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2022 (9) TMI 1138 - AT - Income TaxUnexplained cash credit u/s 68 - assessee has received share application money from those entities who were providing accommodation entries - CIT-A deleted the addition - HELD THAT:- We do not find any justification in the order of the Ld.CIT(A) in deleting the said addition pertaining to the three concerns as these seem to be mere paper companies. It is also pertinent to point out that the statements of Shri Pradeep Poddar and Shri Anand Sharma are not the only reason for making the addition, but AO has further gone into enquiring the nature of the impugned transaction. Upon perusal of the financials of the alleged companies, it is also evident that the said companies’ financials did not corroborate with the amount of investment that was made by the said companies with the assessee company. CIT(A) has erred in deleting the addition made by the AO pertaining to three companies and by only sustaining the addition made with regard to four parties to the extent of Rs.1 crore on the ground that the financials of the four companies did not inspire confidence as to the genuineness of the transaction. Though the assessee has submitted details of the said transaction such as bank statements, profit and loss account, balance-sheet, copy of PAN, etc. the same did not inspire confidence as to the alleged impugned transaction because the credibility of the said concerns are questionable as per the financials of the same. The bank transactions of the investor companies seem to be ficitious and none of these alleged investor companies has shown the source of investment. From the above observation and by placing reliance on the decision of Sumati Dayal [1995 (3) TMI 3 - SUPREME COURT] and Navodaya Castle (P) Ltd [2015 (4) TMI 481 - SC ORDER], NRA Iron & Steel [2019 (3) TMI 323 - SUPREME COURT] we hold that the order of Ld.CIT(A) is not sustainable and thereby we set aside the order of the Ld.CIT(A) and uphold the order of the Assessing Officer. Decided against assessee. Validity of reopening of assessment u/s 147 - HELD THAT:- As it is evident that on the basis of the information received from the Investigation Wing that the assessee company is alleged beneficiary of having received share application money from other alleged companies. As evident that AO had received credible information from the Investigation Wing and also the statement of Shri Pradeep Poddar, director of the said companies has admitted the fact that the said companies were used for providing accommodation entries to various parties. This information received from the Investigation Wing is reliable source for the Assessing Officer to reopen the assessment and this reason is sufficient for the AO to have prima facie belief that income has escaped assessment. Upon this reasonable belief, the assessment order under section 143(3) r.w.s. 147 is valid. We find no absurdity in the reopening of the assessment by the Assessing Officer
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