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TMI Blog2025 (3) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of the original assessment which was completed u/s 143(3) of the Act, on 15.12.2009, accepting the sources of share capital introduced. Even during the course of reassessment proceedings, the appellant filed all the necessary details to discharge its onus to prove genuineness of share capital and share premium received. In the instant case the said onus enjoined upon the appellant company stands discharged in as much as the identity and creditworthiness of the investors stands proved and the genuineness of the transactions stands evidenced by the confirmations and the bank accounts which have been filed before the AO, which has been acknowledged in the assessment order. Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... t to amend, modify, add or forego, alter or modify any ground(s) of appeal at any time before or during the hearing of this appeal." Thus, we have proceeded with the revised grounds filed by the Revenue vide Form No.36 dated 04/04/2024. 4. Brief facts of the case are that assessee is a company and the return of income was filed on 30/10/2007 at a total income of Rs. 7,33,924/- and the assessment was completed u/s 143(3) accepting the income declared by the assessee. Thereafter, proceedings were initiated u/s 147 and notice u/s 148 of the Act was issued on 24/03/2014. The reassessment order was passed u/s 143(3)/147/148 of the Act at total income of Rs. 2,14,33,920/- by making additions on account of share application premium of Rs. 2,00,00,000/- and on account of commission on such accommodation entries of Rs. 7,00,000/-. 5. In first appeal, the Ld. CIT(A) vide order dated 23/02/2017 has deleted the additions made on meirts and also allowed the appeal of the assessee on legal issues of reopening the assessment u/s 147 of the Act and further by holding that no notice u/s 143(2) was served upon the assessee after filing the return of income. 6. As observed above, before us, Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used the materials available on record. It is admitted position that despite of an opportunity provided to the Revenue for filing the revised grounds still the Revenue has not challenged the appellate order where the assessee was allowed the relief on legal issue, thus, the order of Ld. CIT(A) to this extent remained unchallenged. 10. With regard to the merits of the issues, we find that the Ld. CIT(A) has passed a detailed order wherein para 7 to 8 of the order while deleting the additions made, he observed as under: "7. I have considered the findings given by the AO as well as the submissions made by the appellant. The appellant has contested the additions made by the AO on account of share capital and share premium u/s 68 of the I.T. Act on both legal grounds as well as on merit. The appellant has substantively raised the issues as below which are all in the context of addition of Rs. 2,00,00,000/- and has claimed that each one of them is a good enough ground to delete the addition or quash the order:- i) Non-application of mind by the AO by taking mechanical action on the basis of information received from the investigation wing, ii) Issue of notice u/s 148 of the I.T. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll material facts necessary for the assessment. No such failure has been pointed out by the AO. All the companies which invested in the appellant company were duly verified by the AO in the original assessment proceedings u/s 143(3). In the reasons recorded, the AO has not given any finding that there was any failure on the part of the appellant to disclose fully and truly all material facts necessary for assessment. The AO has apparently rejected this contention of the appellant on account of explanation 1 to section 147 of the Act that production of books of account and other documents does not amount to full and true disclosure of all material facts necessary for assessment, but this is not justifiable in view of the fact that the issue had been examined in the original proceedings by issue of notices u/s 133(6) to the share applicant companies. From the reasons recorded it can be seen that the AO has mentioned only the enquiries conducted by the Investigation Wing, resulting in unearthing the accommodation entry racket operated by Sh. Surender K. Jain. There does not seem to be any independent application of mind on the part of the AO. It remains a fact that the issue had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d share premium was received were filed during the course of assessment proceedings. The AO has primarily made additions for the reason that the directors of the said companies were not produced although opportunity was provided. The AO has cited a number of case laws to support his contention. The AO has, however, not mentioned any of the alleged evidence found or seized during the course of search in the case of S.K. Jain even though he had re-opened the assessment for that reason. In absence of the same the AO's case is primarily built on the non-appearance of the directors of the investing companies. It is also noted that the details regarding share capital and share premium received were furnished during the course of the original assessment which was completed u/s 143(3) of the Act, on 15.12.2009, accepting the sources of share capital introduced. Even during the course of reassessment proceedings, the appellant filed all the necessary details to discharge its onus to prove genuineness of share capital and share premium received. In the instant case the said onus enjoined upon the appellant company stands discharged in as much as the identity and creditworthiness of the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat sufficient evidence has been filed by the appellant to prove the genuineness of share capital and share premium received, the addition made u/s 68 of the I.T. Act cannot be sustained. The addition made by the AO u/s 68 of the Act stands deleted, and the appellant gets relief of Rs. 2,00,00,000/-. 8. At Ground of appeal no 7, the appellant has disputed the addition of Rs. 7,00,000/- for alleged commission paid for obtaining accommodation entries. The addition has been made on the presumption that accommodation entry operators charge commission upto 3.5% of the transaction. The AO held2007-08 that the appellant has taken accommodation entry of Rs. 2,00,00,000/- and paid commission of Rs. 7,00,000/- (i.e. @ 3.5% of Rs. 2,00,00,000/-) and added this sum to the total income u/s 69C of the Act. The appellant has pointed out that the addition has been made on mere presumption and there is no evidence of receiving accommodation entry, leave alone making payment of commission. The AO has also not brought anything on record to suggest that commission has been paid. While disposing of the preceding grounds of appeal, addition made u/s 68 of the I.T. Act for the amount of Rs. 2,00,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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