TaxTMI 
TaxTMI 
2017 (6) TMI 63
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....firmation, bank statement and return of Encee Securities Pvt. Ltd. to prove the genuineness of the loan, which as per the assessee were duly filed before the Assessing Officer. It was pleaded that the assessee is not expected to prove the source of source of the loan amount but duly discharged the onus caste upon the assessee. It was asserted that confirmation of loan, creditworthiness of the party and genuineness of the loan was duly explained before the Assessing Officer. It was empathetically explained/claimed that the impugned amount was not a share application money rather it was a simplicitor a loan. On a query from the Bench with respect to any addition, if any, has been made in the case of Encee Securities Pvt. Ltd.. It was explained that addition has been made in the case of Encee Securities Pvt. Ltd. and the appeal is pending before the Ld. Commissioner of Income Tax (Appeal) by further adding that it is a case of double addition of the same amount. It was claimed that it is up to the Department to choose as in whose hands addition has to be made. The ld. counsel further asserted that no question was put to the assessee with respect to Encee Securities Pvt. Ltd. as the as....
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....formation from the Ahmadabad Investigation wing, wherein, a search and seizure operation was conducted on Amrapali Group, Ahmadabad. In post search investigation, it was found that the group was involved in arranging accommodation entries of share capital and bogus long term capital gain through a Mumbai based operator i.e. Shri Shirish Shah, who was also subsequently searched. The statement of Shri Shirish Shah was recorded, wherein, he admitted that he provides accommodation entries through companies controlled and managed by him. Some of the companies of Shri Shirish Shah includes M/s Parinita Industries Ltd., Shri Ganesh Spinners Ltd., M/s Vishesh Infotech Ltd., M/s Channel Guide Ltd., M/s Mohan Industries Ltd, M/s Empower India Ltd., M/s Emporish Projects Ltd., M/s Sanguine Media Ltd., M/s Yantra Naturals Ltd. etc. The Ld. Assessing Officer further observed that the share premium has been paid to M/s. Encee Securities Pvt. Ltd. by few share holders, which are summarized as under:- Shareholder Name No. of equity shares Amount per share Aadhar Venture India Ltd. 57000 10 Sanguine Media Limited 114000 10 Emporis Projects Ltd. 82500 ....
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....c Pvt. Ltd., in which I am a director engaged in the pharmaceutical distributorship. The operations of Milton Generic Pvt. Ltd. are spread over Maharashtra. Our company is trading in goods of Ranbaxy, Laborate, Cipla, and other companies. The turnover of the company is approximate 20-25 crores for last financial year. The business of M/ s Encee Securities Pvt. Ltd. is yet to be commenced as we have not received C&F agency. Q5. When Encee Securities Pvt. Ltd. was registered. Ans. The company was registered in the year of 1994. Q6. Who has registered the company M/s Encee Securities Pvt. Ltd. Ans. Sir, I do not know who has registered the company. Q7. Who help you to register the company M/s Encee Securities Pvt. Ltd Ans. Sir, I humbly say that I do not know. Q8. For what purpose you have formed the company M/s Encee Securities 'Pvt. Ltd.. Ans. Sir, I have been made shareholder of M/s Encee Securities Pvt. - Ltd. and later on made director in the year 2011. There is no real business activity in the company. I am not aware about the purpose. Q9. How much capital you have invested to establish M/s Encee Securities Pvt. Ltd. Ans. I do not remember how m....
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.... one should invest in your company without knowing financial and background of your company: Ans. Sir, I am 'director of company since 2011 and I confirm that I do not know any of 10 other shareholders list is shown to me as below. i. B. Jhanwar 86 Co. Pvt. Limited.. ii. Sujla Tie-up Pvt. Limited. iii. Bhawani Vanija Pvt. Limited. iv. Trisuri Distributors Pvt. Ltd. v. Aadhaar Ventures India Limited. vi. Sanguine Media Limited. vii. Speciality Papers Limited. viii. Rajesh Kamat. ix. Emporis Projects Limited. x. Yantra Natural Resources Limited. The Encee Securities Pvt. Ltd is controlled and managed by Shri Anil C. Jain. Q18. Please explain in details business activity of M/s Encee Securities Pvt. Ltd. Ans. Sir, I am basically working with Milton Generic Pvt. Ltd. as a director. Wherein I myself, shri Anil C. Jain, Shri Nikhil Kumar Jain and shri Arun D. Vaishnav are shareholders. I derive Director's remuneration about 50-55 thousand per month. I look after day, to day activity of distributorship. Sir, there is no real business activity of M/s Encee Securities Pvt. Ltd. The ....
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....long term loans and advances o/s as on 31.03.2013 is Rs. 4,57,60,000/, Please provide detai ls of it like to whom loans was advanced, on what condition loans was advanced, what securities you have taken to advanced the loan, whether board resolution have passed to give advance. Please explain. Ans. Sir, I once again repeat that I do not know the financials of the company, although I am signing all financial document as a director. Shri Anil C. Jain. who control and manage Encee Securities Pvt. Ltd. knows about all transactions of loans given by emcee Securities Pvt. Ltd. Q24. M/s Encee Securities Pvt. Ltd. has advanced loan of Rs. 54 lacs to M/s Milton Genext prop. M/s Anil Chaganlal Jain HUF and Rs. 187 lacs to M/s Milton Pharma Prop. Shri Anil C. Jain in KY. 2012-13. Please confirm. Ans. I have signed cheques' alongwith shri Nikhil Kumar Jain on behest of our owner shri Anil C. Jain. I have also signed for others loans given on behest of shri Anil C. Jain. Q25. In individual capacity you have advanced loan of Rs. 17.13 lacs to M/s Milton Genext prop. M/s Anil Chaganlal Jain, HUF and Rs. 5.34 lacs to M/s Milton Pharma Prop. Shri Anil C. Jain in various financial ye....
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....ted by Shri Harish Sharma within a reasonable time. This aspect was confronted to the Ld. DR, wherein, he admitted that the statement was retracted by him. In such a situation, the authenticity of the stated is under cloud and cannot be considered as sole basis of addition. The retraction letter dated 23/02/2016 supported by an affidavit is available at page 71 to 78 of the paper book. In the affidavit, it has been specifically stated that he received the copy of the statement recorded on 08/01/2016 and 19/02/2016, which was recorded under duress and under pressure and he was forced to sign the statement. The affidavit is self speaking. The contents of the same are reproduced hereunder:- From Harish M.Sharma, Room No. 8,1t Floor,Somji Bldg, North Brook Street, 198, 3rd Khumbharwada, Mumbai -400004. Dated:23rd Feb 2016. To, Asstt.Comm. of Income Tax 18(1) Mumbai. Sub: Filing of Affidavit of Retraction. Dear Sir, I am furnishing herewith the af f idavits of Ret ract ion Copies dated12/01/16 and dated 23/02/16 for statement taken on 08/01/16 in the case of Shri Anil C. Jain and Shri Anil C.....
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....ties Pvt. Ltd., the share application money has been camouflaged and own money has been used in the form of share application money. In such a situation, we are of the view, that addition can be made, if found to be otherwise, in the hands of M/s Encee Securities Pvt. Ltd. but in the case of the assessee loan was received from M/s Encee Securities Pvt. Ltd., which is still live, therefore, addition cannot be made in the hands of the present assessee. Even otherwise, the assessee is not expected to prove the source of source as has been held in various decisions from Hon'ble Apex court as well as Hon'ble High Courts. If the Department is apprehensive of certain foul play/non-genuineness of the amount in the form of share application money then the matter may be extensively examined and addition could have been made in the hands of the M/s Encee Securities Pvt. Ltd. Admittedly, the Department has option/choice, where, the addition has to be made but under the facts available on record, since, unsecured loans was taken by the assessee, no addition justifiably be made in the hands of the present assessee, because, the assessee has nothing to do with the genuineness of the share....
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....books of account whereas in the case of 69 there may not be an entry in such books of account. The law is well settled, the onus of proving the source of a sum, found to be received/transacted by the assessee, is on him and where it is not satisfactorily explained, it is open to the Revenue to hold that it is income of the assessee and no further burden lies on the Revenue to show that income is from any other particular source. Where the assessee failed to prove satisfactorily the source and nature of such credit, the Revenue is free to make the addition. The principle laid down in Ganpati Mudaliar (1964) 53 ITR 623/A. Govinda Rajulu Mudaliar (34 ITR 807)(SC) and also CIT vs Durga Prasad More (72 ITR 807)(SC) are the landmark decisions. The ratio laid down therein are that if the explanation of the assessee is unsatisfactory, the amount can be treated as income of the assessee. The ratio laid down in Daulat Ram Rawatmal 87 ITR 349 (SC) further supports the case of the assessee. In the case of a cash entry, it is necessary for the assessee to prove not only the identity of the creditor but also the capacity of the creditor and genuineness of the transactions. The onus lies on the a....
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.... situation, whether the responsibility/addition can be fastened upon the assessee. The obvious reply is no. It is noted that addition has been made in the case of assessee broadly on the basis of statement of Shri Harish Sharma, which was retracted by him, supported by an affidavit. However, the assessee has fulfilled the conditions required u/s 68 of the Act. 2.6. We have also perused the reply dated 25/02/2016 (filed with the ACIT on 26/02/2016 page-48 of the paper book), wherein, it has been specifically mentioned that copy of statement tendered by Shri Harish Sharma was not provided to the assessee. In this reply, the assessee has duly emphasize that no addition can be made on the basis of statement of Shri Harish Sharma as the assessee has discharged the onus caste upon him and the assessee has duly complied with the requirement of section 68 of the Act by proving the identity, capacity and genuineness of the transaction. The reply contained in para-2 (page-48) clearly explains the position of the assessee. The identity of the lender, capacity and genuineness of the loan is not in doubt. Therefore, in our opinion, the addition made by the Assessing Officer in the hands of t....
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....क सौ रà¥à¤ªà¤¯à¥‡ H.H. CHOWDHARY Reg. No.: 8058 NOTARIAL INDSA TARIAL | महाराषà¥à¤Ÿà¥à¤° MAHARASHTRA पà¥à¤°à¤§à¤¾à¤¨ मà¥à¤¦à¥à¤°à¤¾à¤‚क कारà¥à¤¯à¤¾à¤²à¤¯, मà¥à¤‚बई प.मà¥.वि. कà¥à¤°. ८००००१९ 22 DEC 2015 सकà¥à¤·à¤® अधिकारी शà¥à¤°à¥€. हेमंत सावंत NOTARY M.H.CHOWDHARY Reg . No.: 8058 MUMMAN GOVT. CHOWDILARY Regalo 058 Rs. 100 ON HUNDR A1893 88188 NOTARIAL MENORCIALI INDIA OF 2015 O AFFIDAVIT NT 381679 I, HARISH SHARMA, s/o Madanlal Sharma aged 38 Years, residing at Room No.8 Somji building, 198 Dr. MG Mahimtura Marg, North Brook Street, Mumbai 400004 do hereby solemnly affirm and declare as under: 1. That I am Director of Encee Securities Pvt. Ltd.from 31-03-2011 having its office at Room No.8 Somji bu....