2017 (6) TMI 84

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..... e declared gross income of Rs. 30,77,084/-. The case of the assessee respondent was selected for scrutiny and on the basis of the information received that the respondent assessee has received accommodation entries from some dummy/paper companies which were actually not in existence, the assessment was completed by inter alia making additions in the income of the assessee respondent under Section 68 of the Act. The appeal to the Commissioner of Income Tax (Appeals) on the aforesaid point failed whereupon a further appeal was preferred before the Tribunal and the same has been allowed. The argument of Sri Manu Ghyildyal, learned counsel for the appellant is that the respondent assessee had received entries in respect of share application m .....

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..... uced viz. Form No.2 i.e. return of allotment of shares along with board resolutions, name and address of allotties of the shares, copies of the balance sheets, bank statements, share applications Form and the income tax returns of the two companies but these documents were not considered. The Assessing Officer never gave any opportunity to the respondent assessee to produce the Directors or the employees of the above two companies so as to verify the above transaction. The Tribunal returned a finding of fact that both the above companies were registered with R.O.C. and were regularly assessed to tax with the Income Tax Department. This was proved by the assessment orders of the two companies for the assessment year 2010-11. The said compan .....

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..... er the assessee has discharged the burden placed upon it under Section 68 of the Income-tax Act, 1961, to prove and establish the identity and creditworthiness of the share applicant and the genuineness of the transaction. In such a case, the Assessing Officer cannot sit back with folded hands till the assessee exhausts all the evidence or material in its possession and then merely reject it, without carrying out any verification or enquiry into the material placed before him." The finding of the Tribunal with regard to the existence of the companies, their creditworthiness and the genuineness of the transactions are all findings of fact as has been held in the case of Commissioner of Income Tax Vs. Expo Global India Ltd. (2014) 361 ITR 1 .....

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