2015 (2) TMI 533 - AT - Income Tax

Unexplained cash credit u/s. 68 - accommodation entries - CIT(A) deleted addition - Held that - no interference is called for in the well reasoned order passed by the Ld. CIT(A), because the Ld. CIT(A) has decided the issue in dispute in favor of the assessee after appreciating the evidence filed by the assessee as well as various decisions rendered by the Hon ble Supreme Court as well as Hon ble High Court and the decisions of the ITAT Benches. We are of the view that the share application money received in the hands of the assessee company is properly explained by the assessee during the course of assessment proceedings as well as before the Ld. CIT(A) and even before us. Therefore, we find no infirmity in the impugned order passed by the Ld. CIT(A) and we uphold the same by dismissing the appeal filed by the Revenue. - Decided in favour of assessee.

Summary

Issues:
Appeal against deletion of addition of unexplained cash credit u/s. 68 of the Income Tax Act.

Analysis:
1. Facts and Background: The AO passed an assessment order adding a sum under section 68 of the Income Tax Act. The assessee appealed before the Ld. CIT(A), who partly allowed the appeal by deleting the addition.

2. Grounds of Appeal: The Revenue challenged the impugned order, arguing that the Ld. CIT(A) erred in deleting the addition of the cash credit.

3. Revenue's Contentions: The Revenue received information from the Investigation Wing regarding accommodation entries by the assessee company. The AO made the addition based on this information, stating that the sources of the cash funds were not explained adequately.

4. Material Facts: The Revenue relied on specific information from the Investigation Wing, statements of individuals involved in providing accommodation entries, and the lack of liquidity in the accounts used for the transactions. The case laws cited emphasized the importance of evidence discrediting the particulars furnished by the assessee.

5. Assessee's Defense: The assessee's counsel presented documentary evidence proving the identity, creditworthiness, and genuineness of the transactions. They argued that the AO's addition was based on conjecture and lacked concrete evidence.

6. Tribunal's Decision: After considering submissions and relevant records, the Tribunal upheld the Ld. CIT(A)'s order. The Tribunal found no infirmity in the decision, stating that the share application money was properly explained by the assessee. The appeal filed by the Revenue was dismissed.

In conclusion, the Tribunal upheld the Ld. CIT(A)'s decision to delete the addition of unexplained cash credit under section 68 of the Income Tax Act, emphasizing the importance of concrete evidence and proper documentation in such cases. The judgment highlighted the significance of proving the identity and genuineness of transactions to avoid additions based on conjecture.