Tax Tribunal affirms Rs. 25.00 lakh addition under section 68 for trading companies. Lack of evidence leads to dismissal.

The Tribunal upheld the addition of Rs. 25.00 lakh each by the Assessing Officer under section 68 of the Income-tax Act, 1961 in the hands of three related companies engaged in trading herbal products. The companies failed to substantiate the genuineness of transactions involving share application money from entities linked to providing accommodation entries. Despite multiple adjournments, the assessees' lack of representation led to the Tribunal proceeding ex parte and ultimately dismissing all three appeals, emphasizing the importance of providing substantial evidence and active participation in appeal hearings.

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Issues:
Confirmation of addition of Rs. 25.00 lakh each made by the Assessing Officer u/s. 68 of the Income-tax Act, 1961 in the hands of three related companies.

Analysis:

Issue 1: Addition of Rs. 25.00 lakh under section 68 of the Income-tax Act, 1961
The appeals by the related companies were related to the assessment year 2010-11, with a common issue raised against the confirmation of the addition of Rs. 25.00 lakh each by the Assessing Officer under section 68 of the Income-tax Act, 1961. The companies, engaged in trading in herbal products, received share application money from companies operated by Shri Praveen K. Jain. The AO, based on search and survey actions, noted that Shri Praveen K. Jain was involved in providing accommodation entries through his companies. The AO treated the companies as shell companies and added the share application money to the total income of the assessees. The assessees denied receiving any accommodation entries but failed to provide evidence to substantiate the transactions' genuineness. The Tribunal upheld the additions due to the lack of further evidence from the assessees.

Issue 2: Lack of Representation by Assessees
Despite multiple adjournments and lack of representation by the assessees during the appeal hearings, the Tribunal proceeded ex parte and disposed of the appeals based on the available records and submissions by the Revenue. The absence of the assessees during the hearings further weakened their case, leading to the dismissal of all three appeals.

In conclusion, the Tribunal dismissed all three appeals due to the confirmation of the addition of Rs. 25.00 lakh under section 68 of the Income-tax Act, 1961, as the assessees failed to provide additional evidence to support the genuineness of the transactions. The lack of representation during the appeal hearings also contributed to the dismissal of the appeals.

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