TaxTMI 
TaxTMI 
2026 (6) TMI 342
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.... that in consequence to the evidences gathered during the investigation conducted by the investigation wing, Kolkata, the non genuine nature of these transactions is clearly emerged?" (ii) "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 18,00,000/- and. Rs. 3,15,60,000/- made u/s 68 of the IT Act towards sale of shares ignoring Assessing Officer's investigation regarding the round tripping of funds for the sake of entries. Also, the creditworthiness of the concerns with which the transactions were made by the assessee in doubt as these concerns have negligible income" 2.1 The brief facts of the case are that the assessee filed the return by declaring total income Rs. 2,60,970/-. The return was processed under section 143(1) of the Act. Subsequently, information has been received by the Ld. AO from ADIT (Inv.), Unit 4(1), Kolkata. The content of the information indicated that assessee company is one of the beneficiary who has taken accommodation entry through layering in the guise of bogus share, share premium and unsecured loan to the tune of Rs. 18,00,000/-. The notice under section 148 was is....
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....acts of the case, the submissions made by the appellant and the assessment order passed u/s 143(3) r.w.s 147 of the Income-tax Act, 1961, dated 27-12-2018. The AO, relying on information received vide letter No. ADIT/U-4(1)/S-Binod/Kol/2017-18 dated 12.03.2018 regarding fund deposits in Union Bank of India, Account No. 607701010050233, in the name of M/s Shyam Dealtrade Pvt. Ltd. and M/s Midpoint Traders Pvt. Ltd., noted that the said companies were not found operating from their declared addresses, had common directors, and were filing either negligible or nil returns. Examination of their bank statements revealed frequent credits and immediate transfers. It was further observed that the appellant had received Rs. 15,00,000/- from M/s Shyam Dealtrade Pvt. Ltd. and Rs. 3,00,000/- from M/s Midpoint Traders Pvt. Ltd. In view of these findings, the AO concluded that the identity, genuineness, and creditworthiness of the transactions stood unproved. Thus, the AO invoking provisions u/s 68 made an addition of Rs. 3,33,60,000 (Rs. 3,15,60,000 + Rs. 18,00,000) to the total income of the appellant. 6.5.1 The appellant submitted that during the year it had sold shares amounting to ....
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....014-15, wherein orders under section 143(3) were passed on 12.03.2015 and 17.07.2018 by the ITO, Ward-10(4), Kolkata. These assessment orders, when read together with the documentary evidences furnished, substantiate both the genuineness of the share transactions and the creditworthiness of the said entities. Thus, the appellant has duly discharged the onus cast upon it in establishing the identity of the parties, their creditworthiness, and the genuineness of the transactions. 6.5.3 On a careful consideration of the facts on record and the evidences furnished, it is observed that the appellant has been able to demonstrate through audited balance sheets, schedules of investments, sale notes, bills of shares, bank statements, and purchaser details including PANs, that the impugned amount of Rs. 3,33,60,000/- represented proceeds of share sale transactions. The reduction in the value of investments as per Schedule 'C' of the audited financial statements further corroborates the occurrence of such sale. Moreover, the scrutiny assessments completed under section 143(3) in the cases of both M/s Shyam Dealtrade Pvt. Ltd. and M/s Midpoint Traders Pvt. Ltd. in subsequent years len....
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....lers & their Income Tax Return. In view of the above discussion in totality, the purchases made by the appellant from M/s Padmesh Realtors Pvt. Ltd. is found to be acceptable and the consequent disallowance resulting in addition to income made for Rs. 19,39,60,866/-, is directed to be deleted." The ITAT by its judgment dated 16th May, 2014 relied on the self-same reasoning and dismissed the appeal of the revenue. Likewise, the High Court by the impugned judgment dated 5th July, 2017, affirmed the judgments of the CIT and ITAT as concurrent factual findings, which have not been shown to be perverse and, therefore, dismissed the appeal stating that no substantial question of law arises from the impugned order of the ITAT. In these circumstances, the Review Petitions are dismissed." 6.5.4 In view of the foregoing findings, it is held that the appellant has satisfactorily established the genuineness of the share sale transactions, the identity and creditworthiness of the counter-parties, and the receipt of consideration through verifiable banking channels. The addition of Rs. 3,33,60,000/- (Rs. 3,15,60,000 + Rs. 18,00,000) made under section 68 is held to be ....
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....Investigation Wing and on suspicion arising from banking patterns of the purchaser entities. It is settled proposition of law that suspicion, however strong, cannot take the place of legal evidence. The assessee was also not provided any opportunity of cross-examination of the persons whose statements or investigation materials were relied upon by the department. Thus, the principles of natural justice stood violated. It is also pertinent to note that both M/s. Shyam Dealtrade Pvt. Ltd. and M/s. Midpoint Traders Pvt. Ltd. were subjected to scrutiny assessments under section 143(3) by their respective jurisdictional Assessing Officers. Therefore, the existence and taxability of the said entities cannot be doubted merely on the basis of general observations made in investigation reports. Once the assessee has produced cogent documentary evidences substantiating the transactions and the department has failed to bring any contrary material on record to disprove the same, no addition under section 68 can be sustained. We respectfully concur with the findings recorded by the Ld. CIT(A). The reliance placed by the Ld. CIT(A) on the judgment of the Hon'ble Supreme Court in the case of Odeo....
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....are 1,142,500.00 Schedule - B-Reserve & Surplus Premium of Rs 390/- per share on 40,657,500.00 104250 Equity shares Profit & Loss A/c 2.433.00 40.659 933.00 Schedule - C- Investment No. of Shares Advene Commerce Pvt. Ltd. 3,750 1,500,000.00 Alto Vincom Pvt. Ltd. 3,750 1.500,000.00 Ankita Agro Pvt. Ltd. 8,000 800,000.00 Ashoka Furnishings Pvt. Ltd. 5,000 500,000.00 Ayuvardhan Projects Consultants Pvt. Ltd. 2,500 1,000,000.00 Blupex Traders Ltd. 1,000 500,000.00 Champion Traders Pvt. Ltd. 12,500 5,000,000.00 Excell Infocom Pvt. Ltd. 2,500 1,000,000.00 Goel Properties Pvt. Ltd. 600 600,000.00 Grace Industries Ltd. 60,000 3,000,000.00 Gupta International Industries Ltd. 35,000 3,500,000.00 Happy E- Zone Ltd. 10,000 500,000.00 Khandelwal Finance Pvt. Ltd. 47,500 4,750,000.00 Kolber Commercial Pvt. Ltd. 4,000 1,000,000.00 Malay Mercantiles Pvt. Ltd. 15,000 1,500,000.00 Melfil International Pvt. Ltd. 10,000 1,000,000.00 Mercantile Marketing (I) Pvt. Ltd. 15,000 1,500,000.00 Minutex Processors Pvt. Ltd. 150 600,000.00 M. M. J. Investments Pvt. Ltd. 10,000 1,000,000.00 Narsingh Projects Pvt. Ltd. 2,500 1,000,000.00 Riwaz Investments Pvt. Ltd. 5,000 500,000.00 ....
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....vestments Pvt Ltd 500000 500000 Sager Tie Up Pvt. Ltd. Nil 1500000 Saksham Projects Pvt Ltd. Nil 119100 Satitex Trading Pvt. Ltd. Nil 1000000 SMB Securities Pvt. Ltd. Nil 2000000 Taurus Vinyog pvt. Ltd Nil 1000000 T.D. Constraction co. Pvt. Ltd. Nil 1000000 Virgo Textile Pvt. Ltd Nil 1500000 Vinayak Fasteners Pvt. Ltd. Nil 2500000 Wonder Commercial Pvt. Ltd. Nil 1000000 4359100 37719100 Document 5Schedule C investment 31/3/2006 31/3/2007 31/3/2008 31/3/2005 31/5/2010 31/3/2011 Ramarka Advene Commerce PVL. LMd. #1,500,000 Rs.1,500,000 10 PO PO 10 Ato Vincom PVC. LMd. #1,500.000 #1,500,000 #1,500,000 #1,500,000 #1,500.000 10 Shares Sod of fs. 15,00,000/- during the A.Y. 2011-12 Anita Agro PVC. LM1. 2500,000 #800.000 1500,000 1500,000 $500,000 10 Shares Sod of fs. 8,00,000/- during the A.Y. 2011-12 Ashoka Fimstings PVt Ltd. $500.000 #500.000 1500,000 1500,000 #500,000 10 Snares God of fs. 8,00,000/- during the A.Y. 2011-12 Archana iron Pvt. Ltd. - 90 10 1 15,000.000 10 Shares Dod of fts. 50.00,000/- during the A.Y. 2011-12 Ayurvarthan Furnishings PVC LMS #1.000.000 #1,000,000 #1,000.000 11,000.000 11,000.000 11,000.000 No Shares soid during the A.Y. 2011-12 Agarwal ....