M/S. ADITI SANCHAR SUVIDHA PVT. LTD., ,KOLKATA vs. ITO, WARD - 3(3), KOLKATA , KOLKATA

The assessee in the present case is a Company, which is engaged in the business of trading in shares and securities and giving of loans and advances. The return of income for the year under consideration was filed by it on 25.10.2005 declaring total income of Rs.8,840/-. The said return was initially processed by the Assessing Officer under section 143(1) of the Act on 23.08.2006. Thereafter a search and seizure action under 1 M/s. Aditi Sanchar Suvidha Pvt. Limited section 132 was conducted on 06.08.2008 in the case of M/s. SGM Real Estate Private Limited belonging to Shakun Group of Companies. During the course of said search, a statement of Shri Ballav Das Maheswari, Director of M/s. SGM Real Estate Private Limited was recorded wherein he admitted that his Company had made a payment in cash to the companies based in Kolkata in lieu of share application money introduced. Since the assessee-company was one of such companies, who had allegedly given accommodation entry in the form of share application money of Rs.10,00,000/- and had failed to declare the cash of Rs.10,00,000/.- received against share application money as its income, the Assessing Officer made an addition of Rs.10,00,000/- to the total income of the assessee on account of such undisclosed income in the assessment completed under section 144/147 vide an order dated 28.03.2013.

Against the order passed by the Assessing Officer under section 144/147 of the Act, an appeal was preferred by the assessee before the ld. CIT(Appeals) disputing the addition of Rs.10,00,000/- made by the Assessing Officer on account of alleged undisclosed income and since the submissions made by the assessee in support of its case on this issue were not found acceptable by the ld. CIT(Appeals), he proceeded to confirm the addition of Rs.10,00,000/- made by the Assessing Officer for the following reasons given on page nos. 3 & 4 of his impugned order:- “I have considered the submissions of the authorized representative of the appellant as well as the assessment order framed in the light of the materials available on record before the assessing officer during the assessment proceedings. I find that a Search & Seizure operation u/s.132 of the I.T. Act, 1961 was conducted on 06.08.2008 in the case of M/s. SGM Real Estate (P) Ltd. belonging to Shakun group of Companies. It is informed by the Deputy Commissioner of Income Tax, Central Circle-3, Jaipur that during the course of search statement of Shri Ballav Das Maheswari, Director of M/s.SGM Real Estate (P) Ltd. admitted that expenses were, inflated in the return of income and the surplus generated was used for payment in cash to companies based at Kolkata in lieu of share application money introduced in 2 M/s. Aditi Sanchar Suvidha Pvt. Limited

I have heard the arguments of both the sides and also perused the relevant material available on record. The ld. Counsel for the assessee M/s. Aditi Sanchar Suvidha Pvt. Limited has firstly relied on the decision of Division Bench of this Tribunal in the case of Vasupujya Enterprises Pvt. Limited –vs.- Income Tax Officer (ITA No. 1881/KOL/2016 dated 12.05.2017) to contend that the said decision rendered by the Tribunal on the similar issue and involving identical facts is squarely applicable in the present case. A perusal of the order passed by the Tribunal in the said case shows that the addition in the said case was made by the Assessing Officer on account of undisclosed investment under section 69 and after having found that the conditions stipulated for invoking section 69 were not satisfied by the Assessing Officer in the said case, the addition made by the Assessing Officer was deleted by the Tribunal. The facts involved in the present case, however, are different, inasmuch as, the impugned addition has been made by the Assessing Officer on account of undisclosed income representing cash of Rs.10,00,000/- received by the assessee for allegedly giving the accommodation entry in the form of share application money. It is thus not a case of an addition under section 69 on account of unexplained investment and the decision of this Tribunal in the case of Vasupujya Enterprises Pvt. Limited (supra) cited by the ld. Counsel for the assessee is not applicable.

The other contention raised by the ld. Counsel for the assessee is that the impugned addition on account of undisclosed income allegedly representing cash received by the assessee for giving accommodation entry in the form of share application money has been made by the Assessing Officer and confirmed by the ld. CIT(Appeals) mainly by relying on the statement of Shri Ballav Das Maheswari, Director of M/s. SGM Real Estate Private Limited without giving any opportunity to the assessee to cross examine the said deponent. He has contended that the matter should, therefore, be sent back to the Assessing Officer for giving such opportunity to the assessee. Since the ld. D.R. has also not raised any objection in this regard, I set aside the impugned order of the ld. CIT(Appeals) on the issue under consideration and restore the matter to M/s. Aditi Sanchar Suvidha Pvt. Limited the file of the Assessing Officer for deciding the same afresh after giving the assessee an opportunity to cross examine Shri Ballav Das Maheswari, Director of M/s. SGM Real Estate Private Limited.

In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open Court on December 19, 2018.