TaxTMI 
TaxTMI 
2018 (1) TMI 665
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....pplicants disregarding all the evidences gathered by the revenue establishing that the share capital introduced were through benami concerns operated by Shri Pravin Kumar Jain, which evidences not only remained uncontroverted but even the onus shifted back on assessee in such circumstances were not discharged in the facts of this case? iii. "Whether, on the facts and circumstances of the case and in law, the CIT(A) was justified in allowing the appeal of the assessee by relying on the decision of Apex court in the case of CIT vs Lovely Exports Pvt Ltd 216 CTR 195(SC) without appreciating that the facts in the instant case were different than those in the case relied upon, as in the instant case, the AO did not sit idle but made investigations with the share holders before making an adverse inference and hence the case law relied upon is not applicable in this case?" 3. The genesis of this case lies is search and survey action was carried out in the case of Shri Praveen Kumar Jain and his group on 01.10.2013. The search action resulted into collection of evidences and other findings which proved that the said person through a web of concerns run and operated by him was engaged ....
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....td., Capetown Mercantile Co. Pvt. Ltd.(Sumukh Commercial Pvt. Ltd., Lexus Infotech Ltd. (Triangular Infocom Ltd.) during the year under consideration. As mentioned above, the details furnished by the assessee also reveals the name of the said parties as Nine of its share application money parties, for a sum of Rs. 45,00,000/-. 6. During the search at various premises, which were shown by the assessee group to be the place of operation and registered office addresses as per the Income Tax records, the official website of the Ministry of Corporate Affairs and bank documents, it was found that the entities operated by Shri Pravin Kumar Jain were non-existing at these addresses and no genuine business was being carried out at any of these premises. 7. The Assessing Officer thereafter referred to the statements and admissions of the related persons. Further, the Assessing Officer observed that during the search action as well as the pre search enquiries, it was found that the all the registered addresses of the concerns of Shri Praveen Kumar Jain were non-functional and nowhere the books of accounts of any of the suspected concerns were found. However, during the search proceedings, t....
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....ion money from Nine of the entities of Shri. Praveen Kumar Jain viz. Atharv Business Private Limited ( M/s. Faststone Trading (I) Pvt. Ltd ) The Statement of Shri Praveen Kumar Jain vis-a-vis the Statements of various brokers / Shri. Manish Jain , director of Atharv Business Pvt. Ltd, ckimnry directors of his various entities & statement of Accountant Mr. Nilesh Parmar etc. together with the seized material in his case establish that Shri. Praveen Kumar Jain and his various entities, including Atharv Business Private Limited, have never carried out any genuine business activity but they have merely provided accommodation entries in different forms while the present case relates to an accommodation entry of Rs. 45,00,000/-under the guise of 'Share application money' shown in the Balance Sheet of the assessee company. 10.20 In fact Pravin Jain group of company advancing loans or share application of money to various companies though these companies have no business or creditworthiness to give the share application money on loan. A maza of transactions were created wherein circular entries were made to prove that there existed a creditworthiness however if one lift corporat....
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....e, deemed to be the assessee's income as envisaged in Section 68 of the Income Tax Act, 1961 and accordingly the same is added to income of the assessee company under the head "Income from other sources". 11. Against the above order, the assessee appealed before the ld. Commissioner of Income Tax (Appeals). The ld. Commissioner of Income Tax (Appeals) reproduced the assessee's submissions in 18 pages of his order. Thereafter, by one paragraph on page 19, he deleted the entire addition by observing as under: 3.1 I have gone through the case of CIT vs. Lovely Exports, 216 CTR 195 (SC) wherein the Hon'ble Supreme Court has held a view that once that name and address and other details given to the Department, the Department is free to reopen the concerned individual assessment records and the share application money cannot be declared as undisclosed income u/s. 68 of the Income Tax Act, so respectfully following the decision of the Hon'ble Supreme Court in the case of Lovely Exports, I direct the AO to delete the addition of Rs. 45,00,000/- and hence this ground of appeal is allowed. 12. Against the above order, the assessee is in appeal before the ITAT. 13. I have heard both th....