TaxTMI 
TaxTMI 
TaxTMI 
2020 (4) TMI 261
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....consideration the submissions and the evidences filed before him. That on the facts and in the circumstances of the case and in law, the upholding of said addition of Rs. 15,00,000/- and the interest thereon of Rs. 63,123/- is bad in law. 3. That the Ld. CIT(A) erred in not considering the fact that the A.O. had collected and used certain material behind the back of the assessee without supplying the same to the assessee and neither giving an opportunity of being heard nor providing an opportunity of cross examination to the assessee which is against the principles of natural justice. 4. That the appellant craves leave to add, to alter, amend, modify, substitute, delete and/or rescind all or any of the grounds of appeal on or before final hearing, if necessity so arises. 2. The only effective ground is against sustaining addition of Rs. 15 lakhs and interest thereof of Rs. 63,123/- The facts in brief are that the assessee had filed his return through electronic media on 21.9.2012 declaring total income of Rs. 48,96,104/-. The case was selected for scrutiny assessment and thereafter the assessment u/s 143(3) of the Income Tax Act, 1961 (hereinafter called as 'the Act') was fram....
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....was having loss from which it is clear that it was paper/shell company of meager means and engaged in giving accommodation entries to the beneficiaries in the garb of the unsecured loan. 4.1.4 Onus was on the appellant to prove genuineness of the transactions shown by them by them but they failed to do so. The above mentioned company was not doing any business activities and it was engaged in giving accommodation entries. In this regard, judgement of Hon'ble Delhi High Court in the cases of CIT Vs. Nova Promoters and Finlease (P) Ltd. (2012) 342 ITR 169 (Del) and CIT Vs. N.R. Portfolio Pvt Ltd. (2014) 264 CTR 258 (Del) are relied upon. Further, the judgement of Hon'ble Kolkata High Court in the case of Rajmandir Estate Pvt. Ltd. (2016) reported in 70 Taxmann.com 124 (Cal) and the judgement of ITAT, 'D' Bench. Mumbai in ITA no. 1835/Mum/2014 dated 24.8.2016 in the case of Royal Rich Developers Pvt. Ltd. are also relied upon. In view of above facts, I am of the considered view that this is not sufficient to discharge the onus cast on the appellant as contemplated u/s. 68 of the Act just giving addresses and PAN of the company concerned when the AO has doubted the credit worthiness/....
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.... in existence and thus, the onus shifts back to the appellant to produce the lender before the AO and if the appellant falters, the additions can be made u/s 68 of the Act, Section 68 of the Act has been amended by Finance Act, 2012 w.e.f. 01-04-2013 whereby the onus is cast upon the appellant to justify the sources of unsecured loan, to explain the source of the source of raising the unsecured loan which has been held to be clarificatory in nature. In the present case, the appellant company could not prove that the identity and credit worthiness of the alleged lender and the genuineness of the unsecured loan. Being Private Limited company, it was therefore, viable and proper and duty on the part of the appellant to prove genuineness od the transaction but the fact remains that the appellant could not prove the same. The lender was having loss. This company is having loss for the period under consideration and hence his creditworthiness is also not established. The M.P. High Court held in the case of CIT v. Rathi Finlease Ltd wherein considering the judgement of Hon'ble Supreme Court in the case of CIT v seller Investment and the judgement of Hon'ble Supreme Court in the ca....
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....s. 68 - CIT(A) held that the ingredients of section 68 are not satisfied. However, in one of the cases, CIT (A) held that addition, shall be made substantively in the hands of assessee and protectively in the hands of alleged investors in terms of ITAT Judgement in Asst. CIT v. Narmada Extrusion Ltd. (2012) 19 ITJ 202 (Trib.-Indore) - HELD - Assessee has not established the ingredients of section 68; credits cannot be accepted - Also, in Asst. CIT v. Narmada Extrusion Ltd.(2012) 19 ITJ 202 (Trib.-Indore), it was found that additions has already been made in the hands of investors - In the present case, assesssee is unable to establish the ingredients of section 68 - Addition is called for Pramilla Investment and Finance Ltd. v. ITO (2013) 22 ITJ 149 (Trib. - Indore) 3. Share Application Money - Assessee has not discharged the genuine of the transaction - Additions justified - Share Application money - The AO noticed that bank statement furnished during the original assessment proceedings was fabricated and misled the AO. The AO found that the Assessee had adopted unfair practice by adducing false evidence to get undue advantage of giving colour of genuineness to bogus entries thr....
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....l to show that subscriber was paper company and not a genuine investor -share application money. it was held by the Delhi High Court that certificate of incorporation, PAN etc. are relevant for purchase of identification, but have their limitation when where is evidence and material to show that the subscriber was paper company and not a genuine investor - SLP against this decision of high court has been dismissed. Navodaya Castle (p) Ltd. v CIT (2015) 25 ITJ 552 (SC):(2015) 12 STD 463: (2015) 230 Taxman 268. 7. Share capital and Loan - Assessee not able to establish identify of investor - Merely filling PAN, IT returns, certificate of incorporation, Balance Sheet etc. do not establish the identity - share capital and Loan - "HCL' and "OTIL" had subscribed in shares of assessee company - In some cases, "HCL" and "OTIL" had given loans to assessee company- AO required assessee to prove transaction - Asseessee furnished various document to prove the transaction. On inquiry, the companies were found to be non-existent - Noticed issued to them were returned unserved - HELD - Assessee is not able to establish identity of investors - Merely filing PAN, IT returns , Certification of....