TaxTMI 
TaxTMI 
2014 (7) TMI 389
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....ness of the transaction by not producing the director of the share applicant company. The CIT (A) also noted that the assessee has not produced the persons controlling the share applicant companies in spite of several opportunities being given during the assessment proceedings as well as appellate proceedings to discharge the burden of proof and the appeal of the assessee was dismissed by relying on the decisions of CIT vs. Nova Promoters & Finlease (P) Ltd. - 342 ITR 169 (Delhi), CIT vs. Gold Leaf Capital Corpn. Ltd. (2012) 205 Taxman 16 (Delhi), CIT vs. Neelkanth Ispat Udhyog Pvt. Ltd. - 2012-TIOL-606-HC-DEL-IT and also on the decision of CIT vs. M/s. N.R. Portfolio Pvt. Ltd. - 2012-TIOL-1056- HC-DEL-IT. After sustaining the addition of share application money, the CIT (A) has also sustained the addition of Rs. 67,125/- treating the same as unexplained expenditure for the payment of commission to acquire accommodation entries u/s 69C of the Act. 3. Now, the assessee is in appeal by taking the following grounds of appeal :- "(I) That on the facts and circumstances of the case the learned ITO & CIT (A) erred in (a) Ad....
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....on'ble High Court has decided that once the documents are submitted which will be sufficient to prove identity, creditworthiness and genuineness of share applicant, then Assessing Officer to scrutinize the same and if he nurtures any doubt about veracity then probe the matter further. As per this judgment of Hon'ble High Court, the assessee is required to prove the identity of the shareholder, genuineness of the transaction and creditworthiness of the shareholders. In case the investor/shareholder is an individual, some documents will have to be filed or the said shareholder will have to be produced before the Assessing Officer to prove his identity. If the creditor/subscriber is a company, then the details in the form of its registered address or PAN identity, etc., can be furnished. It has been stated in para 12 of the judgment that genuineness of the transaction is to be demonstrated by showing that the assessee had, in fact, received money from the said shareholder and it had come from the coffers of that very shareholder. When the money is received by cheque and is transmitted through banking or other undisputable channels then genuineness of the transaction would be p....
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....operators and there is no common directorship in various companies. He further submitted that Hon'ble Delhi High Court in the case of CIT vs. Gangeshwari Metal P Ltd - (2013) 214 Taxman 423 (Delhi) has held that there are two types of cases, one in which the Assessing Officer carries out the exercise which is required in law and the other in which the Assessing Officer sits back with folded hands till the assessee exhausts all the evidence or material in his possession and then comes forward to merely reject the same on the presumptions. The case of Gangeshwari Metal P. Ltd., cited supra, was held to be fallen in the latter category. In assessee's case also, there is a complete lack of enquiry on the part of the Assessing Officer when the assessee furnished all the relevant material to the Assessing Officer and as per the ratio in the case of Gangeshwari Metal P. Ltd., no addition can be made u/s 68 in the assessee's case. He also submitted that the judgment of Hon'ble Delhi High Court in the case of Nova Promoters & Finlease Pvt. Ltd., cited supra, has been duly considered and distinguished in the case of CIT vs. Gangeshwari Metal P. Ltd., cited supra. The reliance was als....
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....tantial evidence to establish identity and creditworthiness of creditors and genuineness of share application, merely because it failed to produce creditors, share application money could not be regarded as undisclosed income of assessee under section 68. He also placed reliance on the decision of Hon'ble Delhi High Court in the case of CIT vs. Rock Fort Metal & Minerals Ltd - [2011] 198 Taxman 497 (Delhi) and ITAT, Indore Bench in the case of ACIT vs. ETC Industries Ltd - [2012] 150 TTJ 527 (Indore). He further submitted that Assessing Officer as well as CIT (A) erred in making assessment by not providing copies of third party statements recorded under search even after repetitive request of assessee which has been used against the assessee in assessment proceedings. He submitted that in the case of CIT vs. A.L. Lalpuria Construction P. Ltd. reported in [2013] 32 taxmann.com 384 (Rajasthan), the Hon'ble High Court has held that addition on account of accommodation entry cannot be made on the basis of unconfronted oral statements of third parties. He also relied on the decision of ITAT, Delhi in the case of Yamuna Synthetics P. Ltd. vs. DCIT - [2004] 3 SOT 35 (Delhi) wherei....
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.... Delhi High Court in case of CIT vs. Ashwani Gupta - 322 ITR 396 (Delhi) and Hon'ble Gujarat High Court in case of CIT vs. Indrajit Singh Suri - [2013] 215 Taxman 581 (Gujrat). Finally, he pleaded that assessee has not been supplied reasons recorded u/s 148 within reasonable time, i.e. within maximum time period of six years in which notice u/s 148 can be issued and, therefore, assessment is invalid in law. For this proposition, ld. AR relied on the decision of Hon'ble Delhi High Court in the case of Haryana Acrylic Mfg. Co. vs. CIT - 308 ITR 38 (Delhi). He finally submitted that the Assessing Officer has also recorded that assessee has failed to file copies of the confirmation, affidavit and current ITR from M/s. Shubham Electronics & Electric, one of the share applicants. Ld. AR draws our attention to page 35 of the paper book which is a confirmation from M/s. Shubham Electronics & Electric dated 14.12.2010 wherein M/s. Shubham Electronics & Electric had confirmed that they have made the confirmation of Rs. 4,90,000/- in the equity shares of M/s. Gabs Fabrics (P) Ltd. (assessee) during the financial year ended 31.03.2003. In this confirmation PAN of the share applicant wa....