TaxTMI 
TaxTMI 
2025 (5) TMI 1880
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....TA No. 7144/Del/2018 in respect of AY 2015-16, and ITA No. 7145/Del/2018 in respect of AY 2016-17. The present appeal is confined to the impugned order in so far as it relates to ITA No. 7144/Del/2018 in respect of AY 2015-16. 5. The Revenue's appeal before the learned ITAT arose from the common order dated 13.08.2018 passed by the Commissioner of Income Tax, New Delhi-27(Appeals) [CIT(A)] in respect of AY 2015-16 and 2016-17. 6. The CIT(A) had allowed the Assessee's appeal in respect of aforesaid two assessment years and set aside the additions made by the Assessing Officer [AO] under Section 68 of the Act on account of unsecured loans reflected as 'Receipts' from two entities - M/s Earthworks Metallurgicals Private Limited [EMPL] and M/s Tachyons Trading Private Limited [TTPL]. The books of account of the Assessee for the Financial Year [FY] 2014-15 reflected that it had received a sum of Rs. 8.25 Crores from EMPL and Rs. 2.71 Crores from TTPL. Thus, in aggregate, the Assessee had received a sum of Rs. 10.96 Crores as unsecured loans, which the AO found were not accounted for. However, the said additions were deleted on the ground that one of Assessee's group company had di....
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....he FY 2014-15, the Assessee had reflected the receipt of unsecured loans aggregating Rs. 10.96 Crores from two separate companies: Rs. 8.25 Crores from EMPL and Rs. 2.71 Crores from TTPL. The AO found that the said transactions of receipt of unsecured loans are sham transactions as neither of the two entities were found to be genuine. 13. During the course of enquiry, summons were issued under Section 131 of the Act to the directors of EMPL. However, the notices and summons were received back unserved as the addresses provided was not traceable. Similarly, the enquiry in respect of TTPL also yielded same results and the directors of the said company were also untraceable. 14. It is material to note that there is no cavil that the said companies are not-genuine and the Assessee does not dispute the said finding of the AO. 15. It is also material to note that during the course of search, statement of Sh Gurmeet Singh Anand, who is the promotor of AMPPL was recorded and he too confirmed during his statement that he is agreeable to accept the tax liability arising out of a sum of Rs. 11.00 Crores to buy peace of mind. 16. During the course of assessment proceedings, the Ass....
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.... crores in M/s AMP Motors Pvt. Ltd. & also the loan of Rs.10.96 crores in M/s RB Farms Pvt. Ltd. (totaling Rs.29.96 crores) were only arranged and the funds of the applicant company Itself. It has been submitted that income generated by way of bogus purchases debited to the account was utilized for introduction of bogus share capital and bogus loan. It has been submitted that these represent only application of fund, as reflected in the cash flow statement. It is found from cash-flow statement that the share capital and the unsecured loan is shown as application of the undisclosed income of the applicant. However, as already discussed earlier the applicant has shown speculation Income of Rs 50 lakhs from real estate transaction in the A.Y. 2010-11 just to match the application of funds on account of share capital in this year. *** *** *** 4.4.3. Commission's Finding : We have heard both the parties and considered their submissions. It is observed that the applicant has explained the introduction of share capital through generation of cash from inflation of purchases. The cash flow statement submitted before the Commission has been verified by the PCIT. Hence, no f....
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....und to be satisfactory: Provided further that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless- (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: Provided also that nothing contained in the first proviso or second proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10." 24. As is apparent from the plain reading of Section 68 of the Act, the same is applicable only where the Assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion....