AI Drafter 
TaxTMI 
TaxTMI 
2025 (4) TMI 899
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....cumstance of the case, the Ld. CIT(A) erred in deleting the addition made by the AO of Rs. 1,70,02,500/- on account of unexplained cash credit u/s 68 of the Act in respect of share application money received by the assessee during the year without appreciating the fact that the information was received from investigation wing after thorough verification wherein the identity and credit worthiness of the share applicants as well as the genuineness of the transactions were not proved. 2. On the facts and in the circumstance of the case, the Ld. CIT(A) failed to appreciate the findings of investigation wing wherein the Statement of the principal person of the group, Sh. Praveen Kumar Jain, was recorded in which he has categorically admitted that the entire business of accommodation entries is through him and companies under his control and had been established after dure verification that the concerned entities have provided accommodation entries. 3. On the facts and in the circumstance of the case, the Ld. CIT(A) erred in ignoring all these material findings and failed to appreciate that various Courts including the jurisdiction High Court and also the 7 Apex Court h....
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....ra Business P. Ltd (Formerly known as Hema Trading Co. P Ltd) 35,00,000 Olive Overseas P. Ltd (Formerly known as Real Gold Trading Co. P Ltd) 35,00,000 Traingular Infocom Ltd (Formerly known as Lexus Infotech Ltd) 35,00,000 Total 1,70,02,500 4.1 As is clear that the assessee is a one of the beneficiary for taking the accommodation entries as share application money from the above companies which are managed and controlled by Shri Praveen Kumar Jain through his relatives, agents and his accountants detected during the search & seizure operation conducted by Investigation Wing of Income Tax Department, Mumbai in the case Shri Praveen Kumar jain Group. This information revealed that the income of the assessee for an amount of Rs. 1,70,02,500/- for the assessment year 2010-11 has escaped assessment within the meaning of the provisions of section 147 of the Income Tax Act, 1961 and therefore, the re- assessment proceedings u/s 147 of the Income Tax Act, 1961 was initiated by issue of notice u/s 148 of the Act on 17.03.2015 which was duly served on 24.03.2015. Subsequently. notice u/s 142(1) and along with questionnaire was issued to the assessee and also notic....
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.... value in case of such transactions also stated that those desirous of taking an accommodation entry in the form of share application gives the cash to him and the same is then transferred to the broker through whom the entry is finally provided, for arranging this entry, one get a onetime commission of about 0.25% of total value of the transaction. As is clear from the statement of Shri Praveen Jain that assessee had taken accommodation entry as share application money received from the names as listed herein above, therefore, assessee was asked to show caused as to why the accommodation entry as bogus share application many received from those five companies for an amount of Rs. 1,70,02,500/- was not disallowed and thereby the assessee was required to produce the reply on 18.03.2016 at 11:00 A.M. positively otherwise ld. AO mentioned that failure in furnishing the same, an action will be taken on the above line of the action and materials available on the record. 4.2 In response to the above show cause notice the assessee filed submission on 18.03.2016. The submission filed by the assessee is not acceptable. Because Shri Praveen Kumar Jain accepted that he provided accommod....
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....206 (SC). 4.4 As regards the contention of the assessee company to make available (being witness), Shri Praveen Kumar Jain to enquire about the transactions and cross examination is of no use as sufficient material evidences are already in the possession with the department to disprove the transaction regarding share application as received by the assessee-company from above parties (paper concern of Sh. Praveen Jain Group). The assessee furnished the details of allotment of shares, share application form, bank statement of applicant and replied that the assessee company had received the share application money from the above parties through account payee cheques/ RTCG. The reply found insufficient to prove the genuine nature of the transaction. 4.5 Ld. AO based on the discussion so made and relying on those decisions noted that it is crystal clear that- (a) The primary onus is on the assessee to establish the genuineness of the share application money received. (b) If the investigation done by the department leads to doubt regarding the genuineness of the share applications it is incumbent on the assessee to produce the parties along with necessary document....
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.... IT Act. Now onus is on AO to disprove the genuineness of the investments. However, the AO has not made efforts to conduct enquiries and to establish the genuineness of the investors. From the materials filed, it is understood that the assessee filed all relevant details which are needed to explain genuineness, creditworthiness and identification of investors. 5.2 Hon'ble Apex Court in the case of Commissioner of Income Tax Vs. Odisha Corporation Pvt. Ltd held as under :- "It was noted that the assessee had given names and addresses of the alleged creditors. It was knowledge of revenue that the said creditors were income tax assessees. Revenue apart from issuing notices u/s. 131 at instance of assessee would not pursue matter any further. In view of this, tribunal was justified in concluding that assessee had discharged burden." 5.3. Thus, as per the above judgement, the assessee discharged its burden as per section 68 of the IT Act. The AO simply relied on some vague information from the Investigation Wing regarding the accommodation entries. However, verification of the source of source is not the realm of the AO, as clearly held by the Supreme Cour....
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....orted the fact that present appeal is filed as the addition is based on the condition laid down in the section 68 of the Act. As is clear that the assessee failed to establish the identity and genuineness of the Share Application Money through the company operated and managed by Shri Praveen Jain who has during the search conducted by the revenue has in detailed accepted the method adopted by him in providing accommodation entry of loan and share application money. Based on that information the case of the assessee has rightly been reopened by the revenue and even that ground of re-opening taken by the assessee was dismissed by the ld. CIT(A). So far as the merits of the case of the assessee wherein the ld. CIT(A) hold a view that the AO simply relied on some vague information from the Investigation Wing regarding the accommodation entries. However, verification of the source of source is not the realm of the AO, as clearly held by the Supreme Court in the case of Lovely Exports (269 CTR 194). He further relying on that judgment hold a view that the AO should have to proceed against the investors if they do not have proper creditworthiness for which the AO cannot penalize the asses....
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.... Taxman 89 (SC) SUPREME COURT OF INDIA Sumati Dayal v. Commissioner of Income-tax 3 [2019] 112 taxmann.com 330 (SC) SUPREME COURT OF INDIA Suman Poddar v. Income Tax Officer 4 [1985] 22 Taxman 11 (SC) SUPREME COURT OF INDIA McDowell & Co. Ltd. v. Commercial tax Officer 5 [1979] 2 Taxman 197 (SC) SUPREME COURT OF INDIA Indian & Eastern Newspaper Society v. Commissioner of Income-tax 6 [1964] 53 ITR 231 (SC)SUPREME COURT OF INDIA S.S. Gadgil v. Lal & Co 7 [2019] 103 taxmann.com 48 (SC) SUPREME COURT OF INDIA Principal Commissioner of Income-tax (Central)-1 v. NRA Iron & Steel (P.) Ltd. 8 [1958] 34 ITR 807 (SC) SUPREME COURT OF INDIA A. GovindarajuluMudaliar v. Commissioner of Income- tax 9 [1971] 82 ITR 540 (SC) SUPREME COURT OF INDIA Commissioner of Income-tax v. Durga Prasad More 10 [1973] 87 ITR 370 (SC) SUPREME COURT OF INDIA Commissioner of Income-tax v. S.P. Jain 11 [2018] 95 taxmann.com 327 (SC) SUPREME COURT OF INDIA Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Company 12 [2007] 161 Taxman 169 (SC) SUPREME COURT OF INDIA Commissioner of Income-tax v. P. Mohanakala 13 [1963] 50 ITR 1 (SC) SUPREME CO....
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.... 34 [2022] 143 taxmann.com 402 (Calcutta) HIGH COURT OF CALCUTTA Principal Commissioner of Income-tax v. Nand Kishore Agarwala 35 [1980] 4 Taxman 525 (Delhi) HIGH COURT OF DELHI Yadu hari Dalmia v. Commissioner of Income-tax 36 [2022] 139 taxmann.com 406 (Rajasthan) HIGH COURT OF RAJASTHAN Jawari Lal Lunia v. Union Of India 37 [1978] 113 ITR 389 (DELHI)HIGH COURT OF DELHI Additional Commissioner of Income-tax v. Jay Engineering Works Ltd 38 [1928] 3 ITC 48 (ALL.) HIGH COURT OF ALLAHABAD BhagatHalwai, In re 39 [1984] 18 Taxman 412 (Punj. &Har.) IN THE HIGH COURT OF PUNJAB AND HARYANA Commissioner of Income-tax v. Metal Products of India 40 [1995] 82 TAXMAN 31 (CAL.) HIGH COURT OF CALCUTTA Commissioner of Income-tax v. Precision Finance (P.) Ltd. 41 [1991] 56 TAXMAN 304 (CAL) HIGH COURT OF CALCUTTA Commissioner of Income-tax v. United Commercial & Industrial Co. (P.) Ltd. 42 [2009] 315 ITR 105 (Madras) HIGH COURT OF MADRAS Mangilal Jain v. Income-Tax Officer 43 [1982] 134 ITR 119 (RAJ.)HIGH COURT OF RAJASTHAN Vimal Chandra Golecha v. Income-tax Officer 44 [2011] 12 taxmann.com 276 (Punjab & Haryana) HIGH COURT OF PUNJAB....
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....9 taxmann.com 104 (Ahmedabad - ITAT) IN THE ITAT AHMEDABAD BENCH 'SMC' Atmiben Alipitkumar Doshi v. Income-tax officer 63 [2022] 145 taxmann.com 315 (Kolkata - Trib.)IN THE ITAT KOLKATA BENCH 'A'Shyam Sunder Bajaj v.Income-tax Officer 64 [2023] 149 taxmann.com 98 (Pune - Trib.) IN THE ITAT PUNE BENCH 'A' Dinesh Kumar R. Tulsyan (HUF) v. Income-tax Officer 65 [2023] 147 taxmann.com 21 (Indore - Trib.) IN THE ITAT INDORE BENCH Abhishek Gupta v. Income-tax Officer 66 [2019] 109 taxmann.com 174 (Delhi - Trib.) IN THE ITAT DELHI BENCH 'G' Sandeep Bhargava v. Assistant Commissioner of Income-tax, Circle-60(1), New Delhi 67 Hemil Subhashbhai Shah vs DCIT, Ward-5(3)(1) Ahmedabad, ITA No.1121/Ahd/2018, [Asst. Year : 2014-15] AND ITA No.961/Ahd/2019, [Asst. Year : 2015-16], INCOME TAX APPELLATE TRIBUNAL "B" BENCH, AHMEDABAD dated 12.06.2023 68 2019-TIOL-686-ITAT-DEL IN THE INCOME TAX APPELLATE TRIBUNAL BENCH 'SMC' NEW DELHI ITA No. 3809/Del/2018 Assessment Year: 2015-16 ANIP RASTOGI Vs INCOME TAX OFFICER ITA No. 3810/DEL/2018 Assessment Year: 2015-16 ANJU RASTOGI Vs INCOME TAX OFFICER 69 2018-TIOL-733-ITAT-CHD ....
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.... 128 taxmann.com 224 (Madras) HIGH COURT OF MADRAS Commissioner of Income Tax, Chennai v. Mrs. Pinky Devi 81 [2023] 155 taxmann.com 630 (Kolkata - Trib.) IN THE ITAT KOLKATA BENCH 'B' Saroj Baid v. Income-tax Officer 7.1 Finding of the ld. CIT(A) is only based on the 3-evidence placed on record by the assessee and has not considered the detailed finding of the ld. AO. The ld. DR stated at bar that he will the distinguishing note on the decision of apex court in the case of Lovely Exports with that of the case of the assessee but till the 17th December the said distinguishing note received. He further submitted that the ld. CIT(A) has totally ignored the report of the Investigation wind and conclusions derived therefrom. As regards the contention of not issuing the notice u/s. 133(6) of the Act when the parties from the money is flowing has in fact given in the statement that they were provided accommodation entry and that is why the ld. AO has not invoked that provision and in fact looking to the fact that was not required. As is clear that the ld. AO is not a separate entity, it is the part of the revenue officer and when the other officers have made the detailed ....
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....etails which were needed to explain genuineness, creditworthiness and identification of investors viz. copy of return of income of the investor and schedules reflecting transaction with the appellant, copies of bank statements evidencing the investment of share application money through banking channels & copy of confirmation letters from the investor. However, the AO has not made efforts to conduct enquiries and to establish the genuineness of the investors. Further, the Ld. CIT(A) held that the verification of source of source is not the realm of the AO, as clearly held by the Supreme Court in the case of "Lovely Exports (269 CTR 194). Thus, as held by the Hon'ble Apex Court, the AO to proceed against the investors if they do not have proper creditworthiness for which AO cannot penalize the assessee by making addition. Further, the AO did not point out any specific instance or any information in the statements recorded by the investigation wing in the case of Shri Praveen Kumar Jain Group which reveals that the alleged involvement of assessee in taking accommodation entries. If there was any specific adverse information about the assessee, the burden clearly lies on ....
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.... primary onus is on the assessee to establish the genuineness of the share application money received. In this context, reliance is placed on the judgement of Hon'ble Supreme Court of India in the case of Commissioner of Income-tax Vs. P. Mohanakala wherein it was pointed out that in cases where the explanation offered by the assessee about the nature and source of sums found credited in the books is not satisfactory shows, prima facie evidence against the assessee namely, the receipt of money, the burden is on the assessee to rebut the sum and if he fails to rebut, it can be held against the assessee that it was a receipt of an income nature. Further, it was held that in the absence of satisfactory explanation of the assessee, the Income-tax Officer may assume that cash credit entries in the books represented income from undisclosed sources. The same view has also been taken by the Hon'ble Apex Court in the case of Sumati Dayal Vs. Commissioner of Income-tax. 4. Further, the Ld. CIT(A) has taken reference of judgements of Hon'ble Supreme Court in the case of "Commissioner of Income Tax Vs. Odisha Come Corporation Pvt. Ltd." And "Lovely Exports (269 CTR 194). I....
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....owledgement of IT Returns of the entry providers, bank account statements etc. were not sufficient to discharge the onus u/s 68 of the Act. 6. The Ld. CIT(A) vide its order dated 29.12.2023 has stated that if there was any specific adverse information about the assessee, the burden clearly lies on the AO to give an opportunity to cross examine the person who had given that information. In this regard, it is stated that the AO vide assessment order rejected the request of the assessee company to make available Shri Praveen Kumar Jain to enquire about the transaction and cross examination as sufficient material evidences were already in possession with the department to disprove the transaction regarding share application received by the assessee company from paper concerns of Shri Praveen Kumar Jain. Reliance is placed on the judgement of Hon'ble rajasthan High Court, in the case of Rameshwar Lal Mali V/s CIT 256 ITR 536 (Raj.) wherein it has been held that there is no provision for permitting a cross-examination of the person, whose statement is recorded during survey. 8. On the other hand, ld. AR of the assessee supported the order of the ld. CIT(A) on the merits o....
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....ank Statement PB Pg. Alka Diamond India Limited ✓ ✓ ✓ ✓ 27-36 Javda India Impex Ltd ✓ ✓ ✓ ✓ 37-49 Nakshatra Business P. Ltd (Formerly known as Hema Trading Co. P Ltd) ✓ ✓ ✓ ✓ 50-61 Olive Overseas P. Ltd (Formerly known as Real Gold Trading Co. P Ltd) ✓ ✓ ✓ ✓ 62-73 Traingular Infocom Ltd (Formerly known as Lexus Infotech Ltd) ✓ ✓ ✓ ✓ 74-85 1.2. All the Investor Companies are private/public limited companies duly regulated by the stringent provisions of the Companies Act, 1956 and their complete details could be verified from MCA Site (official website of Ministry of Company Affairs). The department has also issued them PAN and these shareholder companies are regularly assessed to tax. Thus the onus, on the part of the assessee Company, stood fully discharged during the course of assessment proceedings. 1.3. In view of this, no addition can be made in the hands of the assessee company. At best, if the ld. AO was not satisfied, the add....
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....that the companies from which the share application money had been received by the assessee-company were genuinely existing and the identity of the individual investors were also established and they had confirmed the fact of making investment, the finding that assessee had discharged initial burden and addition under Section 68 could not be sustained, was essentially a finding of fact. This Court said,- "19. A perusal of the aforesaid finding goes to show that deletion has been made on appreciation of evidence, which was on record Finding that there was existence of investors and their confirmation has been obtained, were found to be satisfactory. All these conclusions are conclusions of fact based on material on record and, therefore, cannot be said to be perverse so as to give rise to question of law, which may be required to be considered in this appeal under s.260A of the IT Act." 1.6. Further, Hon'ble ITAT Jaipur Bench, Jaipur in the case of M/s. Bells Paper Board (P) Ltd ITA No. 575/JP/2011 and M/s. Misty Meadows (P) Ltd. ITA No. 422/JP/2012 followed the ratio laid down by the Hon'ble Rajasthan High Court in the case of Shree Barkha Synthetics Ltd. ....
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.... is based on suspicion, has rightly been held not sustainable in the eyes of law. Suffice it to say that the finding arrived at by the CIT (A), affirmed by the ITAT, which remains a finding of fact, cannot be said to be capricious or perverse ... " 1.11. Hon'ble Madhya Pradesh High Court in the case of Peoples General Hospital Ltd. [2013] 356 ITR 65 (Madhya Pradesh) held that " .... from the Heads Notes - Section 68 of the Income-tax Act, 1961 - Cash credit [Share application money] - Whether, where assessee had established identity of person providing share application money, burden of proving creditworthiness of said person was not on assessee, and, therefore, addition could not be made as cash credit under section 68 - Held, yes ... " 1.12. Further, Hon'ble Karnataka High Court in the case of Arunananda Textiles P. Ltd. (2011) 333 ITR 0116 (Kar.) held that " ... It is not for the assessee to place material before the Assessing Officer in regard to the creditworthiness of the shareholders. If the assessee has given the addresses of the shareholders and their identity is not in dispute, whether they were capable of investing, the Assessing Officer shall i....
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....made by Shri Praveen Jain during the course of search and survey proceedings and also on the basis of incriminating documents alleged to have been found from the business premises of Shri Praveen Jain. 1.16. Ld. AO, being a quasi-judicial authority, was duty bound to provide opportunity to cross examine Shri Praveen Jain and also for providing copies of the impugned documents before relying on the same for making additions in the hands of the assessee company. Request for the same was made to ld. AO as evident from Page No. 8 of the order of the ld. AO. 1.17. It is submitted that such statements of Shri Praveen Jain were untested and could become evidence only if opportunity of Cross Examination would have been provided to the assessee company. 1.18. It is well settled that statement of third party cannot be unilaterally utilized against the assessee as evidence to frame the assessment for it is a serious violation of the principles of natural justice. This infringement may as well result in a legally untenable assessment. 1.19. In the case of Ashwani Gupta [2010] 322 ITR 396 (Delhi), addition was made on the basis of the statement of a third par....
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....s assumed that Shri Praveen Jain was involved in bogus transactions, such fact may be relevant for suspicion but it ipso facto does not lead to conclusion of all transaction of Shri Praveen Kumar Jain would be bogus. Hon'ble Jharkhand High Court in case of CIT, Jamshedpur v/s Arun Kumar Agarwal (HUF) [2012] 26 taxmann.com 113 (Jharkhand) held that "Even in a case where the share broker was found involved in unfair trade practice and was involved in lowering and rising of the share price, and any person, who himself is not involved in that type of transaction, if purchased the share from that broker innocently and bonafidely and if he show his bonafide in transaction by showing relevant material, facts and circumstances and documents, then merely on the basis of the reason that share broker was involved in dealing in the share of a particular company in collusion with others or in the manner of unfair trade practices against the norms of S.E.B.I and Stock Exchange, then merely because of that fact a person who bonafidely entered into share transaction of that company through such broker then only by mere assumption such transactions cannot be held to be a shame (sic - sham) tran....
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....be dismissed." 9. To support the contention so raised in the written submission ld. AR of the assessee placed reliance on the following evidence / records / decisions: S. No. Particulars Page No. 1. Copy of Computation 1-5 2. Copy of the letter dated 15.09.2015 submitted to the ld. AO 6 3. Copy of the notice issued by the ld. AO under section 143(2) 7-8 4. Copy of reasons recorded for section 148 9-10 5. Copy of the notice issued by the ld. AO under section 142(1) 11-12 6. Allotment Form 2 filled by company 13-18 7. Copy of the Bank Statement of assessee company 19-26 8. Following documents w.r.t Alka Diamond India Limited: * Application/ Board resolution for shares * Audited Financial Statements * Bank Statement 27-36 9. Following documents w.r.t Javda India Impex Ltd: * Application/ Board resolution for shares * Audited Financial Statements * Bank Statement 37-49 10. Following documents w.r.t Nakshatra Business P. Ltd: * Application/ Board resolution for shares * Audited Financial Statements * Bank Statement 50-61 11. Following documents w.r.t Oli....
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....tigation), 3rd Floor Scindia House, Ballard Pier, Mumbai vide its office letter dated 03.07.2014 which was addressed to the Income Tax Officer (Inv)(Hqrs) O/s the Director General of Income Tax (inv). Rajasthan, Jaipur. In that report as is available that the assessee has taken the accommodation entries as share application money from the following companies which are managed and controlled by Shri Praveen Kumar Jain Group, Mumbai: Investor Company Amount (Rs.) Alka Diamond India Limited 35,00,000 Javda India Impex Ltd 30,02,500 Nakshatra Business P. Ltd (Formerly known as Hema Trading Co. P Ltd) 35,00,000 Olive Overseas P. Ltd (Formerly known as Real Gold Trading Co. P Ltd) 35,00,000 Traingular Infocom Ltd (Formerly known as Lexus Infotech Ltd) 35,00,000 Total 1,70,02,500 As per the records with revenue they have the information that assessee is one of the beneficiary for taking the accommodation entries as share application money from the above companies which are managed and controlled by Shri Praveen Kumar Jain through his relatives, agents and his accountants detected during the search & seizure operation conducted by Investigation ....
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....ation entry as share application money received from the names as listed herein above, asked the assessee to show caused as to why the accommodation entry as bogus share application money received from those five companies for an amount of Rs. 1,70,02,500/- should not disallowed. In response assessee filed submission but the same was not found accepted because in the statement of Shri Praveen Kumar Jain he accepted that he provided accommodation entry for share Application and stated that the shares are purchased by companies under his control which are merely paper companies engaged in the business of providing accommodation entries. He gets a one-time commission of 1.25% to 2.0% of the total transaction value in case of such transactions also stated that the client desirous of taking an accommodation entry in the form of share application gives the cash to him and the same is then transferred to the broker through whom the entry is finally provided. For arranging this entry he gets a onetime commission of about 0.25% of total value of the transaction, as it is duly accepted based on the statement of Shri Praveen Jain that the assessee had taken accommodation entry as share app....
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....rtment leads to doubt regarding the genuineness of the share applications it is incumbent on the assessee to produce the parties along with necessary documents to establish the genuineness of the transaction. Payment by account payee cheque is not sacrosanct. Thus, considering that contentions ld. AO hold a view that the assessee failed to establish the genuineness of the Share Application Money received by it or has failed in discharging this onus. The information received from investigation wing and extract of statement of Shri Praveen Jain & others along with relevant material supplied to the assessee clearly explain the modus operandi of these bogus transaction. Ld. AO noted that the case laws cited by the assessee in its defense also do not help it being distinguishable on facts. Thus, ld. AO considering that statement of Mr. Jain and relying on the decision of Hon'ble Delhi High Court on similar facts in the case of CIT Vs. Nova Promoters & Finlease Pvt. Ltd. (2012) reported in 18 taxmann.com 217 (Delhi) made the addition in hands of the assessee as income of the assessee by invoking the provision of section 68 of the Act added share application of Rs. 1,70,02,500/- from ....
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....ainst the evidence on record it is not correct to make addition merely on the basis surmises and presumptions of a statement of the third party Shri Praveen Jain. The evidence placed on record clearly proves the identity, capacity and genuineness of the transactions were proved and thus the criteria as prescribed in section 68 has been fulfilled and it does not warrant the source of source to be proved. The decision cited by the ld. AO does not match with the facts of the case. We also note that proviso to section 68 wherein addition on account of Share Application Money / Share application can be made, stood inserted to the statue book, by Finance Act 2012 w.e.f. 01.04.2013 and therefore considering the explanation about the nature and source of share application money so furnished by assessee by way of various documents as above are in accordance with the provision of law. Considering that aspect of the matter once the credential of the investor is proved about the identity, genuineness and creditworthiness of the investor there is no reason to sustain the addition. We get strength to our view from the decision of the apex court in the case Lovely Exports wherein it has been held....
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....roceed by reopening the assessment of such shareholders and assessing them to tax in accordance with law. It does not entitle the Revenue to add the same to the assessee's income as unexplained cash credit." Thus, it is very much clear from the provision of section 68 as prevailing for year under consideration the ld. AO can make addition u/s 68 only under two circumstances, (i) the assessee does not offer any explanation about nature and source of such credit or (ii) Explanation offered by Appellant is not up to the satisfaction of Ld. AO. Therefore, here we note that the assessee provided so as prove the identity, credit worthiness and genuineness of the transaction by placing all the records such as PAN, Application made for Shares, Board Resolution and Confirmations, Financial Statement and Bank statement of the investor company which were not at all doubted by ld. AO. But all such vital evidence has been ignored solely on the basis of statements of third party recorded by some other officials during the course of search operation conducted. As argued by the ld. AR of the assessee relying on the decision of the Padmavati Agrico(India) Private Limited in ITA no. 702/JP/20....
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....Fincop. P.Ltd. (ITA No.15/Del./2010) where the addition made u/s 68 has been deleted. The ld. CIT(A) further relied upon the decision of Jurisdictional ITAT in the case of PSL Relmart and decision of Supreme Court in the case of Andman Taubar Industries (Civil Appeal No.4228 order dated 02.09.2015) while deleting the addition of Rs.3,00,00,000/- made by the AO u/s 68 is hereby deleted. "........................................................................................................................................ 14. That the Ld. CIT(A) on a very detailed examination was satisfied about identity, creditworthiness and genuineness of the investor companies and held that the assessee had discharged the primary onus to prove their identity, creditworthiness, and genuineness. We, therefore, concur with the finding of the Ld. CIT(A) that the AO has made an addition under section 68 of the Act without any basis. In our view, the CIT(A) has analyzed the transaction with each share holder and assigned reasons as to why share capital have to be treated as genuine and has rightly deleted the addition. There is no reason to interfere in this finding of fact particular....
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....Has received accommodation entries of Rs. 3.00 crores from Shri Shirish Chandrakant Shah. 6. In view of the above, it is crystal clear that the transcations made with the concerns owned or operated by Shirish Chandrakant Shah are not genuine and there are only paper transaction took place instead of actual transactions. Although the transactions are completed through banking channel after getting commission in case. Therefore, share application money of Rs. 3,00,00,000/- shown by the assessee is treated as diversion of profits to evade the tax liabilities. Therefore, the amount of Rs. 3,00,00,000/- is added to the total income of the assessee. Penalty proceedings u/s.271(1) (c) are initiated for concealing income by furnishing inaccurate particulars of income. Addition: Rs. 3,00,00,000/- 7. Shirish Chandrakan Shah in his statement has admitted that "rate of commission varying between 2.5% to 5% on the total benefits provided to the beneficiaries in form of LTCG, STCG, Sharge Application Money or unsecured loans. Therefore, on the basis of admission by Shirish Chandrakant Shah, commission of @2.50% for bogus accommodation entries of Rs. 3,00,00,000/- which amoun....