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2016 (7) TMI 1182 - AT - Income TaxReopening of assessment - undisclosed cash credit - Held that:- The information available with Assessing Officer was sufficient to form a primary belief that income had escaped assessment and, therefore, we don’t find any infirmity in the finding of the learned Commissioner of Income-tax (Appeals) in dismissing the ground challenging the jurisdiction in reopening the assessment. From the finding of the learned Commissioner of Income-tax(Appeals), it is evident that the assessee was provided enough opportunity to represent its case but, however, no submission was filed before the learned Commissioner of Income-tax(Appeals). In view of non-submission, the learned Commissioner of Income-tax(Appeals) decided the issues on merit and we don’t find any infirmity in the findings of the learned Commissioner of Income-tax(Appeals) on the issue in dispute, accordingly, the ground of the appeal is dismissed. Addition u/s 68 - Held that:- We find that the assessee has initially provided details in respect of the share applicants to the Assessing Officer, however, when the summons sent to the share applicants written unserved with the postal remarks that no such firms/companies existed on that address and the Assessing Officer asked to produce those parties before him, it was the onus of the assessee to either produce those parties before him or provide their new addresses as in the case of private limited companies, the shares are allotted through private circulation only. The Assessing Officer also observed deposit of cash in the bank account of the share applicant just before issue of cheques to the assessee. The Assessing Officer gathered copy of bank statements of the share applicants directly from the banks through notice under section 133(6) of the Act and pointed out discrepancy in the copy of the bank statement of one of the share applicant supplied by the assessee. The Assessing Officer also observed that the shares issued at higher premium were subsequently bought back by the directors of the assessee company at very low value. In view of all the evidences, the learned Commissioner of Income-tax (Appeals) also upheld the finding of the Assessing Officer. Thus the assessee has failed to discharge its onus in respect of the credit received in the form of share capital by the assessee of ₹ 11 lakh from the parties and, therefore, there is no infirmity in the findings of ld. Commissioner of Income- tax (Appeals) on the issue in dispute and we, accordingly, uphold the findings of the learned Commissioner of Income-tax (Appeals) on this issue. - Decided against assessee Addition on account of notional commission charged the rate of 2% on the accommodation entries obtained - Held that:- The assessee obtained accommodation entries in respect of the share capital of ₹ 11 lakh and by the preponderance of probability in the facts of the case no person will provide such entries without any payment, thus, we uphold the unexplained commission expenses paid by the assessee. However, the Assessing Officer has not given any justification for the rate of 2% on the amount of accommodation entry. We therefore in the interest of Justice restore the matter back to the file of the Assessing Officer to apply the rate of commission on the basis of any comparable case. Accordingly, this ground of appeal is allowed partly for statistical purposes.
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