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TMI Blog2014 (7) TMI 591X X X X Extracts X X X X X X X X Extracts X X X X ..... ted, considering the creditworthiness of purchasers, that the cash was deposited in their accounts which had its source from the assessee as he had benefitted by the deposit of cash and adverse inference has to be drawn against the assessee – Decided against Assessee. - ITA No.4120/Del/2013 - - - Dated:- 30-6-2014 - S V Mehrotra, J. For the Appellant : Shri Pramod Jain, CA For the Respondent : Shri Amal Garg, Sr. DR ORDER:- PER : S V Mehrotra This appeal has been filed by Assessee against the order of Ld. CIT(A) XIX, New Delhi dated 31th March, 2013 for A. Y 2004-05. 2. Brief facts of the case are that assessee had filed its return of income declaring income of ₹ 444/-. It was processed u/s 143(1). Later on notice u/s 148 was issued to the assessee after recording following reasons, as re-produced in para 3.2 of Ld. Commissioner of Income Tax (Appeals) order :- Certain investigations were carried out by the Directorate of Investigation, Jhandewalan, New Delhi in respect of the bogus/accommodation entries provided by certain individual/companies. The name of the assessee figures as one of the beneficiaries of these alleged bogus transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng summons addressed to Shri Raghubir Singh was received back with the remark left and Smt. Simranjeet Kaur did not comply. He, further, observed that from the perusal of the return filed by these persons for assessment year 2004-05 following facts emerged :- (a) Shri Raghubir Singh was about 35 years old and was salaried employee and his salary during financial year 2003 -04 was only ₹ 44,280. Similarly in case of Smt. Siranjeet Kaur, he found that she was only 25 years of age and had returned income of ₹ 81,075/- as per profit and loss account. However, in the reply dated 2.12.2011, in response to inquiry u/s 133(6), she stated that no P L Account was maintained. Keeping in view the meager means at the disposal of both these lenders, he made an addition of ₹ 4,48,000/-, inter alia, observing that the amount had been arranged through these innocuous persons. 4. Before Ld. CIT(A), the assessee had assailed the initiation of proceedings u/s 148and had also assailed the addition made u/s 68. Ld. CIT(A)upheld the proceeding u/s 148 relying on following 2 decisions :- 1. CIT V. Safetag International India (P.) Ltd. {2012} 332 ITR 622(Delhi) 2. A.G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity to rebut the information received from the Investigation Wing. Notwithstanding the information received, in case of credits, the burden of proving the identity and creditworthiness of the share applicants and the genuineness of the transactions is on the appellant. It is incorrect to say that the burden was on the A.O. has referred to the information received from the Investigation Wing which showed that the appellant had taken accommodation entries to introduce his own undisclosed income in the books of account. In the face of this information, a heavy burden lay on the appellant to prove that the credits were genuine. The onus had clearly shifted to the appellant. In view of the above of the factws discussed above, the appellant has clearly failed to discharge his onus of proof. The addition made u/s 68 is therefore, justified and is upheld. The Grounds are dismissed. 8. Ld. Counsel for the assessee reiterated the submissions made before lower revenue authorities and further submitted that creditworthiness of purchaser need not be proved by assessee and only identity is to be established. In this regard, Ld. Counsel relied on the decision of Tribunal in ITO Ward 16(4) Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich triggers the enquiry regarding creditworthiness of lenders. 11. In the present case the Assessing Officer has pointed out that Shri Raghubir Singh is about 35 years old and his salary was only ₹ 44,280 during financial year 2003-04. Therefore, when considered on the touch-stone of preponderance of probabilities, it is difficult to accept that a person of such meager means would deposit ₹ 2,34,000/- in cash just before the alleged purchase of shares. Similarly, Smt. Simranjeet Kaur was only 25 years of age and had returned an income of ₹ 81,075/- only which was allegedly as per Profit and Loss income. However, as per reply submitted on 2nd December, 2011 by her in response to inquiry u/s 133(6), she stated that no profit loss account was maintained. Thus, apart from meager income of ₹ 81,000 only earned by her, there was contradiction also in her statement and considering her age it was most unlikely that she would have deposited cash of ₹ 2,50,000/- out of her available resources. Under such circumstances, both the lower revenue authorities were fully justified in doubting the genuineness and creditworthiness of purchasers. No doubt, identity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was the broker. Therefore, the matter regarding purchase and sale of shares should have been remanded to the Assessing Officer. Thus, it is urged that the roder of the Assessing Officer may be upheld or the matter may be remanded to the file of the Assessing Officer for further enquiry. 13. Thus, it is evident from the aforementioned findings that the Assessing Officer did not make any inquiry from any of the purchasers of the shares. The whole evidence was disbelieved without making any inquiry. Thus, it is evident that the facts in the present assessment year are different inasmuch as Assessing Officer had made due enquiries from the banks of the purchasers. In assessment year 2003-04, Tribunal has noticed in para 3 that Ld. CIT(A) considered the evidences filed by the assessee and on the ground that the assessee had discharged its burden of providing basic details which were required for verification and to fulfil the condition with respect to identity, creditworthiness and genuineness of the creditors, granted reliefs. Tribuanl has noticed in para 8 as under :- The undisputed fact is that the assessee has purchased shares as investments in the earlier AYs and held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Tribunal noticed that the assessee had filed the confirmation letter of M/s Ramesh Chand Industries Ltd. before the Commissioner of Income Tax (Appeals). Further, the assessee had produced a copy of the ledger account in the case of M/s Ramesh Chand Industries Ltd. in the books of M/s Silver Streaks Trading Pvt. Ltd. before the Assessing Officer in remand proceedings. Furthermore, it was noticed by the Tribunal that the sale of shares to M/s Silver Streaks Trading Pvt. Ltd. was reflected in the books of the assessee and that these amounts were also shown as advance in the balance sheet of the assessee company and as a credit in the balance of M/s Silver Streaks Trading Pvt. Ltd. as on the 31st March, 2003. Concerning the payment made by M/s Silver Streaks Trading Pvt. Ltd., it was found that the same was made in October-November,2003 by Account Payee cheques and a certificate from Corporate Bank in this regard was produced before the Assessing Officer in the remand proceedings, which was forwarded to the Commissioner of Income Tax (Appeals) by the Assessing Officer. Therefore, the Tribunal came to the conclusion that it was clear that the assessee company had been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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