TaxTMI 
TaxTMI 
2016 (1) TMI 1092
X X X X Extracts X X X X
X X X X Extracts X X X X
.... assessee is a company and is in the business of leasing, finance and investments. It belongs to the Minda Group of Companies. For the A.Y. 2004-05, it filed a return of income on 30.7.2004 declaring total income of Rs. 45,57,170/-. The A.O. passed an order u/s 143(3) of the Income Tax Act 1961 (the Act) on 28.12.2006, assessing the total income at Rs. 4,01,36,258/- inter alia making an addition u/s 14A as well as u/s 68 of the Act. 2.1. The assessee has received share application money of Rs. 3,50,88,000/- (i.e. Rs. 3,51,00,000 (-) 12,000/- refund) with premium from 54 companies. The A.O. has given details in his order. When asked to substantiate the genuineness of this share application money, the assessee filed certain details such as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....di is described by the AO as follows. "The modus operandi of the assessee to manage share application money of Rs. 3,51,000/- is same. Cash is handed over by the assessee to the accommodation entry providers, who deposited in bank accounts of the persons/firms being operated by them and from those accounts, the money is transferred to the bank accounts of the companies who used to provide or issue cheques/DD or pay order in favour of the beneficiaries. It is very much clear from the above that the money received by the assessee company by way of share application money, is its own money but rooted through the bank accounts of various persons/firms/companies." 2.3. Thereafter the AO referred to the information received f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d after calling information from banks. c) the material discrepancies as pointed out by the Assessing Officer in the affidavits filed from the alleged share applicants. d) that the purchase of stamp papers from the respective stamp vendors remained to be proved. e) that the said additions were made by Assessing Officer on the basis of definite information from investigation wing that the said amounts were accommodation entries. f) that in respect of many involved entities, their key persons have admitted on oath before the investigation Wing of the Deptt. as reproduced in the assessment order that the said entities merely functioned as entry operators and not carried out any actual business. g) t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by the Assessing Officer in his assessment order. The ratio laid down in the cited cases are applicable to the facts of the case of the assessee company. e) the working adopted by the Assessing Officer for computing the proportionate disallowance is also in consonance with amendments made to section 14A w.e.f. 01.04.2007. f) the ratio of the decision in the case of CIT Vs. HR Sugar Factory (P) Ltd. 187 ITR 363, where it has been held that if parts of the funds have been utilized for non business purposes, part disallowances of interest is justified. g) the ratio of the decision in the case of India Metals & Ferro Alloys Ltd. Vs. CIT 193 ITR 344, where it was held that it is for the assessee to prove that the borrowed fund....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on this issue is bad in law. 8. In our view, certain investigations have been done by the A.O. Evidences have been gathered by the A.O. in support of the addition made by him. The deletion by the Ld.CIT(A) of this addition, on the ground that these evidences were not confronted to the assessee, was not proper. When the inspection report can be put to the assessee by the Ld.CIT(A), other evidences should have also been put to the assessee by the Ld.CIT(A). The assessee contends that all the information and material obtained by the A.O. has to be put to him before coming to a conclusion. He further contends that the assessee has furnished whatever material it could, and as considerable time has elapsed no further burden should be put on t....