TaxTMI 
TaxTMI 
2023 (7) TMI 1264
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....he 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 Dealmark Pvt. Ltd. 30,00,000 3 Zoom Building Material & Products....
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....ction 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 Nagar, Delhi-92 Do 4. MIs Megatech Realtech Ltd, - Mandawali,Delhi-92 Do 7. Copy of the report was provided to the assessee. The assessee was asked to furnish current addresses. The assessee filed a letter alo....
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....s, 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 annual turnover declared by these companies/persons in their P&L account is in no way commensurate with the voluminous financial transactions routed through their bank accounts. Therefore, it is clearly evident that none of these share applicants ha....
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.... 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 Assessing Officer finally made addition of Rs.10.89 under section 68 of the Act. 12. The assessee carried the matter before the ld. CIT(A) and vehemently submitted that at the addresses given by the assessee, some of the notices issued under section 133(6) of the Act returned uns....
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.... 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 available with them before making the impugned share application. In so far as the production of the directors of the share applicant companies is concerned, we find that the Assessing Officer issued notices on 26.03.2015, asking the assessee to produce the directors of the company, for which the as....