AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (9) TMI 263
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....or A.Y 2011-12, the revenue has preferred this appeal raising the following substantial questions of law: "(i) Whether the Ld. Tribunal has erred in law and on facts in deleting the addition made under section 68 of the Act without appreciating that the assessee has introduced unaccounted money in form of bogus share capital and share premium raised from paper companies / accommodation entries and therefore, the same is an unexplained capital introduction under section 68 of Income Tax Act, 1961? (ii) Whether the Ld. Tribunal was justified in restricting the gross profit on URD purchases @0.24% holding that the estimation by the AO @6% on URD purchases was over and above the profit of 5.76% disclosed by the assessee which otherwise....
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....nal share certificates were not issued to the investors. 2.5 Considering the statement recorded under Sec. 132 of the Act, of Shri Ramgopal O. Maheshwari, who admitted that share certificates were not issued to investors, the Assessing Officer was of the view that though the investors made such huge investments who are not family members of the promoter or not known to them, the assessee company did not bother to issue share certificates, and therefore, made an addition under Sec. 68 of the Act of the entire credit of share capital and premium for Rs. 13,41,60,000/-. 2.6 Being aggrieved by assessment order, the assessee preferred appeal before CIT (A) who allowed the appeal by deleting the addition of Rs. 13,41,60,000/-. Being aggriev....
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.... Calcutta High Court in the case of CIT Vs. Precision Finance (P) Ltd., reported in 208 ITR 465 wherein it was as under: "It was for the assessee to prove the identity of the creditors, their creditworthiness and the genuineness of the transactions. On the facts of this case, the Tribunal did not take into account all these ingredients which had to be satisfied by the assessee. Mere furnishing of the particulars was not enough." 13. Now first we proceed to understand the identity of the party. The identity of the party refers existence of such party which can be proved based on evidences. As such, the identity of a party can be established by furnishing the name, address and PAN detail, bank details, ITR etc. 14. ....
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....assessee discharged the onus cast under section 68 of the Act. Hence we do not find any reason to interfere in the finding of the learned CIT (A). Thus, the ground of appeal of the Revenue on merit is also hereby dismissed." 3. Considering the above finding of facts arrived at by the Tribunal confirming the finding of the CIT(A), we are of the opinion that in view of the concurrent findings by both the lower authorities, no question of law, much less any substantial question of law arises so far as question No. 1 is concerned, in view of the fact that the Tribunal has rightly held that the provisions of Sec. 68 of the Act cannot be invoked, more particularly when the addition is made on account of the share premium and the share applicat....
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....s profit already declared by the assessee in its financial statement. However, the learned CIT(A) found that the assessee has already declared gross profit as a whole including the purchase from registered parties at the rate of 5.76% and therefore he was of the view that if any addition is to be made it should be the difference between the profit determined by the AO on the URD purchases viz a viz the gross profit already declared by the assessee. As such the learned CIT(A) confirmed the addition made by the AO in part to the tune of Rs. 72,241/- being 0.24% of the URD purchases. 29. The controversy in the present case arises what rate of profit should be adopted on the URD purchases from the unregistered parties. Admittedly, the ....