TaxTMI 
TaxTMI 
2009 (12) TMI 727
X X X X Extracts X X X X
X X X X Extracts X X X X
....00. 5. Landmark Communication Pvt. Ltd. Rs. 2,50,000. The Assessing Officer noted that as per the report of investigation wing it was found that the above referred five companies were not carrying on actual business but were engaged in the business of providing accommodation entries. The assessee is one of the beneficiaries of such accommodation entries. The Assessing Officer to verify the genuineness of the transaction identity as well as creditworthiness required the assessee to produce principal officers of the said companies with their books of account. The assessee filed the details in its possession like : (i) Certificate of incorporation. (ii) Application for issue of shares made to the assessee-company. (iii) Confirmation for allotment of shares. (iv) Affidavit of the director regarding allotment of shares to the company. (v) Board resolution passed by the said company for applying shares of the assessee-company. (vi) PAN card. (vii) A photocopy of acknowledgment for filing return of income for the assessment year 2001-02. (viii) A photocopy of audited balance-sheet and the profit and loss account for the year ended March 3....
X X X X Extracts X X X X
X X X X Extracts X X X X
....riends and relatives of directors/promoters. The Assessing Officer thereafter issued a show-cause notice that the assessee has failed to discharge its onus of proving the existence of the parties and also genuineness of the transaction. On further query as to whether the shares are still held by respective shareholders, the assessee informed that shares allegedly allotted in the name of M/s. Amba Alloys Pvt. Ltd. stands transferred in the name of M/s. Kesri Holding Pvt. Ltd. which is a family controlled company and wherein Ms. Kesri Gupta is a director. Shares allegedly allotted in the name of M/s. Enpol Pvt. Ltd. and M/s. Landmark Communication Pvt. Ltd. stands transferred in the name of Ms. Seema Gupta who happens to be the director of the company. Shares allegedly allotted in the name of M/s. Profan Finance and Investment Pvt. Ltd. and M/s. Saurabh Petrochem Pvt. Ltd. stands transferred in the name of Ms. Kesri Gupta who is the mother-in-law of Ms. Seema Gupta, and these shares having face value of Rs. 10 each were allegedly sold/transferred at the price of Rs. 5 each share. The Assessing Officer thereafter held that it is not a normal transaction. The amount was never receiv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s stated therein. This is contrary to law laid down by the hon'ble High Court in the case of CIT v. Value Capital Services P. Ltd. [2008] 307 ITR 334 (Delhi). (9) The Assessing Officer has shifted the entire burden on the assessee without discharging the onus which lies upon him. This is contrary to law laid down by the hon'ble Delhi High Court in the case of CIT v. Pradeep Kumar Gupta [2008] 303 ITR 95 ; [2007] 207 CTR 115. (10) When the allegation is made by the Department then the burden lay on the Department to prove the same. The onus for proving that share capital received was accommodation entries lies on the Department. (11) In the case of money received which were capital only, identity needs to be proved. If the identity is proved, it is not for the assessee to prove as to how the shareholders can be in possession of the money. (12) Documentary evidence contained the details not only of the identity of subscribers but also their addresses, PAN card, etc. (13) The assessee has discharged the initial onus of genuineness of transaction and the Assessing Officer was not justified in ignoring various evidence provided to him. Nothing ad....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the fact that when the share applicants do not exist and were not available for their examination, how merely on paper the existence of share applicants can be proved. The Assessing Officer has not merely relied upon the information received from investigation wing but has also tried to find out whether the share applicants exist or not. When the parties were not found at the given address, this fact was brought to the notice of the assessee and the assessee has thereafter not provided any further proof of the existence of share applicants. Though the hon'ble Supreme Court observed as extracted hereinabove, before arriving at a finding that the shares were allotted, the existence of share applicants is required to be established. The observation will be relevant only when the share applicants are existing and shares are allotted to them. In this case existence of share applicants has been shown by the assessee on papers which even could not be substantiated by proof that the existence is on the address provided to the assessee by the share applicants. Therefore, the papers submitted itself by the assessee do not prove the existence of share applicant factually. Therefore in t....