 IN FAVOUR OF SHRI VINOD BANSAL. THE ASSESSING OFFICER HAD NOT DISPUTED THE INVESTMENT MADE BY THE ASSESSEE IN BOTH THESE COMPANI ES WHICH IS EVIDENT FROM THE RETURN FILED BY THE ASSESSEE FOR EAR LIER YEARS. THE COPIES OF CHEQUES ISSUED BY MKM FINSEC PVT. LTD. AND ALSO THE PAN, COPY OF ITR OF THE SAID CONCERN WAS ALSO FILED. THE A SSESSEE HAD NOT EARNED ANY PROFIT ON THE SALE OF SHARES SINCE THE SALE W AS MADE AT THE COST PRICE. THE ONUS TO PROVE CASH CREDIT IN THE BOOK S IS REBUTTABLE AND THE ASSESSEE HAVING FILED ALL THE EVIDENCE HAD DISCH ARGED ITS ONUS. THE FACTS OF THE PRESENT CASE WERE SIMILAR TO THE FACTS DECIDED IN THE CASE OF ITO VS. M/S VAISHALI FINANCIAL SERVICES PVT. LTD (SUPRA). THE ASSESSING OFFICER DID NOT BRING ANY INFORMATION OR EVID ENCE ON RECORD TO DISPROVE THE CLAIMS OF THE ASSESSEE SUBSTANTIATED BY IRR EBUTTABLE EVIDENCE BROUGHT ON RECORD. THE TRANSACTION OF THE ASSESSEE HAS BEEN TREATED AS ACCOMMODATION ENTRY WITHOUT BRINGING ANY EVIDENCE ON ITA NO.4151/DEL/2010 C.O. NO.16/DEL/2011 10 RECORD AND ACCORDING TO THE WELL ESTABLISHED LAW IN T HE DECISION OF UMA CHARAN SHAW (SUPRA), NO ADDITION COULD BE MADE MEREL Y ON SUSPICION, SURMISES AND CONJECTURES AND, IN THIS MANNER, LEARNED CI T (A) HAS DELETED THE ADDITION. 11. THE ASSESSEE IN ITS CROSS OBJECTIONS IS AGGRIEVED BY THE DECISION OF LEARNED CIT (A) VIDE WHICH VALIDITY OF INITIATIO N OF RE-ASSESSMENT PROCEEDINGS HAS BEEN UPHELD. THE REVENUE IN THIS APPE AL IS AGGRIEVED WITH THE DECISION OF LEARNED CIT (A) VIDE WHICH THE IMPUGNED ADDITION OF ` 45 LAC HAS BEEN DELETED. 12. AFTER NARRATING THE FACTS, IT WAS PLEADED BY THE LEARNED DR THAT THE ASSESSING OFFICER HAD RIGHTLY MADE THE ADDITION. H E PLEADED THAT THE ASSESSING OFFICER HAD RECEIVED A SPECIFIC INFORMATIO N REGARDING ACCOMMODATION ENTRY OBTAINED BY THE ASSESSEE FROM MKM F INSEC PVT. LTD. THE DIRECTOR OF THE SAID COMPANY HAD CLEARLY A DMITTED THAT THEY WERE RUNNING THE BUSINESS OF PROVIDING ACCOMMODATION E NTRIES. THUS, THERE WAS DEFINITE INFORMATION WITH THE ASSESSING OFFICE R AND LEARNED CIT (A) HAS WRONGLY DELETED THE ADDITION. THE LEARNE D DR SUBMITTED THAT ORDER OF THE CIT (A) SHOULD BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. 13. ON THE OTHER HAND, THE LEARNED AR OBJECTED TO T HE VALIDITY OF INITIATION OF RE-ASSESSMENT PROCEEDINGS AND, THEN, HE SUB MITTED THAT IN THE LIGHT OF THE EVIDENCES FURNISHED BEFORE THE ASSESSING OFFICER AND CIT (A) AND THE CASE LAWS RELIED UPON BEFORE HIM, IT IS TO BE HELD THAT LEARNED CIT (A) HAS RIGHTLY DELETED THE ADDITION. H E ALSO REFERRED TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF C IT VS. M/S VISHAL HOLDING AND CAPITAL PVT. LTD., THE COPY OF WHICH DE CISION IS FILED AT PAGES 189-191 OF THE PAPER BOOK AND WHICH IS SINCE REP ORTED IN 200 TAXMAN 186 IN WHICH ON SIMILAR FACTS AND CIRCUMSTANCES HONBLE HIGH ITA NO.4151/DEL/2010 C.O. NO.16/DEL/2011 11 COURT HAS UPHELD THE ORDER OF THE TRIBUNAL VIDE WHIC H THE ORDER OF THE CIT (A) WAS UPHELD. THUS, IT WAS PLEADED BY HIM THAT THE ASSESSEES CASE ON MERIT IS COVERED BY THE AFOREMENTIONED DECISIO N. 14. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS I N THE LIGHT OF THE MATERIAL PLACED BEFORE US. IN THE PRESENT CASE, TH E ASSESSEE HAD SUBMITTED AMPLE EVIDENCE WHICH HAS ALREADY BEEN DISCUSSE D IN THE ABOVE PART OF THIS ORDER TO CONTEND THAT THE SHARE TR ANSACTION ENTERED INTO BY IT WITH MKM FINSEC PVT. LTD. WAS A GENUINE TR ANSACTION. THE SHARES WHICH WERE SUBJECT MATTER OF SALE WERE STANDING I N THE BALANCE SHEET OF THE ASSESSEE WHICH WERE SUBJECT MATTER OF SALE. THE PARTY TO WHOM THE SALES HAVE BEEN MADE HAVE CONFIRMED THE TRAN SACTIONS AND THE TRANSACTION WAS SUPPORTED BY DOCUMENTARY EVIDENCE. IT IS ALSO THE CASE OF THE ASSESSEE THAT NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE REVENUE THAT THE SHARE TRANSACTION OF THE ASSESSEE WA S NOT GENUINE. THE ADDITION HAS BEEN MADE ON THE BASIS OF I NFORMATION RECEIVED BY THE ASSESSING OFFICER FROM THE INVESTIGATION WING. IT IS FOUND THAT IN RESPECT OF THE VERY SAME PARTY AN ADDIT ION OF ` 49,55,300/- WAS MADE IN THE CASE OF ITO VS. VISHAL HOLD ING AND CAPITAL PVT. LTD. (SUPRA) AND LEARNED CIT (A) HAD DELETED TH E ADDITION AND THE SAID DELETION WAS CONTESTED BY THE REVENUE BEFORE THE TRIBUNAL AND IT WAS DECIDED BY THE TRIBUNAL VIDE ORDER DATED 17 TH JULY, 2009 IN ITA NO.1788/DEL/2009 AND THE ORDER OF THE CIT (A) WAS UP HELD WITH THE FOLLOWING OBSERVATIONS:- 5. WE HAVE CONSIDERED RIVAL CONTENTIONS AND GONE THROUGH THE RECORDS. IN OUR VIEW THE ORDER OF THE CIT(A) DOES NOT REQUIRE ANY INTERFERENCE. FIRST OF ALL THE ASSESSEE HAS PRODUCED ALL DETAILS IN RESPECT OF ITS TRANSACTIONS. COPIES OF TH E CONTRACT NOTES AND BILLS, THAT WERE ISSUED TO IT, WERE ALL MADE A VAILABLE. THE ASSESSING OFFICER HAS NOT VERIFIED THESE DETAILS AND IN RESPECT OF THE MATERIAL, WHICH HAS BEEN RELIED U PON BY HIM, HE HAS NOT PROVIDED ANY FINDINGS OF THE INVESTIGATI ON TO THE ASSESSEE. THEREFORE, IN THESE CIRCUMSTANCES, THE AD DITION MADE BY THE ASSESSING OFFICER CANNOT BE SAID TO BE ON THE BASIS ITA NO.4151/DEL/2010 C.O. NO.16/DEL/2011 12 OF SOME EVIDENCE THAT WAS PUT TO THE ASSESSEE IN THE COUR SE OF ASSESSMENT PROCEEDINGS. THE LEARNED CIT(A) HAS CORRECTLY DELETED THE ADDITION AND WE DECLINE TO INTERFERE. A CCORDINGLY, ORDER OF CIT(A) ON THE ISSUE IN QUESTION IS UPHELD . 6. IN THE RESULT, REVENUE S APPEAL IS DISMISSED. 15. THE AFOREMENTIONED ORDER OF THE TRIBUNAL WAS CON SIDERED BY HONBLE JURISDICTIONAL HIGH COURT IN THE AFOREMENTIO NED CASE OF CIT VS. VISHAL HOLDING AND CAPITAL PVT. LTD. WHICH IS NOW REP ORTED AT 200 TAXMAN 186 AND THE ORDER OF THE TRIBUNAL WAS UPHELD BY THE HONBLE HIGH COURT WITH THE FOLLOWING OBSERVATIONS:- 6. WE ARE OF THE VIEW THAT THE ASSESSEE HAD PRODUCED COPIES OF ACCOUNTS, BILLS AND CONTRACT NOTES ISSUED BY M/S. MKM FINSEC PVT. LTD. AND HAD BEEN MAINTAINING BOOKS OF ACC OUNT AS PER COMPANIES ACT. THE ASSESSEE HAD ALSO DEMONSTRATED THE PURCHASE AND SALE OF SHARES OVER A PERIOD OF TIME AS SEEN FROM THE BALANCE SHEET/S. IN OUR OPINION, THE AO HAS SIMPL Y ACTED ON THE INFORMATION RECEIVED FROM THE INVESTIGATION WING WITHOUT VERIFYING THE DETAILS FURNISHED BY THE AS SESSEE. THE ASSESSEE HAS ALSO PRODUCED BEST POSSIBLE EVIDENC E TO SUPPORT ITS CLAIM. CONSEQUENTLY THE ADDITION MADE BY THE AO CANNOT BE SUSTAINED. 7. IN ANY EVENT, THE FACTUAL FINDINGS OF THE F INAL FACT FINDING AUTHORITY ARE NEITHER PERVERSE NOR CONTRARY TO R ECORD. ACCORDINGLY, WE FIND THAT NO SUBSTANTIAL QUESTION O F LAW ARISES IN THE PRESENT APPEAL WHICH, BEING BEREFT O F MERIT, IS DISMISSED IN LIMINE BUT WITH NO ORDER AS TO COSTS . 16. IN THIS VIEW OF THE SITUATION, WE FIND THAT SO FAR AS IT RELATES TO ISSUE ON MERITS, THE CASE OF THE ASSESSEE IS COVERED BY THE AFOREMENTIONED DECISION OF THE TRIBUNAL WHICH HAS BEE N CONFIRMED BY HONBLE HIGH COURT. THEREFORE, WE DECLINE TO INTER FERE IN THE DELETION MADE BY THE LEARNED CIT (A) AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. 17. SO FAR AS IT RELATES TO THE CROSS OBJECTIONS FILED B Y THE ASSESSEE, THE ASSESSEE IS MAINLY AGITATING THE VALIDITY OF INITIAT ION OF RE- ITA NO.4151/DEL/2010 C.O. NO.16/DEL/2011 13 ASSESSMENT PROCEEDINGS WHICH IN VIEW OF DELETION OF ADDI TION HAS BECOME ACADEMIC AND DOES NOT REQUIRE TO BE ADDRESSED. IT MAY BE MENTIONED THAT GROUND NO.3 OF CROSS OBJECTIONS WAS NOT PRESSED BY THE LEARNED AR. IN RESPECT OF GROUND NO.4 OF CROSS OB JECTIONS, WE HOLD THAT LEVY OF INTEREST U/S 234B IS MANDATORY AND IS CONSE QUENTIAL. THE ASSESSING OFFICER WILL RE-CALCULATE INTEREST U/S 234B AFT ER GIVING EFFECT TO OUR ORDER VIDE WHICH THE AFOREMENTIONED DELETION OF ADDITION HAS BEEN UPHELD. WE DIRECT ACCORDINGLY. 18. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISPOSED OF I N THE MANNER AFORESAID. THE ORDER PRONOUNCED IN THE OPEN COURT ON 25.01.20 12. SD/- SD/- [SHAMIM YAHYA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 25.01.2012. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES ITA NO.4151/DEL/2010 C.O. NO.16/DEL/2011 14 DATE OF DICTATION 19.01.2012 DATE OF PRESENTATION OF THE DRAFT ORDER TO THE MEMBER 23.01.20122 DATE OF RETURN FROM THE BENCH AFTER PRONOUNCEMENT &SIGNING DATE OF DISPATCH OF THE ORDER TO THE BENCH