TaxTMI 
TaxTMI 
2017 (12) TMI 300
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.... case. 4. The grounds of appeal taken by the assessee in the lead case in ITA No.270/Kol/2015, are as follows: "1. For that in view of the facts and circumstances of the case the Ld. CIT(A) was wholly wrong and unjustified in dismissing the Ground Nos.1 & 2 of the appellant assessee company's appeal challenging the jurisdiction, legality and validity of (i) the arbitrary action taken against the appellant company u/s 132(1) of the I.T Act without issue and service of any search warrant on it (ii) seizure and recovery of the appellant's money lying in Axis Bank, Lake Town Branch, Kolkata (A/c No. 5906) on 11.02.2010 and (iii) the subsequent order of search assessment passed by the A.O u/s 143(3)/153A of the Act on 30.12.2011 without going into and analyzing the facts and merit of the case. 2. For that in view of the facts and circumstances of the case the Ld. CIT(A) was wholly wrong and unjustified in dismissing the Ground Nos.1 & 2 of the appellant's appeal without considering the basic facts and the legal provisions that (i) no search warrant u/s132(1) was issued in the name of and served on the appellant company for searching its premises and the bank a/c (ii) no pr....
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....are application money as bogus because identity & creditworthiness of the share applicants as well as the source and genuineness of the investments made by the applicants were not established by the assessee. Ground No.1 and 2 were not pressed by the assessee. 6. The brief facts qua the issue are that a Survey u/s.133A was conducted at two premises of Shri Santosh Kumar Shah, located at 9/12, Lal Bazar Street, Block-E, 2nd Floor, Kolkata-1 and 1A, Grant Lane, 2nd Floor, Kolkata on 14/12/2009, later the said survey operation was converted into search operation u/s 132(1) of the Income Tax Act 1961. In the course of survey operation u/s.133A of the I.T. Act, 1961, at 1A, Grant Lane, 2nd Floor, Kolkata Cash amount of Rs. 40.50 lakhs and various papers/documents were found which pointed to a number of bank accounts being used to provide accommodation entries to a number of persons /firms and companies. It was further revealed during the course of survey/search that unaccounted cashis received from prospective beneficiaries and same was deposited in some Bank accounts maintained by these entry operators. After various circular transactions, cheques are issued to the beneficiary. Such e....
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....essing officer. Regarding money lying in the current account of the company at Axis bank, Lake Town branch, the same were recorded in the books of account and assessee and provided with all reasonable evidences as to the source of such amount. The assessee also explained to AO with regard to year wise increase in the share capital and year wise share application money stating the full details in respect of year wise increase in share capital and share application money along with all supporting documentary evidences including Balance Sheet, Bank Statement, confirmation letters with PAN details of share applicants before AO from time to time. The share applicants to the assessee company were corporate bodies and the share application and subscription money have been received by account payee cheques only. All share applicants were genuine, properly identifiable persons having well established credit worthiness and are asssssed to Income-Tax, whose PAN have also been furnished before AO. Based on the above facts the assessee submitted before the AO that the share application money received by the assessee company for raising its share capital should not be treated as bogus and cannot....
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....hat he was indulged in the activity of providing accommodation entries to various beneficiaries after accepting cash from them. Therefore, substantial amount of cash was found from his premises at the time of search operation. In his statement, Shri Santosh Kumar Shah admitted that he had provided accommodation entries to various parties and charged commission from them. It was found by the AO that in the year under consideration the assessee company had also received share capital of Rs. 1,20,000/- in the similar fashion. It was also observed by AO that in the course of post search enquiries in the case of Shri Santosh Kumar Shah, the statement of Shri Vinod Kumar Shah, Director of the assessee company was recorded by the ADIT(Inv.), Unit-II(6), Kolkata on 10.02.2010. In his statement it was stated by Shri Vinod Kumar Shah that he is the relative of Shri Santosh Kumar Shah and he was the director of M/s Budhiya Marketing Pvt. Ltd. i.e. the assessee company till the year 2007. It was stated by him that M/s Budhiya Marketing Pvt. Ltd. was engaged in the activity of providing accommodation entries. For that the company was charging commission. It was also stated by Shri Vinod Kumar t....
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....e CIT(A) observed that in the course of search and post search enquiries Shri Santosh Kumar Shah had given a specific statement that the appellant company was floated by him and the directors of the company were acting on his instructions. He also stated that the assessee company was engaged in the activity of providing accommodation entries to various beneficiaries. Shri Santosh Kumar Shah also declared commission income in his hands earned by him by providing accommodation entries. He did not retract his statement given in the course of search. Further, similar statement was also given by Shri Vinod Kumar Shah, the erstwhile dummy director of the appellant company. He stated that the appellant company was providing accommodation entries and that the bank account in Axis Bank, Lake Town Branch was opened by him and at that time he was one of the signatory of the bank account. In view of above facts, the CIT(A) confirmed the addition made by the AO at Rs. 1,20,000/-. 8. Not being satisfied with the addition by the ld. CIT(A), the assessee is in appeal before us. The ld. Counsel for the assessee submitted before us that the assessee submitted complete details of share application m....
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....ave already noted in our earlier para and is not being repeated for the sake of brevity. 10. We have heard both the parties and perused the materials available on record, we note that the assessee submitted complete details of share application money including copy of share applications, copies of relevant bank statements of share applicants, copy of PAN card of share applicants, copy of their I.T. Returns and balance sheet. We also note that the AO had issued notices u/s 133(6) of the Act to all the persons who had subscribed to the assessee's share capital and nothing adverse was found by him. Though, in the assessment order, the AO has not mentioned this fact. The assessee has proved the identity, genuineness, and creditworthiness of the share applicants as well as the genuineness of the transactions. We observe that in the assessee`s case under consideration, the AO has made the addition on the basis of statement of Shri Santosh Kumar Shah but AO did not allow the assessee an opportunity of cross examination of the statement of Shri Santosh Kumar Shah. In addition to this, the assessee's case under consideration is squarely covered by the judgment of ITAT, Kolkata in ITA N....