TaxTMI 
TaxTMI 
TaxTMI 
2020 (2) TMI 147
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....lear from the facts of the case that the share premium has been brought in by share holders which are bogus entry providers as established by the Investigation Wing, Mumbai. 2. Whether on the facts and in circumstances of the case and in law, the ld. CIT(A) is right in deleting the addition by disregarding the fact that despite his directions and the best efforts of the AO to afford an opportunity of cross examination to the assessee no compliance was made either by the assessee of Shri Pravin Kumar Jain, the controller of these bogus entry providers. 3. Whether on the fac6ts and in circumstances of the case and in law, the ld. CIT(A) is right in agreeing with the assessee who stated that its name did not appear in the statement of Shri Pravin Kr. Jain, whereas the said statement clearly mentioned that wherever the companies controlled by the said entry provider had made investment/provided share capital these were bogus transaction. 4. The appellant prays that the order of the CIT(A) on the grounds be set aside and that of the AO be restored. 5. The appellant craves leave to add, amend or alter all or any of the grounds of appeal which may be necessary." 3. The only issue....
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....ies provided accommodation entries as have been brought out during the search on Shri Praveen Kumar Jain/related entities and accordingly rejected the explanation of the assessee by making an addition u/s 68 of Rs. 1,50,00,000/- by framing assessment u/s 143(3) r.w.s 147 of the Act dated 04.03.2015. 5. In the appellate proceedings, the ld. CIT(A) after considering the reply of the assessee deleted the addition made by the AO by observing and holding as under: "10. I have considered the facts and submissions carefully. The investor had complied with the notices issued u/s 133(6) by the assessing officer. The assessing officer did not examine the investors nor carried out any further investigations. The six investor companies are assessed to tax and their identity is not in doubt. They have confirmed the transactions and the amounts are paid by way of cheques through banking channels, Copy of their bank statements have been filed. The shares have been issued at premium to these six companies as well as to promoter and his friends and family. By restricting the additions to the six companies, the assessing officer has accepted the issue of shares at premium. 11. The investment an....
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....nkers. The Assessing Officer ought to have found out their details through PAN cards, bank reholders. Thus, the view taken by the Tribunal could not be faulted. (iii) The Hon'ble Supreme Court of India in the case of CIT vs. Orissa Corporation reported in 159 ITR 78 (SC) has held as under: "That in this case the respondent had given the names and addresses of the alleged creditors, It was in the knowledge of the Revenue that the said creditors were income-tax assessee's. Their index numbers were in the file of the Revenue. The Revenue, apart from issuing notice under section 131 at the instance of the respondent, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they are creditworthy. There was no effort made to pursue the socalled alleged creditors. In those circumstances, the respondent could not do anything further. In the premises, if the Tribunal came to the conclusion that the Respondent had discharged the burden that lay on it, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence". Reliance is also placed on the following decision....
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.... application money, audited balance sheet and P&L a/c of these parties were filed. These are similar details as were filed in case of three other companies for asst. yr. 2005-06. We have already disposed of the appeal for asst. yr. 2005-06 whereby we have held that the assessee has discharged its onus by filing necessary details and further have relied on the decisions of Hon'ble Supreme Court and Hon'ble Delhi High Court along with various other decisions of Tribunal and have held that addition cannot be made under S.68 in the hands of the assessee company. Therefore, in view of the same reasoning, we cancel the entire addition made and confirmed by the lower authorities here also. The above decision of ITAT also related to Mr.Mukesh Choksi's case of investment in share application money. On perusal of above case it is clear that if a bogus shareholder has invested the money and if appellant receives such money as share application money and appellant during assessment proceedings provides the details like name & address of the corporate entity, PAN No., ROC No., then ITAT held that this may be referred to the concerned A.O. for proceeding against such bogus sharehol....
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....is arguments, the ld. DR relied on a series of decisions namely PCIT vs. NRA Iron & Steel Pvt. Ltd. Civil Appeal No of 2019(arising out of SLP (Civil No.29855 of 2018) Supreme Court dated 05.03.2019, PCIT vs. NDR Prompters Pvt. Ltd. ITA 49/2018 of Hon'ble Delhi High Court dated 17.01.2019 and CIT vs. Navodaya Castle Pvt. Ltd. [2014] 367 ITR 306(Del) . 7. The ld. AR on the other hand relied on the order of ld. CIT(A) and submitted that the ld. CIT(A) has passed a speaking and reasoned order after taking into account all the aspects of the issue and by relying on the various decisions of the Hon'ble Supreme Court and High Courts. The ld. AR submitted that the assessee filed all the necessary details which were called for by the AO during the course of assessment proceedings namely PAN cards, confirmation letters, Income Tax Returns, bank statements, applications for shares, balance sheets of investors showing investment made by the subscribers with the assessee, memorandum of Association of the investor companies, etc. The ld. AR submitted that notices were issued and were duly served upon the shareholders by the AO. The ld. AR submitted that instead of carrying out further investig....
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....d genuineness of the transactions of the investors which were duly served and were duly complied with by filing details/evidences as called for by the AO. We note that instead carrying out further investigation, the AO has relied primarily on the statement of Shri Pravin Kumar Jain which has been retracted since then. Finally, the AO made addition u/s 68 of the Act on account of bogus share premium and share application money. The ld. CIT(A) deleted the addition after taking into account the various facts and ratio laid by the various judicial forums as reproduced above in CIT(A)'s order. In the present case, the AO has not made any further investigations to find out the truth but relied on the statement of Shri Praveen Kumar Jain and therefore has no basis. In our opinion, the assessee has sufficiently discharged its onus by filing the necessary evidences and the onus shifted to the AO to make further investigation as has held in the case of Haresh D Mehta (supra). The Hon'ble Apex Court in the case of Lovely Export (supra) has held that whereas the assessee has received application money from alleged bogus shareholders whose names are given to the AO, then the Revenue is free to ....