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TMI Blog2015 (12) TMI 1418X X X X Extracts X X X X X X X X Extracts X X X X ..... y of acknowledgment of income tax return filed, copy of balance sheet and profit and loss account of share applicants. In the case of Gangeshwari Metal (P.) Ltd (2013 (1) TMI 624 - DELHI HIGH COURT ), the Hon’ble High Court has held that when there was a clear lack of inquiry on the part of the Assessing Officer, once the assessee had furnished all the material, then in such eventuality, no addition could be made under Section 68 of the Act - Decided in favour of assessee - ITA No. 4102/Del/2013 - - - Dated:- 18-12-2015 - Sh. Aby T. Varkey, Judicial Member And Sh. O. P. Kant, Accountant Member For the Appellant : Sh. Amit Jain, Sr. DR For the Respondent : Sh. K. Sampath V. Raja Kumar, Adv ORDER Per O. P. Kant, A. M. The present appeal by the Revenue is directed against the order dated 02.04.2013 of learned Commissioner of Income Tax(Appeals)-XV, New Delhi, for the assessment year 2004-05, raising the following grounds of appeal: i. On the facts and in the circumstances of the case, the learned Commissioner of Income Tax(Appeals) erred in deleting the addition of ₹ 10,55,000/- u/s 68 of the I.T. Act, 1961. ii. On the facts and in the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 50080, State Bank of Patiala, Darya Ganj, Delhi) - ₹ 2,00,000 22.04.2003 M/s Rabik Exports Ltd. (A/c No. 49, Ratnakar Bank, Karol Bagh, New Delhi) 56612 ₹ 2,80,000 24.04.2003 M/s Shattarchi Fin. Leasing Pvt. Ltd. (A/c No. 71, Ratnakar Bank, Karol Bagh, New Delhi) 51736 ₹ 1,75,000 28.04.2003 M/s M.V. Mktg. Pvt. Ltd. (A/c No. 47, Ratnakar Bank, Karol Bagh, New Delhi 8649 The said amount has been credited into assessee s bank account with OBC, LSC-6, Derawala Nagar, Delhi by way of transfer entries. On investigation made by the Investigation Wing it has been found that assessee is a beneficiary of taking the aforesaid accommodation entries. I have also perused various materials and report from Investigation Wing and on that basis it is evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries, therefore, I have reason to believe t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals). Before the Commissioner of Income Tax (Appeals), the assessee submitted that it had met all the conditions required under Section 68 of the Act in respect of five companies but the learned Assessing Officer had neither examined nor found any adverse observations in respect of those evidences. Further, the assessee submitted that its case was covered by the findings of the Hon ble Delhi High Court in the case of Commissioner of Income Tax Vs. Gangeshwari Metal (P.) Ltd., [2013] 30 taxmann.com 328 (Delhi). After considering the submissions of the assessee, the learned Commissioner of Income Tax (Appeals) deleted the additions with the following findings: 6. I have carefully considered the facts of the case in the light of the submission made by the appellant and the applicable law in this regard. On careful consideration, I find that the appellant during the course of assessment proceedings, the appellant had furnished details in support of identity, genuineness and creditworthiness of the companies which had invested an amount of ₹ 14,70,000/-(AO examined only an amount of ₹ 10.55 lakh out of it) in the appellant company as share application money, by pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore the appeal is heard on merit. 4. Learned Sr. Departmental Representative relied on the order of the Assessing Officer and submitted that the fact of accommodation entries was brought to the knowledge of the assessee, however, the assessee did not submit any documents controverting the finding of the Investigation Wing in respect of the five share applicants. 5. On the other hand, the learned Authorized Representative submitted that the case of the assessee was squarely covered by the judgments of the Hon ble Jurisdictional High court in the case of Gangeshwari Metal (P.) Ltd (supra). 6. As grounds nos. 1 and 2 of the appeal of the Revenue are in respect of the addition of ₹ 10.55 lacs made under Section 68 of the Act and being interrelated, they are being taken together. 7. We have heard the rival submissions of the parties and perused the material on record. We observed that the Assessing Officer had received information from the Director of Income Tax (Investigation), New Delhi that those five share applicants have provided accommodation entry to the assessee. The persons who provide money to the taxpayers through cheques against receipt of cash ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d was ₹ 55,50,000/- and not ₹ 1,11,50,000/- as mentioned in the notice. The assessee has furnished details of such receipts and the contention of the assessee in respect of the amount is found correct. As such the unexplained amount is to be taken at ₹ 55,50,000/-. The assessee has further tried to explain the source of this amount of ₹ 55,50,000/- by furnishing copies of share application money, balance sheet, etc. of the parties mentioned above and asserted that the question of addition in the income of the assessee does not arise. This explanation of the assessee has been duly considered and found not acceptable. This entry remains unexplained in the hands of the assessee as has been arrived by the Investigation wing of the Department. As such entries of ₹ 55,50,000/- received by the assessee are treated as an unexplained cash credit in the hands of the assessee and added to its income. Since I am satisfied that the assessee has furnished inaccurate particulars of its income, penalty proceedings under section 271(1)(c) are being initiated separately. 10. The facts of Nova Promoters and Finlease (P) Ltd. (supra) fall in the former category and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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