TaxTMI 
TaxTMI 
2014 (7) TMI 591
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....ssee. Benificiary's NameBenificiary Bank NameBenificiary bank BranchValue Of entry takenInstrument No. by which entry takenDate on which entry takenName of Account holder of entry giving AccountBank from which entry giving BankBranch of entry giving Bank A/c No. entry giving account Tulip Engineering P. Ltd.Corporation Bankon Bank Paschim Vihar2340 0023568018/10/20 03Raghubir SinghCorpn BankPaschim Vihar 1227 6 Tulip Engineering P. Ltd.Corporation BankPaschim Vihar2500 0024260118/10/20 03Simranjeet KaurCorpn BankPaschim Vihar 1736 7 The above amount of Rs. 4,84,000/- has been credited into assessee's bank account on various dates. Investigation made by the Investigation Wing of the Department has found that assessee is a beneficiary of taking the aforesaid accommodation entries. I have also perused various materials and report from investigation wing and on that basis it is evident that the assessee company has introduced its own unaccounted money in its bank account by way of above accommodation entries. Therefore, I have reason to believe that the income of the assessee company amounting to Rs. 4,84,000/- has escaped assessment. The escapement of income ....
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.... the persons did not have the capacity to give these amounts to the assessee. (II) The transaction was not genuine and represented bogus accommodation entries. (III) The assessee had claimed to have received huge amounts by sale of shares not only under year of the consideration, but year after year, in assessment year 2002-03, 2003-04, 2004-05 and 2005-06. 6. In view of the decisions of Hon'ble Supreme Court in Sumati Dayal V. CIT (1995) 214 ITR 801, CIT Vs. Nova Promotors & Finlease (P.) Ltd. [2012] 342 ITR 169 (Delhi), the evidence adduced by the assessee had to be examined not superficially but in depth having regard to the test of human probabilities and normal course of human conduct. Ld. CIT appeal also relied on following decisions :- 1. CIT v. Nova Promoters & Finlease (P.) Ltd. [2012] 342 ITR 169 (Delhi) 2. CIT v. Gold Leaf Capital Corpn Ltd. [2012] 205 Taxman 16 (Delhi) 3. ITO v. Diza Holdings (P.) Ltd. (2002) 255 ITR 573 (Ker) 4. CIT v. United Commercial & Indl. Co.(P.) Ltd. (1991) 187 ITR 596 (Cal) 5. CIT v. NEELKANTH ISPAT UDHYOG PVT. LTD - 2012-TIOL-606-HC-DEL-IT &nb....
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.... of sale of shares. Unlike the case where the assessee issues shares and collects money, in a case of sale of shoes the degree of burden of proof is not the same. In case of sale of shares, one asset i.e. shoes is converted into another asset i.e. cash. No new asset is acquired by the assessee. If sold at a higher rate, the difference is profit subject to tax. So in our view, if the assessee give the identity of the person, it should be sufficient." 9. Ld. Counsel further, relied on the decision of Hon'ble Delhi High Court in the case of CIT Vs. Medshave Health Care Ltd. ITA 124/2010 Ld. Counsel also relied on the decision in the case of CIT Vs. Value Capital Services P. Ltd. 307 ITR 334. Ld. Counsel, further, relied on ITAT order under ITA No. 4629 (Del)/2010 ITO Vs. Tulip Engineering P. Ltd. for A.Y. 2002-03 Ld. Counsel also pointed out that assessee had duly established the identity of the persons who had purchased the shares from assessee and there was no dispute that the proceeds credited in books of account of the assessee were out of sale of shares held by it. Ld. Departmental Representative submitted that assessee has not been established the purchaser's creditworthiness a....
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....itworthiness of the purchaser. It is interesting to note that in earlier years also the purchases were doubted. However since A.O. had not made any enquiries, Tribunal came to the conclusion that the assessee's claim was justified. The facts in the present case are, however, clearly distinguishable as would be clear from the ensuing discussion. In assessment year 2002-03, Tribunal in para 2.3, inter alia, noted as under with reference to the findings of Ld. CIT appeal :- "In the case of sale proceeds of the shares of Uttranchal Finance Ltd, it has been mentioned that the AO has not disputed the acquisition of shares by the assessee and the purchase consideration has been paid through cheques. Necessary evidence in respect of sale of 186550 shares has also been placed on record of the Assessing Officer. The Assessing Officer has not controverted these facts except stating that the transactions were not believable. The Ld. CIT(A) held that the identity of the purchasers has been proved. The transactions of sale have been settled by payment through cheques. There is nothing unusual about these transactions. Therefore, the addition of Rs. 18,65,500/- has also been d....
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....ments in its balance sheet is not in dispute. The only dispute is whether the genuineness of the sale of the shares, has been demonstrated by the assessee or not. The assessee in this case has filed copies of the confirmation letters, affidavit, confirmation of account etc. in support of the fact that the sales made were genuine. PAN number of the purchasers of shares was also given. The Ld. commissioner of Income Tax (Appeals) has summarized the evidences at para 10 at pages 3 and 4 of his order. For the sake of brevity we do not extract the same. In fact the assessee produced these documents before the assessing Officer, is evident from the recording in page 2 of the assessment order. The defects pointed out by the Ld. Assessing Officer in the evidences filed, were explained before the Ld. Commissioner of Income Tax (Appeals)." 14. In the background of above factual aspects, Tribunal observed that in case of sale of shares normally it should be sufficient if the identity of the person is established. However, Tribunal has not ruled that if the identity is established, the Assessing Officer can not examine the genuineness of transaction and creditworthiness of purchasers. It all ....