TaxTMI 
TaxTMI 
2026 (6) TMI 658
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..../143(3) of the Income Tax Act, 1961 ('Act' for short) on 26/12/2019 by making certain additions. Aggrieved by the assessment order dated 26/12/2019, Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 05/06/2025, dismissed the Appeal filed by the Assessee. As against the order of the Ld. CIT(A) dated 05/06/2025, Assessee preferred the captioned Appeal. 3. None appeared for the Assessee even after issuing several notices, therefore, we are constrained to decide the Appeal on hearing the Ld. Departmental Representative. 4. The Ld. Departmental Representative submitted that the Assessee has not able to substantiate its grounds of Appeal before the Ld. CIT(A) by producing cogent documents even befor....
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....t's reliance on such precise and actionable data underscores the legitimacy of initiating the reassessment, negating any contention of arbitrariness or lack of basis. 6.1. Contrary to the appellant's assertion that the reassessment was a mechanical exercise, the AO demonstrated a diligent and independent application of mind. Upon receiving the Investigation Wing's report, the AO undertook a thorough examination of the appellant's financial statements of A.Y. 2012-13. The reasons recorded by the AO for initiating reassessment were detailed and specific, highlighting glaring inconsistencies such as the infusion of substantial share capital and premium from investors whose financial profiles did not align with their purported investme....
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....ailable during the initial processing, constituted "reason to believe" that income had escaped assessment, distinct from any prior opinion. The absence of scrutiny of this issue in the original proceedings and the emergence of post facto evidence unequivocally establish that the reassessment was not a rehash of an earlier view but a lawful response to new facts. 6.4. The appellant pointed to an alleged inconsistency in the reasons recorded, noting references to 5.10 crores and 1.20 crores, suggesting a lack of clarity or coherence in the AO's basis for reopening. This argument is misconceived and warrants clarification. The figure of Rs. 5.10 crores is miscalculated as the chart in page 15 of AO's order establishes figure as 51 lak....
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.... is the addition of 2,49,90,000 under Section 68 and 69 C of the Act, attributed to unexplained share capital and premium received from various entities and unexplained expenditure. Section 68 imposes a clear statutory obligation on the assessee to establish three critical elements regarding any sum credited in its books: the identity of the investor, the creditworthiness of the investor, and the genuineness of the transaction. Failure to substantiate these elements empowers the AO to treat the amount as unexplained income, taxable in the assessee's hands. In this case, the onus rested squarely on the appellant to dispel the AO's suspicions, raised on the basis of concrete evidence linking the investments to accommodation entry operators. T....
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.... or to affirm these entities creditworthiness, leaving the transaction's genuineness unproven. 7.3 The AO also rightly estimated cash expenditure as commission for accommodation entries, amounting to Rs. 4.90 lakhs. This figure aligns with the typical commission rates of 1-2% charged by entry operators, a pattern well documented in tax evasion cases. The appellant offered no credible explanation for these transactions. Hence the addition is upheld. 7.4 In light of the foregoing, the appellant utterly failed to discharge its statutory onus under Section 68. The AO, conversely, meticulously established the nexus between the appellant and entry operators, supported by financial mismatches, unverifiable investors, and a clear ....