9911796707
TMI Blog2025 (4) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the addition made by the AO of Rs. 1,70,02,500/- on account of unexplained cash credit u/s 68 of the Act in respect of share application money received by the assessee during the year without appreciating the fact that the information was received from investigation wing after thorough verification wherein the identity and credit worthiness of the share applicants as well as the genuineness of the transactions were not proved. 2. On the facts and in the circumstance of the case, the Ld. CIT(A) failed to appreciate the findings of investigation wing wherein the Statement of the principal person of the group, Sh. Praveen Kumar Jain, was recorded in which he has categorically admitted that the entire business of accommodation entries is through him and companies under his control and had been established after dure verification that the concerned entities have provided accommodation entries. 3. On the facts and in the circumstance of the case, the Ld. CIT(A) erred in ignoring all these material findings and failed to appreciate that various Courts including the jurisdiction High Court and also the 7 Apex Court have held time to time that cross examination is not a legal right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmerly known as Real Gold Trading Co. P Ltd) 35,00,000 Traingular Infocom Ltd (Formerly known as Lexus Infotech Ltd) 35,00,000 Total 1,70,02,500 4.1 As is clear that the assessee is a one of the beneficiary for taking the accommodation entries as share application money from the above companies which are managed and controlled by Shri Praveen Kumar Jain through his relatives, agents and his accountants detected during the search & seizure operation conducted by Investigation Wing of Income Tax Department, Mumbai in the case Shri Praveen Kumar jain Group. This information revealed that the income of the assessee for an amount of Rs. 1,70,02,500/- for the assessment year 2010-11 has escaped assessment within the meaning of the provisions of section 147 of the Income Tax Act, 1961 and therefore, the re- assessment proceedings u/s 147 of the Income Tax Act, 1961 was initiated by issue of notice u/s 148 of the Act on 17.03.2015 which was duly served on 24.03.2015. Subsequently. notice u/s 142(1) and along with questionnaire was issued to the assessee and also notice u/s 143(2) was issued. Pursuant to those notices the assessee filed the reply and also objected to the initiation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the same is then transferred to the broker through whom the entry is finally provided, for arranging this entry, one get a onetime commission of about 0.25% of total value of the transaction. As is clear from the statement of Shri Praveen Jain that assessee had taken accommodation entry as share application money received from the names as listed herein above, therefore, assessee was asked to show caused as to why the accommodation entry as bogus share application many received from those five companies for an amount of Rs. 1,70,02,500/- was not disallowed and thereby the assessee was required to produce the reply on 18.03.2016 at 11:00 A.M. positively otherwise ld. AO mentioned that failure in furnishing the same, an action will be taken on the above line of the action and materials available on the record. 4.2 In response to the above show cause notice the assessee filed submission on 18.03.2016. The submission filed by the assessee is not acceptable. Because Shri Praveen Kumar Jain accepted that he provided accommodation entry for share Application and stated that the shares are purchased by companies under his control which are merely paper companies engaged in the busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ross examination is of no use as sufficient material evidences are already in the possession with the department to disprove the transaction regarding share application as received by the assessee-company from above parties (paper concern of Sh. Praveen Jain Group). The assessee furnished the details of allotment of shares, share application form, bank statement of applicant and replied that the assessee company had received the share application money from the above parties through account payee cheques/ RTCG. The reply found insufficient to prove the genuine nature of the transaction. 4.5 Ld. AO based on the discussion so made and relying on those decisions noted that it is crystal clear that- (a) The primary onus is on the assessee to establish the genuineness of the share application money received. (b) If the investigation done by the department leads to doubt regarding the genuineness of the share applications it is incumbent on the assessee to produce the parties along with necessary documents to establish the genuineness of the transaction. (c) Payment by account payee cheque is not sacrosanct. Based on these discussion ld. AO hold a view that the assessee failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to explain genuineness, creditworthiness and identification of investors. 5.2 Hon'ble Apex Court in the case of Commissioner of Income Tax Vs. Odisha Corporation Pvt. Ltd held as under :- "It was noted that the assessee had given names and addresses of the alleged creditors. It was knowledge of revenue that the said creditors were income tax assessees. Revenue apart from issuing notices u/s. 131 at instance of assessee would not pursue matter any further. In view of this, tribunal was justified in concluding that assessee had discharged burden." 5.3. Thus, as per the above judgement, the assessee discharged its burden as per section 68 of the IT Act. The AO simply relied on some vague information from the Investigation Wing regarding the accommodation entries. However, verification of the source of source is not the realm of the AO, as clearly held by the Supreme Court in the case of Lovely Exports (269 CTR 194), Hon'ble Apex Court held as under .- "If the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the Assessing Officer, then the department is free to proceed to reopen their individual asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue has in detailed accepted the method adopted by him in providing accommodation entry of loan and share application money. Based on that information the case of the assessee has rightly been reopened by the revenue and even that ground of re-opening taken by the assessee was dismissed by the ld. CIT(A). So far as the merits of the case of the assessee wherein the ld. CIT(A) hold a view that the AO simply relied on some vague information from the Investigation Wing regarding the accommodation entries. However, verification of the source of source is not the realm of the AO, as clearly held by the Supreme Court in the case of Lovely Exports (269 CTR 194). He further relying on that judgment hold a view that the AO should have to proceed against the investors if they do not have proper creditworthiness for which the AO cannot penalize the assessee by making addition. Further, the AO did not point out any specific instance or any information in the statements recorded by the Investigation Wing in the case of Sri Praveen Kumar Jain Group which reveals the alleged involvement of assessee in taking accommodation entries. Further, the AO did not make any efforts to examine the investo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Commissioner of Income-tax 6 [1964] 53 ITR 231 (SC)SUPREME COURT OF INDIA S.S. Gadgil v. Lal & Co 7 [2019] 103 taxmann.com 48 (SC) SUPREME COURT OF INDIA Principal Commissioner of Income-tax (Central)-1 v. NRA Iron & Steel (P.) Ltd. 8 [1958] 34 ITR 807 (SC) SUPREME COURT OF INDIA A. GovindarajuluMudaliar v. Commissioner of Income- tax 9 [1971] 82 ITR 540 (SC) SUPREME COURT OF INDIA Commissioner of Income-tax v. Durga Prasad More 10 [1973] 87 ITR 370 (SC) SUPREME COURT OF INDIA Commissioner of Income-tax v. S.P. Jain 11 [2018] 95 taxmann.com 327 (SC) SUPREME COURT OF INDIA Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Company 12 [2007] 161 Taxman 169 (SC) SUPREME COURT OF INDIA Commissioner of Income-tax v. P. Mohanakala 13 [1963] 50 ITR 1 (SC) SUPREME COURT OF INDIA Kale Khan Mohammad Hanif v. Commissioner of Income-tax 14 [2019] 109 taxmann.com 53 (SC) SUPREME COURT OF INDIA NDR Promoters (P.) Ltd.v. Principal Commissioner of Income-tax 15 [2011] 13 taxmann.com 189 (SC) SUPREME COURT OF INDIA Ram Jethmalani v. Union of India 16 [1977] 107 ITR 938 (SC) SUPREME COURT OF INDIA Roshan Di Hatti v. Commissioner of Income-tax 17 [2016] 66 taxmann.co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RT OF ALLAHABAD BhagatHalwai, In re 39 [1984] 18 Taxman 412 (Punj. &Har.) IN THE HIGH COURT OF PUNJAB AND HARYANA Commissioner of Income-tax v. Metal Products of India 40 [1995] 82 TAXMAN 31 (CAL.) HIGH COURT OF CALCUTTA Commissioner of Income-tax v. Precision Finance (P.) Ltd. 41 [1991] 56 TAXMAN 304 (CAL) HIGH COURT OF CALCUTTA Commissioner of Income-tax v. United Commercial & Industrial Co. (P.) Ltd. 42 [2009] 315 ITR 105 (Madras) HIGH COURT OF MADRAS Mangilal Jain v. Income-Tax Officer 43 [1982] 134 ITR 119 (RAJ.)HIGH COURT OF RAJASTHAN Vimal Chandra Golecha v. Income-tax Officer 44 [2011] 12 taxmann.com 276 (Punjab & Haryana) HIGH COURT OF PUNJAB AND HARYANA Balbir Chand Maini v. Commissioner of Income-tax-III, Ludhiana 45 [2015] 54 taxmann.com 10 (Punjab & Haryana) HIGH COURT OF PUNJAB & HARYANA Chandan Gupta v.Commissioner of Income-tax, Ludhiana 46 [2013] 37 taxmann.com 286 (Gauhati) HIGH COURT OF GAUHATI Commissioner of Income-tax v. Smt. JasvinderKaur 47 [2003] 132 TAXMAN 629 (RAJ.)HIGH COURT OF RAJASTHAN Rameshwar Lal Mali v. Commissioner of Income-tax 48 [2020] 122 taxmann.com 180 (Madras) HIGH COURT OF MADRAS Commissioner of Income Tax, Chennai v. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssistant Commissioner of Income-tax, Circle-60(1), New Delhi 67 Hemil Subhashbhai Shah vs DCIT, Ward-5(3)(1) Ahmedabad, ITA No.1121/Ahd/2018, [Asst. Year : 2014-15] AND ITA No.961/Ahd/2019, [Asst. Year : 2015-16], INCOME TAX APPELLATE TRIBUNAL "B" BENCH, AHMEDABAD dated 12.06.2023 68 2019-TIOL-686-ITAT-DEL IN THE INCOME TAX APPELLATE TRIBUNAL BENCH 'SMC' NEW DELHI ITA No. 3809/Del/2018 Assessment Year: 2015-16 ANIP RASTOGI Vs INCOME TAX OFFICER ITA No. 3810/DEL/2018 Assessment Year: 2015-16 ANJU RASTOGI Vs INCOME TAX OFFICER 69 2018-TIOL-733-ITAT-CHD IN THE INCOME TAX APPELLATE TRIBUNAL BENCH'A' CHANDIGARH ITA No.951/Chd/2016 Assessment Year: 2011-12 SHRI ABHIMANYU SOIN Vs ASSTT COMMISSIONER OF INCOME TAX CIRCLE- VII, LUDHIANA 70 2014-TIOL-1459-ITAT-MUM IN THE INCOME TAX APPELLATE TRIBUNAL BENCH 'F' MUMBAI ITA No.6858/Mum/2011 Assessment Year:2006-07 USHA CHANDRESH SHAH Vs INCOME TAX OFFICER 19(1)(2), MUMBAI 71 2016-TIOL-1746-ITAT-MUM IN THE INCOME TAX APPELLATE TRIBUNAL BENCH 'D' MUMBAI ITA No.995/Mum/2012 Assessment Year: 2006-07 RATNAKAR M PUJARI Vs INCOME TAX OFFICER 72 2013-TIOL-128-ITAT-MUM IN THE INCOME TAX APPELLATE TRIBUNALBENCH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report of the Investigation wind and conclusions derived therefrom. As regards the contention of not issuing the notice u/s. 133(6) of the Act when the parties from the money is flowing has in fact given in the statement that they were provided accommodation entry and that is why the ld. AO has not invoked that provision and in fact looking to the fact that was not required. As is clear that the ld. AO is not a separate entity, it is the part of the revenue officer and when the other officers have made the detailed investigation the ld. AO did not considered it to give the cross examination to the assessee. The wing has derailed the economic offence done by Shri Praveen Jain and therefore, the addition made by the ld. AO be sustained. The ld. DR has filed the paper book containing the following supporting documents: Index S. No. Description Page No. 1 Brief Facts of the Case 1 to 5 2 Assessment Order 6 to 14 3 Speaking order regarding objections filed against the issuance of Notice u/s 148 of the Act, 1961 15 to 18 4 Notice u/s 148 of the Income Tax Act, 1961 19 to 20 5 Reasons recorded for initiation of re-assessment proceedings. 21 to 22 6 Statement on oath o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditworthiness for which AO cannot penalize the assessee by making addition. Further, the AO did not point out any specific instance or any information in the statements recorded by the investigation wing in the case of Shri Praveen Kumar Jain Group which reveals that the alleged involvement of assessee in taking accommodation entries. If there was any specific adverse information about the assessee, the burden clearly lies on the AO to give an opportunity to cross-examine the person who had given that information. The AO could not establish about the non- genuineness of the share application money. Comments of AO :- 1. In this case, information was received from Investigation wing of the department which was gathered during the search conducted on Shri Praveen Kumar Jain Group. Shri Praveen Kumar Jain has categorically accepted that he provided accommodation entry for share application and stated that the shares are purchased by companies under his control which are merely paper companies engaged in the business of providing accommodation entries for which he gets one time commission of 1.25% to 2.0% of total transaction value. Further he stated that the client desirous of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries in the books represented income from undisclosed sources. The same view has also been taken by the Hon'ble Apex Court in the case of Sumati Dayal Vs. Commissioner of Income-tax. 4. Further, the Ld. CIT(A) has taken reference of judgements of Hon'ble Supreme Court in the case of "Commissioner of Income Tax Vs. Odisha Come Corporation Pvt. Ltd." And "Lovely Exports (269 CTR 194). In this regard, it is stated that in the case of Lovely Exports, "the monies were received through banking channels. In some case, affidavits/confirmations of the share applicants containing the above information were filed. The Assessing Officer did not carry out any inquiry into the income tax records of the persons who had given their file numbers in order to ascertain whether they were existent or not. He neither controverted nor disapproved the material filed by the assessee." Further the case of Orissa Corporation (1986) 159 ITR exemplifies the category of cases where no action is taken by the Assessing Officer to verify or conduct an enquiry into the particulars about the creditors furnished by the assessee, including their income-tax file numbers. In this case, the decision was based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s placed on the judgement of Hon'ble rajasthan High Court, in the case of Rameshwar Lal Mali V/s CIT 256 ITR 536 (Raj.) wherein it has been held that there is no provision for permitting a cross-examination of the person, whose statement is recorded during survey. 8. On the other hand, ld. AR of the assessee supported the order of the ld. CIT(A) on the merits of the case and to support further to that finding ld. AR of the assessee relied upon the following written submission: I. Assessee Company is engaged in business of Manufacturing of MS Ingots and TMT Bars in the brand name of "AMCO TMT saria." Assessee Company filed its Return of Income, for the relevant Assessment Year, declaring total income of Rs. Nil. II. During the relevant previous year, assessee company received Share Application Money, amounting to Rs 1,70,02,500, from the below mentioned investor Companies: - Investor Company Amount (Rs.) Alka Diamond India Limited 35,00,000 Javda India Impex Ltd 30,02,500 Nakshatra Business P. Ltd (Formerly known as Hema Trading Co. P Ltd) 35,00,000 Olive Overseas P. Ltd (Formerly known as Real Gold Trading Co. P Ltd) 35,00,000 Traingular Infocom Ltd (Formerly kn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ood fully discharged during the course of assessment proceedings. 1.3. In view of this, no addition can be made in the hands of the assessee company. At best, if the ld. AO was not satisfied, the addition could have been made in the hands of the investor company who had confirmed the transactions. 1.4. Reliance is placed on the following judicial pronouncements, the extracts of which have been set out for the sake of convenience :- 1.4.i CIT vs. Lovely Exports (P) Ltd. (2008) 216 CTR 195 (SC) "If share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO. Then the department is free to proceed to reopen their individual assessments in accordance with law, but it cannot be regarded as undisclosed income of assessee company." 1.4.ii CIT vs. Stellar Investment Ltd. 25 ITR 463 (SC) "Even if it is assumed that the subscribers to the increased share capital were not genuine, under no circumstances could the amount of share capital be regarded as undisclosed income of the company." 1.4.iii CIT vs. Sophia Finance Ltd. 205 ITR 98 (Delhi) "The ITO would be entitled, and it would indeed be his duty to, to enquir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ratio laid down by the Hon'ble Rajasthan High Court in the case of Shree Barkha Synthetics Ltd. (Supra). 1.7. The above decisions are based on the logic that strangers can be shareholders of the Company. Therefore, once the identity is established then the onus is discharged on the part of the Company. In case the identity is not established or the shares are issued to non- existent persons then only the addition under Section 68 can be made in the hands of the Company. 1.8. APPARENT IS REAL: The transaction is absolutely in accordance with the procedure laid down in the law and fully evidenced. No defects have been pointed out in these. Therefore, the transaction must be accepted as genuine. We rely on the ratio laid down by the Hon'ble Supreme Court in the case of Daulat Ram Rawatmull (1973) 87 ITR 349 (SC), wherein it was held that the onus of proving that the apparent was not real was on the party who claimed it to be so. 1.9. Ld. AO framed the entire assessment on the basic premise that unaccounted cash was handed over by the assessee company which in- turn got deposited in the Bank Account of the assessee company in the form of Investment in Share Application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer shall investigate. It is not for the assessee to establish but it is for the Department to enquire with the investors about their capacity to invest the amount in the shares .... " 1.13. Section 68 amended by the Finance Act 2012 w.e.f 1.4.2013 goes to confirm that prior to this amendment the person/entity in whose name such credit was recorded in the books of the company was not expected to offer any explanation about the nature and source of such sum. Reliance is also placed on the recent judgment of the Hon'ble Bombay High Court in the case of M/s. Gagandeep Infrastructure Pvt. Ltd., ITA No. 1613/Mum/2014, vide order dated 20.03.2017 wherein it was held that: " ... We find that the proviso to Section 68 of the Act has been introduced by the Finance Act 2012 with effect from 1st April, 2013. Thus it would be effective only from the Assessment Year 2013-14 onwards and not for the subject Assessment Year. In fact, before the Tribunal, it was not even the case of the Revenue that Section 68 of the Act as in force during the subject years has to be read/understood as though the proviso added subsequently effective only from 1st April, 2013 was its normal me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the seized documents were provided to the assessee nor was any opportunity of cross-examination of the adverse party given. Hon'ble Delhi High Court, following its own judgment in the case of SMC Share Brokers Ltd. [2007] 288 ITR 345 (Delhi) deleted the addition on the premise that there was violation of the principles of natural justice. 1.20. Hon'ble Supreme Court in the case Andaman Timber Industries (CIVIL APPEAL NO. 4228 OF 2006), vide its orderdated 02.09.2015, held that " ... not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected" 1.21. It was observed by the Apex Court that an order passed in violation of the principles of natural justice is a nullity as held in A.K. Kraipak vs. Union of India A/R - 1970 SC-150 RB. Shree Ram Durga Prasad and Fateh Chand vs. Settlement Commissioner 1989-SC-1038. 1.22. It is submitted that in the statements recorded of Shri Praveen Jain, u/s 132 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e necessarily does lead to conclusion of all transaction of that broker as tinted (sic - tainted). In such circumstances, further enquiry is needed and that is for individual case. Such further enquiry was not conducted in that case." 1.26. Attention is drawn towards the judgment of Hon'ble Rajasthan High Court in the case of Pooja Agarwal, ITA 385/2011, wherein it was held that no addition can be made if the following conditions are satisfied: * The payments and receipts are through banking channel. * There is no trail which could substantiate that the cash has flown back to the assessee. * The transactions is supported by documents appear to be genuine transaction. * The statements recorded do not have a clear and a distinct remark about the assessee so as to challenge the genuineness of the transaction. 1.27. Below mentioned is the summary of the contentions made herein above, asserting that the additions made by the ld. AO were illegal and deserved to be deleted. * Identity, Creditworthiness of the Investor Company and genuineness of the transactions was established beyond doubt. * Once identity was established Id. AO could have at best made additions in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ritten Submissions filed by the assessee company before ld. CIT(A) in the first appellate proceedings 86-106 Case laws relied upon: S. No. Particulars Page No. 1. Copy of the order of ITAT, Jaipur Bench in the case of Padmavati Agrico (India) Pvt. Ltd. ITA No. 702/JP/2023 1-28 2. Copy of the order of ITAT Mumbai Bench in the case of Centaurus Equities Pvt. Ltd. ITA No. 4102/Mum/2018 29-46 3. Copy of the order of ITAT, Mumbai Bench in the case of Ambee Investment & Finance Pvt. Ltd., ITA No. 3899 & 3948/Mum/2017 47-52 10. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the addition were made merely based on the statement of Shri Praveen Jain. It is also in the public domain that Shri Praveen Jain has retracted the statement made in the search by filling an affidavit. [ Reference para 7 in the decision in the case of Padmavati Agro (I) Ltd. Vs. ACIT [ Manu/IT/0167/2024 listed in the case law paper book]. 11. We have heard the rival contentions and perused the material placed on record. Ground no. 1 to 4 raised by the revenue deals the addition of Rs. 1,70,02,500/- made by ld. AO and deleted by the ld. CIT(A). Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Subsequently. notice u/s 142(1) and along with questionnaire was issued to the assessee and notice u/s 143(2) was issued. Pursuant to those notices the assessee filed the reply and objected to the initiation of the re-assessment proceeding against the assessee company praying there to drop the proceeding or pass a speaking order disposing off the objection take to the re- assessment proceeding. Ld. AO passed a speaking order regarding objections filed against the issuance of notice u/s 148 of the Act on 12.02.2016 and rejected the objections filed by assessee. In response to the notices so issued filed the details of share capital received during the year, share application form, bank statement of applicant and bank statement of assessee company, Board Resolution and confirmation Financial of the investor company as per the chart filed in the written submission all these documents were also filed in the paper book page 27 to 85. Ld. AO disregard to the evidence so placed on record and based on the statement of Shri Praveen Kumar Jain recorded during the search operation wherein answer of question No. 66,75 and 76 in which he accepted that he had provided accommodation entrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry of payment by cheque and through banking channels does not make the transaction genuine. He further observed that ITAT, Jaipur in the case of M/s Kanchwala Gems vis JCIT, ITA No. 134/JP/02 dated 10.12.2003 and affirmed by Hon'ble Supreme Court in 288 ITR 10(SC) has held that even payment by account payee cheque is not sufficient to establish the genuineness of the transaction. Further, in CIT V/s Precision Finance Pvt. Ltd. 208 ITR 465 (Cal.), the Hon'ble Calcutta High Court has held that payment made by account payee cheque is not sacrosanct and it would not make an otherwise non genuine transaction genuine. It is a well settled law that strict rules of evidence do not apply to the Income Tax Act and the real test with regard to genuineness of transactions is "Preponderance of probabilities" and not "Beyond reasonable doubt". Ld. AO also placed reliance on the decision f Chaturbhuj Panauj AIR 1969 (SC) 255, Sumati Dayal V/s CIT, 214 ITR 801 (SC), C. Vasant Lal & Co., 45 ITR 206 (SC). As regards the contention of the assessee company to make available (being witness), Shri Praveen Kumar Jain to enquire about the transactions and cross examination is of no use as sufficie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s documents so as to prove the identity, creditworthiness and genuineness of the transaction. Thereby the assessee has placed on record, Copy of Return of Income of the investor and schedules reflecting transaction with the appellant, Copies of bank statements evidencing the investment of share application money through banking channels, and Copy of confirmation letters from the investor. Thus, he noted that the assessee discharged its onus as per 68 of the IT Act. Now onus is on AO to disprove the genuineness of the investments. However, the AO has not made efforts to conduct enquiries and to establish the genuineness of the investors. From the materials filed, it is understood that the assessee filed all relevant details which are needed to explain genuineness, creditworthiness and identification of investors. As held in the case of Commissioner of Income Tax Vs. Odisha Corporation Pvt. Ltd that "if the assessee had given names and addresses of the alleged creditors. It was knowledge of revenue that the said creditors were income tax assessees. Revenue apart from issuing notices u/s. 131 at instance of assessee would not pursue matter any further. In view of this, the tribunal wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the law cannot apply retrospective as held by Hon'ble Bombay High Court in the case of Commissioner of Income Tax - 1 vs. M/s Gagandeep Infrastructure Pvt. Ltd. reported in 394 ITR 680, wherein it has been held that : "(e) We find that the proviso to Section 68 of the Act has been introduced by the Finance Act 2012 with effect from 1st April, 2013. Thus it would be effective only from the Assessment Year 2013-14 onwards and not for the subject Assessment Year. In fact, before the Tribunal, it was not even the case of the Revenue that Section 68 of the Act as in force during the subject years has to be read/understood as though the proviso added subsequently effective only from 1st April, 2013 was its normal meaning. The Parliament did not introduce to proviso to Section 68 of the Act with retrospective effect nor does the proviso so introduced states that it was introduced "for removal of doubts" or that it is "declaratory". Therefore it is not open to give it retrospective effect, by proceeding on the basis that the addition of the proviso to Section 68 of the Act is immaterial and does not change the interpretation of Section 68 of the Act both before and after the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement no addition can be made. The relevant finding of binding judicial precedent is reproduced herein below: 6. In the background of the aforementioned facts, Mr. K.K. Bissa, the learned standing counsel submits that the findings recorded by the Tribunal are ex-facie erroneous and contrary to the materials on record. The learned counsel for the appellant submits that on examination of the soft data seized and impounded in course of the search proceeding, it was detected that Shirish Chandrakant Shah had provided one-time entry of Rs.3,00,00,000/- to the assessee-company through a broker named Hiren Shah and such transaction was not genuine. 7. After having considered the materials on record, we are of the opinion that the Tribunal has rendered the findings on the basis of the materials on record. The Tribunal held as under: ".................................................................................................................................... 12. From the record, it is evident that the appellant has furnished each and every document required for proving the identity, creditworthiness of the share applicants and genuineness of the transactions whereas the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... untry that question, however important and difficult it may have been regarded in the past and however large may be its effect on any of the parties, would not be regarded as substantial question of law. The expression 'substantial question of law' has been explained by the Hon'ble Supreme Court in "Sir Chunilal V. Mehta and sons Ltd. v. Century Spinning and Manufacturing Co. Ltd." AIR 1962 SC 1314 wherein the Hon'ble Supreme Court held that the proper test for determining whether a question of law raised in the case is substantial would be to find out whether it directly and substantially affects the rights of the parties and if so whether it is either an open question or is not free from difficulty or calls for discussion of alternative views. 9. Applying the aforesaid test, we find that the question sought to be raised in this Income Tax Appeal is not even a question of law. The ground taken by the appellant that the findings recorded by the Tribunal are contrary to records seems to have been raised just for the sake of creating a ground; nothing has been shown to this Court on this point. The findings recorded by the appellate Authority and the Tribunal are in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er u/s.143(3) dated 24.03.2014 6756612 Add: (1) On account of Bogus share application money as discussed in Para-6 as above 3,00,00,000 (2) On account of bogus share application money as discussed in para-7 as above 750000 Total Income f 37506612 Rounded off of Income u/s.288A 3,75,06,610/- Assessed u/s. 143(3) of the Income Tax Act, 1961 at total income of Rs. 3,57,56,610/ -. Demand Notice, Challan & other forms are also hereby issued as per ITNS-150 which is forming part of this assessment order. Penalty Notice u/s.271(1)(c) of the Income Tax Act, 1961 is being issued separately for concealing income by furnishing inaccurate particulars of income." 11. Now it is a matter of record that Shirish Chandrakant Shah had retracted his statements given before the Assessing Officer. Even otherwise, an admission by the assessee cannot be said to be a conclusive piece of evidence. The admission of the assessee in absence of any corroborative evidence to strengthen the case of the Revenue cannot be made the basis for any addition. Therefore, the substantial questions of law framed by the appellant pertained to an open issue which stands concluded by the decision of the Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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