AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (7) TMI 827
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....leting an addition of Rs. 40,375/- made by the AO w.r.t. commission paid @ 5% for procurement of accommodation entries through share application money from non-descript companies. 3. The Commissioner of Income Tax (Appeal) erred in admitting additional evidence under Rule 46A. 4. a) The order of the CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any/all the grounds of appeal before or during the course of the hearing of the appeal." 3. A search and seizure operation was conducted against the Mahesh Mehta group of cases on 30/6/2009 u/s 132/133A of the Income Tax Act, 1961 and the premises of the assessee were also covered. Notice u/s 153A was issued on 13/4/2010. In response to the notice the Assessee filed reply and submitted that return declaring income of Rs. 78,230/- filed originally on 9/2/2009 be treated as the return in response to the notice. Notices u/s 143(2) and 142(1) along with questionnaire were issued. The case was assessed at an income of Rs. 81,93,610/- after making an additions. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). Th....
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....were not complied with the shareholders although there is no dispute about the service of summons. When the summons were not complied by the shareholders by making personal appearance but the shareholders responded by submitting information by Dak. The Assessing Officer required the assessee to provide the directors vide order sheet dated 14.12.2011. The assessee expressed his inability to produce the directors. The Assessing Officer deputed the inspector to verify the existence of four entities out of nine share applicants. The inspector reported that entities namely Chintpurni Builders P. Ltd., Multitech Semi Conductor P. Ltd., Scient Informatics India P. Ltd. and Skylink Software P Ltd. don't exist at given addresses. Scient and Skylink having address at 301, Himalaya Palace, 65 Vijay Block, Laxmi Nagar, Delhi reported that no such company existed at the above address as the premises were occupied by M/s M.S. Jain and Associates. The said concern was dealing in finance and housing loan and who confirmed that they have not heard name of these companies before. The remaining two companies namely Chintpurni and Multitech both have the address Laxmi Nagar and Shakarpur addresses. Th....
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.... by the CIT(A). The CIT (A) for A.Y. 2006-07 has given a findings that there have been filing of returns for subsequent years by the share applicant companies and all the share applicant companies are active in the compliances under the Companies Act. All the companies had resources more than the share capital investment with the assessee company. There have been cases of Assessment u/s 143(3) completed by the department for A.Y. 2007-08 in December 2009 in the case of Scient Informatics P Ltd. In other cases, returns of income were subsequent years have been filed to show that companies are in existence. There is an observation by the Assessing Officer in Assessment Order that in the instant case the undersigned is of knowledge which was gathered through post search and during the course of assessment proceedings, that entities are subject of accommodation entries. This observation of the Assessing Officer is based on no material and farfetched. Neither in the Assessment Order nor in the remand proceedings the Assessing Officer has substantiated the above allegation and this allegation is the basis for the Assessing Officer to reject the explanation of the assessee u/s 68. The abo....
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....reliance was placed in the case of Makhani & Tyagi Pvt. Ltd. 267 ITR 430 (Del) and CIT vs. Victor Electrodes Limited 329 ITR 271 (Del). The assessee has relied on various judgments which are mentioned in CIT(A)'s order and special reference is made in the decision of Nova Promoter & Finlease Pvt. Ltd. 342 ITR 169 (Del) extracted in order of the CIT(A). The crux of the judgment was that if the Assessing Officer has any material on the basis of the investigation carried out by the revenue authorities into the activities of the entry providers and the assessee has some accommodation entries from any such entry providers then in that case the paper evidences furnished by the assessee will not sufficient to discharge onus u/s 68. But in case no such material is the hands of the Assessing Officer, the Assessing Officer cannot sit with folded hands till assessee exhaust all material and evidences in his possession. As per this judgment, where there is no adverse material so as to characterized share holder entities as entry provider, no addition cannot be made in the hands of the assessee company u/s 68 and remedies open to the revenue to go after the share applicants in accordance with l....
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....cle Cables Pvt. Ltd. 1000000 1500000 2 Arsey Hosiery Pvt. Ltd. 1000000 3 Twicne Traders Pvt. Ltd. 1000000 4 Chardham Impex Pvt. Ltd. 1500000 5 Vidur Builders Pvt. Ltd. 1500000 6 Tejender Fabrication Pvt. ltd. 1500000 7 Kaiser Marketing Pvt. Ltd. 800000 800000 8 Indolon Hosiery P Ltd. 1200000 425000 1000000 1500000 9 Brainsoft Info Consultannts Pvt. Ltd. 45000 500000 10 Chintapurni Builders Pvt. Ltd. 500000 2000000 1000000 11 Midas Touch Medica Pvt. Ltd. 1300000 1000000 1000000 12 Multitech Semicondsuctors Pvt. Ltd. 1900000 1000000 13 Ribbel Manufactuerrs & Expoerters Pvt. Ltd. 1000000 2500000 14 Scient Infoormatics India Pvt. Ltd.  ....
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.... Fabrication Pvt. Ltd. The ITR for AY 2010-11 was electronically filed on 27.09.2010 vide acknowledgment No. 161381151270910. Therefore, the question of nonexistence of this co. does not arise. 7 Kaiser Marketing Pvt. Ltd. The case was assessed for AY 2006-07 u/s 143(3) by the Department itself on 26.12.2008. The ITR for AY 2010-11 was electronically filed on 25.09.2010 vide acknowledgment No. 159633301250910. Therefore, the question of non-existence of this co. does not arise. 8 Indolon Hosiery P Ltd. ITR for AY 2011-12 was filed on 29.03.2012 vide acknowledgment No.370700291290312. Copies of MCA filings and confirmations from the Directors were also filed. Therefore, the question of nonexistence of this co. does not arise. 9 Brainsoft Info Consultants Pvt. Ltd. ITR for AY 2011-12 was filed on 31.03.2012 vide acknowledgment No.381694521310312. Copies of audited balance sheet and confirmations from the Directors were also filed. Therefore, the question of non-existence of this co. does not arise. 10 Chintapurni Builders Pvt. Ltd. ITR for AY 2008-09 was filed on 26.09.2008 vide acknowledgment No.40183200260908 and ITR for AY 2011-12 was filed o....
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....d. ITR for AY 2011-12 was filed on 05.03.2012 vide acknowledgment No.346599241030312. Copy of the audited balance sheet as on 31.03.2009 was also filed. Therefore, the question of non-existence of this co. does not arise. Co. appears to have source for the investment 19 Intelife Marketing Pvt. Ltd. ITR for AY 2011-12 was filed on 31.03.2012 vide acknowledgment No.382068051310312. Copy of the audited balance sheet as on 31.03.2009 was also filed. MCA master data shows the co. active and having filed the balance sheet as on 31.03.2010. Therefore, the question of nonexistence of this co. does not arise. 20 Kay Buildwell Pvt. Ltd. ITR for AY 2011-12 was filed on 30.03.2012 vide acknowledgment No.374037341300312. Copy of the audited balance sheet as on 31.03.2009 was also filed. Therefore, the question of non-existence of this co. does not arise. Co. appears to have the source for investment. 21 Kela Devi Builders Pvt. Ltd. ITR for AY 2011-12 was filed on 20.03.2012 vide acknowledgment No.356042621200312. Copy of the audited balance sheet as on 31.03.2009 was also filed. Therefore, the question of non-existence of this co. does not arise. Co. appears to hav....
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....ched by the revenue but no such evidence was found. Public functionaries must act in a transparent and non-partisan manner. This does not appear to be the case. 5.5. In view of the above, the additions made in various years, i.e. Rs. 83,00,000/- for AY 2006-07 (A.No.361/13-14), Rs. 12,00,000/- for AY 2007-08 (A.No.360/13- 14), Rs. 80,75,000/- for AY 2008-09 (A.No.359/13- 14), Rs,2,58,00,000/- for AY 2009-10 (A.No.358/13-14), and Rs. 75,00,000/- for AY 2010-11 (A.No.357/13-14), on account of share applications / capital received cannot be held to be unexplained. The conclusion is not tenable in view of the evidence produced and must be deleted. I hold so accordingly for all these assessment years. The respective additions made for these AYs are deleted." In the present Assessment Year 2008-09, the facts are identical and the CIT(A) has rightly followed the order of A.Y. 2006-07 passed by the same CIT(A). There is no need to interfere with the findings of the CIT(A). Therefore, appeal filed by the Revenue is dismissed. 9. In result, ITA No. 54/Del/2014 filed by the Revenue is dismissed. 10. Grounds for ITA No. 55/DEL/2014 (2009-10) are as under: 1. The Comm....
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....by the AO w.r.t. commission paid @ 5% for procurement of accommodation entries through share application money from non-descript companies. 3. The Commissioner of Income Tax (Appeal) erred in admitting additional evidence under Rule 46A. 4. (a)The order of the CIT(A) is erroneous and not tenable in law and on facts. (b)The appellant craves leave to add, alter or amend any/all the grounds of appeal before or during the course of the hearing of the appeal." 15. The Ld. DR submitted that the Companies were not existed as per the Inspector Report. The Ld. DR relied upon the Assessment Order for A.Y. 2010- 11. The Ld. AR submitted that the issue is identical with the A.Y. 2008-09. 16. We have heard both the parties and perused all the relevant records. For Assessment Year 2010-11, the assessee has filed all the required documents before the Assessing Officer. Therefore, the submission of the Ld. DR that the Companies were not existed as per the Inspector Report is not proper. Therefore, the appeal filed by the Revenue for the Assessment Year 2010-11 is dismissed. 17. In result, ITA No. 56/Del/2014 filed by the Revenue is dismissed. 18. Grounds of A....
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.... response to notice u/s 133(6). The Assessing Officer issued show cause notice on the ground that in normal days the share applicant company has nominal balance and it did not have own funds to make investment of Rs. 3,00,000/-. In reply to show cause notice the assessee explained that the share applicant company was assessed u/s 143(3) for A.Y. 2007-08 vide order dated 10.12.2009. The applicant is a registered company under Companies Act with valid CIN number. The company has been operating bank account with nationalized bank with KYC documents and due compliance of banking regulations, the details of the said company was submitted before the Assessing Officer. To prove creditworthiness, the assessee submitted that the said company has net worth of Rs. 300.69 lakhs on 31.03.2010 and Rs. 345.95 lakh on 31.03.2011. So said company has sufficient funds accumulated out of past inflow of funds. The Assessing Officer rejected the explanation of the assessee by relying on CIT vs. Globus Securities and Finance P Ltd. to hold that criteria of identity, creditworthiness and genuineness of transaction has not been satisfied. The CIT(A) also confirmed the action of the Assessing Officer by re....