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2017 (3) TMI 328 - AT - Income TaxUnexplained cash credit entries - Held that:- As in compliance to notices issued u/s 131 of the I.T. Act to both the persons by the AO, details have been furnished. The AO has given the finding that Shri Virender Kumar Jain is closely associated to Sh. Surender Kumar Jain. However, no such report is available on record and Assessing Officer has also not narrated how they are closely associated. M/s Steller Investment Ltd. is connected to Sh. Surender Kumar Jain who is said to be hawala operator is also not clear from the assessment order. In view of these facts, I find that AO has wrongly disbelieve share application money received from M/s Steller Investment Ltd. Regarding the share application money received from Sh. Vijendra Thapliyal and AO noticed that there was a balance of ₹ 15,50,OOO/- before issuing the cheque for share application money. However, he has added this amount on the ground that before issuing the cheque appellant has received some money in the bank account. Without investigating who has given the money before issuing the cheque for share application, AO has disbelieved the transaction. There is no allegation against Shri Vijendra Thapliyal for providing the accommodation entry to the assessee, but Ld. A.O. has added this amount alongwith 2% commission for paying commission to get entries. The action of the AO clearly indicates that he has treated both the transactions similar without assigning any reason. During the year the assessee has not received any income because business was not carried on by the appellant. The AO has wrongly treated the share application money as income of the assessee. If any amount is to be added it should be added in the hand of Directors because only they can take the entry by giving the cash from their pockets.- Decided in favour of assessee Addition on account of share application money - Held that:- 2% commission addition was rightly deleted, due to the fact that there is no evidence that assessee has taken entry for share application money.- Decided in favour of assessee
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