TMI Blog2016 (9) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... usal of ground 2.2 of appeal filed by Revenue shows that assesee is one among many persons who may have attempted to benefit from the alleged racketeering. When Investigation Wing of Income Tax Department has busted the racket of bogus accommodation entries ; and when the alleged entry operators have admitted on oath that they ran this racket ; and when name of the assesee is discovered as one of the beneficiaries of the alleged racket ; and when amounts are actually found in the books of assessee to be credited in the name of alleged entry operators ; burden was on the assessee to prove that it was not a beneficiary of the racket. In view of the foregoing we set aside the order of the Ld. CIT(A) and restore the matter to the file of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appreciating the fact that the assessee is involved in the racket of obtaining accommodation entries and the ratio of Hon ble Apex Court s judgement in the case of M/s. Divine Leasing Finance and in the case of M/s. Lovely Export Pvt. Ltd. is not applicable to the case of the assessee. 3. The appellant craves leave to add, to alter, or amend any grounds of appeal raised above at the time of the hearing. 2. The only issue involved in appeal filed by Revenue and the cross objection filed by the assessee is the addition of ₹ 99,00,000/- made by the Ld. AO u/s 68 of the I.T. Act, which was deleted by the Ld. CIT(A) vide order dated 26.2.2010. For the sake of convenience the grounds of appeal in the appeal filed by Revenue and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. AO vide order sheet entry dated 10.12.2007 asked the assessee to produce the Directors of the aforesaid alleged entry operators. However the assessee failed to produce them before the Ld. AO. Also, during assessment proceedings the assessee company also filed letter dated NIL before the AO requesting to make available the material / statement so that the true state of affairs could be brought to notice of AO. But the Ld. AO did not provide such materials / statement to the assessee company. The Ld. AO made an addition of the aforesaid amount of ₹ 99,00,000/- taking adverse view of the fact that the assesee company failed to produce the directors of alleged entry operators. The assessee filed an appeal before Ld. CIT(A) in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ators before the Ld. AO and the Ld. AO was justified in taking an adverse view since the assessee company failed to produce them before the Ld. AO. He further contended that the Ld. CIT(A) should have upheld the addition or should have atleast directed the assessee company to produce the directors of the alleged entry operators before the Ld. AO. Ld. DR also cited case laws on merits of the addition. In reply, Ld. AR of the assessee supported the order of the Ld. CIT(A) and also cited numerous decisions to support the order of Ld. CIT(A). 5. The central issue is whether the amount of ₹ 99,00,000/- received by the assessee was genuine subscription of share capital and share premium of the assesee company or these were only accommoda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces at two different times or before two different authorities, as the alleged entry operators have done , it was appropriate to subject the alleged entry operators to further examination / cross-examination if either side (whether Revenue or assessee) wished to examine / cross-examine. While Ld. AO has relied on the evidence against the assessee and while the Ld. CIT(A) has relied on the evidence in favour of the assessee neither of the two lower authorities has explained why the evidence on the other side was overlooked. As the ITAT is a final fact finding authority we feel that all relevant facts should be allowed to emerge before the issue is decided on merits. We also feel that both sides, Revenue as well as assessee should have got a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tablish that the amounts which the AO proposes to add back, under section 68 are properly sourced, does not cease by merely furnishing the names, addresses and PAN particulars, or relying on entries in a Registrar of Companies website. One must remember that in all such cases, more often than not, the company is a private one, and share applicants are known to it, since they are issued on private placement, or even request basis . If the assessee has access to the share applicant s PAN particulars, or bank account statement, surely its relationship is closer than arm s length. Its request to such concerns to participate in income tax proceedings, would, viewed from a pragmatic perspective, be quite strong, because the next possible step of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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