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Income Tax Appellate Tribunal, DELHI BENCH, ‘G’: NEW DELHI
Before: SHRI SHAMIM YAHYA & SHRI CHANDRA MOHAN GARG
ORDER PER SHAMIM YAHYA, AM,
This appeal by the assessee is directed against the order of ld. CIT (Appeals)-9, New Delhi, dated 17.02.2017 for the Assessment Year 2006- 07.
The issue raised is that the Ld. CIT(A) erred in confirming the addition u/s 68 made by the Assessing Officer.
The AO in this case, noted that reliable information was received that the assessee company has received accommodation from certain entry providers. The AO noted that the assessee was found to have received Rs.65 lakh in the form of share application money from the parties mentioned in the table ‘A’ of his order. The assessee company could not produce the Director or Principal Officer mentioned therein.
Referring to several case laws, the AO added the same to the income of the assessee.
3.1. Furthermore, the AO noted that the assessee company has stated to have issued 247500 shares of face value of Rs.10/- each along with a premium of Rs.30/- for 62500 shares and the remaining at a premium of Rs.90/- amounting to Rs.2,10,00,000/-. The AO noted that an Inspector of this ward was deputed to make enquiry and serve the notices u/s 133(6) to the above mentioned parties to whom the shares have been issued but no service could be done because no such company was found at the given address. Hence, the entire share application money of Rs.1,45,00,000/- was added to the income of the assessee.
Upon assessee’s appeal, the Ld. CIT(A) elaborately referred to the written submission of the assessee. The Ld. CIT(A) elaborately analyzed the case of the assessee and referred several case laws. He noted that the assessee has failed to prove the genuineness and creditworthiness of the parties. The Ld. CIT(A) further noted that only the transactions have been made through banking channel does not prove the genuineness of the transaction. For this, he referred to certain case laws. He observed that the parties from which share application money have been received are paper companies. They are providing only accommodation entry and not doing any business activity. These companies are floated by Sh. S.K.
Jain who is engaged in providing accommodation entry. The ld. CIT(A) noted that the assessee has not been able to discharge the onus. The Ld. CIT(A) after examining the facts and various case laws concluded as under:-
“Considering the above facts, it is very clear that the appellant failed to prove identity, genuineness and creditworthiness. The explanation offered by the appellant was found by the AO to be unsatisfactory. I also hold that explanation and nature and source of the amount is not satisfactory. Therefore, the disallowance made by the AO of amounting to Rs.2,10,00000/- is hereby confirmed. Hence the ground of appeal is dismissed.”
5. Against the above order, the assessee is in appeal before us.
6. We have heard the ld. DR and perused the record. None appeared on behalf of the assessee despite service of notice. Hence, we proceed to adjudicate the issue ex-parte. Upon careful consideration, we note that in the present case, the AO got information that the assessee company has received accommodation entries in the form of share application money from different parties. The existence of share applicants was not found at its respective address. Even AO’s Inspector gave information that no such parties found at given address. The Ld CIT(A) has duly analyzed the facts and has given proper finding. Nothing has been brought to our notice to warrant a contrary view. Hence, we do not find any infirmity in the order of the authorities below and affirm the same.
In the result, the appeal of the assessee stands dismissed.
Order pronounced in the open court on 30th November, 2022.