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2019 (10) TMI 125 - AT - Income TaxUnexplained cash credit u/s 68 - CIT(A) has relied on statements of few persons, claimed to be directors of the share applicant companies, recorded during the course of search proceedings by the Investigation Wing of the Income Tax Department on parties other than the assessee who stated that the share application money invested by their companies into the assessee company was in the nature of the accommodation entry - HELD THAT:- No other incriminating documentary evidence related to the assessee found during the course of the searches, has been referred either by the Assessing Officer or by the Ld. CIT(A). Thus, no corroborating material was found in the course of the searches to support statements of persons of the share applicant companies. It is also not in dispute that the assessee sought cross-examination of those persons and the lower authorities have failed to provide any such opportunity to the assessee. Further, we also find that directors of very same share applicant companies filed confirmations of having invested share application money and also appeared before the AO in remand proceedings (part of first appellate proceedings) along with all documentary evidences which includes, confirmation of share application money invested; bank statement of their company; balance sheet of their company; copy of Board Resolution of their company etc. The directors of the share applicant companies have not confirmed providing of any accommodation entry to the assessee. Thus, the oral statement given by the persons before the Investigation Wing, which have been relied upon by the learned CIT(A), is of no relevance, when directors of the share applicant companies have confirmed the investment in assessee company. The lower authorities have also failed to corroborate the statement of those persons that cash was deposited in their bank accounts and, thereafter, cheques have been issued to the assessee. The Assessing Officer has failed to substantiate this claim of cash deposit in the bank account of those persons or share applicant companies. CIT(A) is not justified in relying the statements of those persons given before the Investigation Wing, and that too without any cross-examination and corroborating material on record. CIT(A) has relied on statement of Sh. Amit Gupta, recorded during the course of survey proceedings under section 133A of the Act at the premises of the assessee. Sh. Amit Gupta stated that the company obtained share application money through accommodation entry but, later on, he retracted from his statement. No material corroborating the statement was found in survey proceeding from the premises of the assessee. Further, the assessee has submitted that Sh. Amit Gupta was not director in the assessee company at the time of receipt of share application money and, therefore, his statement is irrelevant. The Revenue before us could not establish, that Sh. Amit Gupta was director at the time of receipt of the share application money. In the case of S. Khader Khan Son [2013 (6) TMI 305 - SC ORDER] has held that statement under section 133A of the Act cannot be admitted as evidence unless corroborated by other documentary evidences. The assessee has succeeded in substantiating its claim as directed by the Tribunal in first round of proceedings. It is also evident that the Assessing Officer or the Ld. CIT(A) could not establish that the money deposited in the bank accounts of the share applicant money was in any manner rooted from the coffers of the assessee company. Case of LAKSHMI FLOAT GLASS LTD. [2016 (8) TMI 1463 - DELHI HIGH COURT] followed - Decided in favour of assessee.
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