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TMI Blog2022 (11) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... of income. That being the position in law, find no merit in assessee s challenge regarding validity of reopening of assessment under Section 147 - Thus hold that the assessing officer has validly reopened the assessment under Section 147. Addition u/s 68 - Facts on record reveal that the additions were made on conjecture and surmises by entertaining doubts regarding the genuineness of the transaction. It is fairly well settled, suspicion, howsoever, strong cannot take place of evidence - amount representing share application money received from M/s. Rapid Impex Pvt. Ltd., cannot be treated as unexplained cash credit under Section 68 of the Act. More so, when it is a fact on record that against the share application money, the assessee has issued equity shares to the concerned party. As regards, sale of shares of M/s. Taurus Packaging Pvt. Ltd. to M/s. Globetec Solution Pvt. Ltd., facts are more or less identical with the share application money received from M/s. Rapid Impex Pvt. Ltd. In this regard, the assessing officer has primarily relied upon the statement of Shri S.H. Malik to conclude that the share transaction is ingenuine. However, as discussed earlier, in the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a resident corporate entity. For the assessment year under dispute, assessee filed its return of income on 25.11.2004 declaring income of Rs.1,000. The return of income filed by the assessee was processed under Section 143(1) of the Income-Tax Act, 1961. Subsequently, the Assessing Officer received information that the assessee is a beneficiary of accommodation entries provided in the form of share application money for issue of equity shares and long term capital gain on sale of shares. Based on such information, the Assessing Officer reopened the assessment under Section 147 of the Act. 3. In course of assessment proceedings, the Assessing Officer called upon the assessee to prove the genuineness of the aforesaid transactions. In response to the query raised by the Assessing Officer, the assessee furnished explanation stating that it has received an amount of Rs.1,00,000 from M/s. Rapid Impex Pvt. Ltd. through cheque as share application money for issue of 10,000 equity shares having face value of Rs.10 per share. Further, it was submitted, assessee received an amount of Rs.1,92,500 from M/s. Globetech Solution Pvt. Ltd. through cheque towards sale of 17,500 shares of M/s. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing officer made the addition, that too, without allowing cross-examination to the assessee, inspite of a specific request being made by the assessee. Further, drawing my attention to the statement recorded, learned counsel submitted, nowhere the concerned person has referred to the name of either M/s. Rapid Impex Pvt. Ltd. or M/s. Globetec Solution Pvt. Ltd. Therefore, the conclusion of the assessing officer that these two entities are controlled by Shri S.H. Malik is without any basis. As regards the sale of shares of Taurus Packaging Pvt. Ltd. to M/s. Globetec Solution Pvt. Ltd., learned counsel submitted, the entire transaction was carried out through banking channel and all documentary evidences including copy of ITR, company master data with ROC and confirmation were furnished by the assessee. He submitted, merely because turnover of the company is shown at lesser figure cannot lead to the conclusion that the transaction is ingenuine. Thus, he submitted, the addition made should be deleted. 7. The learned Departmental Representative relied upon the observations of the assessing officer and learned Commissioner (Appeals). 8. I have considered rival submissions and peru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n response to the summons issued. On a perusal of statement recorded from Shri S.H. Malik, a copy of which is at page 27 of the paper book, I do not find any mention of M/s. Rapid Impex Pvt. Ltd., therefore, on what basis, the departmental authorities concluded that it is controlled by Shri S.H. Malik is not known. At least, no corroborative evidence to establish control of Shri S.H. Malik on the share applicant has been brought on record. 13. In course of proceedings before the departmental authorities, the assessee had produced ITR copy, ROC master data and confirmation. These documents certainly prove the identity of the share applicant. The very fact that the status of the share applicant is appearing as active in the ROC master data proves that the company is in existence. This is further corroborated by the fact that for the assessment year under dispute, the company has filed income tax return in Delhi jurisdiction. Thus, the share applicant company is in the roll of the department. In case, the assessee was unable to produce the company and the summons issued were not responded, the assessing officer could very well have obtain necessary information regarding the share a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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