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TMI Blog2022 (12) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... establish the genuineness of transactions of purchase of shares of that company. Following the decision in the case of Hon ble Supreme Court in the case of Friends Trading Co. [ 2022 (9) TMI 1076 - SUPREME COURT] with other several decisions, additions confirmed X X X X Extracts X X X X X X X X Extracts X X X X ..... uineness of the transactions, identity of creditors and creditworthiness of the investors to make the investment in question to the satisfaction of the Assessing Officer. Therefore, the Assessing Officer had brought to tax the accommodation entries and completed the assessment vide order dated 31.03.2015 passed u/s 144 r.w.s. 147 of the Act. 7. Being aggrieved by the above assessment order, an appeal was filed before the ld. CIT(A) contending that the loans and advances were obtained through crossed account payee cheques and the appellant had discharged the onus by filing the confirmations. Before the ld. CIT(A), the assessee also contested the very validity of the re-assessment and filed certain additional evidence in the form of cash receipts issued to the appellant by M/s. Kothari and Company under little diamond etc. This additional evidence was confronted to the Assessing Officer by the ld. CIT(A). The ld. CIT(A) dismissed the appeal by holding that mere receipt of the loans by crossed account payee cheques is not sacrosanct to prove the genuineness of the credit in the books of accounts placing reliance on the decision of the Hon'ble Calcutta High Court in the case of CIT vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laced reliance on the following decisions :- (i) PCIT vs. hodiman Investments (P.) Ltd., 422 ITR 337 (Bom.). (ii) PCIT vs. Meenakshi Overseas (P.) Ltd., 395 ITR 677 (Delhi). And also by raising the following additional grounds of appeal :- "Gr. No. 5 : The Hon'ble CIT(A) is not justified in upholding and confirming the additions made by the Ld. Assessing Officer without considering the fact that there was mechanical approval of the Joint CIT with regard to reopening of the case under section 148 and as such, proceedings are liable to be quashed in view of the judgment of Hon'ble Apex Court in the case of S. Goyanka Lime and Chemical Ltd. as reported in 237 Taxman 0378 (SC). Thus, the assessment order becomes bad in law and hence the impugned additions may please be deleted. Gr. No. 6 : The Hon'ble CIT(A) is not justified in upholding and confirming the additions made by the Ld. Assessing Officer since the Ld. Assessing Officer has reopened the proceedings only on the borrowed satisfaction and without application of own mind showing live nexus between the information received and the alleged escapement of income." 12. On the other hand, ld. Sr. DR submits that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance with the onus placed on the assessee. The Hon'ble Supreme Court in the case of PCIT vs. NRA Iron & Steel (P.) Ltd., 412 ITR 161 (SC) referring to its earlier precedent on the subject and summarized the principles on the issue vide para 11 of the said judgment is reproduced hereunder :- "11. The principles which emerge where sums of money are credited as Share Capital/Premium are : i. The assessee is under a legal obligation to prove the genuineness of the transaction, the identity of the creditors, and creditworthiness of the investors who should have the financial capacity to make the investment in question, to the satisfaction of the AO, so as to discharge the primary onus. ii. The Assessing Officer is duty bound to investigate the creditworthiness of the creditor/subscriber, verify the identity of the subscribers, and ascertain whether the transaction is genuine, or these are bogus entries of name-lenders. iii. If the enquiries and investigations reveal that the identity of the creditors to be dubious or doubtful, or lack credit-worthiness, then the genuineness of the transaction would not be established. In such a case, the assessee would not have discharged the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing the imposition of custom duty. The ratio of judgement is squarely applicable to the transaction under consideration before us. Further, the application of principle of the fraud under judicial Acts was considered by the Hon'ble Supreme Court in the case of Smt. Badami (Deceased) By her L.R. vs. Bhali in Civil Appeal No.1723 of 2008 dated 22.05.2012, wherein, the Hon'ble Apex Court held as follows :- "20. In S. P. Chengalvaraya Naidu (dead) by L.Rs. v. Jagannath (dead) by L.Rs. and others [AIR 1994 SC 853] this court commenced the verdict with the following words:- ""Fraud-avoids all judicial acts, ecclesiastical or temporal" observed Chief Justice Edward Coke of England about three centuries ago. It is the settled proposition of law that a judgment or decree obtained by playing fraud on the court is a nullity and non est in the eyes of law. Such a judgment/decree - by the first court or by the highest court - has to be treated as a nullity by every court, whether superior or inferior. It can be challenged in any court even in collateral proceedings." 21. In the said case it was clearly stated that the courts of law are meant for imparting justice between the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, the principle of fraud can be squarely applied to the facts of the present case and principles of natural justice have no application. Applying the said doctrine, we have no hesitation to hold that the transaction of purchase and sale of shares of SRK Industries under consideration before us is void ab-initio, this is nothing but sham, make believe and colourful device adopted with excellent paper work with intention bringing the undisclosed income into books of account. Accordingly, we confirm the orders of the Assessing Officer as well as the ld. CIT(A) and find no merits in the appeal preferred by the assessee before us. Hence, the grounds of appeal filed by the assessee stand dismissed. 18. In the result, the appeal of the assessee in ITA No.447/PUN/2020 for A.Y. 2007-08 stands dismissed. ITA Nos.448 to 452/PUN/2020, A.Ys. 2008-09 to 2012-13 : 19. Since the facts and issues involved in the above appeals in ITA Nos.448 to 452/PUN/2020 for A.Ys. 2008-09 to 2012-13 are identical, therefore, our decision in ITA No.447/PUN/2020 for A.Y. 2007-08 shall apply mutatis mutandis to the appeal of the assessee in ITA Nos.448 to 452/PUN/2020 for A.Ys. 2008-09 to 2012-13 resp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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