TaxTMI 
TaxTMI 
2018 (1) TMI 186
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....0,000/- M/s. Alka Diamond Industries Ltd. 10,00,000/- M/s. Javda India Impex Ltd. 5,00,000/- M/s. Yash-V-Jewelers Ltd. 5,00,000/- M/s. Vanguard Jewels Ltd. 5,00,000/- M/s. Hema Trading Co. Pvt. Ltd. 5,00,000/- Total 41,00,000/- The assessing officer assessed the same as unexplained cash credit u/s 68 of the Act. 3. The Ld CIT(A) noticed that the assessee has discharged the initial onus placed upon it u/s 68 of the Act by furnishing necessary evidences to prove the identity of the applicants, credit worthiness of the applicants and the genuineness of the transactions. On the other hand, the Ld CIT(A) noticed that the AO did not take any steps to disprove the evidences furnished by the assessee. Accordingly he deleted the addition and hence the revenue has filed this appeal. 4. The Ld D.R submitted that the assessee has taken share application money from paper companies and hence the evidences furnished by the assessee are not sufficient and the test of human probabilities should be applied. In this regard, she placed reliance on the decision rendered by Hon'ble Delhi High Court in the case of CIT Vs. Independent Media (P) Ltd (210 Taxmann 14). 5. The Ld A.R submitte....
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....he appellant had failed to submit documentary evidence to support the transactions. In course of assessment proceedings, the Assessing Officer had issued notices u/s 133(6) of the Act to the above parties. As per paras 13 and 14 of the order, no responses were received from any party. Accordingly, the Assessing Officer held that identity, creditworthiness and genuineness of transaction were not established in terms of section 68 of the Act. Therefore, he concluded that the share application/premium received was "bogus/accommodation entry" and added the impugned amount u/s 68. of the Act. 5.1.2 Perusal of copies of letters/details filed by the appellant before the Assessing Officer in course of appellate proceedings reveal that the appellant vide letters dated 19/03/2015 &24/03/2015 had filed the following : a) Name, address and PAN of share holders from whom the share capital/premium is received during the year; b) IT acknowledgement of the shareholders; c) GIN Master data of shareholders issued by Registrar of Companies. The said company, as on date, is disclosed as 'active' companies; d) Share application forms disclosing the mode of payment, number of shar....
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....Application of mind is the sine qua non for forming the In the instant case, the appellant filed all reasonable and acceptable explanation and the AO has not even mentioned them or explained why he has rejected them. 5.1.5 In the case of Orient Trading Co. Ltd. v. Commissioner of Income-tax (1963) 49 ITR 723 (Bom.), one of the questions referred to the Bombay High Court was whether there was any material before the Tribunal to hold that a sum standing in the books of the assessee to the credit of a third party belonged to the assessee. The Bombay High Court discussed the nature and significance of cash credits in such cases and observed as follows: "When cash credits appear in the accounts of an assessee, whether in his own name or in the name of third parties, the income-tax Officer is entitled to satisfy himself as to the true nature and source of the amounts entered therein, and if after investigation or inquiry he is satisfied that there is no satisfactory explanation as to the said entries, he would be entitled to regard them as representing the undisclosed income of the assessee. When these credit entries stand in the name of the assessee himself, the burden is undoubte....
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....Officer has not brought forth any evidence but has based his conclusions on suspicion. It is trite law that on suspicion of the highest degree cannot take place of evidence. There must be some material on record as evidence for addition. Addition made on the basis of presumption cannot be sustained in law. This position is strongly supported by the following decisions: a) CIT V Roman & Co (1968) 67 ITR 11 (SC) b) CIT v Calcutta Discount Co Ltd (1973) 91 ITR 8 (SC) c) OmarSalayMohamedSaitvsCIT195937ITR151 (SC) d) Dhirajlal Girdharilal v CIT (26 ITR 734)(SC) e) Dr Anita Sahai v DIT (266 ITR 97)(AII) f) MODI Creations Pvt Ltd v/s. ITO [2011] 13 taxmann.com 114 (Delhi) g) CIT-IV v Shree Rama Multi Tech Ltd [2013 34 taxmann.com 32 (Gujarat) h) CIT v Divine Leasing & Finance Ltd 158 Taxmann 440 (Delhi) (2007) i) Nemichand Kothari v CIT (136 Taxman 216) (Gau)(2004). j) CIT v value capital services (P) Ltd 307 ITR 334 (Delhi)(2008). k) Parmit Textiles v ITO (ITA No. 4012 to 405 and 4020 to 2041/Mum/2012. 5.1.9 Income assessed by Assessing Officer without supporting material is not justified. This ratio has emerged in following judgements: * CIT v Bhuv....
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.... in the accounts of the recipient and gets absorbed there. For an entry to be considered "accommodation entry", there must be some evidence that the appellant had paid unexplained cash to the share applicant which was routed through share application/premium back to the appellant. In the instant case, there is no such evidence. In a similar case involving PKJ Group companies, where no other incriminating evidence was brought on record by the AO, Hon'ble ITAT Mumbai, in their decision in Shri Jitendra Kumar Jain vs DC/7, ITA Nos.5788 to 5794/M/201 f, had observed: 9. We have heard the Id. representatives of both the parties and also have gone through the record. The contention of the Id. A.R. has been that the Revenue has failed to establish any link between Shri Pravin Kumar Jain and the assessee. No incriminating material except a few cheques and two letter heads belonging to other persons was found. The two of the said persons were also examined by the revenue authorities. The purchase parties/sale parties having business links with the assessee responded to the notices served by the AO and furnished the necessary details/confirmations also. Confirmations by the sundry cre....