TaxTMI 
TaxTMI 
2021 (6) TMI 397
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....spectively (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s.153C of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 30/03/2015 & 31/03/2015 respectively by the ld. Dy. Commissioner of Income Tax, Central Circle-4(3), Central Range-4, Mumbai (hereinafter referred to as ld. AO). 2. The assessee has raised the following grounds of appeal for A.Y.2011-12:- "1. The ld. C.I.T(Appeals) erred in confirming the addition made by Ld. D.C.I.T by account of Share Application Money (Share Capital) holding the same as non-genuine. 2. The Ld. C.I.T(Appeals) erred in confirming the action of Ld. D.C.I.T of treating the Share Application Money (Share Capital) as bogus and thereby erred in maki....
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.... The Appellant craves leave to alter, amend or rescind any of the grounds of appeal. Additional Grounds (A.Y.2012-13) 1. The Ld. A.O. is unjustified in treating the share application money received by the Appellant amounting to Rs. 3,46,00,000/- as unexplained cash credit under section 68 of the Act relying on the statements of third parties without providing the Appellant an opportunity to cross examine those persons. Thus, the action of the Ld. A.O. is in breach of principles of natural justice. Thus, the assessment order dated 31/03/2015 passed under section 143(3) r.w.s. 153C of the Act is bad in law and void ab initio. Hence, the same may be quashed. 2. The Appellant craves leave to alter, amend or rescind any of t....
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..... AO also observed that during the course of that search, various documents, loose papers, books of accounts etc., belonging to M/s.Guru Ashish Texfab Ltd., (assessee herein) were found and seized. The relevant seized material and satisfaction note was forwarded to the present Assessing Officer to take suitable action in the case of the assessee. Consequently, a notice u/s.153C was issued to the assessee on 19/08/2013 for A.Y.2011-12. In the said Section 153C proceedings, the ld. AO sought to examine the veracity of the share application money received by the assessee in the sum of Rs. 50 lakhs from M/s. Emporis Projects Ltd and Rs. 346 lacs from few other concerns allegedly belonging to Shirish Chandrakant Shah. The assessee furnished the ....
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.... money as unexplained cash credit u/s.68 of the Act merely on the premise that EPL is a company managed and controlled by Shri Shirish Chandrakant Shah, who during the course of search had admitted in statement u/s.132(4) of the Act that he, through his entities / concerns is engaged in providing accommodation entries to various companies in the form of bogus share capital and bogus loans etc. Merely based on this statement from a third party i.e. Shri Shirish Chandrakant Shah, the ld. AO proceeded to add the said receipt as unexplained cash credit in the hands of the assessee. This action of the ld. AO was upheld by the ld. CIT(A) for A.Y.2011-12. 3.3. We find similar addition was made by the ld. AO by treating the receipt of share appl....
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.....45 crores added as bogus share capital, Rs. 50 lakhs was received in the earlier assessment year. Hence, the same can never be added u/s. 68 in the present assessment year. 13. Per contra, learned Departmental Representative Ms. Samantha Nullamudi submitted that addition has been made on the basis of clear and cogent finding of the investigation wing of the Income Tax department that Shri S.C. Shah operates bogus company to provide accommodation entries. The said M/s. Speciality Papers Ltd. from whom assessee has received share capital was one of them which have provided bogus accommodation entries to the assessee company. Learned Departmental Representative further submitted that at any time during time of proceeding aut....
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....vor to bring representative/director of the company before authorities below. We find that notice by the authorities below issued u/s. 133(6) has remained unresponded. Further the assessee has submitted certain documents including financial statement of the investor company, for which the authorities below have observed that these are part of surreptitious routing of money and investor company was not doing proper business. In our considered opinion for addition u/s. 68 as undisclosed income following three ingredients have to be examined :- (i) Genuineness of the transaction (ii) Identity of the payer (iii) Creditworthiness 15. In the present case we note that the lower authorities have noted that notice u/s. 133(6) has not be res....