2016 (7) TMI 1719

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ces of the case, the Commissioner of Income Tax (A) has erred in law and on facts in deleting the addition of Rs. 6700000/- on account of income from other sources." 3. The assessee is private ltd company, who filed its return of income on 30.09.2008 showing income of Rs. 451580/- from the business of trading of computers and its parts but during the year, however, the main source of income for the year is interest on loan. Ld. AO was of the view that there is allegation against the company that it has taken a large number of accommodation entries from various entry operators. During the year the assessee has received Rs. 6700000/- in the form of share application money from 11 parties. On the addresses given the Inspector....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

...., the assessee has discharged onus cast on him. 4. ld. DR vehemently supported the order of the Assessing Officer and supported that for the reasons given by the Assessing Officer the addition is rightly made. He, therefore, submitted that order of the ld. Assessing Officer may be upheld. 5. Ld. AR of the appellant submitted that as assessee has completely demonstrated that identity, creditworthiness of the depositors and genuineness of the share application money by furnishing confirmation, bank statement and income tax returns of the depositors. He further submitted that mere failure on part of the inspectors to locate these persons the additions cannot be made as details of bank account and income tax returns of the depositors are ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... reference to the respective AOs of these shareholders giving the details of transactions and for causing necessary inquiry in the matter. In case those AOs confirm that the transactions are not genuine, necessary action may be taken in those cases and also to reopen the assessment in appellant's case." 7. On perusal of the above order it is apparent that assessee has furnished confirmation of the parties stating their name, address, PAN, copy of their bank statement, acknowledgement of income tax returns and copy of the balance sheet in case of the companies. Therefore, before the ld. CIT (A) assessee has discharged primary onus of the above share capital proving identity of the creditors, and creditworthiness of those creditors. Re....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....entire details of the share applicants were made available to the AO by the Assessee. This included their PAN numbers, confirmations, their bank statements, their balance sheets and profit and loss accounts and the certificates of incorporation etc. It was observed by the ITAT that the AO had not undertaken any investigation of the veracity of the above documents submitted to him. It has been righty commented by the ITAT that without doubting the documents, the AO completed the assessment only on the presumption that low return of income was sufficient to doubt the credit worthiness of the share-holders. 5. The Court is of the view that the Assessee by produced sufficient documentation discharged its initial onus of showing the gen....