TaxTMI 
TaxTMI 
2016 (3) TMI 1319
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....ion of that credits claimed to be on account of share application money were actually bogus credits representing the accommodation entries. b) The assessee could not rebut the above finding either during the assessment proceedings or during the appellate proceedings. c) Merely because the accommodation entries were received through public limited company does not make the credit a genuine credit or genuine share application money receipt. d) The Ld CIT (A) failed to appreciate that facts of the case were so peculiar, especially with regard to non compliance to notices / summons issued during the assessment proceedings, {even after the Hon'ble High Court had held the reopening of assessment as per law and extended the limitation period upto 28 Feb 2011), that he (Ld CIT(A» should have allowed the AO the an opportunity of hearing before allowing relief to the assessee. e) The Ld CIT (A) failed to appreciate that the case laws relied by the AO and rejection of the case law relied by the assessee were well discussed and the addition made on the basis of proper enquiry and after confrontation to the assessee could not be said to based on sus....
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....On the facts and in the circumstances of the case and in law the Ld CIT (A) has failed to appreciate that the case laws relied upon by the AO and rejection of the case law relied by the assessee were well discussed and the addition was made on the basis of proper enquiry and" after confrontation to the assessee which cannot be said to be based on suspicion, conjectures or surmises." 1.5 "On the facts and in the circumstances of the case and in law the Ld CIT (A) has failed to appreciate that the assessee failed to produce the books of accounts and other relevant details called for, which were necessary to examine the case in full details." 1.6 "On the facts and in the circumstances of the case and in law the Ld CIT(A) has wrongly held that the assessee filed the requisite details and produced the books of accounts during the assessment proceedings." 1.7 On the facts and in the circumstances of the case and in law the Ld. CIT(A) has erred in relying on the various case laws, which had no similarities of facts of the assessee, especially in view of the information regarding beneficiary for accommodation entries on records and the information gathered during....
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....eting the addition of Rs. 15 lacs by observing that the recovery of the advance is outside the scope of s.68 without appreciating that unless the assessee explain the nature and source of credit to the satisfaction of the AO, the provisions of section 68 will apply. 3. "On the facts and in the circumstances of the case and in law the Ld CIT (A) has erred in deleting the addition of Rs. 4.50 Lac without appreciating the facts of the case just by accepting the submission of the assessee that the credit amounts was sale proceeds of shares". 3.1 "On the facts and in the circumstances of the case and in law the Ld CIT (A) has erred in deleting the addition of Rs. 4.50 without appreciating the facts that the assessee did not produce any documentary evidence related to sale of shares as claimed". 3.2 "On the facts and in the circumstances of the case and in law the Ld CIT (A) has erred in deleting the addition of Rs. 4.50 without appreciating the facts as revealed from enquiries conducted by the AO accepting the submission as correct on face value without rebutting the finding of the AO during the assessment proceedings or during the appellate proceedings." ....
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....sed on the bank a/c statement of the assessee. " 5.1 "On the facts and in the circumstances of the case and in law the Ld CIT (A) has erred in deleting the addition of Rs. 10 Lac made by the AO ignoring the fact that the assessee did not produce the books of accounts despite the adequate opportunity allowed to the assessee." 5.2 "On the facts and in the circumstances of the case and in law the Ld CIT (A) has erred in deleting the addition of Rs. 10 Lac accepting additional evidence in form of bank alc in the books of the assessee without allowing an opportunity to the AO to give his comments in contravention of Rule 46A of the Income Tax Rules." 6. "On the facts and in the circumstances of the case and in law the Ld CIT (A) has erred in deleting the addition of Rs. 40000/-- made by the AO ignoring the fact that the assessee did not produce the books of accounts despite the adequate opportunity allowed to the assessee." 6.1 "On the facts and in the circumstances of the case and in law the Ld.CIT (A) has erred in deleting the addition of Rs. 40000/- made by the AO by accepting additional evidence in form of confirmation of alc from M/s Modline Buil....
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....assessee drawn our attention towards the Application filed by the Assessee u/R 27 of the Income Tax (Appellate Tribunal rules, 1963) in which he has stated that the Notice u/s. 148 issued in the case of assessee is bad in law and without jurisdiction as the requisite sanction u/s. 151 of the Income Tax Act, 1961 for issuance of notice u/s. 148 has not been obtained. Secondly, he argued that notice u/s. 148 issued in this case is bad in law and without jurisdiction as the reasons for issue of notice u/s. 148 has been recorded in a mechanical manner and without application of mind and without independent examination. Therefore, he requested that on this legal issue, the reassessment may be quashed and Revenue's Appeal may be dismissed accordingly. 7. On the other hand, Ld. DR relied upon the order of the CIT(A) on this issue and strongly opposed the Application filed by the assessee under Rule 27 of the ITAT Rules, 1963 and stated that assessee has challenged the notice u/s. 148 issued by the AO in the Hon'ble High Court of Delhi in WP(C) No. 8260/2010 and CM 2124/2010 in the case of Vivsun Properties (P) Ltd. vs. CIT & Anr. wherein the Hon'ble High Court of Delhi has held that th....
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....ard both the parties and perused the records, especially the Orders of the revenue authorities. We find that the Ld. CIT(A) has elaborately discussed the issue and gave his finding vide para no. 9 to 18 at page nos. 4 to 9 of his impugned order. For the sake of convenience, the relevant finding of the Ld. CIT(A) is reproduced below:- "9. Share Application money /Share Capital: The assessee company received share application money / share capital from the following persons / companies and the details furnished are as under:- S.No Name & Address Share Capital Including share premium (Rs.) Remarks 1. Geefcee Finance Ltd. 13/34, WEA, 4th floor, Main Arya Samaj Road, New Delhi -110 005 20,00,000.00 Date incorporation: 17.5.1990 PAN: AAACG1103H 2 Mahanivesh India Ltd. 13/34, WEA, 4th Floor, Main Arya Samaj Certificate Road, New Delhi- 110005 10,00,000.00 Copies of Ale, Bala nce ""'" Certificate Date of incorporation: PAN: AAACM 3 Combine Overseas Ltd. E-65, 6th Floor, Himalaya House, 23, K.G. Marg, New Delhi-110001 40,00,000.00 Copies of Share PAN: AAACC 4 Ojswi Traders Investment & Finance Lt , 5/5761, Dev Nagar, Karol B....
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....held that: 'There cannot be two opinions on the aspect that the pernicious practice of conversion of unaccounted money through the masquerade or channel of investment in the share capital of a company must be firmly excoriated by the Revenue. Equally, where the preponderance of evidence indicates absence of culpability and complexity of the Assessee it should not be harassed by the Revenue's insistence that it should prove the negative. In the case of public issue, the company concerned cannot be expected to know every details pertaining to the identity as well as financial worth of each of its subscribers. The company must, however, maintain and make available to the Assessing Officer for his perusal, all the information contained in the statutory share application documents. In the case of private placement the legal regime would not be the same. A delicate balance must be maintained while walking the tightrope of section 68 and 69 of the Income Tax Act. The burden of proof can seldom be discharged to the hilt by the assessee; if the Assessing Officer harbors doubts of the legitimacy of any subscription he is empowered, nay duty-bound, to carry out thorough inves....
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....(P) Ltd. (2009) 221 CTR (Del) 511, CIT vs. Lovely Exports (P) Ltd. (2008) 216 CTR (SC) 195: (2008) 6 DTR (SC) 308, Shipra Retailers (P) Ltd. (SLP No. 451 of 2008, dt. 21 st Jan. 2008) and Divine Leasing & Finance Ltd. (SLP No. 375 of 2008, dt. 21st Jan. 2008) the Hon'ble ITAT observed as under: "We have considered the rival contentions and found that identity of the share applicants are not in dispute. The Hon'ble Supreme Court in case of Divine Leasing & Finance Ltd. (supra) has held that if the share application money is received by the assessee company even from the bogus shareholders whose names are given to the AO then the Department is free to proceed to reopen their individual assessments in accordance with law. Accordingly, addition made under s. 68 which was deleted by the Hon'ble High Court was upheld by Hon'ble Supreme Court. A perusal of the orders of the Hon'ble Supreme Court in the case of Divine Leasing & Finance Ltd. referred to supra is in regard to SLP filed by the Revenue against the order of the Hon'ble jurisdictional High Court. The Hon'ble Supreme' Court has specifically with a speaking order dismissed the SLP. The Hon&....
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....duly reflected in their books of account as seen from the schedule to the respective balance sheets furnished. In the statement recorded from Shri Tarun Goyal, the appellant company is not figuring as beneficiary of accommodation entries. 11.3 The AO conducted inquires with regard to the sources of funds before issuing cheques to the appellant by M/s Mahanivesh India Ltd., and M/s Geefcee Finance Ltd. The AO observed that the transactions are not genuine. But the fact remains that the said two companies are Public Limited companies and they have invested in many other companies. 12. The AO in the assessment order reproduced extensively the notings of order sheet, questioners issued and replies furnished by the appellant. The AO observed that the facts of the case are distinguishable from the facts of the cases which were considered by the various judicial fora. It is more or less settled position of law that once identity is established, the better course suggested by the judicial authorities is to reopen the assessments of share applicants. In respect of share applicants other than M/ s Mahanivesh India Ltd. and M/s Geefcee Finance Ltd., nothing adverse was broug....
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....o the sources of funds before issuing cheques to the appellant by M/s Mahanivesh India Ltd., and M/s Geefcee Finance Ltd. We find that the AO observed that the transactions are not genuine. But the fact remains that the said two companies are Public Limited companies and they have invested in many other companies. The AO in the assessment order reproduced extensively the notings of order sheet, questioners issued and replies furnished by the appellant. The AO observed that the facts of the case are distinguishable from the facts of the cases which were considered by the various judicial fora. It is more or less settled position of law that once identity is established, the better course suggested by the judicial authorities is to reopen the assessments of share applicants. In respect of share applicants other than M/ s Mahanivesh India Ltd. and M/s Geefcee Finance Ltd., nothing adverse was brought on record. The law of evidence mandates that if the best evidence is not placed before the court, an adverse inference can be drawn against the person who ought to have produced it. As stated above the assessee has produced possible/best evidence to support its claim. The assessee cannot ....
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....ade expenditure of Rs. 4,50,000/- out of unexplained sources for getting the credit of this Rs. 4,49,500/-. Therefore, he submitted that the AO has rightly made the addition of Rs. 4,50,000/- may be upheld accordingly. 12.2 On the other hand, Ld. Counsel of the Assessee relied upon the order of the Ld. CIT(A) and stated that Ld. CIT(A) has passed a well reasoned order which does not need any interference and the same may be upheld. 12.3 We have heard both the parties and perused the records, especially the Orders of the revenue authorities. We find that Ld. Counsel of the assessee has explained in the course of assessment proceedings that amount of Rs. 4,50,000/- and shares of Highthrow Corp Ltd. for Rs. 50,000/-. These are already credited to the P&L a/c as sale of shares. The AO simply brushed aside the submission of the AR without appreciating the evidence brought on record. We further note that AO has not disputed the acquisition of shares of the assessee. Therefore, the Ld. CIT(A) has rightly deleted the addition in dispute, which does not need any interference on our part, hence, we uphold the same and dismiss the ground nos. Ground No. 3 to 3.4 raised by the Revenue. ....
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.... which reads as under: "14.10.2003 by FDR with State Bank of Mysore Cheque No. 581629, 581619 for FDR A/c to State Bank of Mysore. FDR No. 01202045263 dated 16.2003." In our considered opinion, based on these facts, Ld. CIT(A) has rightly held that there is no scope for addition of Rs. 10 lacs towards Fixed Deposit made with State Bank of Mysore and accordingly, deleted the addition, which does not need any interference on our part, hence, we uphold the same and dismiss the ground no. 5 to 5.2 raised by the Revenue. 15. Apropos deletion of addition of Rs. 40,000/-. 15.1 On this issue, Ld. DR relied upon the order of the AO and reiterated the contentions raised in the grounds of appeal filed by the Revenue. He stated that assessee has not furnished any documentary evidence has also not produced the books of accounts, hence, the AO has rightly made the addition of Rs. 40,000/- on this account which may be upheld. 15.2 On the other hand, Ld. Counsel of the Assessee relied upon the order of the Ld. CIT(A) and stated that Ld. CIT(A) has passed a well reasoned order which does not need any interference and the same may be upheld. 15.3 We have heard both the partie....