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TMI Blog2017 (3) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... eque for share application, AO has disbelieved the transaction. There is no allegation against Shri Vijendra Thapliyal for providing the accommodation entry to the assessee, but Ld. A.O. has added this amount alongwith 2% commission for paying commission to get entries. The action of the AO clearly indicates that he has treated both the transactions similar without assigning any reason. During the year the assessee has not received any income because business was not carried on by the appellant. The AO has wrongly treated the share application money as income of the assessee. If any amount is to be added it should be added in the hand of Directors because only they can take the entry by giving the cash from their pockets.- Decided in favour of assessee Addition on account of share application money - Held that:- 2% commission addition was rightly deleted, due to the fact that there is no evidence that assessee has taken entry for share application money.- Decided in favour of assessee - ITA No. 1131/Del/2015 - - - Dated:- 2-2-2017 - SHRI H.S. SIDHU, JUDICIAL MEMBER For The Department : Sh. S.K. JAIN, SR. DR For The Assessee by : S h . SANDEEP SAPRA, ADV. ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the name of relative/friends or other person hired by him, for the purpose of opening bank account. The entry operator thereafter issues Cheque/DD/PO in the name of beneficiary from the same account (in which the cash is deposited) or another account in which funds are transferred through clearing in two or more stages. The beneficiary in turn deposits these instruments in his bank accounts and the money comes to his regular books of account in the form of gift, share application money, loan etc. through banking channels and the transactions looks genuine. As mentioned above, in this case the relevant assessment was made on the basis of information received from Investigation Wing of Income Tax Department, New Delhi that the assessee has been the beneficiary of accommodation entries provided by Surender Kumar Jain Group of concerns. As per the reasons recorded, the assessee has taken the accommodation entries amounting to ₹ 30 lacs from the concerns floated /controlled by Surender Kumar Jain group. The above cited entry is reflected in the accounts as share application money. During the course of reassessment proceedings, it was seen that the assessee has obtained total sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk account before and after giving share application money. Immediately Before, contributing share application money, there are of ₹ 15,50,000/-. And, the company M/S Steller Investment Ltd. is a established entry provider floated by Sh. Surrender Kumar / Virender Jain group as established by DIT(Inv.) in action u/s. 132 and post search inquiries. AO further observed that as per the provisions of 68 of Income Tax Act, onus is on the assessee to explain the credits appearing in its books of accounts to the satisfaction of the AO. Mere filing of paper details does not satisfy the conditions laid down under 68 of Income Tax Act. In the case of CIT vs. Nova Promoters and Finlease Pvt. Ltd. reported in 252 CTR 187 Hon'ble High Court of Delhi has held that Statements of M and R explaining their modus operandi afford sufficient material on the basis of which the AO can be said to have discharge such duty. These constitute materials upon which one could reasonably come to the conclusion that the monies emanated from the coffers of the assessee company It In the case of CIT Delhi-V versus NR Portfolio Pvt. Ltd. in ITA No.134 of 2012 vide in its order dated 21.12.2012 has also held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n during the assessment proceedings, the confirmation and affidavit was filed by Shri Virender Kumar Jain on behalf of M/s Steller Investment Ltd. but no enquiry was made. The Ld. AO requested for production of the parties, however, they were not produced before the AO by the appellant. In compliance to notices issued u/s 131 to both the persons by the Ld. AO, details have been furnished. Ld. AO has given the finding that Shri Virender Kumar Jain is closely associated to Sh. Surender Kumar Jain. However, no such report is available on record and assessing officer has also not narrated how they are closely associated. M/s Steller Investment Ltd. is connected to Sh. Surender Kumar Jain who is said to be hawala operator is also not clear from the assessment order. In view of these facts, I find that Ld. AO has wrongly disbelieve share application money received from M/s Steller Investment Ltd. Regarding the share application money amounting to ₹ 15 lacs received from Sh. Vijendra Thapliyal and Ld. AO noticed that there was a balance of ₹ 15,50,OOO/- before issuing the cheque for share application money. However, he has added this amount on the ground that before issuing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o such report is available on record and Assessing Officer has also not narrated how they are closely associated. M/s Steller Investment Ltd. is connected to Sh. Surender Kumar Jain who is said to be hawala operator is also not clear from the assessment order. In view of these facts, I find that AO has wrongly disbelieve share application money received from M/s Steller Investment Ltd. Regarding the share application money amounting to ₹ 15 lacs received from Sh. Vijendra Thapliyal and AO noticed that there was a balance of ₹ 15,50,OOO/- before issuing the cheque for share application money. However, he has added this amount on the ground that before issuing the cheque appellant has received some money in the bank account. Without investigating who has given the money before issuing the cheque for share application, AO has disbelieved the transaction. There is no allegation against Shri Vijendra Thapliyal for providing the accommodation entry to the assessee, but Ld. A.O. has added this amount alongwith 2% commission for paying commission to get entries. The action of the AO clearly indicates that he has treated both the transactions similar without assigning any reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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