TMI Blog2015 (5) TMI 923X X X X Extracts X X X X X X X X Extracts X X X X ..... atistical purposes. - ITA No. 1308/Del/2010 - - - Dated:- 8-5-2015 - Shri N. K. Saini And Shri Chandramohan Garg,JJ. For the Appellant : Shri Y. Kakkar DR For the Respondent : Shri Alok Kumar Gupta, CA ORDER Per C. M. Garg, Judicial Member This appeal has been directed by the Revenue against the order of the CIT, Faridabad dated 27.01.2010 in Appeal No.150/09-10 for AY 2005-06. 2. The sole ground raised by the revenue reads as under:- 1. On the facts and in the circumstances of the case, the ld. CIT(A) has erred on facts and in law in deleting the addition of ₹ 2,50,0000/- made by the AO on account of unexplained credits in the books of account u/s 68 of the Income Tax Act, 1961 especially when the assessee had completely failed to discharge its onus to prove the identity of the persons, genuineness and creditworthiness of the persons giving share applicants money to the assessee. 3. We have heard arguments of both the sides and carefully perused the relevant material placed on record, inter alia assessment order, impugned order of the CIT(A), assessee s paper books spread over 164 pages and citations, judgments and orders relied by bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d when the asessee succeeds to discharge its onus, then only the onus shifts to the AO to demolish explanation, details and evidence of the assessee to bring the case for making addition u/s 68 of the Act because the assessee only filed copies of the bank statement, income tax return and confirmation of the alleged share application money providers but this was not sufficient to discharge required onus of the assessee to prove identity, creditworthiness and genuineness of the transaction. Ld. DR finally prayed that the impugned order may be set aside by restoring that of the AO. 4. Ld. AR supporting the impugned order submitted that the AO made additions with pre-determined mind and she has thrown away all relevant explanation, details and evidence filed by the assessee during the assessment proceedings. Ld. AR has further drawn our attention towards paper book page no. 157 to 164 and submitted that the assessee through letter dated 29.12.2009 requested the AO to provide one more day i.e. up to 30.12.2009 to conclude its submissions and to submit required information and other details but the AO proceeded to make additions and to frame assessment order in a hasty manner and viol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e note that from 14.12.2009 to 29.12.2009 regularly the AO was making efforts to verify and investigate the alleged share application money provider but without result and the Inspector s report was also called on 24.12.2009 which was supplied to the assessee and the case was adjourned to 29.12.2009. On 29.12.2009, the assessee again requested to give one more day for providing required information and submission but the AO denied adjournment by holding that as the assessment was getting time barred by limitation on 31.12.2009, the AO completed assessment proceedings and passed assessment order on 29.12.2009 itself. From the letter of the Advocate of alleged share application money provider dated 30.12.2009, we observe that the alleged entry providers also submitted some details and documents for the consideration of the AO but the assessment order was passed on 29.12.2009. Although we are unable to see from record which details were filed by the alleged share application money provider on 30.12.2009, there was an attempt to submit information and submission from the AO on behalf of the share applicants. At this juncture, we respectfully take guidance from the decision of Hon ble D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as a facility to revenue to keep track of transactions. The PA N Number cannot be blindly and without consideration of surrounding circumstances treated as sufficiently disclosing the identity of the individual. 27. Referring to the various judgments of the Supreme Court {A. GOVINDARAJU LU MUDALIAR VS CIT (1958) 34 ITR 807 (SC), CIT VS M. GANAPATHI MUDALIAR (1964) 53 ITR 623 (SC) AND CIT VS DEVI PRASAD VISHWANATH PRASAD (1969 (72) ITR 194 (SC)} we have in N.R.P ORTFOLIO PRIVATE LIMITED (SUPRA) rejected the contention that the revenue must have evidence to show a circulation of money from the Assessee to third parties. Following CIT VS NOVA PROMOTERS AND FINLEASE PRIVATE LIMITED CASE (2012) 342 ITR 169 (DELHI) we have held that in view of the link between the entry providers and incriminating evidence, mere filing of PAN Number, acknowledgement of Income Tax Returns of the entry providers, bank account statement is not sufficient to discharge the onus on the Assessee. 28. In the case of private limited companies, generally person known to the directors or shareholders directly or indirectly buy or subscribe to shares. The share subscribers post investment do not lose touch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order, we note that the CIT(A) granted relief for the assessee with following observations and conclusion:- 6. I have carefully considered the contentions of the Ld. AR and perused the order of assessment. I have also gone through the various documents produced by the Ld. AR in the shape of the paper book, examination of which clearly shows that during the course of reassessment proceedings u/s 147, the appellant through the Ld. AR had produced all the documentary evidences which establish the genuineness of the transaction of the credits of receipt of ₹ 5 lakhs from the 5 persons involved and that the AO has no material on record to prove that all these credits of ₹ 25 lakhs were mere accommodation entries and not genuine credits in the books of account as per the provisions of section 68 of the Income Tax Act, because the appellant had proved also the identity an credit-worthiness of all the parties through their confirmations and accounts through the banking channels which left no room for any shred of doubt for the genuineness of the credits in the books of the company. Moreover, as per the legal position settled by a catena of judicial pronouncements cited by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 68 of the Act and the assessment proceedings were completed, keeping in view the fact that the assessment was getting time barred on 31.12.2009. During first appellate proceedings, CIT(A) granted relief for the assessee by holding that the duty of the revenue is to establish its case by bringing material on record and the AO has not discharged his onus at all. At this stage, we respectfully take cognizance of the ratio of the decision of Hon ble Jurisdictional High Court of Delhi in the case of MAF Academy P. Ltd. wherein it was held that the onus to prove genuineness, creditworthiness and identity of the transaction is on the assessee and mere production of incorporation details, PAN or income tax returns may not be sufficient when surrounding and attending facts predicate a cover up. Their Lordships also made it clear that the production of incorporation details, PAN or income tax details may indicate towards completion of paper work or documentation but the genuineness, the creditworthiness and the identity of investment and the investors are deeper and obtrusive than mere completion of paper work or documentation. On the basis of foregoing discussion, we hold that the AO den ..... X X X X Extracts X X X X X X X X Extracts X X X X
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