TaxTMI 
TaxTMI 
2026 (9) TMI 1629
X X X X Extracts X X X X
X X X X Extracts X X X X
.....147 have not fully been complied and hence the re-opening of the assessment itself is bad in law. 2 a) On the facts and circumstances of the case and in law, the learned CIT(A)-NFAC erred in confirming the addition of Rs. 60,00,000 under Section 68 of the Act without going into the details and the total additions in respect of Unexplained Cash Credit amounting to Rs. 60,00,000 were confirmed by way of surmise and conjecture. b) On the facts and circumstances of the case and in law, the learned CIT(A)-NFAC wrongly confirmed the additions of Rs. 60,00,000 made under Section 68 of the Act. c) The CIT(A)-NFAC erred in not considering the detailed submissions filed though the same was incorporated in the CIT(A)'s order. The AO has not verified the details and has purely relied upon the report of Investigation without going in to detail aspect of the same. d) On the facts and circumstances of the case and in law, the learned CIT(A)-NFAC ignored the details filed though the appellant has proved the capacity, identity and genuineness of the transactions with the lenders. 3. The order of the CIT(A)-NFAC is not a speaking order and has been p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f making the investments. The assessee, thus, argued that the identity of the investors, their creditworthiness, and genuineness of the transactions stood duly proved and consequently, no addition under section 68 of the Act was warranted. 4.1 It also submitted that the AO erred in relying solely upon the general statement of Shri Praveen Kumar Jain recorded during the course of search by the Investigation Wing. It was argued that no specific reference to the assessee company was made in the said statement and also Shri Jain had subsequently retracted his earlier admission. The assessee pleaded that no opportunity of cross-examination of Shri Jain or his alleged associates was given, thereby violating the principles of natural justice. It relied upon various judicial pronouncements including Kishanchand Chellaram v. CIT (125 ITR 713 SC), H.R. Mehta v. ACIT (Bom HC, 2016), and others, to stress that additions could not be sustained merely on third-party statements without granting cross-examination. According to it, since the funds were received through banking channels and remained invested as share application money on the closing date, there was no element of unaccounted incom....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s seized books of accounts, pen drives, and statements of brokers and dummy directors, all of which independently confirm the accommodation entry business. 5.3 In respect of the evidences submitted by the assessee, he observed that the assessee had sought to emphasize that mere filing of PAN, ITRs, and audited accounts by the share applicants established their identity and creditworthiness. However, the judicial position laid down by the Hon'ble Bombay High Court in Major Metals Ltd. v. Union of India (2012) 19 taxmann.com 176 (Bom.) and by the Hon'ble Delhi High Court in Nova Promoters & Finlease Pvt. Ltd. v. CIT (342 ITR 169 Del.)clarifies that such documents were not sacrosanct and could not by themselves establish genuineness or creditworthiness when overwhelming evidence indicated that the companies are paper entities engaged in providing accommodation entries. Similarly, the Hon'ble Supreme Court in CIT v. Durga Prasad More (82 ITR 540) and Sumati Dayal v. CIT (214 ITR 801) has laid down the principle that taxing authorities are entitled to look beyond the apparent and consider the surrounding circumstances and test of human probabilities. In the instant case, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ports P.Ltd. in ITA No.3647/Mum/2017, VHM Apparels P.Ltd.in ITA Npo.3078/Mum/2017 and Diwali Capital and Finance P. Ltd in ITA NO.2019/Mum/2018,Pyramid Realty P.Ltd, Mumbai on 6 December, 2017 in I.T.A. No. 3579/Mum/2017and several other decisions. It is submitted that all such orders were quoted by the assessee but were neither considered nor distinguished in any manner by the lower authorities. 7. The ld.DR on the other hand placed reliance on the orders of the authorities below. 8. We have carefully considered all the relevant facts. From the submissions made before us, we observe that the assessee had issued share application money and submitted PAN, Board resolutions, bank statements and confirmations etc. from the above said parties. Thus, the assessee had submitted all the relevant documentations substantiating the identity. 8.1 With regard to creditworthiness of the companies, assessee had submitted bank statements and other financial statements of the investors including the companies having relationship with Mr. Pravin Kumar Jain and other investors which showed that they had a capacity to invest in the assessee company. From the analysis made, it is clear that t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....te law that on suspicion of the highest degree cannot take place of evidence. There must be some material on record as evidence for addition. Addition made on the basis of presumption cannot be sustained in law. This position is strongly supported by the decisions in CIT V Roman & Co (1968) 67 ITR 11 (SC),CIT v Calcutta Discount Co Ltd (1973) 91 ITR 8 (SC) and OmarSalayMohamedSaitvsCIT195937ITR151 (SC). 8.4 The expression "nature and source" in section 68 of the Act has to be understood together as a requirement of identification of the source and the nature of the source, so that the genuineness or otherwise could be inferred. The law on the subject has been illustrated in a number of decisions. The Hon. Supreme Court, in Kale Khan Mohd. Man if Vs. CIT (supra), pointed out that the onus on the assessee has to be understood with reference to the facts of each case and proper inference drawn from the facts. The law under section 68 is no different. If the prima facie inference on the fact is that the assessee's explanation is probable, the onus will shift to the Revenue. In this case, the assessee had shown the impugned amount as share application. The evidences were not disp....