ACIT, CC- 5, NEW DELHI vs. NCML INDUSTRIES LTD., NEW DELHI

dated 28.03.2017 of Ld Commissioner of Income Tax (Appeals)-25, New Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. „FAA‟) in appeal No. 73 for AY 2009-10 & appeal No. 74 for AY 2010-11, arising out of a appeals before it against the orders dated 31.03.2016 u/s 153 read with section 143(3) of the Income Tax Act, 1961 (hereinafter referred as „the Act‟) for respective AYs, passed by the ld. Assessing Officer, ACIT, Central Circle-5, New Delhi (hereinafter referred as the Ld. AO).

Facts are that during the course of Search, various Hard Disks were seized and the data was analyzed. On such analysis, an email received by Sh. Manish Jain from one Sh Ramit was also found where certain transactions including Cash transactions were mentioned in the attachment with the email. During Post-Search proceedings, the Assessee could tally only the Turnover figures and denied having any relation with any other figures mentioned in the file, which was held as not acceptable by the Assessing Officer, who observed that at the bottom of such Sheets, many transactions, mostly in Cash had been noted. It was held by Ld AO that the notings in these Sheets represent payments to the Broker in different years from Unaccounted Cash. Based on these sheets Ld AO observed that such payments in different years was Rs.20,00,000/- in FY 07-08 (AY 08-09), Rs.26,00,000/- in FY 08-09 (AY 09-10), Rs.46,62,940/- in FY 09-10 (AY 10-11) and Rs.37,50,000/- in FY 10-11 (AY 11-12). Accordingly, Rs. 1,65,00,000/- was added to the Income in AY 09-10 as deposits in Books of Account in Share Capital and Rs.26,00,000/- as Unaccounted Cash payment. Similarly for AY2010-11 Rs. 12,00,00,000/- was added to the Income in as deposits in Books of Account in Share Capital and Rs.46,62940/- as Unaccounted Cash payment. The Assessee Company went in appeal against the additions of Share 3. Capital & Premium added u/s 68 and on account of Unaccounted Cash payment before Ld CIT(A), which had allowed the appeals and now the Revenue has come in appeal raising grounds which are reproduced below from appeal for AY 2009-10 and except for different amounts involved similar are grounds in appeal for AY 2010-11. “1. That the order of the Ld. CIT (A) is not correct in law and on facts. 2. On the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of unexplained share capital amounting to Rs. 1,65,00,000/-. 3. On the facts and circumstances of the case, the CIT(A) has erred in ignoring the findings of inquiry conducted during search and assessment proceedings, wherein it was established that the investor companies were mere paper companies. 4. On the facts and circumstances of the case, the CIT(A) has erred in holding that the seized document which shows expenses related to share-capital is not relevant for this year.

On the facts and. circumstances of the case, the CIT(A) has erred in reducing the amount of addition on account of unaccounted payment from Rs. 26,00,000/- to Rs. 2,65,507/-.”