TaxTMI 
TaxTMI 
2025 (9) TMI 1020
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....ght from time to time and the addition of INR 6,15,34,820/- was made u/s 68 of the Act on account of unexplained credits in the shape of share application money, unsecured loans and cash deposits in the bank accounts. Besides this, disallowance of unverifiable expenses to the extent of INR 2,90,787/- was also made and accordingly, total income of the assessee was assessed at INR 6,23,09,377/-. 3. Against this order, an appeal was filed by the assessee before Ld.CIT(A) who vide impugned order dated 10.02.2023 has allowed part relief to the assessee wherein addition of INR 4.50 crores on account of share application money and INR 1.50 crores on account of unsecured loans were deleted by Ld. CIT(A). 4. Against the said order, the Revenue is in appeal before the Tribunal by taking following grounds of appeal:- 1. "That on the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts by deleting the addition of Rs. 4,50,00,000/- on account of share application money received by assessee but treated unexplained credit u/s 68 of the IT, Act by the AO, without going into the creditworthiness of the lender and genuineness transaction. 2. That on t....
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....ished showed that both investors received identical credit entries in their own accounts immediately prior to issuing cheques to the assessee. The pattern of sudden deposits followed by immediate issuance of cheques raises suspicion of an accommodation entry. The source of funds in the hands of the investors was not explained, and the remand report clearly mentions that no explanation was offered in this regard. The Ld. CIT(A), however, failed to address this critical aspect while deleting the addition. It is respectfully submitted that for A.Y. 2013-14, the first proviso to section 68 was applicable, which places an additional statutory burden on companies to prove not only the identity of the contributor but also the nature and source of funds in the hands of the person from whom such amounts are received. This dual requirement has not been satisfied in the present case. The assessee failed to demonstrate either the financial capacity of the investors or the commercial rationale behind the investment, especially in light of the fact that the share capital was never allotted and the funds were refunded after one year. Merely submitting PAN and ITRs, with....
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....onsists of only cash and cash equivalents. The P&L account of the assessee shows no real business. The only income shown is from interest income. The financial statement of the assessee show all ingredients of a shell company. That the investors have done real transactions with the assessee company can not be accepted as genuine by any stretch of imagination. These comments go well beyond mere reiteration of the assessment order and directly support the AO's findings under section 68. The CIT(A)'s failure to address these specific remarks has led to an erroneous deletion of the addition. These findings, based on evidence and commercial reality, form a strong basis for restoration of the additions as made by the AO." 6.1. He thus prayed for the restoration of the additions made by AO which were deleted by Ld.CIT(A). 7. On the other hand, Ld.AR for the assessee supports the order of Ld.CIT(A) and submits that assessee has discharged the burden by filing complete details of investors as additional evidences which were confronted to AO by Ld.CIT(A) by obtaining Remand Report who has not pointed out any defects in the details submitted. Rather in the statements re....
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....lected the receiving of amounts. 3. Creditworthiness of the creditor- The Income Tax Returns of Sh. Ramesh Chander and Sh. Mahender Pal Khanna. For AY 2013-14 Sh. Ramesh Chander and Sh. Mahender Pal Khanna had filed a return of Rs. 78,43,466 and Rs. 86,65,239/ respectively. Further, AO issued notice u/s 133(6) to Sh. Ramesh Chander and Sh. Mahender Pal Khanna which was not responded. Analysing the above details with AO, only the non-response to notice u/s 133(6) of the I.T. Act, 1961, alone is not sufficient to rule out identity of the creditor (The name alongwith PAN and address of the assessee being already furnished), creditworthiness of the creditor (the return of income of both the creditors reflects healthy financial status showing capability of investment which has been made) and Genuineness of the transaction (is through banking channel). Further in this case during the remand report proceedings (remand report was submitted to then CIT Appeal)-80 on 12.07 2018, uploaded for faceless proceedings), the appellant has furnished that these amounts have been refunded back to the creditors in the subsequent financial year. The details of which h....
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.... case. On facts Itself, the provisions of Section 68 is not applicable in this case, hence addition of the amount of Rs. 4,50,000,00/- as share application money is deleted. The ground no.1 of the appellant is allowed." 9. We find that before us, ld. Sr. DR failed to controvert the findings of ld. CIT(A) and relied upon the observation made by AO while making the additions and in the Remand Report. While alleging the genuineness of the transactions, AO solely based his findings on the bank statements of both the applicants where funds were deposited immediately before the release of funds to the assessee. 10. The Hon'ble Delhi High Court in the case of PCIT vs. Agson Global Pvt. Ltd reported in [2022]134 Taxmann.com 256 (Delhi) while allowing the appeal in favour of the assessee towards the additions made u/s 68 of the Act has held as under : Section 68 of the Income-tax Act, 1961 - Cash credits (Share capital money) - Assessment years 2012-13 to 2017-18 - Assessee-company received share capital and share premium money from several investors - Assessing Officer made addition in respect of same on account of unaccounted income under section 68 on basis of....
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....ion that the cash was unexplained. Ld. Sr. DR further submits that Ld. CIT(A) deleted the addition for the sole reason that these are the group companies and funds were advanced for acquiring industrial property. Ld. Sr. DR submits that in case of M/s. Jas Logistics Pvt. Ltd., INR 50 Lakhs were deposited in cash on 10.05.2012 and the amount was given to the assessee on the same day through banking channel. As per Ld. Sr.DR, explanation given by the assessee was that the company has given advances to the villagers for purchasing their lands however, they failed to fulfill the commitments thus amounts advanced were returned back which was deposited in the bank account. 15. With respect to M/s. Sabee Finanz Pvt. Ltd., it is submitted by Ld. Sr. DR that INR 50 Lakhs in three trenches were deposited on 28.09.2012 and on the same day, the amount was advanced to the assessee company. With respect to the source of the same it was submitted by ld. SR DR that similar type of explanation was given as was given in case of M/s. Jas Logistics Pvt. Ltd. therefore, it is argued by Ld. Sr. DR that during the assessment as well as remand proceedings, no credible evidences were provided to establi....
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....fulfill the commitments, advance was refunded to the lender companies which were re-deposited in the bank accounts. With respect to the balance amount of INR 50.00 lakhs, it was stated that this amount represents the redemption of mutual funds. 18. From the perusal of order of Ld.CIT(A), we find that Ld.CIT(A) has accepted this explanation of the assessee and also admitted the additional evidences such as Iqrarnama (agreement) between M/s. Jas Logistics Pvt. Ltd and villagers according to which advances were given and upon non-fulfillment of the commitments, refunds were made. Ld.CIT(A) further observed that such Iqrarnama cum Cancellation agreements were also produced. However, from the order of Ld.CIT(A), it appears that these documents were not forwarded to AO nor was any opportunity provided to AO to examine the villagers who have stated to received the advance and refunded back upon cancellation of the agreement. Thus, in the interest of justice and fair play, in our considered opinion, AO should provide atleast one opportunity to examine all these evidences. Accordingly, the loan taken from M/s. Jas Logistics Pvt.Ltd needs to be re-examined by the AO. 19. With regard to....
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....tly allowed. Order pronounced in the open Court on 12.09.2025. ============= Document 1 Anementhol Sh. Ramesh Chander Khanna; S/o Sh. Brojlal Khanna, R/6 90; Chunder Nok aEnclave Bitanipura. Saraswati Vihar North West Delhi. Delhi-1 0034. recorded. un. Oath Section tato the Income Tax Act, 1961 in the case of Mis Sourabh Loyistle Ist Lid."a Room no. T. Building, I. P. Estale. New Delhi-1-10002 in continuation of Statement recordedcon 16042018 the Storm - 4| 1 |3| g IT Act, ? will Speak THING willnot else 8)-(dos et ony fully Lite, nicepi gy Lalistatem Nenutkuma Oath Administered 6/4/18 hanna. Sle Sh. Brijlal Khanna; R/o 90, Chander I. r Norily West Delhi, Delhi-110034 -1, Im ! 02304 S proof ofid Card glish come ental ome from guest h's Indust is (the fr přem nichA Whether the shares have been allotted to you. fives/ then at what time" Ans Shares were nouissued to us and the entire amount of Rs. 2:32.50.000 - vais femmefat back by 's Soumbh Logistics Put. Ltd: 'in the very next year i.e. F.Y., 2013-10 S. Did you get any interest on the amount so invested in M/s Sourabh Logistics Pvt Lide not then why? aliisn-No ....