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TMI Blog2023 (9) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... alleged to be a provider of bogus bills, it is observed that what is under dispute is the purchase from the parties from whom bills have been taken and cheques have been issued to them. There is nothing on record which substantiates that quantitative detail of stock with respect to purchase and sales have been furnished and analysed by the authorities below to demonstrate that there is actual dealing of the goods. There are no detailed investigations made by the authorities below on the stock records. In such a situation, where issue relating to purchase is under dispute, what is important is to take into consideration the movement of stock with their quantitative details to justify the claim. Another scenario relating to purchase is worth considering where purchase itself need not be in dispute but the parties from whom purchases are shown to be made are disputed and suspicious, in which case, only the profit element is taken as unexplained income for the purpose of addition. In the present case before us, there is nothing on record which demonstrates the quantitative movement of the stock against the alleged purchases, except for existence of bills, their accounting entrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Shri Rajesh Kumar Agarwal, Resolution Professional (RP) of the assessee. In this letter, it is stated that assessee has gone into the Corporate Insolvency Resolution Process (CIRP) under the Insolvency Bankruptcy Code, 2016 (IBC) admitted by Ld. National Company Law Tribunal (Kolkata Bench) (NCLT) vide order No. CP(IB) No. 1412/KB/2018 dated 07.03.2019 and the undersigned i.e. Shri Rajesh Kumar Agarwal has been appointed as the Interim Resolution Professional (IRP). Through this letter, the IRP has submitted that no proceeding by any authority could have been continued or initiated when the moratorium comes into effect. In the case of assessee, as per the said letter, moratorium has come into effect on and from 07.03.2019. Against this letter, appeal was adjourned sine die on 27.08.2019. Subsequently, matters which had been adjourned sine die were fixed for hearing for the update on developments in those cases from the respective departments. This case was fixed for hearing on 10.02.2023. The matter was adjourned for 20.03.2023. On 17.04.2023, direction was given to Ld. CIT, DR to confirm the present status/whereabouts of the assessee. Finally, the matter was taken up on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bad in law as well as on the facts and in the circumstances of the case. 2. That the learned Commissioner of Income Tax (Appeals) has erred in sustaining the addition of Rs. 19,10,96,000/- made by the Assessing Officer by adding back the entire share application/ allotment money under section 68 as undisclosed income of the appellant. 3. That the learned Commissioner of Income Tax (Appeals) has erred in holding that the appellant was unable to establish the genuineness of the subscribers to the share capital/share application money/ share premium and creditworthiness/sources of income of the investors could not be established satisfactorily. 4. That the learned Commissioner of Income Tax (Appeals) has erred in holding that there is no infirmity in finding of the AO in treating the impugned share capital from the two companies amounting to Rs. 19,10,96,000/- as unexplained cash credit u/s. 68 of I.T. Act, 1961. 5. The above grounds of appeal are without prejudice to each other. 6. The Appellant craves leave to add, alter, amend and/or modify the above grounds of appeal. 5. Brief facts of the case are that assessee filed its return of income on 28. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from the AO for the additional evidence placed before him and has also obtained a rejoinder from the assessee on the said remand report. After considering the written submissions, remand report, rejoinder and various case laws, Ld. CIT(A) arrived at a conclusion that assessee could not establish the genuineness of the transaction of raising of share capital along with share premium. According to the Ld. CIT(A), assessee has failed to satisfactorily discharge its onus in establishing the genuineness of the transaction since copies of bank statements were not produced during the assessment as well as first appellate proceeding despite specific requisition by the Ld. AO. From the perusal of detailed proceedings undertaken before the Ld. CIT(A), we are not inclined to interfere with the finding given by the Ld. CIT(A) in this respect. Accordingly, grounds taken by the assessee in this respect are dismissed. 7. In the result, appeal of the assessee is dismissed. 8. We now take up the appeal by revenue which is in respect of two issues i.e. addition towards bogus purchase and disallowance u/s. 14A of the Act. On the first issue, Ld. AO had noted that information was received from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO, since the assessee is taking accommodation entries from the entry operator, there is no legal sanctity of the purchases shown by the assessee. Thus, he took a stand to add the entire amount of bogus purchase instead of GP ratio for blocking the leakage of revenue. 8.2. Ld. CIT(A) called for a remand report in respect of the submissions made by the assessee in this respect. Assessee also made a rejoinder to the remand report. After considering all the material available on record, ld. CIT(A) concluded to give relief to the assessee on three observations, that (a) All the transactions with the assessee are supported with documentary evidence in the shape of bills. (b) All the transactions are duly recorded in the books of account of the assessee which have been audited. (c) All the payments were made against the said transactions through banking channels. 8.3. Ld. CIT(A) also placed his credence on the copies of ledger accounts of the parties furnished by the assessee while giving relief to the assessee. 8.4. From the perusal of the observation and finding arrived at by the Ld. CIT(A), we note that there is no enquiry which has been conducted or cause ..... X X X X Extracts X X X X X X X X Extracts X X X X
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