TaxTMI 
TaxTMI 
2021 (7) TMI 1232
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....sessee. On this date also i.e. 27.07.2021 despite service of notice to the Assessee none appeared on behalf of the Assessee. The bench on 13.05.2021 has given specific direction to the registry to issue notice with RPAD to the Assessee, however, on 27.07.2021 none appeared on behalf of the Assessee. In view of this the appeal are decided on the merits of the case in absence of Assessee as per information available on record. 3. The ld DR supported the order of the ld AO and stated that the ld CIT(A) has deleted the addition without any cogent reason. 4. We have carefully considered the rival contentions of the ld DR and perused the orders of the lower authorities. The Assessee is a company who filed its return of income on 30.09.2009 declared a loss of Rs. 58,42,335/-. During the course of search of Mr. SK Jain in respect of taking accommodation entry the name of the Assessee figures as one of the beneficiary as bogus transaction. A sum of Rs. 3 crores was found to be credited in the bank account of the Assessee with respect to 10 different partiers. Based on this notice u/s 148 was issued on 06.08.2013 and notice u/s 143(2) was served on the Assessee on 24.02.2015. During th....
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....mpanies are paper companies returning meager income in the year under consideration. The bank statements also reflect that the funds are crediting in their bank accounts from undisclosed sources and getting transferred on the very same days. Moreover, there is no normal business transactions reflected in the bank statements of any of the investee companies. After examining all such details it was required on the part of the assessees to prove the acid test with regard to and statutory notices u/s 143(2) A 142(1), upon change of jurisdiction, dated 24.02.2015 were issued and duly served on the assessee. In response to notices issued from time to time Shri Sanjay Sehgal CA/AR of the assessee appeared furnished required details. The other necessary details as regard to share capital A share premium received from the above said companies during the financial year 2007-08 have been filed and the case was discussed with the AR of the assessee. 4. On perusal of the various details furnished by the assessee vide its letter dated 05.12.2014 it is observed that the assessee has received share application money amounting to Rs. 3,00,00,000/- from M/s. Mega Top Promoters Pvt. Ltd., M/....
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....ard could also accompany the AR to record the statement of any principal officer at the premises of the investor of the Investor company. However, the AR again showed his inability in this regard. Now it is matter of surprise and pertinent to mention here that how the companies which are claimed to have invested such a huge amount in the assessee company could evade/refuse to attend the legal assessment proceedings going on in the case of the assessee company. 5.1 It has been judicially established that the primary onus is on the assessee to prove the identity, creditworthiness and genuineness of transactions in respect of cash credits in its books of account. Identity of the party does not simply mean its existence. The identity should be seen in perspective that it has got a standing in the particular line of activity. Identity is defined in the new shorter oxford dictionary as " The condition or fact of a person or thing being that specified unique person or thing" The person has to have some sign of identification other than merely on paper. These signs could be the place of work, staff members, actual transactions, recognition in the eye of public, sign board....
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.... do not have their own profit making apparatus other than by earning commission on such illegal activity. They do not manufacture or produce anything. They do not render any services other than its services for laundering of money. Their bank account reflects their creditworthiness. The moneys that come to its account by way of cash or by way of other similar accounts seldom rest for a day. It immediately finds its destination. The source of money is not explainable by the entry operators. However the beneficiary, who enjoys the benefit of such money ever after, does not ever give back any dividend or any share in profit or interest to the entry operators. The volume of transactions undertaken is not visible in their balance sheet/ P&L account. They are only available in the bank statements in a definite pattern. Profit motive in the entire transaction of the entry operators is conspicuously absent. They give the money to the beneficiary and never bother to ask for the fit of providing so much money to the beneficiary. In case of share capital, in most of the cases, subsequently the shares are purchased back at nominal amount otherwise the shares keep on lying in the name of the en....
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.... CIT W.B.(1978) 111 ITR 991 have been that mere filing of confirmation letter the assessee did not discharge the onus that lay on the assessee. 5.7 In the above backdrop the assessee was required to produce the person alongwith their books of account to verify its claim of. The assessee failed to discharge its onus. In such cases the source and nature of transactions need to be proved beyond doubt. The assessee has miserably failed to do so. Since the assessee was well aware about the fact of bogus credits in its books, he has chosen not to subject itself to the investigation/inquiry conducted by the department. 5.8 All the facts discussed above prove that the credits of Rs. 3,00,00,000/- are directly hit by section 68 of the I.T. Act. The onus is on the assessee to prove the genuineness of the transactions and creditworthiness of the person who has given credit to the assessee. The assessee has failed to discharge its onus. The assessee has also failed in submitting the details of the credits in its books. Merely filing some papers in supports of its transactions cannot be termed as genuine transactions. In the light of above discussion Rs. 3,00,00,000/-....
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.... Act have also been duly served on all the investor companies. As such, on account of the independent enquiry conducted by the AO, no adverse information came to suggest that either the shareholders are nonexistent companies or they don't have capacity to invest or any of the shareholder denied the investment made in the appellant company. On the contrary, all the shareholders duly confirmed the investment made in the appellant company. In the present case, section 68 is applicable to the share application money and share premium received by the appellant to the extent of discharging its onus regarding the nature and source thereof, to the satisfaction of the assessing officer. It involves three incidents namely: (i) Proof regarding the identity of the share applicants. (ii) Their creditworthiness to purchase the shares (iii) The genuineness of the transaction as a whole. In the instant case, infact all the aforesaid three limbs are satisfied as in response to independent enquiry made by the AO, i.e. in response to notices issued u/s 133(6), all the shareholders have filed their replies and has confirmed the investment made in assess....