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2015 (12) TMI 1418 - ITAT DELHI

2015 (12) TMI 1418 - ITAT DELHI - TMI - Addition u/s 68 - CIT(A) deleted the addition - Held that:- Assessing Officer had received information from the Director of Income Tax (Investigation), New Delhi that those five share applicants have provided accommodation entry to the assessee. The persons who provide money to the taxpayers through cheques against receipt of cash are called as accommodation entry providers. However, we have also noted that the Assessing Officer did not carry out any indep .....

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rs, whereas the assessee has submitted confirmation letter certificate of incorporation of share application money, a copy of PAN certificate, copy of acknowledgment of income tax return filed, copy of balance sheet and profit and loss account of share applicants.

In the case of Gangeshwari Metal (P.) Ltd (2013 (1) TMI 624 - DELHI HIGH COURT ), the Hon’ble High Court has held that when there was a clear lack of inquiry on the part of the Assessing Officer, once the assessee had furnis .....

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Tax(Appeals)-XV, New Delhi, for the assessment year 2004-05, raising the following grounds of appeal: i. On the facts and in the circumstances of the case, the learned Commissioner of Income Tax(Appeals) erred in deleting the addition of ₹ 10,55,000/- u/s 68 of the I.T. Act, 1961. ii. On the facts and in the circumstances of the case, the learned Commissioner of Income Tax(Appeals) erred in deleting the addition of ₹ 10,55,000/- u/s 68 of the Act despite the settled position of law t .....

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me before or during the hearing of this appeal. 2. The facts in brief are that for the assessment year in consideration, the assessee filed its return of income on 11.08.2004 declaring income of ₹ 1,16,168/-. The return was processed under Section 143(1) of the Income-tax Act, 1961 (for short the Act ). Consequently upon the information received from the Director of Income Tax (Investigation), New Delhi, that the assessee was one of the beneficiaries of the accommodation entry in the form .....

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ated 19.08.2011. The reasons recorded are reproduced as under: As per information received from the officer of the DIT(Inv.), New Delhi, the assessee company has taken following accommodation entry totaling to ₹ 10,55,000/- Value of entry taken Date of entry From whom taken Instrument No. ₹ 2,00,000 12.04.2003 M/s B.I.C. Consultants Pvt. Ltd. (A/c No. 50088, State Bank of Patiala, Darya Ganj, Delhi) - ₹ 2,00,000 12.04.2003 M/s Nishant Finvest Pvt. Ltd. (A/c No. 50080, State Ban .....

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entries. On investigation made by the Investigation Wing it has been found that assessee is a beneficiary of taking the aforesaid accommodation entries. I have also perused various materials and report from Investigation Wing and on that basis it is evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries, therefore, I have reason to believe that the income amounting to at least ₹ 10,55,000/- has escaped assessmen. 2.2 In the a .....

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ee cheques through regular banking channels. The Assessing Officer further issued a show cause notice to the assessee stating the share application money of ₹ 10.55 lacs was accommodation entry, as per the information received from the Investigation Wing of the Department and fixed the hearing on 15.12.2011. In response to the said show cause, neither anyone attended nor any written submissions was filed and therefore the Assessing Officer completed the assessment holding the share applica .....

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t many companies/individuals and other entities are involved in giving or taking accommodation entries. The purpose of taking/giving these entries was nothing but to route through their unaccounted money into business. The findings were referred to all the assessing officers alongwith list of name of the persons and details of transactions for further necessary action. The details were not prepared baselessly. In fact, it was based on facts revealed during & after search/survey operations. E .....

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sing Officer had neither examined nor found any adverse observations in respect of those evidences. Further, the assessee submitted that its case was covered by the findings of the Hon ble Delhi High Court in the case of Commissioner of Income Tax Vs. Gangeshwari Metal (P.) Ltd., [2013] 30 taxmann.com 328 (Delhi). After considering the submissions of the assessee, the learned Commissioner of Income Tax (Appeals) deleted the additions with the following findings: 6. I have carefully considered th .....

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ies of PAN card, income tax return, registration certificate issued by ROC and bank statement in support of the fact that such money was invested through the banking channel through cheque. This information was furnished to the AO by the AR vide letter dated 9.12.2011.The AO has also acknowledged these facts, however, having acknowledged the same, he sat idle and did not use this information for further verification. The AO proceeded ahead by treating the' information from the Investigation .....

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identity, genuineness and creditworthiness of the cash creditors in respect of an amount of ₹ 10.55 lakhs received during the year as share application money, the addition made by the Ld. AO under Section 68 cannot be sustained. Accordingly, addition made is deleted. 3. At the outset, the learned Authorized Representative submitted that the tax effect in the Revenue appeals was below ₹ 4 lacs and therefore relying on the decision of Income Tax Officer Vs. Sh. Om Prakash, ITA No. 633 .....

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and not retrospective. He submitted that the CBDT circular for non filing of appeals before the Tribunal having tax effect less than ₹ 4 lacs was issued on 10.07.2014 whereas the present appeal was filed on 12.04.2013 and therefore the said circular was not applicable in the case of the assessee. We agree with the submissions of the learned Sr. Departmental Representative and therefore the appeal is heard on merit. 4. Learned Sr. Departmental Representative relied on the order of the Asses .....

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nos. 1 and 2 of the appeal of the Revenue are in respect of the addition of ₹ 10.55 lacs made under Section 68 of the Act and being interrelated, they are being taken together. 7. We have heard the rival submissions of the parties and perused the material on record. We observed that the Assessing Officer had received information from the Director of Income Tax (Investigation), New Delhi that those five share applicants have provided accommodation entry to the assessee. The persons who prov .....

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the informations collected by the Investigation Wing. He did not bring on record any documentary evidence leading to conclusion that those five share applicants were accommodation entry providers, whereas the assessee has submitted confirmation letter certificate of incorporation of share application money, a copy of PAN certificate, copy of acknowledgment of income tax return filed, copy of balance sheet and profit and loss account of share applicants. In the case of Gangeshwari Metal (P.) Ltd .....

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ch the assessing officer 'its 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 Wi .....

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377; 1,11,50,000/- as mentioned in the notice. The assessee has furnished details of such receipts and the contention of the assessee in respect of the amount is found correct. As such the unexplained amount is to be taken at ₹ 55,50,000/-. The assessee has further tried to explain the source of this amount of ₹ 55,50,000/- by furnishing copies of share application money, balance sheet, etc. of the parties mentioned above and asserted that the question of addition in the income of th .....

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