TMI Blog2014 (3) TMI 961X X X X Extracts X X X X X X X X Extracts X X X X ..... SHRI RAJPAL YADAV, JJ. For The Appellant by : Shri Ramesh Goel, C. A, For The Respondent by : Ms. Meenakshi Vohra.Sr.DR. ORDER PER J. S. REDDY, ACCOUNTANT MEMBER This appeal filed by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals)-XVIII, New Delhi dated 22.10.2012. 2. Facts in brief, the assessee is a company and had filed its return declaring income of ₹ 16,360/- on 31.08.2004, which was processed u/s 143(1). Later a notice u/s 148 was issued. The Assessing Officer passed an order u/s 143(3) adding an amount of ₹ 5 lac as income u/s 68, on the ground that the assessee has received bogus accommodation entries from M/s Hopewin Admark and Consultancy Services Pvt. Ltd., based on information received from the investigation wing. 4. The assessee carried the matter in appeal without success. 5. Before us the assessee challenged the reopening. On merits he submitted that the assessee had filed the following documents before the A.O. and hence discharged its burden of proof. The assessee has filed following documents vide their letter dated 14.12.2011 and 28.12.2011: 1. Share application fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground that the assessee has created a paper trial is not correct. The assessee has discharged the burden of proof that lay on it. Now the onus shifted to revenue and this in our view was not discharged by the AO. The Assessing Officer in this case did not conduct any enquiry or investigation, but merely rejected the evidence given by the assessee. This is not permissible in law. 11. We now discuss the case law on the issue. (a) In the case of CIT vs. Victor Electrodes Ltd. 329 ITR 271, (Delhi), in para 8 at page 274 and 275 held as under: Held, dismissing the appeal, that it had not been disputed that the share application money was received by the assessee by way of account payee cheques, through normal banking channels. Admittedly, copies of application for allotment of shares were also provided to the Assessing Officer. It was the case of the Revenue that the share applications were not signed on behalf of the Revenue that the shares were not actually allotted to the companies. If the Assessing Officer had any doubt about the identity of the share applicants, he could have summoned the directors of the applicant-companies. No such attempt was, hwoever, made by him. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... One in which the Assessing Officer carries out the exercise which is required in law and the other in which the Assessing Officer sits back with folded hands till the assessee exhausts all the evidence or material in his possession and then comes forward to merely reject the same on the presumptions. The present case falls in the latter category. Here the Assessing Officer after noting the facts, merely rejected the same. This would be apparent from the observations of the Assessing Officer in the assessment order to the following effect:- Investigation made by the Investigation Wing of the department clearly showed that this was nothing but a sham transaction of accommodation entry. The assessee was asked to explain as to why the said amount of ₹ 1,11,50,000/- may not be added to its income. In response, the assessee has submitted that there is no such credit in the books of the assessee. Rather, the assessee company has received the share application money for allotment of its share. It was stated that the actual amount received was ₹ 55,50,000/- and not ₹ 1,11,50,000/- as mentioned in the notice. The assessee has furnished details of such receipts and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rg. To elevate the inference which can be drawn on the basis of reading of such material into judicial conclusions would be improper, more so when the assessee produced material. The least that the Assessing Officer ought to have done was to enquire into the matter by, if necessary, invoking his powers under Section 131 summoning the share applicants or directors. No effort was made in that regard. In the absence of any such finding that the material disclosed was untrustworthy or lacked credibility the Assessing Officer merely concluded on the basis of enquiry report, which collected certain facts and the statements of Mr.Mahesh Garg that the income sought to be added fell within the description of S.68 of the Income Tax Act, 1961. 7. Having regard to the entirety of facts and circumstances, the Court is satisfied that the finding of the Tribunal in this case accords with the ratio of the decision of the Supreme Court in Lovely Exports (supra). 8. The decision in this case is based on the peculiar facts which attract the ratio of Lovely Exports (supra). Where the assessee adduces evidence in support of the share application monies, it is open to the Assessing Officer to exam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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