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TMI Blog2018 (7) TMI 2045X X X X Extracts X X X X X X X X Extracts X X X X ..... ged by the Revenue. The impugned order of the Tribunal, on examination of facts, has come to the conclusion that the investment made by the shareholders is not hit by Section 68. It records, that the entire basis of the Revenue's case is based on surmise that the respondent was taking bogus purchase bills and cash was introduced in the form of share capital without any evidence in support. - Decided in favour of assessee Bogus purchases - Addition of 5% of cash purchases as profit by way of discount - as alleged assessee had failed to furnish supporting evidence to prove the identity of the party and genuineness of such purchases - ITAT deleted the addition - HELD THAT:- Contention of the Revenue that, when purchases have been made in cash, the respondent would have necessarily received a discount on the price from the seller of the goods is not supported by any material on record. It proceeds, as held by the impugned order of the Tribunal, purely on the basis of surmise that the cash purchases would necessarily involve a discount which has been offered to and availed of, by the respondent-assessee. This submission is not backed by any cogent or demonstrative evidence. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee had failed to furnish supporting evidence to prove the identity of the party and genuineness of such purchases ? (C) Whether, on the facts and in the circumstances of the case and in law, the Tribunal has erred in deleting the addition of 2% as unexplained expenses by way of commission/service charges paid for arranging accommodation bills ? Brief Facts : 3. On 1st September, 2009 a survey was conducted on M/s. Globe Pharma by the Investigation Wing of the appellant-Revenue. During the course of the survey, it was found that M/s. Globe Pharma was issuing bogus accommodation bills to various concerns including the respondent-assessee and its sister companies. Consequently, on 9th September, 2010 a search operation was conducted on the premises of the respondent and its sister companies. 4. Consequent to the above, notice under Section 153B of the Act was issued to the respondent for Assessment Years 2005-06 to 2009-10. Thereafter, assessment orders dated 30th March, 2013 were passed under Section 153(3) read with 153A of the Act by the Assessing Officer for Assessment Years 2005-06 to 2009-10 making additions under the following heads :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09-10. (b). So far as the identity is concerned, we find that the persons who invested in the shares of the respondent-assessee had PAN numbers allotted to them which was made available by the respondent to the Assessing Officer. Besides, the shareholders had also filed Affidavits before the Assessing Officer pointing out that they had invested in the shares of the respondentassessee out of their own bank accounts. Copies of acknowledgement of Return of Income of the shareholders was also filed. The respondent also requested the Assessing Officer to summon the shareholders. These evidences have not been shown to be incorrect. Therefore, this objection with regard to identity of the shareholders not being established does not survive. (c) So far as, the creditworthiness of the investors is concerned, Mr. Mohanty seeks to rely upon the decision of the Delhi High Court in the case of Commissioner of Income-Tax Vs. Nipun Builders Developers Pvt. Ltd. 350 ITR 407. This, in support of his submission that the source of the funds of the shareholder-investor in the respondent-assessee's company was not considered by the Tribunal. Thus, where the creditworthiness of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objection of lack of creditworthiness of the shareholder also does not survive. (d). So far as the genuineness of the investment by the shareholders is concerned, Mr. Mohanty placed reliance upon the statement dated 9th September, 2010 of Kamlesh Jain who was an employee, as well as, the shareholder of the respondent-assessee and on the fact that during the course of the search, certain blank transfer forms were found in the possession of the respondent-assessee. Besides, it is submitted that the shares were supposed to be finally transferred to the family members of the Directors of the respondent assessee company at a discounted price. We note that, the impugned order of the Tribunal records the fact that copies of the share application form, share allotment Register and Bank Statements showing receipt of funds were on record. Moreover, all the shareholders had filed Affidavits declaring the fact that they are investing in the respondent-Company by issuing of cheques from their Accounts. As pointed earlier, the PAN details of the shareholders was also submitted to the Assessing Officer. Moreover, the statement of Kamlesh Jain dated 9th September, 2010 relied upon by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue is not supported by any material on record. It proceeds, as held by the impugned order of the Tribunal, purely on the basis of surmise that the cash purchases would necessarily involve a discount which has been offered to and availed of, by the respondent-assessee. This submission is not backed by any cogent or demonstrative evidence. (c). In the above circumstances, the view taken by the Tribunal on this issue is an entirely possible view on the facts and calls for no interference. (d). Thus, this question, as proposed also does not give rise to any substantial question of law. Thus, not entertained. 10. Regarding Question No.(C) : (a). The Assessing Officer had made an addition on account of commission paid at 2% for obtaining accommodation bills treating the same as unexplained expenditure. The accommodation entries, according to the Assessing Officer were taken to enable showing bogus purchases and use the cash to make investment through dummy shareholders. (b) However, before us, there is no challenge to the impugned order of the Tribunal holding that the additions on account of bogus purchases is not sustainable. In such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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