2023 (2) TMI 633 - AT - Income Tax

Addition u/s 68 - assessee has received share capital and share premium fund - assessee has obtained accommodation entries from S.K. Jain group of companies - HELD THAT - Assessee has received bogus share capital and share premium from S.K. Jain group of cases. Assessee has not submitted any cogent material to dislodge the findings of the AO and ld. CIT (A). CIT (A) has passed a very elaborate order considering all facets of the case. In our considered opinion there is no infirmity in the same hence we uphold the same. Appeal filed by the assessee stands dismissed.

Summary

Issues:
1. Addition of Rs.30,00,000 as income from undisclosed sources.
2. Addition of Rs.54,000 as commission paid for obtaining accommodation entries.

Analysis:
1. The case involved an appeal by the assessee against the order of the ld. CIT (A) confirming the addition of Rs.30,00,000 as income under section 68 of the Income Tax Act, 1961. The Assessing Officer (AO) noted that the assessee received share capital from S.K. Jain group of companies, which was deemed to be accommodation entries. The AO concluded that the transactions were not genuine, considering the evidence obtained during a search operation in the Jain group of cases. The AO lifted the corporate veil to reveal the true nature of the transactions and added the amount to the assessee's income. The ld. CIT (A) upheld the addition, emphasizing the need for positive evidence to establish the genuineness of transactions and the burden of proof lying on the assessee. The Tribunal found no infirmity in the orders of the AO and ld. CIT (A), leading to the dismissal of the appeal.

2. The second issue pertained to the addition of Rs.54,000 as commission paid for obtaining the accommodation entries. The AO justified this addition under section 69C of the Act, considering the nature of the transactions and the evidence gathered during the investigation. The ld. CIT (A) upheld this addition, stating that the appellant failed to prove the genuineness of the transactions. The Tribunal concurred with the findings of the lower authorities, leading to the confirmation of the entire addition amounting to Rs.30,54,000. Despite several notices, the assessee did not appear, and the appeal was dismissed.

In conclusion, the Tribunal upheld the additions made by the AO and confirmed by the ld. CIT (A) regarding the receipt of bogus share capital and share premium, as well as the payment of commission for obtaining accommodation entries. The judgment emphasized the importance of positive evidence to establish the genuineness of transactions and the burden of proof lying on the assessee. The appeal was dismissed, and the additions were upheld, highlighting the need for transparency and compliance with tax laws in financial transactions.