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2016 (9) TMI 654 - AT - Income Tax


Issues:
Addition of ?99,00,000 under section 68 of the I.T. Act - Genuine subscription or accommodation entries.

Analysis:
The appeal and cross objection were directed against the order of the Ld.CIT (Appeals) for the Assessment Year 2005-06. The key issue revolved around the addition of ?99,00,000 made by the Ld. AO under section 68 of the I.T. Act, which was subsequently deleted by the Ld. CIT(A). The investigation revealed that certain entities were providing accommodation entries, and the assessee received ?99,00,000 from these entities. The Ld. AO made the addition as the assessee failed to produce the directors of these entities. The Ld. CIT(A) did not adjudicate on the grounds raised by the assessee, leading to appeals and cross objections.

The central question was whether the amount received was genuine share capital or mere accommodation entries. Both lower authorities made decisions without allowing all facts to emerge. The failure to produce directors hindered a thorough investigation. Conflicting evidence and lack of reconciliation were noted. The ITAT emphasized the need for all relevant facts to surface before a decision is made. The burden was on the assessee to prove they were not part of the alleged racket. Citing case law, the ITAT set aside the Ld. CIT(A)'s order and directed the Ld. AO to provide copies of adverse material and conduct further inquiries, allowing the assessee to submit additional evidence.

The ITAT refrained from expressing an opinion on the merits of the addition due to the incomplete information. The decision to set aside the Ld. CIT(A)'s order and restore the matter to the Ld. AO for a fresh assessment was made to ensure a comprehensive examination of all relevant facts. Both the appeal by Revenue and the cross objection were allowed for statistical purposes, indicating a procedural victory without a definitive judgment on the substantive issue.

 

 

 

 

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