M/S. GANPATI SUGAR LTD.,NEW DELHI vs. ITO, NEW DELHI

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ITA 1986/DEL/2013Status: DisposedITAT Delhi11 May 2023AY 2003-044 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the additions made by the departmental authorities on account of unexplained share application money and commission paid thereon. The assessees failed to furnish evidence to establish the source and genuineness of the share capital introduced.

What were the facts?

The assessees failed to appear for multiple hearings before the ITAT, despite previous ex-parte orders being recalled. The appeals concerned additions made on account of accommodation entries availed by way of share capital and alleged commission paid thereon.

What were the issues?

Whether the share capital introduced by the assessees was genuine or an accommodation entry, and whether the commission paid on such entries was deductible.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘C’ NEW DELHI

Before: SHRI SAKTIJIT DEY & SHRI M. BALAGANESH

Hearing: 01.05.2023Pronounced: 11.05.2023

ORDER PER SAKTIJIT DEY, JM: Captioned appeals by two different assessees arise out of separate orders of learned Commissioner of Income Tax (Appeals) for the assessment years 2003-04 and 2004-05.

452/Del/2014 & 1987/Del/2013

2.

When the appeals were called out, none appeared on behalf of the assessee to represent the case. Even, there is no application from assessees’ side seeking adjournment. On perusal of record, it is noticed, though, the appeals were listed for hearing on innumerable occasions earlier, however, the assessee mostly remained absent. Due to repeated absence of the assessee, the Bench was compelled to decide the appeals ex parte by dismissing them earlier. However, while considering the miscellaneous applications filed by the assessee, the Tribunal recalled the ex parte order for re-adjudication of the appeals. Despite that, there is no improvement in situation, as the assessee has failed to appear on each and every date fixed for hearing of the appeal.

These facts reveal complete lack of concern and negligent approach of the assessees in prosecuting the present appeals.

Since, sufficient opportunity of hearing has been extended to the assessees, which they have failed to avail, we are of the view that no further opportunity of being heard is required to be granted to the assessee, as, the assessee does not deserve any further leniency. Accordingly, we proceed to dispose of the appeals ex parte qua the assessee after hearing learned departmental representative and based on materials available on record. 2 | P a g e

452/Del/2014 & 1987/Del/2013

3. From the grounds raised in the appeals, it is observed that common issue arising in all the appeals relates to additions made on account of accommodation entries availed by way of share capital and alleged commission paid thereon. On going through the respective orders of the Assessing Officer and learned first appellate authority, it is observed, as per the investigation carried out by the Director of Investigation, New Delhi, it was found that the assessees have availed accommodation entries to legitimize their own unaccounted money. To give a colour of genuineness to the accommodation entries availed, the assessees have pleaded before the departmental authorities that the amounts in dispute are received as share capital. However, neither before the Assessing officer, nor before the first appellate authority, the assessees were able to furnish any evidence worth its name to establish the source and genuineness of the share capital introduced in the books. The Assessing Officer has specifically observed, the assessee failed to furnish various documentary evidences called for in respect of share applicants. Since, the assessee has not appeared before us or filed any documentary evidences to controvert the concurrent factual findings of the departmental authorities on the genuineness of the share 3 | P a g e

452/Del/2014 & 1987/Del/2013 application money received, we find no reason to interfere with the decision of the departmental authorities. Once the share application money is treated as non-genuine, it has to be assumed that the assessees must have availed accommodation entries by paying commission. Hence, the addition made on account of unexplained share application money and commission paid thereon deserves to be upheld. Accordingly, we do so.

Grounds are dismissed.

3.

In the result, all the appeals are dismissed.

Order pronounced in the open court on 11th May, 2023

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