2021 (12) TMI 977

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..... 4,11,00,000/- to the total income of the appellant, by invoking the provision of section 68 of the act is not genuine and required to delete. 2. Your appellant submit that under the fact and circumstances of the case as narrated in statement of facts above for enhancement to share capital as well as collection of share premium are genuine and for that purpose, appellant has furnished all necessary evidences before the AO, and therefore assessing officer is not justified in holding the same as otherwise and invoking the provision of section 68 of I T Act 1961. 3. Your appellant submit that assessing officer has heavily relied on statement of Mr. Bagrecha, Director of Bhumidev Credit Corporation Limited, who has duly retracted his statement, which was given before the Investigation Wing, Ahmedabad recording his statement by AO of the Appellant. Further, during the course of recording his statement by AO, Shri Bagrecha has not furnished any short of evidence which proves that the appellant has taken accommodation entries in form of Cash in order to raise Share Capital and collection of share premium. In absence of any iota of evidence, no addition of unaccounted income can be ma....

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....who was also the director in all the companies as discussed above. In the statement furnished under section 131 of the Act, Shri Prakash Bagrecha admitted to be engaged in the activity of entry provider. ii. On a later date i.e. 28 May 2010, all the aforesaid companies transferred the shares to one company namely M/s Silicon Infrapanel Ltd. which recorded the value of the shares as investment at Rs.30,07,500.00 only in its books. Furthermore, the company M/s Silicon Infrapanel Ltd. did not file the income tax return for the assessment years 2010-11 to 2013-14 as there was no activity in the company. A notice under section 133(6) of the Act was issued to M/s Silicon Infrapanel Ltd. but there was no reply. Similarly, there was a common director between the assessee company and M/s Silicon Infrapanel Ltd. namely Shri Dharmesh Mansukbhai. iii. As per the balance sheet of the assessee for the financial year 2009-10, the FMV works out at Rs.47 only whereas the shares have been issued at an exorbitant value of Rs. 400 per share. iv. The assessee has also issued shares in the financial year 2014-15 at Rs.70 only comprising of Rs.10 face value and Rs.60 share premium against the value....

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....l as sham and bogus. The learned CIT (A) in support of his view has made reference to the judgment of Hon'ble Gujarat High Court in the case of Pavankumar M. Sanghvi vs. ITO reported in 90 taxmann.com 386. 8.1 The learner CIT (A) also found that his predecessor in the own case of the assessee involving identical facts and circumstances has treated the impugned amount of share capital as bogus in nature and upheld the assessment order for the immediate preceding assessment year i.e. 2009-10. In view of the above, the learned CIT (A) confirmed the order of the AO. 9. Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. 10. The learned DR before us vehemently supported the order of the authorities below. 11. We have heard the ld. DR and perused the materials available on record. It is the onus upon the assessee to justify the cash credit received by it in the form of share capital in the year under consideration based on the documentary evidence. However, we note that the case on hand has been listed for hearing time and again on several occasions but we did not get any reply from the side of the assessee. 11.1 The issue in the given facts and....

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....ll the three essential ingredients of a credit entry in the books of account, existence of the lender, ability of the lender to advance funds in question, and, above all, genuineness of the transaction. There is no dispute about the basic legal position about section 68 which provides that where any sum is found credited in the books of account of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and sources thereof, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income tax as income of the assessee of that previous year. The expression 'nature and source' appearing in section 68 has to be understood as a requirement of identification of source and its genuineness. It is also a settled legal positon that the onus of the assessee, of explaining nature and source of credit, does not get discharged merely by filing confirmatory letters, or demonstrating that the transactions are done through the banking channels or even by filing the income tax assessment particulars. There is thus no escape from proving genuineness of a transaction. As lo....