TaxTMI 
TaxTMI 
2014 (2) TMI 1124
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....een raised by the revenue, the first question, which is in the following terms, is broad enough to cover the ambit of the controversy and reads as follows:- "Whether the Hon'ble ITAT has erred in law as well as in the facts and circumstances of the case in giving relief on account of addition being unexplained credits on wrong appreciation of law and without any basis substituting its own satisfaction in place of AO's satisfaction despite the fact that the assessee company has not discharged the onus as provided in Section 68 of the I.T. Act, 1961." The Assessing Officer, in the course of an order of assessment under Section 153-A, made an addition of an amount of Rs.8.50 crores which was received by the assessee as share appl....
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....to another company in response whereto both the companies had confirmed the investments made by them and filed share receipt confirmation, bank statements of the relevant period, acknowledgments of the income tax returns and the balance sheet. The CIT (A) held that the Assessing Officer had erred in relying upon the contents of the black diary which did not pertain to the Assessment Year 2007-08 but only to Assessment Year 2005-06. As regards the statement of the Chartered Accountant, the CIT(A) referred to a response dated 27 April 2012 in pursuance of the summons under Section 131 in which he denied having entered into any such transaction. The statement of the Chartered Accountant was considered to be contradictory to the statement earli....
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....the Tribunal held that the assessee had discharged the onus which lay on it to prove the identity of the applicant companies, their credit worthiness and genuineness of the transactions. Two submissions have been urged on behalf of the revenue in this appeal. The first submission relates to the statement of the Chartered Accountant, Aseem Kumar Gupta, who according to the revenue had, during the course of the statement in the survey proceedings and on 22 April 2010, confirmed his involvement in the accommodation entries. It was urged that the retraction by the Chartered Accountant in a letter to the Assessing Officer was an afterthought. Both the CIT(A) and the Tribunal relied on the retraction and it has been urged that Aseem Kumar Gupt....
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....ng the identity and credit worthiness of the applicant companies and of the genuineness of the transaction. In this regard, both the CIT(A) and the Tribunal had noted that the assessee had established all the three aspects by producing, during the course of the assessment, necessary documentary material such as the share application forms, copies of bank accounts, income tax returns and balance sheets. The view which was taken by the CIT(A) and which was sustained by the Tribunal would thus have to be regarded as being, at least, a possible view to take in the circumstances of the case. Reliance has been placed on behalf of the assessee on the judgment of the Supreme Court in Commissioner of Income Tax Vs. Lovely Exports (P) Ltd.1. While....
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....establishes the link between self-confessed "accommodation entry providers", whose business it is to help assessees bring into their books of account their unaccounted monies through the medium of share subscription, and the assessee. The ratio is inapplicable to a case, again such as the present one, where the involvement of the assessee in such modus operandi is clearly indicated by valid material made available to the Assessing Officer as a result of investigations carried out by the revenue authorities into the activities of such "entry providers". The existence with the Assessing Officer of material showing that the share subscriptions were collected as part of a pre-meditated plan - a smokescreen - conceived and executed with the conn....