9911796707
TMI Blog2010 (8) TMI 983X X X X Extracts X X X X X X X X Extracts X X X X ..... contending that there was no legal basis for assuming jurisdiction u/s 147 of the Act as there was no material to believe that any income of the assessee had escaped assessment. 5. The facts giving rise to the present appeal may be discussed, in brief, as under: 5.1 In this case the assessee filed its return of income on 31.10.2001 declaring loss of ₹ 2,65,657/-. Thereafter, the AO issued a notice u/s 148 on 14.3.2008 after recording the reasons to entertain a belief that the income amounting to ₹ 17,50,000/- had escaped assessment in the light of the information received from Investigation Wing of the department. The AO had taken necessary approval in writing from Addl. Commissioner of Income-tax, Range-XIV, New Delhi for issuing notice u/s 148 of the Act. The assessee vide letter dated 15.4.2008 stated before the AO that the regular return filed on 31.10.2001 may be treated as a return filed in response to notice u/s 148 of the Act. 5.2 In the body of the assessment order, the AO stated that the case of the assessee was reopened on the ground that the assessee during the relevant period had received accommodation entries as were found by the Investigation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the identity of the shareholders by filing necessary evidences. 9. Hence, the Department is in appeal before us. 10. The learned DR has submitted that there was specific information available with the AO being received from Investigation Wing that the assessee had availed the benefit of accommodation entry in the nature of share capital introduced in the name of 5 parties aggregating to ₹ 17,50,000/-. She further submitted that all these parties were not available at their original postal address, as the notice sent to them by the AO had returned unserved with the postal remarks left . She, therefore, submitted that the identity of these parties were not established and AO was justified in making the addition of ₹ 17,50,000/-, being share capital introduced by the assessee in the name of certain parties, name thereof has been detailed in the assessment order. 11. The learned counsel for the assessee, on the other hand, submitted that in the course of assessment proceedings, the assessee submitted various details in support of the genuineness of the share application money received by the assessee from respective parties as would be clear from the letter dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the assessee also relied upon the decision of ITAT, Delhi bench F in the case of ITO vs Pawan Kumar Gupta reported in (2010) 42 DTR (Trib) 148 where the addition u/s 69A made by the AO on the basis of statements of third parties without providing the submissions to the assessee and without affording any opportunity to the assessee to cross examine the deponents despite repeated request by the assessee is not sustainable. 13. Rival contentions of both the parties have been considered and material on record has carefully been perused. 14. In this case, the AO issued notice u/s 148 of the Act on the basis of information received from Investigation wing of the Department. In the reasons recorded, the AO has stated that enquiries were made by the Directorate of Investigation on the various persons, who were indulged in providing accommodation entries/bogus share application money/bogus share capital, in the course of which some persons had provided the details of various persons to whom such accommodation or bogus entries were provided. Based on such enquiries made, the Director of Investigation has provided the details of persons, who were beneficiary/ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the AO for providing those information to the assessee to have its say in that regard and to provide an opportunity of cross examination of all those persons whose statements were relied on for arriving at a conclusion that the share application money received by the assessee are accommodation entries, through which the assessee had introduced its unaccounted money in the books in the garb of share application money. But in the present case, the AO has not made any reference at all to any such evidence or material on the basis of which it could be prima facie said that the money received by the assessee was nothing but an accommodation entry except the conclusion arrived at by the Investigation Wing and the information passed over by the Investigation Wing to the AO without there being any reference to any evidence or material on the basis of which the aforesaid information or conclusion was arrived at. 17. Further, it is not in dispute that the assessee has furnished following details in respect of share applicants to justify the assessee s claim that assessee had received genuine share application money from the concerned parties: (i) Copies of form of share applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see filed copies of resolutions passed by the board of directors of applicant companies, besides their bank statements and IT returns. The addresses of the applicant companies are recorded in these documents. It is not the case of the Revenue that the copies of board resolutions, IT returns and bank statements were not genuine documents. The AO did not make any verification in this regard either from the internal record of the Department or from the concerned banks. If he so wanted, he could have called for the IT returns of the share applicants to ascertains whether the investment made in the assessee company was reflected in their balance sheets or not. Nothing prevented the AO from summoning the record of the banks on which cheques issued by the applicant companies were drawn. No such course was, however, adopted by him. 9. There was no legal obligation on the assessee to produce some director or other representative of the applicant companies before the AO. Therefore, failure of assessee to produce them could not, by itself, furnished documents, on the basis of which, the AO, if he so wanted could have summoned them for verification. No attempt was made by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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