TaxTMI 
TaxTMI 
2017 (9) TMI 1811
X X X X Extracts X X X X
X X X X Extracts X X X X
....ineness of the transaction. 3(i) On the facts and circumstances of the case, the learned CIT(A) has erred in confirming above said addition taking adverse view against the assessee, without conducting any independent investigation made by the AO. (ii) On the facts and circumstances of the case, the addition made by the AO is arbitrary and against the facts on record. (iii) That in absence of any adverse material having brought on record, the addition made by the AO invoking the provisions of section 68 is unsustainable. 4(i) On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in upholding the action of the A.O in denyinq exemption U/s 10(23C)(iiiad) to the assessee amounting to Rs. 7,89,745/- claimed by the assessee despite the assessee being eligible for the same. (ii) That the exemption U/s 10(23C)(iiiad) was denied by wrongly interpreting the conditions laid down under the said section. 5. The respondent craves leave to add, amend or alter any of the grounds of appeal." 2. The brief facts of the case are that the assessee filed the return of income declaring NIL income on 15.10.2011 a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....above, a notice dated 24.03.2014 was issued and assessee society was asked to show cause as to why the exemption claimed u/s 10 23C)(iiiad) should not be withdrawn and excess of income over expenditure should not taxed as per the provisions of Income Tax Act as the gross receipts of the society are exceeding Rs. One crore and the society has not taken prior approval from the Ld. CCIT, Panchkula u/s 10(23C) (vi) of the Income Tax Act, 1961 which is mandatory for claiming exemption. In response, the society filed its written reply stating therein that receipt of our school should be kept at Rs. 72,28,383/- which is prescribed limit explained in section 10(23c)(iiiad) of the Income Tax Act, 1961. AO observed that the contention of the assessee is not genuine because, the gross annual receipts of the society exceeding Rs. One crore and society has not taken prior approval from the Ld. CCIT, Panchkula, Therefore, the society is not eligible for exemption u/s. 10(23C)(iiiad) of the Act. The same was withdrawn and the excess of income over expenditure shown at Rs. 7,89,745/- was added to the returned income of the assessee. Accordingly, the income of the assessee was assessed at Rs. 75,64....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2015 (PB Pg 107) to produce 6 persons, 5 persons appeared & confirmed about the transaction and their statement on oath uls 131 were recorded by the AO (PB Pg 109-131). 4. AO was not justified in calling upon the assessee to prove the source of source case laws relied upon are as under :- . * Orissa Corporation (P)ltd 159 ITR 78(SC) * P.K. Noorjahan 273 ITR 570(SC) * Nabadwip Chandra Roy v/s CIT (1962) 44 ITR 591 (Assam). * Tolaram Daga v/s CIT (1966) 59 ITR 632 (Assam). * Anand Prakash Agarwal vIs ACIT ( 2008) 6 DTR (All) (Trib) 191. * Radheshyam vIs Safiyabai Ibrahim AIR 1988 Born 361 * Rohini Builders 182 CTR 373 (Guj) 5. The list of 177 persons PB Pg 88-94/1-350 by whom the loan were provided during the assessment proceedings with detailed confirmation with name of persons, father's name, addresses, date of amount received, amount, date of repayment and detail regarding their profession were provided alongwith their identification, address proof in the form of Ration Card/Adhar Card/PAN Card/Voter Card/Driving License, etc. were submitted to the Ld AO in support of identification and genuinenes....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessing officer "sits back with folded hands" till the assessee exhausts all the evidence or material in his possession and then comes forward to merely reject the same on the presumptions. The present case falls in the latter category. Here the assessing officer, after noting the facts, merely rejected the same. This would be apparent from the observations of the assessing officer in the assessment order to the following effect: - "Investigation made by the Investigation Wing of the Department clearly showed that this was nothing but a sham transaction of accommodation entry. The assessee was asked to explain as to why the said amount of Rs. 1,11,50,000/- may not be added to its income. In response, the assessee has submitted that there is no such credit in the books of the assessee. Rather, the assessee company has received the share application money for allotment of its share. It was stated that the actual amount received was Rs. 55,50,000/- and not Rs. 1, 11,50,000/- as mentioned in the notice. The assessee has furnished details of such receipts and the contention of the assessee in respect of the amount is found correct. As such the unexplained amount is to be taken ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the facts, evidence and material. No substantial question of law arises. The appeal is accordingly dismissed. 3) CIT vs Expo Globe India Ltd ITA 1257/2011 (Delhi) Para 7. "This Court has carefully considered the submissions. The previous discussion, particularly the order of the CIT (A), would reveal that even though the Assessing Officer had initially concluded on the basis of the materials made available at that stage that service of the entry providers had been utilized to bring in capital, after remand the CIT (A) elaborately took into account considerable material furnished by the assessee. These included income tax returns, balance sheets, ROC particulars and bank account statements. On the basis of these, the CIT (A) held that the share application money or the source of the share application money had been satisfactorily explained. The ITAT was of the opinion that no interference was warranted having regard to the facts of this case. This Court is of the opinion that the only sentence in paragraph-6 of the impugned order that amounts were refunded to the applicants itself should not be a ground to conclude that the findings recorded by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....application money from five companies and had filed confirmations, PAN Numbers, bank statement, balance sheet etc. with the Assessing Officer. The Assessing Officer did not conduct any enquiries and made the addition. The relevant observation of Hon'ble High Court are reproduced below:- "We have examined the said contention and find that the assessee during the course of assessment proceedings has filed confirmation letters from the companies, their PAN number, copy of bank statements, affidavits and balance sheet. Thereafter the Assessing Officer had asked the assessee to produce the said Directors/parties. Assessee expressed its inability to produce them. The Assessing Officer did not consequent thereto conduct any inquiry and closed the proceedings. This is a case where the Assessing Officer has failed to conduct necessary inquiry, verification and deal with the matter in depth specially after the affidavit/confirmation along with the bank statements etc. were filed. In case, the Assessing Officer had conducted the said enquiries and investigation probably the challenge made by the revenue would be justified. In the absence of these inquiries and non verification of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncing such huge amount of loan amounting to about Rs. 5 crores and secondly that assessee even for taking such huge amount of loan did not want to pay any interest for which creditors also agreed, Tribunal had rightly, arrived at a finding of fact, on analysis of all relevant material on record, that genuineness of transaction had not been established and assessee had failed to independently prove same application money, amount so received was liable to be taxed under section 68. 4. Sanraj Engineering Pvt. Ltd. Vs CIT (ITA 79/2016) (Delhi) where Hon'ble Delhi High Court held that addition made u/s 68 on account of unsecured loans was justified, where initial onus of proving the creditworthiness of the lenders was not discharged by the assessee. 5. Naresh Chandra Jain Vs CIT (ITA No.335 of 2009) (Allahabad) Where Hon'ble Allahabad High Court held that tribunal was justified in holding that amount of loan received by assessee was unexplained income u/s 68 in as much as identity, genuineness, creditworthiness of the transaction is not proved." 6. We have heard both the parties and perused the records and gone through the orders of the authorities below, es....