TaxTMI 
TaxTMI 
2023 (7) TMI 1264
X X X X Extracts X X X X
X X X X Extracts X X X X
....he addition of Rs.10.89 crores made by the Assessing Officer u/s 68 of the Income-tax Act, 1961 [the Act, for short] 3. The representatives of both the sides were heard at length, the case records carefully perused and we have duly considered the documentary evidences brought on record in the form of Paper Book in light of Rule 18(6) of ITAT Rules. 4. Briefly stated, the facts of the case are that while scrutinizing the return of income for the year under consideration, the Assessing Officer found that the assessee has received share application money amounting to Rs.10.89 crores from 19 share applicants as under: Sr. No. Name of the Share Applicant Amount 1 Suktara Tradelink Pvt. Ltd. 50,00,000 2 Lotus Dealmar....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 3. MIs Zoom Building Material & Products Pvt. Ltd Firm closed returned to sender 4. MIs AMS Powertronic Pvt. Ltd No such firm at such address 5. MIs Assemble Construction Pvt. Ltd Insufficient address 6. The Assessing Officer deputed an Income tax Inspector to make field enquiry about share applicants situated at Delhi. The inspector submitted his report as under: S.No. Name of the share applicants Remarks 1. MIs Evergreen Realcon Pvt. Ltd, 210, Karkardooma, Delhi-94 No such company in existence at given address 2. MIs Zarf Infra Development Pvt. Ltd, 17, Ground Floor, Gurunanak Pura, Laxmi Nagar , Delhi-92 DO 3. MIs Freak Buildcon Pvt. Ltd, Ground Floor, Gurunanak Pura, Laxmi N....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat these share applicants were acting as conduit to transfer funds from one entity to another in the garb of share application money/capital and share premium. The astounding volume of transactions reflected in these bank accounts, as well as, the recurring pattern of credit of funds into these accounts from some source followed by its immediate transfer to some other entity forms clear proof that these bank accounts were utilized just to confer semblance of genuineness to credit introduced in the books of the assessee. III. These share applicants, which the assessee has claimed to have received such huge transactions, do not any functional business activity, their annual income as declared in their ITRs is very nominal, and the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ired details and notice issued to M/s Assemble Construction Pvt. Ltd. was returned back by the postal authority with remarks "insufficient address", VII. A further examination of details has revealed that a few of the companies were correlated and managed by same set of people in which directors and auditors are common. The cumulative effect of all the factors narrated above unequivocally points out the real intention behind these transactions and leads to a logical conclusion that these persons/companies were paper entities which have acted as name share applicants so as to confer semblance of legitimacy to that credit introduced into the books of the assessee." 11. After referring to various judicial decisions, the As....
X X X X Extracts X X X X
X X X X Extracts X X X X
....esses at which notices under section 133(6) of the Act were issued by the Assessing Officer were served, evidenced by deliveries thereof by submitting copies of printouts taken out from the website indiapost.gov.in, which are placed in the paper book. 18. It is also not in dispute that the assessee has also proved the identity of some of the investing companies by obtaining information under the Right to Information Act, 2005. Confirmations and copies of relevant bank accounts along with copies of income, tax, return, acknowledgement, annual accounts, memorandum and articles of association of the share applicant companies were provided. 19. A perusal of the bank statement shows that share applicant companies had sufficient funds avail....