TaxTMI 
TaxTMI 
2015 (5) TMI 923
X X X X Extracts X X X X
X X X X Extracts X X X X
....cord, inter alia assessment order, impugned order of the CIT(A), assessee's paper books spread over 164 pages and citations, judgments and orders relied by both the parties. Ld. DR has drawn our attention towards para no. 8 to 11 of the assessment order and submitted that the assessee failed to produce the persons who have given credit to the assessee company during the year under consideration, leave apart to discharge its onus of proving the genuineness and creditworthiness of the share application money providers. Ld. DR, placing reliance on the various decision of Hon'ble Jurisdictional High Court of Delhi including recent decision in the case of CIT vs MAF Academy P. Ltd. (2014) 361 ITR 258 (Delhi), submitted that in the context of unexplained cash credit when the assessee does not produce evidence or tries to avoid appearance before the AO and the assessee deliberately and intentionally fails to produce relevant evidence during assessment proceedings with the desire to prevent inquiry/investigation, then adverse inference should be drawn against the assessee. Ld. DR further contended that mere production of Permanent Account Number (PAN) or assessment particulars does not est....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bmissions and to submit required information and other details but the AO proceeded to make additions and to frame assessment order in a hasty manner and violating the fundamental principle of natural justice. Ld. AR also pointed out that the alleged share application money providers also requested through their Advocate Shri Devender Singh to provide information about the share application money providers but the AO did not allow the same. Ld. AR also pointed out page no. 164 of the Paper book and submitted that this letter was also submitted by the alleged share application money providers on 30.12.2009 but the AO passed assessment order by mentioning the date of 29.12.2009 denying opportunity of hearing to the assessee and the alleged share application money providers. Ld. AR has further drawn our attention towards paper book page no. 51 to 57, 58 to 115 and 116 to 153 and submitted that plethora of judgements support the case of the assessee that if the assessee has submitted proof of identity, genuineness and creditworthiness of the alleged transaction in the form of copies of income tax returns, bank statement, and confirmation from the share application money contributors, t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ubmit information and submission from the AO on behalf of the share applicants. At this juncture, we respectfully take guidance from the decision of Hon'ble Delhi High Court in the case of CIT vs MAF Academy P. Ltd. wherein their lordships after considering the ratio of all relevant judgments and orders of Hon'ble Supreme Court and Hon'ble High Court at page 283-284 in para 25 to 29 held as under:- "25. We have in the NR PORTFOLIO CASE (SUPRA ) held that when an Assessee does not produce evidence or tries to avoid appearance before the assessing officer, it necessarily creates difficulties and prevents ascertainment of true and correct facts as the assessing officer is denied advantage of the contention or factual assertion by the Assessee before him. In case an Assessee deliberately and intentionally fails to produce evidence before the assessing officer with the desire to prevent inquiry or investigation, an adverse inference should be drawn. The said case, i.e., N.R. PORTFOLIO PRIVATE LIMITED (SUPRA ), was also one of the cases where accommodation entries were being provided by Mahesh Garg Group of entry providers as in the present case . It has been noticed in that case that....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rally person known to the directors or shareholders directly or indirectly buy or subscribe to shares. The share subscribers post investment do not lose touch or become incommunicado. In the case of private limited companies where normally there is close proximity between the company, i.e., the directors and shareholders and the investors. The Assessee cannot simply furnish details and remain quiet even when summons issued to the shareholders under Section 131 are returned unserved and uncomplied. In N.R.P ORTFOLIO PRIVATE LIMITED (SUPRA ) we have held that the Assessee cannot plead as a general preposition that they had received summons and it was for the assessing officer to enforce the contents on the share holders. 29. We have further held that the Court or Tribunal should be convinced about the identity, creditworthiness and genuineness of the transactions. The onus to prove the three factum is on the Assessee as the facts are within the personal knowledge of the Assessee. Mere production of incorporation details, PAN Numbers or income tax returns may not be sufficient when surrounding and attending facts predicate a cover up. The production of incorporation details, PAN nu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e genuineness of the credits in the books of the company. Moreover, as per the legal position settled by a catena of judicial pronouncements cited by the Ld. AR as above, that in the case of the company only the identity of the share-holders is sufficient to be proved and which the appellant has through various documents on record proved, for example, the cases of Steller Investment Ltd., Sophia Finance Ltd. and Achal Investment Ltd. (all Supra). Moreover, the issue regarding cash credits in the shape of share application money in the case of a company has been finally clinched recently by the Apex Court's decision in the case of CIT Vs. Lovely Exports Pvt. Ltd. (2008) 216 ITR (SC) 195 wherein it has been held that if the share application money is received by the assessee company from alleged bogus share holders whose names are given to the AD, then the department is free to proceed to reopen their individual assessment in accordance with law, but it cannot be regarded as undisclosed income of the assessee company under the provisions of section 68 of the Income Tax Act, 1961. It is also further pertinent to cite the Ld. Jurisdictional Tribunal's order dated 03.03.2006 in ....