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Judgment
PER MANISH AGARWAL, AM :
The present appeal is filed by the Revenue against the order dated 15.10.2024 of Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld. CIT(A)”] in Appeal No. CIT(A), Delhi-7/11026/2019-20 passed u/s 250 of the Income Tax Act,1961 [“the Act”] arising out of the assessment order dated 31.12.2019 passed u/s 143(3) of the Act pertaining to Assessment Year 2017-18.
Brief facts of the case are that assessee is a Private limited company and filed its return of income on 31.10.2017, declaring loss of INR 1,25,243/-. The case of assessee was selected under CASS and assessment was completed by making additions towards the profit of INR 1,17,08,931/- on the sale of equity shares and profit from F&O segment of INR 86,70,879/- and further dividend income of INR 3,38,060/- as income of the assessee and after reducing the amount of service tax, net addition of INR 1,80,37,381/- was made by the AO. Besides this, an addition of INR 2,33,06,326/- is made regarding credit balance appearing in the name of M/s RKS Distributor Pvt. Ltd. u/s 68 of the Act and further, an addition of INR 9,05,423/- was made u/s 14A of the Act. Accordingly, total income of the assessee stood assessed at INR 4,21,23,887/-.
Against the said order, the assessee preferred appeal before Ld. CIT(A), who confirmed the addition made u/s 14A of the Act and deleted the other two additions made by the AO.
Aggrieved by the said order, Revenue is in appeal before the Tribunal by taking following grounds of appeal:-
1.Whether on the facts of the case and in law, the Ld. CIT(A), has erred in deleting the additions totaling to Rs. 1,80,37,381/-made by the A.O. on account of undisclosed income earned by the assessee during the year under consideration on sale of equity, F&O Profit and dividend income for which the assessee received Rs. 2,07,17,870/- and payment of STT totaling to Rs. 26,80,489/-on these transactions was made which is evident in Form 10DB which the assessee failed to explain during the assessment proceedings.
2.Whether on the facts of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 2,33,06,326/- made by the A.O. on account of bogus credit balance appearing in the books of the assessee against M/s RKS Distributors Pvt. Lid. which the assessee failed to explain during the assessment proceedings despite being provided ample opportunities to do so.
3.The appellant craves to be allowed to add any fresh ground(s) of appeal and or deleted or amend any of the ground(s) of appeal.”
Ground of appeal No.1 raised by the Revenue is with respect to the deletion of addition of INR 1,80,37,381/- made by AO by holding the same as undisclosed income earned by the assessee from sale of equity shares and F&O segment and dividend income.
Before us, Revenue has vehemently supported the order of the AO and submits that assessee was trading in shares and had not declared any income on account of profits earned from such trading in the return of income filed for the year under appeal though the same was appearing in AIS statement of the assessee. Ld. Sr. DR submits that all the transactions are appearing in the name of the assessee in Form 10B however, the assessee claimed that it had provided management services where the funds were received from M/s RKS Distributor Pvt. Ltd. and funds received from the said company were invested in the stock market and assessee earned 10% as commission on the profit earned from such transactions. Ld. Sr. DR submits that AO has observed that no formal agreement was filed by the assessee and further after examining the details filed and submissions of the assessee, concluded that entire profits earned from trading of shares and from F&O segment is the income of the assessee company and not of M/s RKS Distributor Pvt. Ltd. and accordingly, made the addition. He submits that order of Ld. CIT(A) deserves to be uphold.
On the other hand, Ld.AR for the assessee supported the order of ld. CIT(A) and submits that assessee has worked as management consultants in terms of agreement executed with M/s RKS Distributor Pvt. Ltd. which is placed at page 14 of the Paper Book filed by the assessee. As per the said agreement, there was an arrangement between the assessee and M/s RKS Distributor Pvt. Ltd. that M/s RKS Distributor Pvt. Ltd. will providing the funds to assessee for making investment I the stock market including F&O segment on its behalf and assessee will be eligible for 10% of the profit earned as commission for the services rendered. Ld. AR submits that as per this arrangement, funds were received from M/s. RKS Distributor Pvt. Ltd. from time to time which were invested in stock market and profits earned from such transactions were credited to the account of M/s. RKS Distributor Pvt. Ltd. maintained by the assessee, and remained payable at the end of the previous year. Ld. AR further drew our attention to the affidavit of Director of M/s RKS Distributor Pvt. Ltd., Shri Sanjay available at page 50 to 51 of the Paper Book, wherein he had admitted that the funds were provided by the company to the assessee for making investment in share market and the entire income received after deduction of commission paid to assessee, was offered for tax in the return of income filed by the company M/s RKS Distributor Pvt. Ltd. The necessary copy of the computation of the said company was also filed in the Paper Book alongwith affidavit. Ld. AR submits that the assessee has acted as an Agent for M/s RKS Distributor Pvt. Ltd. and income earned from share trading as well as F&O segment pertained to M/s RKS Distributor Pvt. Ltd. who offered the same for tax in its return of income filed. Ld. AR submits that Ld. CIT(A) after considering these facts has rightly deleted the additions made by AO and he prayed for the confirmation of the order of ld. CIT(A).
Heard the contentions of both the parties and perused the material available on record. It is seen that there was an arrangement between the assessee and M/s RKS Distributor Pvt. Ltd. according to which assessee has acted as Agent for M/s RKS Distributor Pvt. Ltd. who provided the funds to the assessee and the assessee invested such funds in stock market on behalf of M/s RKS Distributor Pvt. Ltd. and the assessee got 10% of the profit as commission. It is further seen that such commission is duly credited in the books of the assessee and declared as income in the Profit & Loss account. The profits earned from such transactions also stood credited in the ledger account of M/s. RKS Distributor Pvt. Ltd. in the books of assessee. As this income actually belonged to M/s. RKS Distributor Pvt. Ltd. who declared the same in its return of income, therefore same was not disclosed by assessee and there was mismatch with the information available in AIS statement. As observed above, M/s. RKS Distributor Pvt. Ltd. has accepted these transactions as belonged to it and further confirmed the balance appearing in the books and after including the profits in its income paid the taxes thereon. Ld. CIT(A) appreciated these facts and deleted the additions made. The relevant observation of Ld. CIT(A) as appearing in para 6.2 to 6.3.4 of the order are reproduced as under:-
6.2 Ground No. 3 :
This ground pertains to an addition of Rs. 2,33,06,326.29/- on account of alleged non reporting of income by the appellant. In para 1 of page 2 of the assessment order A.O. has detailed the facts that appellant was asked to substantiate the huge share transactions made by the appellant during financial year 2016-17, relevant to assessment year 2017-18. The AO states that the appellant has submitted that during the period under consideration, appellant has done share transactions on behalf of another entity M/s RKS distributors private limited. The AO further states that in support of the appellant's contention, the appellant has submitted a copy of letter duly signed dated 06/04/2016 on the letterhead of appellant.
6.2.1.The letter details about the fact stated by the appellant that income, of any nature is incurred in course of sale of shares are securities dividend earned on shares and securities, interest earned on investments et cetera will be accounted in the books of account of M/s RKS distributors private limited.. Further stock of shares and distributor balance as on last date of financial year will also be accounted in M/s RKS distributors private limited.. The appellant only will be eligible to receive 10% of the profit earned from the share trading as well as F & O transactions made during the arrangement with M/s RKS distributors private limited.. This will be after deduction of any expenses incurred as mentioned. Further, the contents of the letter states, if any losses incurred as on last date of the financial year or any date when this agreement is mutually terminated. It will be borne by M/s RKS distributors private limited and the appellant will in no way be liable to bear the loss in its account.
6.2.2.The appellant has given the comments and arguments in support of his claim with respect to this addition made. The appellant has submitted the copy of agreement with M/s RKS distributors private limited., which was entered on 06/04/2016, wherein it has stated that Appellant will receive 10% of the profit earned from share trading and then the appellant will not share, loss incurred if any such from the trading. The appellant also has enclosed the copy of the said agreement which is reproduced here.
OVAL INVESTMENT PRIVATE LIMITED
Reg. Office: B-97, 2ND FLOOR, AMRITPURI, GARHI, EAST OF KAILASH, NEW DELHI-110065 CIN: U74899DL1980PTC010864, E-MAIL ID: [email protected]
M/s RKS Distributors Pvt. Ltd. 252-B, Ground Floor, Shahpur Jat, New Delhi- 110049
Date: 06/04/2016
Dear Sir.
As per our long-term association of more than one decade and discussion we had from time to time regarding investment in shares and other securities, we propose the following arrangement between us, the details of which are as follows: -
1.Expenses of any nature incurred in the course of sale and purchase of shares or securities such as interest on late payments, share trading expense, Delay payment charges, Bank charges etc. will be borne by RKS Distributors Pvt. Ltd.
2.Income of any nature incurred in the course of sale of shares or securities. Dividend earned on shares and securities, interest earned on investments etc. will be accounted in books of account of RKS Distributors Pvt. Ltd.
3.All the stock of shares and the broker balances as on the last date of financial year will be accounted in RKS Distributors Pvt. Ltd. books of account.
4.Oval Investment Pvt. Ltd. will only be eligible to receive 10% of the Profit earned from share trading as well as F&O transaction made during this arrangement by RKS Distributors Pvt. Ltd. This will be after deduction any expenses incurred as mentioned in Point no 1 above.
5.The stock of shares as on last date of the financial year or when this agreement is mutually terminated will be solely decide by RKS Distributors Pvt. Ltd. Oval Investment Pvt. Ltd. will have no right to claim over it.
6.If any loss has incurred as on the last date of the financial year or any date when this agreement is mutually terminated it will be borne by RKS Distributors Pvt. Ltd. and Oval Investment Pvt. Ltd. will in no way be liable to bear the loss in its account. Oval Investment Pvt. Ltd. will be only receiving 10% of the Profit earned as above after deduction all expenses as mentioned on Point no 4 above.
For Oval Investment Pvt. Ltd. For OVAL INVESTMENT PVT. LTD.
Accepted For RKS Distributors Pvt. Ltd. For R K S Distributors Pvt. Ltd. Director/Authorized Signatory
6.2.3.The appellant further states that M/s RKS distributors private limited has not paid any amount during the year. However, the appellant on behalf of M/s RKS distributors private limited had carried out share transactions on the credit side of Rs. 67,88,42,874.24/- and all debit side of Rs. 65,55,63,547.97/-, thus, at the end of the financial year, there was an amount of Rs. 2,33,06,326.29/-, payable to M/s RKS distributors private limited which was reflected in the books of account of the latter. The appellant has also enclosed the Ledger account of M/s RKS distributors private limited in the books of the appellant and also given computation of the calculation sheet of net loss from share trading. These details were submitted to A.O., vide his reply dated 06.12.2019. These ledger details the transaction under taken by the appellant on behalf of M/s RKS distributors private limited.
6.2.4.Further, with respect to this amount of Rs. 2,33,06,326/- which was payable by appellant to M/s RKS distributors private limited., the appellant has taken a claim that it has reflected the same under other current liabilities reflected in the note 3 of the balance-sheet. The relevant part of the balance-sheet of the Appellant is reproduced as under:
OVAL INVESTMENT PRIVATE LIMITED Balance Sheet As At 31st March, 2017
Particulars Note No. (Amount in Rupees) As at 31st March,2017 As at 31st March,2016 EQUITY AND LIABILITIES Shareholder's Funds Share Capital 1 35,926,500 35,926,500 Reserves and Surplus 2 34,449,801 21,630,804 Current Liabilities Other Current Liabilities 3 210,721,479 223,347,250 Total Equity & Liabilities 281,097,780 280,904,554 ASSETS Investments 4 245,573,115 245,573,115 Current Assets Inventories 5 22,609,163 22,609,163 Cash and cash equivalents 6 143,564 30,338 Short Terms Loans and Advances 7 569,938 489,938 Other Current Assets 8 12,202,000 12,202,000 Total Assets 281,097,780 280,904,554 6.2.5.The appellant also states that the amount has been reflected by M/s RKS distributors private limited under the head other current assets. The appellant during the appellate proceedings has filed relevant extract from notes forming part of the balance-sheet, which are enclosed as annexure 3 and annexure for and annexure 5. The copy of balance sheet in respect of M/s RKS distributors private limited is pasted below.
The copy of affidavit from the director of M/s RKS distributors private limited with the appellant has also has stated on oath that all trading transactions related to amount in question, totalling to Rs.2,33,06,326/- were carried out on behalf of M/s RKS distributors private limited. The affidavit further states that all the transactions were undertaken by the Appellant on its behalf.
AFFIDAVIT
I, Sanjay Jalan, S/o Sh. Narayan Jalan, R/o N-118, Panchsheel Park, New Delhi- 110017 do hereby solemnly affirm and state as under :-
1.That I am the director of RKS Distributors Pvt Ltd. And I am fully conversant with the facts of the case relating to Assessment Year 2017-18 of Oval Investment Pvt. Ltd.
2.Based on the agreement with Oval Investment Pvt. Ltd., trading was done by Oval Investment Pvt. Ltd. on our behalf.
3.Net loss of Rs. 4,15,497/- was incurred by M/s. Oval Investment Pvt. Ltd. on trading and F&O Transaction on stock exchange carried out on behalf of us during Assessment Year 2017-18 the same has been included in the net profit earned by us on trading of Future & Options in our Profit and Loss Account for Financial Year 2016-17.
4.Further the closing balance as on 31.03.2017 of Rs. 2,33,06,326/- recoverable from M/s Oval Investment Pvt. Ltd. is included under the head "Other Current Assets" as "Advance Recoverable in cash or in kind or for value to be received, considered goods" in the financial statement for the FY 2016-17.
DEPONENT
VERIFICATION
I, the above named deponent do hereby verify that the contents of the above affidavit in Para 1 to 4 are true and correct to the best of my knowledge and belief.
Verified today 30th December, 2019 New Delhi.
DEPONENT
NOT
The Appellant has also produced a copy of letter filed in the letterhead of M/s RKS distributors private limited, wherein it is stated that the loss incurred by the Appellant in the trading transactions is included by M/s RKS distributors private limited in its books and also the closing balance is reflected in its books.
RKS DISTRIBUTORS PRIVATE LIMITED
Reg. Office: K-6, 3RD FLOOR, KALKAJI, NEW DELHI-110019 [email protected] CIN NO- U23209DL1990PTC041006
Date: 13.12.2019
This is to certify that net loss of Rs. 4,15,497/-incurred by the M/s. Oval Investment Pvt. Ltd. on trading transactions carried out on behalf of us during AY 2017-18 is included in the net profit earned by us on trading of Future & Options during FY 2016-17. Further, the closing balance as on 31.03.2017 of Rs. 2,33,06,326/- recoverable from M/s. Oval Investment Pvt. Ltd. is included under the head "Other Current Assets" as "Advance Recoverable in cash or in kind or for value to be considered good" in the financial statement for the FY 2016-17.
Thanking You, Yours Faithfully, For R K S Distributors Pvt. Ltd.
Authorised Signatory/Director
For M/s. RKS Distributors Pvt. Ltd. (Director)
The appellant has taken a claim that these transactions have been accurately recorded in Ledger account of the said party in the books of the appellant and therefore the same needs to be deleted in the assessment.
On going through the contentions of the appellant, only one issue emerges for consideration. Whether the transactions carried out by the appellant on behalf of M/s RKS distributors private limited should be assessed in the hands of the appellant or not. The AO has felt that these transactions should be added in the hands of the appellant. The appellant during the course of assessment has submitted to the various documents in support of its contention to delete said additions.
The appellant has submitted an agreement entered between the appellant and M/s RKS distributors private limited. for share trading. According to the said agreement, the Appellant will receive 10% of the profit earned from share trading and Appellant will not share the loss incurred. The copy of the agreement mentioned is reproduced above. On going through the contents of the agreement, it is very clear that the Appellant has undertaken transactions on behalf of M/s RKS distributors private limited. It is also noted that the agreement holder M/s RKS distributors private limited has also offered income in consequence to the agreement as per the documents submitted by the appellant. The AO in the assessment order has stated that all fund movement was from Appellants account the various brokers through which share transactions were made., The appellant during the course of assessment proceedings, and also during the course of present appellate proceedings has submitted that such fund moment from Appellants account to brokers was in consequence to agreement between the appellate and M/s RKS distributors private limited., dated 06/04/2016. As the Appellant has carried out share trading on behalf of M/s RKS distributors private limited, the claim of the appellant is that the moment of funds has been from the account of Appellant to the brokers. further, the Appellant has drawn Ledger account in respect of the party, M/s RKS distributors private limited total amount payable is Rs. 2,33,06,326/- is reflected. This includes profit on sale of equity, F & O profit, dividend income and reducing an amount of incurred by the Appellant on account of STI paid. The further observation of the assessing officer is that there was no outstanding balance payable by Appellant to M/s RKS distributors private limited pertaining to earlier years. The agreement was signed on 06/04/2016, which is during the financial year corresponding to the assessment year. If the agreement is signed during the year and there was no such agreement during the earlier years, there is no scope for such arrangement in the earlier years. There is no merit in the observation of a A.O. in this regard. The next allegation by the assessing officer that as per Ledger account, there is only journal entry with the brokers and no bank transaction found. In this regard, the Appellant has submitted that he has provided requisite documentation in response to show cause notice dated 20/04/2019. The assessee contends that all transactions are as per the agreement mentioned supra. In response to said show cause notice included statement of bank accounts which reflected transactions conducted with the share brokers. The Appellant has submitted such bank accounts, as a part of submissions during the present appellate proceedings.
The observations of AO In para 4 and 5 of page 5, wherein he alleges that there is no proof, which shows any fund or the stock moment between the appellant and M/s RKS distributors private limited., the Appellant in this regard has submitted that the share transactions were indeed conducted by the Appellant on behalf of M/s RKS distributors private limited using the Appellant's own funds. Further, there is a Ledger maintained by the Appellant which reflects the arrangement in consequence of which there is amount payable at the end of the financial year. When these amounts are properly reflected in the books of account, the balance sheet of the Appellant and also the balance-sheet of M/s RKS distributors private limited, the AO is wrong in such observation. Further, M/s RKS distributors private limited has also filed an affidavit owning all transactions and filing return of income in this regard. There cannot be any technical infirmity in this regard.
In response to allegation in point No. 7 of page 6 of the assessment order wherein the AO has observed that there is no supporting evidence of expenditure claimed in respect of the late payment charges, interest on share trading expenses. The appellant has submitted that the Appellant has not claimed the late payment charges and interest incurred in trading transactions carried out on behalf of M/s RKS distributors private limited in the books of accounts. Further, in the reply dated 28.12.2019 submitted before the assessing officer, the appellant has already submitted the broker statement highlighting the late payment charges. The same is also submitted during the present appellate proceedings,
In response to allegation by the assessing officer in para 8 and 9 of page 6 of the assessment order wherein he states that as per so-called agreement letter dated 06/04/2016, the mentioned that The appellant will only be eligible to receive 10% of profit earned from share trading as well as F & O transactions made during the arrangement with M/s RKS distributors private limited. And also any loss incurred as on last date of financial year or when agreement is mutually terminated, It will be borne by M/s RKS distributors private limited and appellant in no way liable to bear the loss in its account., In this regard, the Appellant has clarified that as per point number 8 of the agreement dated 06/04/2016 all stock of shares and broker balance as on last date of financial year will be accounted in M/s RKS distributors private limited., not in books of the appellant. Therefore, Appellant transferred all closing stock and broker balances to a case distributors private limited and has submitted summary of accounts received/payable from M/s RKS distributors private limited.
In para 10 of page 6 the AO alleges that, during assessment proceedings at point No. 4 of affidavits submitted by the appellant, wherein it is mentioned that sum of Rs. 2,33,06,326 recoverable from appellant is included in under the head other current assets in advance recoverable in cash or in-kind for value to be received. In absence of any stocks/fund transfer from M/s RKS distributors private limited. to appellant. How is it possible that there is a balance in books of M/s RKS distributors private limited.. The appellant has submitted that there was no stock or fund that has transferred from Mrs M/s RKS distributors private limited to the Appellant. The Appellant has submitted that he has transferred the stock and broker fund as per point No. 3 of the agreement dated 06/04/2016 and summary of balance is payable to M/s RKS distributors private limited. With the net balancing of Rs. 2,33,06,326 is transferred. The Appellant further submitted that M/s RKS distributors private limited, duly acknowledged all balances in its books of accounts and net income from share trading activity in consequence to the agreement.
To summarise, on the basis of discussion above, the allegations made by the assessing officer is that the income from transactions belongs to the Appellant not to M/s RKS distributors private limited. In this regard, there is a memorandum of understanding or agreement between the 2 parties, dated 06/04/2016. the transactions are as per the agreement and both the parties have done transactions as per the agreement. The Appellant has provided the details of confirmation from M/s RKS distributors private limited wherein M/s RKS distributors private limited has confirmed that such transactions were indeed carried out by the Appellant on behalf, and the same have been reflected in its books. Further, there is an affidavit filed by the agreement holder M/s RKS distributors private limited that the appellant has under taken transactions and also has offered income in its hands. The Appellant has also provided detailed reconciliation with respect to transactions wherein the said transactions are reflected in the books of accounts of the Appellant in the closing balance in the balance sheet of the Appellant and there is contra entries in the confirmation is filed by the agreement holder M/s RKS distributors private limited. Further, documentary evidences are filed as per return of income filed by both the parties to the agreement namely appellant and M/s RKS distributors private limited.
In the transaction between the two parties when there is a binding agreement which is followed in letter and spirit, further the agreement holder owns up the transactions and files an affidavit in this regard. Then, with respect to transactions there is re conciliation filed along with details filed in Return of Income filed, it is wrong on the part of the A.O.I.D.tax.this amount in hands of the Appellant. M/s RKS distributors private limited has owned up transactions and also filed affidavit and also reflected the said transaction in its books of accounts and the confirmations are filed, in this background, it is wrong on the part of the assessing officer to include this amounts in the hands of the appellate and tax it again. There is nothing brought on record by the assessing officer to show that the income belongs to the appellant or any infirmity on part of the documentary evidences submitted by the Appellant.
For arguments sake, just for the sake of discussion, not conceding but considering if the income is added in the hands of the Appellant then it would be double taxation which is wrong background, that the agreement holder M/s RKS distributors private limited has shown that the transactions and filed affidavit and income is offered in his return of income filed.. In this background in view of the discussion above, the additions made by the assessing officer in the assessment order to the extent of Rs. 2,33,06,326/- are deleted. The above ground of appeal filed by the assessee is hereby allowed.
1. 1. Ground No. 2 and 5 :
These grounds, pertaining to objection to addition of Rs. 1,80,37,381/-by the A.O. The Appellant has filed submissions against addition of ☐ 1, 80, 37, 381 on account of non reporting of income in return filed by Appellant and there is a net addition of this amount. The Appellant has submitted that Appellant has carried out the business of share trading on behalf of M/s RKS distributors private limited. All the trading transactions have been posted to Ledger account of the party in books of the appellate. As the entire transactions and the details are already filed by the agreement folder M/s RKS distributors private limited, the addition should be deleted.
The Appellant has filed the details of copy of audited financials including ITR and computation sheet in respect of his claim. Further, the has submitted that it has carried out the business of share trading on behalf of M/s RKS distributors private limited. In this background, the Appellant has requested that the additions may be deleted.
The only issue is whether this amount of Rs. 1,80,37,381/- is different from the additions made by the AO in the earlier part of the assessment order amounting to Rs. 2,33,06,326. I have verified the reconsideration filed by the appellant which was also filed before the assessing officer, and this amount of Rs. 1,80,37,381/- is included in the addition made by the AO in the earlier part of the assessment order which is dealt in earlier grounds wide supra amounting to Rs. 2,33,06,326/-. As the additions which are made by the AO in the earlier part of the assessment order with respect to share transactions and others which are carried out by the Appellant on behalf of M/s RKS distributors private limited have been deleted as per discussion above, the additions made which are dealt here are wrong and shall be liable to be deleted, AO is not correct. In making this additions, on two counts
Firstly, when the amount is added on share transaction amount or Rs. 2,33,06,326/- issue which includes this addition of Rs. 1,80,37,381/-. This amounts to double addition as both relate to share transactions under taken by appellant on behalf of M/s RKS distributors private limited and this amount of Rs. 1,80,37,381/- is included in the additions made of Rs. 2,33,06,326/-.
Secondly, For the detailed discussion in the earlier grounds and also that the Appellant has taken transactions on behalf of the agreement holder M/s RKS distributors private limited there is no scope of additions from such transaction, It is directed that the addition made by the AO is deleted. The addition made of Rs.
Before us, Revenue has failed to controvert the findings given by Ld. CIT(A) who has based his findings after examining Balance Sheet of the assessee company as well as of M/s. RKS Distributor P.Ltd. wherein this income was disclosed by M/s. RKS Distributor P.Ltd. and taxes were paid on such income. It is also seen that company, M/s. RKS Distributor Pvt. Ltd. has accepted all the transactions and filed its confirmations which is available at page 49 of the Paper Book and it is also a matter of fact that no independent inquiry was made by AO from M/s. RKS Distributor PVT. Ltd. though all these details were filed by the assessee before him. It appears that AO has proceeded with pre-conceived notion and failed to make any independent inquiry before reaching to the conclusion that the profits from such transactions pertained to the assessee company and was its income.
Once it is established that these profits are actually pertained to M/s. RKS Distributor Pvt. Ltd. who has paid the taxes after including the same in its total income any further addition of the said income in the hands of the assessee would tantamount to double addition of income. Accordingly, we find no error in the order of Ld.CIT(A) in deleting the addition made which is hereby, upheld. Both the grounds of appeal of the revenue are thus, dismissed.
In the result, appeal of the Revenue is dismissed.