TaxTMI 
TaxTMI 
2019 (6) TMI 1531
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....ating the fact that the entries of these share application money in the books of accounts are bogus accommodation entries which have been provided by Mr. Vipul Bhatt and his key employee and associate group in the form of share application in F. Y. 2008-09 pertaining to A. Y. 2009-10." 2. "The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 4. The brief facts of the present case are that the assessee is engaged in the business of 'development of properties'. The return of income for the year under consideration was filed on 12.09.09 declaring total income at NIL. Subsequently, information was received by the AO from ADIT(Inv.), Mumbai related to bogus purchase entries. Thereafter, the case was selected for scrutiny and after serving statutory notices and seeking reply of the assessee, the case was reopened and assessment order was passed u/s 143(3) r.w.s. 147 of the Act on 28.12.16 thereby making additions of Rs. 1,75,00,000/- to the total income of the assessee u/s 68 of the Act. 5. Aggrieved by the order of the AO, the assessee preferred appeal before Ld. CIT(A), Mumbai and Ld.CIT(A) after considering the cas....
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....the Paper Book. 20/04/2016 Notice dated 20th April, 2016 u/s 142(1) of the Act asking for various details. Received by the appellant on 21/04/2016 23/04/2016 The Appellants filed a reply along with acknowledgement of original return of income filed, Computation of Income, copy of Audited Accounts and also requested for providing reasons on the basis of which the assessment is reopened. The copies are placed at Page 2 to 17 of the Paper Book. 10/05.2016 The Assessing Officer furnished the reasons dated 29th March, 2016 for reopening of the assessment and the copy is placed at Page 19 and 19 of the Paper Book. 04/07/2016 The Assessing Officer issued a show cause notice for non compliance of Notice dated 20th April, 2016 u/s 142(1) and 143(2) of the Act, 07/07/2016 The Appellants filed objections to the reasons for reopening and asked for further details such as, copies of information available with Assessing Officer and/or office of ADIT (investigation) including copies of statements recorded of the parties wherein those parties have allegedly stated that they have given accommodation entry to the Appellants. The Appellants further stated that the above ....
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....Principal Commissioner of Income-tax-6 vs. Meenakshi Overseas (P.) Ltd. [2017] 82 taxmann.com 300 (Delhi) b) Aavkar infrastructure Company vs. DC/7"[2012] 21 taxmann.com 488 (Delhi) c) Kothi Steel Ltd. v/s ACIT, 72 taxmann. com 252 (Guj) d) CIT v/s Akot Ginning and Pressing Factory Ltd., 66 taxmann.com 80 (Bombay) 7.7) The reasons further states that - "the true natures of all these transactions with above entities are not known. As a result the income of the Assessee Company has been understated and further there was failure on the part of the Assessee Company to fully disclose the details for year under consideration." 7.8) That in the first line it is stated that true nature of transaction is not known. In such case, how it is concluded in the second line that the income of the Appellant Company has been understated. This shows the assessment has been reopened to make enquiries. 7.9) That it further states that there was a failure on the part of the Appellant Company to fully disclose the details for year under consideration. It is respectfully submitted that all the details required as per return of income under efiling syst....
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.... Book. 17/08/2016 M/s. Santoshima Lease Finance & Investment (India) Pvt. Ltd. filed the details as per Notice u/s 133(6). Copy is placed at Page 242 of the Paper Book. 17/08/2016 M/s. Do/ex Commercial Pvt. Ltd. filed the details as per Notice u/s 133(6). Copy is placed at Page 240 of the Paper Book. 18/08/2016 The Appellants filed the submission along with fresh confirmation and copies of ITR-V for the A. Y. 2009-10, 2011-12 and 2015-16 for all above four parties. Please refer Pages 244 to 268 of the Paper Book. 29/08/2016 Summons to the Assessee u/s 131 of the Act. received by the Appellant on 01/09/16 02/09/2016 The Appellants requested for adjournment 16/09/2016 Show Cause Notice for non compliance of summons. 10/10/2016 Summarizing all the details submitted during the course of hearing. Please refer Page 271 of the Paper Book. 8.2) The Assessing Officer has not issued any fresh notice u/s 142(1) and/or 143(2) of the Act after passing of the order u/s 148 read with section 147 rejecting the objections of the Appellant. He started with the reassessment proceedings. The Appellant furnished all the details vide letter ....
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....esses Company failed to prove the true identities of the investors, creditworthiness and genuineness of all these transactions made with above corporate investors who have invested as share application money in Assessee's Company. He has not pointed out as what is not furnished to prove identity, creditworthiness and genuineness of these transactions. 8.7)The Appellant vide letter dated 21st April, 2016 has requested the Assessing Officer to arrange to furnish the following particulars: (a) A copy of the proposal given to Commissioner of Income Tax/Additional Commissioner of Income Tax for issuing the said Notice; and (b) A copy of the approval received from the office of the Commissioner of Income Tax, Mumbai City or Additional Commissioner of Income Tax Mumbai. These details are not yet furnished to the Appellant. 8.8)The Appellant made request vide letters dated 5th July, 2016 and 18th August, 2016 to the Assessing Officer to arrange to furnish following particulars to the Appellant Company: i) Copy of information available with ADIT (Investigation), Unit 7(4), Mumbai. ii) Copy of information available with Your Honour, ....
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....um referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10." 8.11) In the instant case before Your Honour the Appellant has furnished the detailed explanation about the nature and source of the amount received and the Assessing Officer has not pointed out any mistake on any of the particulars furnished by the Appellant and also by these parties directly. The Assessing Officer has made the addition on the basis of report received from investigation wing, the copy whereof is also not given to the Appellant. 8.12) The Appellant rely on the following decisions: i) CIT v/s Lovely Exports Pvt. Ltd., 216 CTR 195 (SC); ii) CIT v/s Gagandeep Infrastructure Pvt. Ltd., 80 taxmann.com 272 (Bombay) iii) CIT v/s Green Infra Ltd., 392 ITR 7 (Bombay) iv) Pr. CIT v/s Jatin Investment Pvt. Ltd., ITA Nos. 43 & 44 of 2016 (www.itatonline.org) v) Pr. CIT v/s Laxman Industrial Resources Ltd., ITA No. 169 of 2017 (www.itatonline.org). 8.13) A proviso is added to section 68 by Finance Act, 2012 with effect from 1st April, 2013. It is submitted that the provi....
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....onclusion that the identity, credit worthiness of the lender and the genuineness of the transaction were not proved and found to be unsatisfactory. He therefore, made the addition of Rs. 1,75,00,0007-. 2.4.23. Ld. AR drew my attention to the documents such as share application form, resolution of respective companies, memorandum and articles of the companies, copies audited statement of accounts, bank statements of respective companies and also copies of acknowledgement of income tax return filed for A.Ys. 2009-10, 2011-12 and 2015-16. He also filed the copies of confirmation of the respective parties and the copies of letters filed by all the four parties 'pursuant to notice issued u/s. 133(6) of the Act. Ld. AR also relied on the affidavit of Vipul Vidhur Bhatt dated 2nd September, 2016 wherein he has retracted the statement made before the Department at the time of search, 2.4.24. Ld. AR argued that the copies of evidence / information against the appellant were not provided to it and no opportunity to make submission or rebut the same was given to appellant. Therefore, such evidence / information, according to him, could not be used against the appellant. ....
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.... source', ,is prospective from AY 2013-14 onwards and cannot apply to past years. This 'feeing the law of the land, it must be applied to the appellant's case. Ld. AR has further submitted the copy of decision of the Jurisdictional High Court in the case of CIT v/s Orchid Industries Pvt. Ltd, in ITA No. 1433 of 2014, wherein following the earlier decision in the case of Gagandeep Infrastructure (P) Ltd., the Hon'be Court did not agree with the Revenue. 2.4.28. Recently, the Hon'ble Mumbai ITAT in the case of Arceli Realty Ltd v ITO (ITA 6492/M/2016), has followed the decision of Jurisdictional High Court in the case of Gagandeep Infrastructre P Ltd (supra). The facts of the case are directly related with the facts of the present case as the issue involved therein was also related to share application money accepted by the assessee from Pravin Jain Group of companies and the information in this regard had been received by the AO from the DGIT (Inv) Mumbai. In that case also the assessee had submitted the supporting documentary evidences such as copy of ITR, Balance Sheet and bank statement of the investor companies, Board Resolution, confirmation, ROC re....
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....t the aforesaid addition made in the assessment order. During the appeal proceedings, it was argued that no proper opportunity was given to the assessee to produce the parties even though the parties were ready to appear before the authorities. Therefore, considering this request of the assessee, the matter was remanded back to the assessing officer with a direction to give one more opportunity to the assessee to produce the parties. However, even during the course of remand report proceedings which lasted for almost two years, the parties could not be produced in spite of several opportunities given by the assessing officer. Therefore, the addition of Rs. 95,00,000/- was confirmed by the Ld.CIT(A) vide his order dated 17.06.2011. On further appeal, the appeal was allowed by Hon'ble ITAT on the ground that all the relevant documentary evidences were produced and thus, the genuineness of the transaction and identity and credit worthiness of the parties had been established. Thus, the addition of Rs. 95,00,000/- was deleted by Hon'ble ITAT vide its order dated 07-02-2014. 2.4.31. The Department filed an appeal to Hon'ble Bombay High Court raising the following Qu....
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....he case of the Assessee. The judgment in case of Gagandeep Infrastructure (P.) Ltd. (supra) would be applicable in the facts and circumstances of the present case." 2.4.33. In the case of Orchid Industries P Ltd (supra), the AO issued 133(6) notices to the parties. Despite the fact that the parties did not appear before the AO, the Hon'ble Bombay High Court held that the transaction was genuine as the assessee produced voluminous documentary evidence. I find that the facts of this case are identical to that of the appellant's case. 2.4.34. Therefore, in view of the binding decisions of the jurisdictional High Court in similar set of facts, the addition u/s. 68 cannot be upheld and is hereby deleted. Accordingly, Ground Nos.3-16 are Allowed. 2.4.35. Ground No. 17 is in respect of rate of tax oh the sums held as unexplained cash credit. In view of the decision rendered supra on merits of the addition, this ground becomes infructuous and is accordingly, Dismissed. 2.4.36. Ground No. 18 is against charging of interest u/s. 234B of the Act and the same being mandatory as well as consequential, this ground is Dismissed. 2.5. In the res....
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....all the parties responded to the notices u/s 133(6) of the Act and submitted all the required documents /particulars. In this respect, under these circumstances, Ld. AR relied upon the following decisions: i) CIT v/s Lovely Exports Pvt. Ltd., 216 CTR 195 (SC); ii) CIT v/s Gagandeep Infrastructure Pvt. Ltd., 80 taxmann.com 272 (Bombay) iii) CIT v/s Green Infra Ltd., 392ITR 7 (Bombay) iv) Pr. CIT v/s Jatin Investment Pvt. Ltd., ITA Nos. 43 & 44 of 2016 (www. itatonline. org) v) Pr. CIT v/s Laxman Industrial Resources Ltd., ITA No. 169 of 2017 (www.itatonline.org). 10.3 We have also noticed that the assessee had complied with all the notices and even the parties had also submitted all the required documents in the shape of copies of share application forms, copy of resolution passed by the company for investment in shares of assessee, copy of memorandum and article of association of the company, copies of bank statements of the company, copy of audited statement of account as on 31st March 2009, copy of acknowledgement of Return of Income filed for AY 2009-10, copy of ITR, computation of total income and financial statement alongwith the....
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....plication money accepted by the assessee from Pravin Jain Group of companies and the information in this regard had been received by the AO from the DGIT (Inv) Mumbai. In that case also the assessee had submitted the supporting documentary evidences such as copy of ITR, Balance Sheet and bank statement of the investor companies, Board Resolution, confirmation, ROC return etc. In that case, the Hon'ble ITAT held that - "The assessee duly furnished the proof of identity like PAN, bank account details from the bank, other relevant material, genuineness of the transaction, payment through banking channel and even the source of source, therefore, the assessee has proved the conditions laid down u/s 68 of the Act. It is also noted that in spite of repeated request, the Id AO did not provide opportunity to cross examine the concerned persons and even the relevant information and allegation, if any, made therein, which has been used against the assessee, was not provided to the assessee. At this stage, we add here that mere information is not enough rather it has to be substantiated with facts. The information may and may not be correct. For fastening the liability upon anybod....
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....d an appeal to Hon'ble Bombay High Court raising the following Questions of Law: "Whether on the facts and in the circumstances of the case and in law, orders of the Tribunal was perverse in deleting the addition of Rs. 95,00,000/made u/s. 68 of the Act, relying only on the documentary evidence produced by the Respondent Company while ignoring the key factor that these entities were not- traceable at their given addresses? Whether on the facts and in the circumstances of the case and in law, the Tribunal erred in not appreciating the observations made by the Delhi High Court in Nova Promoters and Fin/ease Pvt. Ltd. 18 Taxman.com 217 wherein the Court has observed that cases of this type cannot be decided only on the basis of documentary evidences above and there is need to take into account the surrounding circumstances? The Tribunal ought to have taken note of the fact that the assesses was not able to produce even a single party before the AO despite agreeing before the CIT(A) that it will produce all parties before the AO during Remand proceedings." 10.8 The Hon'ble Bombay High Court observed that the assessee had produced the documents such....
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.... facts of the present case as the facts in the above case (supra) were entirely different. 10.11 Moreover, no new facts or contrary judgments have been brought on record before us in order to controvert or rebut the findings so recorded by Ld. CIT(A). Therefore, we see no reasons to interfere into or deviate from the findings recorded by the Ld.CIT(A). Hence, we are of the considered view that the findings so recorded by the Ld. CIT (A) are judicious and are well reasoned. Resultantly, this ground raised by the revenue stands dismissed. Ground No. 2 12. This ground raised by the revenue is general in nature, thus requires no specific adjudication. 13. Consequently, the appeal filed by the revenue stands dismissed. C.O. No. 47/Mum/2019 for AY 2009-10 14. Now we take up C.O. No. 47/Mum/2019 for AY 2009-10 filed by the assessee. 15. At the very outset, Ld. AR appearing on behalf of the assessee drawn our attention towards letter dated 30.01,19 which relates to condonation of delay in filing CO before Hon'ble ITAT. Ld. AR submitted that the present CO could not be filed within time because of the reasons mentioned in affidavit and thus there was a delay of 32 d....