TaxTMI 
TaxTMI 
2015 (12) TMI 518
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.... AY 2011-12, it was seen that the assessee has received share application money to the tune of Rs. 3.8 Crores from Kolkata and Delhi based companies. After indepth investigationsand after giving many opportunities to assessee, assessee's case for the AY 2010-11 was reopened u/s 147 on 14/03/2014 with reason as below: 2. "......During the course of assessment proceedings of M/s. Paradise Inland Shipping Pvt. Ltd., PAN: AAFCP2941R for AY. 2011-12 it was seen that the assessee has allotted equity shares to various companies from Kolkata and New Delhi. Assessee was asked about the share holding pattern and assessee submitted the following details: Sl.No Name of the Company Address No. of Equity Shares Amount of investment Date of Allotment 1 SONY FINANCIAL SERVICES LIMITED 1/4233, Ansari Road 2nd Floor darya Ganj, New 40,000 40,00,000 09.01.2010 2 AKI ORGANICS PRIVATE LIMITED 449, RPS Flats, Mansarover Park, Shahdara„ Delhi - 110032, Delhi, India 40,000 40,00,000 09.01.2010 3 CONTINENTAL FISCALMANAGEMENT LTD 36, GANESH CHANDRA AVENUE, CABIN NO-4B, KOLKATA - 700013 30....
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....Inv.), Unit-II(3), Kolkata, I visited the above mentioned address on 16/01/2014 to know the existence of the above-mentioned company but I did not find. I enquired the local people available there as to the whereabouts of the above said company but they could not say anything about the said company. Directors from Ld. DDIT (Inv), Kolkata regarding further steps to be taken are awaiting." Commission to the Deputy Director of Income Tax (Inv), New Delhi was issued in the matter of share holding companies based out of New Delhi which are: 1. SONY FINANCIAL SERVICES LIMITED 2. AKI ORGANICS PRIVATE LIMITED The Office of the Deputy Director of Income Tax (Investigation), New Delhi replied vide letter dated 10.03.2014, saying that "The principal officers of M/s Sony financial services limited and AKI organics private limited were summoned for furnishing the following details. However, neither of the principal officers responded to the summons Afterwards, an inspector of Unit-VI, New Delhi was deputed to serve the summons at the registered office of AKI organics private limited at 449, RPS Flats, Mansarovar Park, Shandara, Delhi-110032... Inspec....
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....his office and verified on commission. This assessing officer has the following objective reasons to believe that income chargeable to tax has escaped assessment for assessment year 2010-11 since: The assessee did not produce those parties Assessee could not give the contact details other than addresses of those parties Companies were found to be non-existent in those addresses as verified by DDIT(Inv), Kolkata and DDIT(Inv), New Delhi No communication with the parties were given No explanation was offered how the companies came to know about the share issue. No newspaper advertisement, etc. which publicized the sha4 issue was given No Original receipt of application of these companies for share allocation was .given Thus, the assessee company offered no satisfactory explanation in the opinion of the assessing officer about the share application money credited. In this background, this assessing officer has objective reasonsas discussed above to believe that income chargeable to tax has escaped assessment for the AY. 2010-11. The assessee company not having assessed for A.Y. 2010-11, it is hereby decid....
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....) 2. At 113 Blackburn Lane, 4th floor, Kolkata-12 M/s Centak Distributors Pvt. Ltd (5 more companies) 3. At 33 CR Avenue, Kolkata ...(2 companies) 4. 8 lake town, Block B, Nikita tower, Kolkata-89 M/s Paridhi Finvest Pvt. Ltd M/s Kanupriya Commercial Pvt. Ltd 5. At 43A Narsingh Avenue, 4th floor,Kolkata-74 ... (2 companies) 6. At 27 Brabourne Road, 4th floor, Kolkata M/s Continental Fiscal Management Pvt. Ltd ...(1 company) 7. At 13 Khudiram Bose Road, Saranji, Mall Enclave, Kolkata ...(1 company) 8. At 211/1/ Sarat Chatterjee Road ...(1 company) 9. at 12 Bharpara Road, 4th floor, Howrah ...(1 company) 10. at 65B Guru Garden Road ...(1 company) 11. 13 Khudiram Bose Road, Saranji, Mall Enclave, Kolkata ....(1 company) 12. at 171/12 Ray Bahadur Road ...(1 company) These above companies are fully managed and operated by me and Dilip Agarwal by placing various directors in _ place. I along with Dilip Agarwal are the brain behind these companies and its ope....
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....ce Sheet I got a monthly remuneration of Rs. 2000/- to Rs. 3000/- . The details of the company and their activities can only be provided by Mr. Deepak Patwari..." 7. The director of M/s J P Engg Corp Pvt. Ltd, M/s Rameswar Retails Pvt. Ltd, Shri. Baikunth Nath Pandey said as below: "...I, Baikunth Nath Pandey resident of 66, Salkia School Road, 5th Floor, Block-B, Kolkata - 711106 was then the Director in the following companies during the F.Y :- 2009-10 1. M/s. Afsons (India) Pvt Ltd 2. M/s. J P Engineering Corpn Pvt. Ltd. was just a dummy director in those companies which were operated and managed by Mr. Deepak Patwari. I am just a paid employee of Mr. Deepak Patwari and for signing cheque and balance Sheet I used to get a monthly remuneration of Rs. 2000/- to Rs. 3000/-. The details of the companies and their activities can only be provided by Mr. Deepak Patwari..." 8. The director of M/s Paridhi Finvest Pvt. Ltd, Shri. Amit Agarwal said as below "..I, Amit Agarwal, the resident of 29A, Weston Street, 31(1 Floor, Kolkata - 700012 and the then Director of the company M/s. Abex I-nfocom Pvt. Ltd. during the F.Y 2007-08 was just....
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....was also seen from the statements of these companies that they get money from various bank accounts and were transferred to assessee account within the same day. The profit and loss account and Balance sheet figures of these companies look as below: Sl.No. Investor Company Returned income P&L (for AY 2010-11) Balance Sheet (for AY 2010-11) 1 M/s. Sony Financial Services Ltd Rs.56,000 (for AY 2008-09) Income side (total) = Rs. 12,35,283 Sources of funds side (total) = Rs. 11,53,29,727 2 M/s AKI Organics Pvt. Ltd Rs.56,972 (for AY 2008-09) Income side (total) = Rs.8,70,000 Sources of funds side (total) = Rs. 108639994 3 M/s Continental Fiscal Management Pvt. Ltd NIL (for AY 2008-09) Income side (total)= Rs. 1,15,57,930 Sources of funds side (total)= Rs. 40,28,95,480 4 M/s Centak Distributors Pvt. Ltd Rs.22,671 (for Ay 2009-10) Income side (total)= Rs. 1,46,99,662 Sources of funds side (total)= Rs. 43,73,34,298 5 M/s Kanupriya Commercial Pvt. Rs.62,183 (for AY 2009-10) Income side (total) = Rs.12,35,283 Sources of funds side (total) = Rs. 11,53,29,727 6 M/s Orp....
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....ts and transactions..." It was seen from the above submission that even after multiple opportunities, Assessee is still not able to produce the parties Assessee is still not able to give any communication they had with the parties other than a latest explanation that the parties were contacted through a family friend, Shri. Rajendra Prasad Singla. Assessee is still not able to give contact details of those parties. Assessee is' still not able to give any latest confirmation letter from the investor companies. 13. Assessee Company was again given an opportunity to explain by summoning the Assessee Company's director, Shri Yuri Alemao u/s 131 of the Income Tax Act, 1961 and recording his statement. He was also confronted of the latest facts passed from Deputy Director ofIncome Tax (Investigation), Kolkata during the statement. The statement is given below: "...Statement recorded u/s 131 of the Income Tax Act 196.1, of Shri Yuri Lennon Alemao, Son of Joaquim Alemao, Director of M/s Paradise Inland Shipping Pvt. Ltd, residing at Casa Alemao, Chadwaddo, Varca, Salcete, Goa, in connection with the assessment proceedin....
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....td Rs. 40,00,000 b) M/s. AKI Organics Pvt. Ltd Rs. 40,00,000 c) Continental Fiscal.Management Pvt. Ltd Rs.30,00,000 d) M/s Centak Distributors Pvt. Ltd Rs.50,00,000 e) M/s Kanupriya Commercial Pvt. Ltd Rs. 40,00,000 f) M/s Orpat Commercial Pvt. Ltd Rs.25,00,000 g) M/s J P Engg Corp Pvt. Ltd Rs.25,00,000 h) M/s Rameswar Retails Pvt. Ltd Rs.35,00,000 i) M/s Paridhi Finvest Pvt. Ltd Rs.60,00,000 j) M/s Omega Ventures Pvt. Ltd Rs.35,00,000 10. Who are the Directors of the above companies? Ans: As per the submissions, the details are as below: Sl.No Investor Company Place Directors) Share application signed by 1 M/s. Sony Financial Services Ltd Delhi Yogesh Gupta Sandeep Gupta 2 M/s. AKI Organics Pvt. Ltd Delhi Yogesh Gupta Sandeep Gupta 3 M/s. Continental Fiscal Management Pvt. Ltd Kolkata Chandramohan Jha SantoshKumar Gupta 4 M/s. Centak Distributors Pvt. Ltd Kolkata Santosh Kumar Gupta 5 M/s.Kanupriya Commercial Pvt. Ltd Kolkata RamChander Sharma 6 M/s. Orpat Commercial Pvt. Ltd ....
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...., no one from our company is in contact with these investor companies or director. 21 If you are asked to produce these directors or companies, will you be able to do that? Ans: No. I will not be able to produce any of these directors. As I have already submitted, these share application money has come thru' proper banking channels. 22. You are hereby shown a statement (Annexure-A) of Shri. Santosh Kumar Gupta, Director of M/s Continental Fiscal Management. Ltd in front of DDIT, (Inv), Unit-II(3), Kolkata, saying as below: I, Santosh Kumar Gupta resident of 27/1, T.N. Mukherjee Road, Hooghly - 712245 and the then Director of the company M/s. Continental Fiscal Management Ltd during the F.Y. 2008-09 was just a dummy director in this company which was operated- and managed by Mr. DeepakPatwari. I was just a paid employee of Mr. Deepak Patwari and for signing cheque and balance Sheet I got a monthly remuneration of Rs. 2,000/- to Rs. 3,000/-. The details of the company and their activities can only be provided by Mr. Deepak Patwari. Do you have anything to say? Ans: No. I do not have anything to say. I do not know the person al....
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....Amit Agarwal, the resident of 29A, Weston Street, 3rd Floor, Kolkata - 700012 and the then Director of the company M/s. Abex Infocom Pvt. Ltd. during the F.Y. 2007-08 was just a dummy director in the company which was operated and managed by Mr. Deepak Patwari, I was just a paid employee of Mr. Deepak Patwari and for signing cheque and balance Sheet I used to get a monthly remuneration of Rs. 2,000/- to Rs. 3,000/-. The details of the company and their activities can only be provided by Mr.Deepak Patwari. Do you have anything to say? Ans: No. I do not have anything to say. I do not know the person also. 27. In the statement shown to you right now, Shri. Amit Agarwal has stated that he is just a dummy director in M/s Abex Infocom Pvt. Ltd. and gets paid a monthly remuneration of around Rs. 2000 to Rs. 3000 for signing cheque and Balance sheet. He is a paid employee of Mr. Deepak Patwari. Do you confirm? Ans: Yes. I have read the statement of Shri. Amit Agarwat and I have gone thru the contents of the statement. I do not know the person also. 28. You are hereby shown a statement (Annexure-D) of Shri. Deepak Patwari at The Aayakar Bhawan, K....
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....o not know anything about the content of the statement. 31. In the above statement of 05.06.2013, Shri. Deepak Patwari said that "...the cash received from Rashmi Group was deposited in the various accounts of other entry operators such as ... I am submitting you the details of cash trails in respect of some of the transactions to collaborate my statement. However, due to paucity of time I could not furnish cash trails in respect of all the transactions. The said cash trails are prepared randomly just to demonstrate and illustrate the point that how the availability of funds were manipulated by depositing cash in various bank accounts on the same day immediate prior to issuing the cheques in such bank accounts, cash amounts were credited and immediately entire amounts were withdrawn through issuance of such cheques which culminated into share capital and share premium in the hands of Rashmi Group. The same modus operand is followed in respect of all other transactions also..." Have you read the statement and do you have anything to say? Ans: Yes. I have read the statement and I do not have anything to say. We have received the share application premium am....
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.... and the application money was duly remitted into our bank account..."(Emphasis supplied) Ironically this supposed middleman was never mentioned in that reply. The present claim, which is not verifiable since the supposed middleman has expired, is submitted after being given multiple opportunities for over a year. Assessee's version of also changed with every submission. 16. As can be seen, assessee was confronted of these evidences given opportunity of being heard and, Assessee did not know any of the directors of these companies. Assessee said he will not be able to produce these directors. Assessee never talked communicated with these companies either thru' email or telephone or post. Assessee says one Shri. Rajendra Prasad Singla, who is a family friend, got these investors but the assessee company doesn't have any business dealings with Shri. Singla too. The present claim is not verifiable since the supposed middleman, Shri. Singla has expired. It came to light when the assessee was asked to produce the middleman. This latest explanation is given after 1 year of multiple opportunities asking about how t....
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.... Shri. Deepak Patwari, the operator of these investor companies gave in statement that he is an accommodation entry operator who receives cash from customers who route it thru different bank accounts and at last route it to customer companies back as share application money and gets a commission of Rs. 25 paise for every 100 Rupees. Assessee was also given a multitude of opportunities to explain the transaction. 17. Hence the explanation for sum found credited in the books of the assessee company found as not satisfactory. The sum credited is added under Section 68 which reads as below: "Cash credits. 68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year" The present assessment order also derives strength from the following proviso inserted in Section 68 by the Finance Act, 2012, w.e.f. 1-4-2013. "Provided that where the....
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..... A statement of Shri Yuri Alemao was recorded on that day i.e. the 9th March, 2015 between 4.30 p.m to 8.30 p.m. Hence the statement recorded without any valid notice u/s 131 has no evidentiary value. Your appellant relies on the Supreme Court judgment in the case of CIT, Salem Vs S. Kadar Khan, 352 ITR 481 (SC) dated 29.09.2012. The judgment of Madras High Court in the case of CIT, Salem Vs S. Kadar Khan 300 ITR 157 (Mad) was affirmed. S. No Name of the Investor Amount Ch.No Bank Date No. of Shares 1 Sony Financial Services Ltd. 40,00,000 RTGS Deutsche Bank,K C Marg, New Delhi 15/12/2009 40,000 2 AKI organics Private Limited. 40,00,000 RTGS The Bank of Rajasthan Ltd, Karol. Bagh, Nev 12.12.2009 40,000 3 Continental Distributors Private Limited 30,00,000 000270 HDFC Bank, Stephen House, Kolkata 07.01.2010 30,000.00 4 Centak Distribut ors Private Limited 50,00,000.00 000258 HDFC Bank, Stephen House, Kolkata 01.01.2010 50,000.00 5 Kanupriya Commercial Private Limited 40,00,000. 691478 HDFC Bank, GC Avenue, Kolkata 10.12.2009 40,000.00 ....
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....lant vide letter dated 10th March 2015 sought the copy of the statement of one of the Directors recorded on 9th March 2015 which was provided after 14 days on 24th March 2015. However, without waiting for our response much less applying his mind comprehensively on the same, on the next day itself the AO rejected it, drew adverse conclusions against your appellant and issued the assessment order without giving adequate opportunity to clarify or rebut some vague questions raised by him, thus acting beyond the scope of the provisions of the Act and law. Your appellant vide letter dated 16.03.2015 had reminded the learned AO to provide the copies of statements of some persons allegedly recorded at Kolkata and being referred to by him. We also requested the learned AO to arrange for the cross examination of the said persons particularly Shri Deepak Patwari, Shri. Amit Agarwal and Shri. Dilip Agarwal. This fair request was also summarily rejected, thus denying natural justice. It is an established principle that if share application money is received by your appellant's company from some allegedly bogus shareholders, whose names are given to the Assessing Officer, t....
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.... b) Certificate of Incorporation c) Acknowledgement of the Return of Income AY 08-09 d) Affidavit of the Director confirming the investment e) Application for allotment of shares f) Photocopy of the share certificate g) Audited account and Directors report thereon including Balance- sheet, Profit and Loss Account and schedules for the year ended 31.03.2009 h) Audited account and Directors report thereon including Balance sheet, Profit and Loss Account and schedules for the year ended 31.03.2010 i) The Bank statement highlighting receipt of the amount by way of RTGS. j) Banks certificate certifying the receipt of the amount through Banking channels. 3. Continental FiscalManagement Ltd. -CIN U74140WB1995PLC07 1534 - Date of Registration 16/05/1995 a) Memorandum of Association and Article of Association b) Certificate of Incorporation c) Certificate of commencement of business d) Acknowledgement of the Return of Income AY 09-10 e) Affidavit of the Director confirming the investment f) Application for allotment of shares g) Photocopy of the ....
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....and schedules for the year ended 31.03.2010 h) The Bank statement highlighting -receipt of the amount by way of RTGS. i) Banks certificate certifying the receipt of the amount through Banking channels. 7. J P Engineering Corp Pvt. Ltd. - CIN U34103WB1951PTC019638 -Date of Registration 19/04/1951 a) Memorandum of Association and Article of Association b) Certificate of Incorporation c) Acknowledgement of the Return of Income 09-10 d) Affidavit of the Director confirming the investment e) Application for allotment of shares f) Photocopy of the share certificate g) Audited account and Directors report thereon including Balance sheet, Profit and Loss Account and schedules for the year ended 31.03.2010 h) The Bank statement highlighting receipt of the amount by. way of cheque. - i) Banks certificate certifying the receipt of the amount through Banking channels. 8. Rameswar Retailers Pvt. Ltd. - CIN U51909WB2003PTC097065 -Date of Registration 01/10/2003 a) Memorandum of Association and Article of Association b) Certificate of Incorporation c) Ack....
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....5. The assessment is completed by disregarding the written request made by your appellant to arrange the cross examination of the persons whose statements are relied on by the AO. 6. The learned AO has not established the trail of funds invested in the investor companies. Hence the assessment is beating around the bush allowing the real bird to fly away. 7. The learned AO states in the assessment order the date of hearing as 22.07.2014 and 09.03.2015. No hearing has taken place on 09.03.2015 as your appellant's CA was not allowed hence this statement is malicious. 8. All the investments in shares are received through banking channels and appearing as investment in the respective company balance sheets. 9. The shares are allotted at par and no premium is received on allotment. 10. The share capital received was immediately deployed for construction of barge for iron-ore transportation. It is therefore prayed that for all the reasons stated above the appeal may kindly be allowed. 11. All the transactions from the investor companies are through banking channels duly accounted in the books of investors companies and hence no ....
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....Pvt Ltd iii. Paridhi Finvest Pvt Ltd iv. Kanupriya Commercial Pvt Ltd v. The Continental Fiscal Pvt Ltd However there is no doubt raised or statement recorded against the other five companies namely: i. Orpat Commercial Pvt Ltd ii. Rameswar Retail Pvt Ltd iii. Omega Ventures Pvt Ltd. iv. Sony Financial Services Ltd. v. AKI Organics Pvt Ltd 4. The Commissioner of Income Tax (Appeals), after considering the submission of the assessee deleted the addition and held as under: 5. "I have gone through the assessment order and the submission of the appellant. In this case, the appellant company was incorporated on 19th December 2009 i.e. during financial year 2009-10 relevant to A.Yr. 2010-11. After incorporation, the appellant company received share capital totaling to Rs. 3.8 crores and shares were allotted on 09.01.2010, i.e. the same financial year. The investor companies were from Kolkata and New Delhi. With this money, the appellant company purchased barges and commenced its business of transportation of iron ore in the subsequent financial year. Since there was no business in F. Y. 2009-10, ....
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....ed. v) The assessee did not have the acknowledgement of original application receipts either by post or some other communication. vi) No advertisement or communication was done via media to let investors know about the share issue. vii) Assessee did not have any explanation about the statementgiven by Shri. Deepak Patwari, the operator of investor companies who gave in statement that he is an accommodation entry operator who receives cash from customers and route it through different bank accounts and last route it to customer companies back as share application money etc. viii) Assessee did not have any explanation about the statements given by the Directors of the investor companies who said that they are just lowly paid employees signing on cheques and drafts on behalf of Shri. Deepak Patwari. On the basis of the above, the A.O. concluded that source of investment was not satisfactorily explained by the appellant company and consequently, he added entire share application money amount of Rs. 3.80 Crores as unexplained cash credit u/s.68 as income of the appellant company. On the other hand, the appellant, during the course of....
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.... did not have any business, there is no question of earning any unaccounted income, which could be routed back to the company, as alleged by the A.O. The investor companies were contacted through common contact, i.e. Shri Rajendra Prasad Singla. All the investors are companies, details of which are available on the site of Registrar of companies. Entire share capital has come through banking channels, through account payee cheques. Since these investors were initial investors, inspite of mining boom in Goa, no premium was charged and shares were issued, subscribed and allotted at par. The learned counsel further stated that valid share certificates were issued and all the relevant documents were submitted before the A.O., which he chose to ignore, while framing assessment order. Therefore, the appellant has proved the identity, credit worthiness and genuineness of the transaction and addition u/s. 68 was not warranted. In view of the above facts, in my opinion, the A.O. has made the addition with pre-conceived mind without appreciating full facts of the case. The appellant company is a new company and it could not have made or generated unaccounted income, without even com....
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....s. J.P. Engineering Corporation Pvt. Ltd Rs. 25.00 lacs, M/s Centak Distributors Pvt. Ltd Rs. 50.00 lacs, Paridhi Finvest Pvt Ltd Rs. 60.00 lacs, Kanupriya Commercial Pvt. Ltd Rs. 40.00 lacs and the Continental Fiscal Pvt. Ltd Rs. 30.00 lacs, was the statement of Shri Deepak Patwari and the common Directors of these companies Shri Santosh Kumar Gupta, Shri Baikunth Nath Pandey, Shri Amit Agarwal. The assessee claimed before the Assessing Officerthat the money was received through banking channel which are supported by the following documents. i. Copy of Memorandum of Association ii. Copy of Article of Association iii. Copy of Share Application form iv. Certificate of Incorporation v. Income Tax return filled Acknowledgement vi. Affidavit of Directors confirming the investment. vii. Audited accounts and director report viii. Bank certificate certifying the receipt through banking channel 7. In view of this overwhelming evidences and the material furnished by the assessee, the transaction in question cannot be held as not genuine. The identity of share application cannot be doubted. 8. The statement made by....
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....k Patwari is the person who managed all the companies providing accommodation entries, admitted that he was in the business of providing accommodation entries in terms of capital and share premium. Equipped with this information, the A.O. asked the appellant to prove genuineness of its transactions. In response, the appellant stated that though they did not know the investor companies directly, but a family friend and reputed industrialist of Goa Shri. Rajendra Prasad Singla helped the appellant to get investment from these companies. The A.O. recorded the statement of Shri. Yuri Alemao and he reiterated the same thing. He admitted that he did not know Directors of these companies. The A.O. also confronted Mr. Yuri Alemao with the statements of dummy Directors of investor companies and on the basis of all the material gathered, the A.O. reached the following conclusion: ix) Assessee did not know any of the Directors of these companies x) Assessee said, he will not be able to produce these directors. xi) Assessee never communicated with these companies either there email or telephone or post. xii) Assessee says one Shri. Rajendra Prasad Singla, wh....
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....no hearing took place, no clarification wassought for and the assessment was finalized with pre-conceived mind. iv) The appellant submitted voluminous documents on 9th march 2015, but the A.O. has not even made a mention of the same in assessment order. v) The A.O. has not said that investment companies were non-existent or bogus or that they have not invested in the appellant company. vi) A private company cannot seek share capital from public by advertising in the Newspaper. vii) Statements of the Directors of the investor companies was recorded at Kolkata, behind the back of the appellant company, and the same was used to draw adverse conclusion in the case of the appellant. Inspite of specific request made vide letter dated 16.03.2015, for allowing cross-examination, the A.O. did not give the opportunity to cross examine, violating the principles of Natural Justice. viii) The A.O. issued a notice u/s.148 to verify the genuineness of investor, which is not permissible under: the provisions of the Act. In the reasons recorded, the A.O. does not mention of any income escaping assessment. Apart from raising above technical groun....
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.... statements have been used against the appellant. Also, a case can be reopened u/s. 147 for assessing the income escaping assessment and not for making verifications circumstances, the A.O., in my opinion, was not justified in making an addition of Rs. 3.80 crores u/s.68 of the Act. The A.O. is directed to delete the addition of Rs. 3.80 crores accordingly:" 10. Before us the Departmental Representative supported the order of the Assessing Officer and submitted that in view of the statements of the persons recoded by the department the addition made was fully justified. 11. On the other hand, the Authorized Representative of the assessee submitted that the receipt of share application by the assessee from the above mentioned 10 persons are supported by various documents which were filed before the Assessing Officer. In view of these documents, which were filed before the Assessing Officer, the identity of share applicant is beyond dispute. Further, the transactions were through banking channels and were also supported by share application form duly executed by the share applicant companies. Thus, the genuineness of the transaction and their creditworthiness was also proved by....
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.... the assessee and the mode of payment. Thereafter, if the person concerned is in existence and has actually paid the amount from his account by cheque, it can be said that the initial burden is discharged so far as explanation to be considered under section 68 of the Act. Thereafter, the burden would be upon the revenue to show that either the person was bogus or there was no financial capacity to make the payment and the arrangement of money was artificial or that the money has not passed over and it was only by way of an eye wash. Such could be proved by the Revenue in the present case through the statement of the persons, but unfortunately, they were not made available for cross-examination and therefore, the statements could be used as an evidence against the assessee. No other evidence was available with the Revenue. 7. Under these circumstances, if the Tribunal has found that the explanation under section 68 of the Act was acceptable in absence of non-discharge of the burden upon the Revenue, such a finding of fact would not call for interference when the appeal before this Court is limited to the substantial questions of law. The decision upon which the reliance has....