TMI Blog2020 (2) TMI 1091X X X X Extracts X X X X X X X X Extracts X X X X ..... ftware Pvt. Ltd. 35,00,000/- 2. M/s Corporate Network Solution Pvt. Ltd. 50,00,000/- 3. M/s Gajanan Realcon Pvt. Ltd. 19,00,000/- 4. M/s Garnet Textiles Pvt. Ltd. 50,00,000/- 5. M/s Shivanjali Impex Pvt. Ltd. 25,00,000/- 6. M/s Zesty Construction Pvt. Ltd. 40,00,000/- Total 2,19,00,000/- 3. Accordingly, during the assessment proceedings, the assessee company was asked by the Assessing Officer to prove the identity, creditworthiness and genuineness of the aforesaid advances. In response, the A.R of the company vide his letter dated 26.08.2014 filed confirmations of the companies from whom advances of ₹ 2,19,00,000/- have been received by the company. The A.R. of the company vide letter dated 22.09.2014 stated that during the year company has advanced a sum of ₹ 12,22,00,000/- to M/s Nidhi Promoters Pvt. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to the assessee company in the month of March, 2011 in F. Y. 2010-11 January, 2012 in F.Y. 2011-12. ii) Further, these companies had filed merely the extracts of bank statements; it was difficult to discern whether these companies had sufficient creditworthiness to match the advances given to the assessee company. Another vital fact which emerged from perusal of extracts of these bank statements was revelation of a common trend wherein prior to each transaction of transfer of funds to the assessee company, these companies had received exactly same amount of funds from some other source on the same date, which was then transferred to the assessee company. iii) These companies audited by the common auditor i.e. M/s Anil Meenu Company. iv) In compliance to notice issued u/s 133(6) of the Income Tax Act, 1961, submissions were filed on the same date i.e. 24.11.2014. v) In the statement of Sh. Vikas Kadam stated that he is director in 2 companies namely M/s Corporate Network Solution Pvt. Ltd. M/s Gajanan Realcon Pvt. Ltd. But from ROC data he has been found directors in 6 more companies. vi) In the statement of Sh. Ankur Verma stated that he is director in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filed during the appellate proceedings. 9. The ld. CIT (A) further held that it is a case of mere suspicion by the AO of it being a case of accommodation entry. The AO has made addition of the amounts received by the assessee from six entities by relying on inadequate educational qualifications of directors, working profiles of directors, fact of there being no major business activity done by these incomes reported by these entities, bank accounts being in entities, very low turnovers and same bank and branch of these entities. The AO has alleged that it is a case of accommodation entries in lieu of cash. 10. The ld. CIT(A) further held that, however AO has failed to bring on record any evidence of cash earning outside books of account by the assessee and its deployment back in books by way of accommodation entries as well as reasons for its refund in a very short period of time. The AO has completely ignored the refund of money received by assessee within a short period of time that too before the assessee s case was taken up for scrutiny. There is nothing on record to suggest that any search or survey was conducted on these entities resulting into any finding by the Inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filing of PAN, acknowledgment of income tax returns of the entry provider, bank account statements etc. was not sufficient to discharge the onus. The ld. DR has also relied on the judgment of Hon'ble Delhi High Court in order dated 22-11-2013 in the case of CIT V/s N.R. Portfolio P Ltd., Hon'ble Apex Court in the case of Me Dowell Co Limited 154 ITR- 148 on the issue of using dubious means by the assessee for tax evasion. He also relied on the judgment of the Calcutta High Court in the case CIT vs. L.N. Dalmia in 207 ITR 89 wherein held that for determining whether the transaction is sham or illusory or a device or a ruse, the Income-tax authorities are entitled to penetrate the veil covering it and ascertain the truth. According to the Court the authorities are entitled to look into the surrounding circumstances to find out the reality and truth and other case laws as mentioned in the assessment order. 12. Rebutting, the ld. AR argued that all the details have been given to the authorities along with copy of the bank statement, ITR, replies have been given to the notices issued u/s 133(6) of the Act and all the Directors have attended before the Assessing Officer an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee No xi. Whether there was any substantial corroborative evidence to prove the bogus nature of these advances No xii. Whether the ratio of Nova Promoters regarding the link between the entry provider and the incriminating material exists in the instant case No xiii. Whether the companies which have advanced been strike off from the ROC No xiv. Whether the Directors are also Directors in other companies Yes xv. Whether the observation of the Assessing Officer that there were no agreements for booking of the space is correct No xvi. Whether the observation of the Assessing Officer that investors have not provided space and advance have been refunded is correct - Yes xvii. Whether the decision in the case of Andaman Timber Industries Vs CCE is applicable to the instant case No 14. Hence, keeping in view the entire facts and legal proposition specific to the instant case and since, the revenue has not brought any tangible material on record to support the addition made u/s 68 of the Act regarding the advances received by the assessee for booking of commercial space, we hereby decline to interfere with the order of the ld. CIT (A). 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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