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Principal Commissioner of Income Tax-7 Versus Oriental International Co. Pvt. Ltd.

2018 (1) TMI 607 - DELHI HIGH COURT

Addition u/s 68 - AO took note of the statement made by the individual styled as Director, disowning the investment made in the assessee company by M/s. Creative Financial Services Pvt. Ltd. - Held that:- This Court is of the opinion that the lone circumstance of a Director disowning the document per se could not have constituted a fresh material to reject the documentary evidence. In this case, the existence of the company as an income tax assessee, and that it had furnished audited accounts is .....

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their means. In the absence of any such enquiry, the Court is of the opinion that the findings holding that the assessee had not discharged the onus placed upon it by law cannot be considered unreasonable. No question of law arises. - ITA 9/2018 - Dated:- 8-1-2018 - MR. S. RAVINDRA BHAT & MR. A.K. CHALWA JJ. Appellant Through: Sh. Sanjay Kumar, Standing Counsel. Respondent Through: None. S. RAVINDRA BHAT (OPEN COURT) 1. The Revenue is aggrieved by an order of the Income Tax Appellate Tribun .....

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ation Ltd. 3. The Assessing Officer (AO) was of the opinion that such large amounts of share application money need to be probed further and, therefore, required the assessee to furnish particulars, which it did. 4. The assessee inter alia provided details relating to the share application money provided by each of the entities - confirmation letters; board resolutions from each company; PAN card details; copies of the Memorandum and Articles of Association; Forms 18 and 32 and audited financial .....

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ports P. Ltd. 216 ITR 195 (SC). 6. Aggrieved, the assessee appealed to the CIT(A). By an order dated 02.08.2010, the CIT(A) examined all the materials afresh and held that further material in the form of documents pertaining to the share applicant companies had been provided, which however, were not examined by the AO while confirming the assessment. The CIT(A) was of the opinion that the AO gave undue importance to the statements given by Mr. Mahesh Garg, Ms. Rekha Garg and Mr. Vinod Garg and o .....

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ng officer has not effected any enquiries to bring out any facts which could suggest that these parties have given accommodation entries to the appellant and that the money received from these parties is appellant's own undisclosed income and routed back to the appellant company in the guise of share application. Even appellant has not been provided with an opportunity to cross-examine the so called entry providers. He has simply relied upon the statement given by Sh. Mahesh Garg, Ms. Reba G .....

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lant's hand. In the case of Addl. CIT v. Hanuman Pd. Aggarwal 151 ITR 151 (Parna) it was held that assessee having furnished the correct name and address of the creditor, having confirmatory letter from the creditor and all materials show prima facie not only identify of the creditor but also the genuineness of the transaction, no adverse inference can be drawn. Reference can also be made to the judgement of Hon'ble Apex Court in the case of Steller Investment Ltd. (2001) 251 ITR 263 (SC .....

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CIT vs. General Exports and Credits Ltd (2008) 299 ITR 268 (Del). In the case of CIT vs. Lovely Exports Pvt. Ltd. (2008) 299 ITR 268 (Del), the Delhi High Court held that once the identify of the share holder has been established, even if there is a case of bogus share capital, it can not be added in the hands of the company unless any adverse evidence is no record. The Hon'ble Delhi High Court in the case of CIT vs. Divine Leasing & Finance Ltd. (supra) has laid down the law on the sub .....

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be justified in drawing an adverse inference only because the creditors/subscribers fails or neglects to respond to its notices. The onus would not stand discharged if the creditors/subscriber denies or repudiates the transaction set up by the assessee." 7. The CIT(A) was also of the opinion with respect to M/s. Creative Financial Services Pvt. Ltd that the AO did not complete the task assigned diligently in that the master details furnished to him were neither examined nor controverted. T .....

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, the assessee has submitted before the AO that Sh. Suresh Chand Garg, who has denied on behalf of the company to have made any transaction with the assessee company was not a director of the share subscriber company when the share capital was subscribed. The assessee has given particulars of all the directors of the aforesaid company since its incorporation vide letter dated 30.12.2009. The master details available from the ROC also clarifies that the said Sh. Suresh Chand Garg was neither the .....

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see was denied the opportunity to cross examine Shri Suresh Chand Garg. The reliance placed by the AO on the statement of Sh. Suresh Chand Garg in the absence of cross examination is incorrect. The law with respect to cross examination is well settled in view of the judgment passed by the Hon'ble Delhi High Court in the case of CIT Vs. SMC Brokers Ltd. 288 ITR 245. The said statement cannot be used against the assessee company. 11. The assessee in the present case, has discharged its onus by .....

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