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TMI Blog2012 (7) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of the return filed on 01.11.2004 for the assessment year 2004-05. Subsequently notice reopening the assessment was issued under Section 148 of the Act. The assessment was reopened on the ground that there was information received from Investigation Wing, New Delhi of the income tax department that the assessee was involved in giving and taking accommodation entries for commission. In the course of the reassessment proceedings it was noticed by the Assessing Officer that the assessee received share capital to the extent of Rs.2,20,00,000/-. On the basis of the information received by him from the Investigation Wing, he called upon the assessee to prove the genuineness of the share subscription as also the creditworthiness and identity of the persons who subscribed for the shares. The assessee was also requested to furnish confirmation and explain how the money received as share subscription was utilised. 4. In response the assessee submitted the copies of the share application forms and the balance sheet of the companies which applied for the shares. No confirmation or evidence to establish the genuineness of the transaction or creditworthiness of the share applicants was file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eptable because it has been admitted by the person involved in giving entries, during the course of statement by Investigation Wing, that the assessee has accepted the adjustment entries from the persons who are involved in providing entries to a number of persons wherein cash is taken and cheque or draft is given by floating different companies. The assessee has received such entries from the said person. The assessee has merely received adjustment entries. 13. The share application money received by the assessee to the extent of Rs.2,20,00,000/- (by taking the entries only once) is treated as income of the assessee from undisclosed sources and brought to tax as Income from other sources. Penalty u/s 271 (1)(c) of the Act is initiated on this point for concealment of income." 7. It may be noted that the Assessing Officer also added the amount of Rs.4,40,000/- as commission paid by the assessee to obtain the accommodation entries @ 2% of Rs.2,20,00,000/-. 8. The assessee challenged the additions as well as the jurisdiction of the Assessing Officer to reopen the assessment in appeal before the CIT (Appeals). The CIT (Appeals) turned down the objections against the jurisdiction to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so, the Tribunal proceeded to observe that a duty is cast on the Assessing Officer to verify the correctness of the statements wherein certain persons have allegedly stated that they had merely provided accommodation entries after accepting cash for commission, and that since no corroborative material was brought on record and no opportunity was given to the assessee to cross-examine those persons with reference to their statements in which they are alleged to have implicated the assessee, the addition can be considered only in the hands of the persons who had given the said money to these bogus companies for making investment in the form of share capital. According to the Tribunal no such inquiry had been done by the Assessing Officer nor any corroborative material had been brought on record. Reference was made to the judgment of this Court in CIT v. Value Capital Services Pvt. Ltd., (2008) 307 ITR 334 wherein it was held that if the Revenue accepts the existence of the share applicants and is not able to show that they did not have the means to make the investment, there is an additional burden upon it to show that the investment actually emanated from the coffers of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted by the Court. Venkatarama Iyer, J. speaking for the Court observed as under (page 810 of the report): - "Now the contention of the appellant is that assuming that he had failed to establish the case put forward by him, it does not follow as a matter of law that the amounts in question were income received or accrued during the previous year, that it was the duty of the Department to adduce evidence to show from what source the income was derived and why it should be treated as concealed income. In the absence of such evidence, it is argued, the finding is erroneous. We are unable to agree. Whether a receipt is to be treated as income or not, must depend very largely on the facts and circumstances of each case. In the present case the receipts are shown in the account books of a firm of which the appellant and Govindaswamy Mudaliar were partners. When he was called upon to give explanation he put forward two explanations, one being a gift of Rs.80,000/- and the other being receipt of Rs.42,000/- from business of which he claimed to be the real owner. When both these explanations were rejected, as they have been it was clearly upon to the Income-tax Officer to hold that the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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