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TMI Blog2024 (1) TMI 1189X X X X Extracts X X X X X X X X Extracts X X X X ..... I.T. Act, 1961 made by the assessing officer in his order passed u/s 147/143(3). 2. That the Ld. CIT (A) has erred both on facts and in law by confirming an addition of Rs. 4,35,000/- u/s 69C of the I.T. Act, 1961 made by the assessing officer in his order passed u/s 147/143(3)." 3. Brief facts of the case are that in this case, return of income was filed by the assessee on 30.09.2008 declaring the loss of Rs. 27,360/-. The case was processed u/s 143 (1) of the Income-tax Act, 1961 (for short 'the Act'). Subsequently, information was received by AO from the Investigation Wing of the Department that the assessee is beneficiary of taking accommodation entries of Rs. 35,00,000/- in the garb of share application money/share capital from ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tire amount of Rs. 1,45,00,000/- is liable to be added to the income of the assessee u/s 68 of the Act. The AO also noted that since the assessee had arranged accommodation entries of the amount of Rs. 1,45,00,000/- from Praveen Kumar Jain group of companies, the commission @ 3% of the total sum was taken by the entry providers. Hence, AO added 3% for arranging bogus transaction amounting to Rs. 4,35,000/- and added the same under section 69C of the Act. 4. Upon assessee's appeal, ld. CIT (A) considered the issue and confirmed the AO's order. While doing so, he observed that assessee company is different from public limited company. He gave various features of public limited company and found that in the case of private company like the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee was not provided to the assessee. Further, he submitted that only three companies were mentioned by the Investigation Wing. However, ld. Counsel of the assessee submitted that other companies were not at all mentioned in the bogus entry providers list. He further submitted that assessee has asked to cross-examine Praveen Kumar Jain but this request was not granted. He further submitted that ld. CIT (A) was wrong when he mentioned that AO has issued summons to the concerned parties. He submitted that only assessee was requested to produce the Directors at the fag end of the assessment. Ld. Counsel submitted that the assessee has filed the balance sheet of the companies and the financials of the companies and no adverse inference has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the documents as called for. In this regard, we note that with respect to these companies, assessee has provided the following chart and also attached details with the paper book filed before us :- Sr.No. Nature of Documents 1. Acknowledgement of Return of Income and computation of total income for the A.Y. 2008-09 along with Financial Statement 0of the assessee for the A.Y. 2008-09 2. Ledger Copy along with Bank Statement of assessee reflecting the payment received for share application money 3. M/s. Hema Trading Private Ltd. 3.1 Ledger confirmation 3.2 Bank Statement Highlighting the transactions 3.3 Acknowledgement of return of income for the A.Y. 2008-09 3.4 Financial Statements as at 31.03. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade before the Learned Assessing Officer during the course of assessment proceedings 10. Submissions made before the Learned CIT (A0 during the course of appellate proceedings. 11. Form 2 for shares allotted. 9. We find that all the documentary evidences were duly provided to the AO. AO did not offer any examination of these documents and did not mention even a single adverse point in the financials of these companies. His whole exercise was based upon his claim that section 133 (6) notice was returned unserved. However, it was not at all the case that these companies were not having PAN or they were not filing income-tax returns. Ld. CIT (A) has mentioned that AO has issued summons u/s 131 of the Act to the Directors of the company bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) In the case of CIT vs. Lovely Exports (P.) Ltd. 216 CTR 195 (SC), it was held by Hon'ble Apex Court that if share application money is received by assessee company from alleged bogus shareholders, whose names are given to Assessing Officer, then Department is free to proceed to reopen their individual assessments in accordance with law but this amount of share money cannot be regarded as undisclosed income u/s 68 of the Act. 11. Thus, in the background of the aforesaid decisions and precedent, we are of the opinion that assessee has discharged its onus, hence orders of authorities below are set aside. Since addition under section 68 of the Act has been directed to be deleted, the addition for commission does not survive and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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