Cash credits — Addition — Validity of — Camouflage transactions —
Assessee filed return declaring nil income and return was processed u/s
143(1) — Based on information received from Investigation Wing, notice
u/s 148 was issued to Assessee — Investigation Wing came across names of
various individuals, operating as entry providers and also various
parties, who were taking such accommodation entries —
Name of Assessee also figured as one of parties involved in taking such accommodation entries — AO noticed that assessee received substantial share application money along with premium which was not proved by assessee as genuine — AO made addition u/s 68 — CIT(A) deleted addition and Tribunal upheld CIT(A)’s order — Hence Revenue is in appeal — Held, in case of CIT v NR Portfolio Pvt Ltd, it was held that when Assessee does not produce evidence or tries to avoid appearance before AO, it necessarily creates difficulties and prevents ascertainment of true and correct facts as AO is denied advantage of contention or factual assertion — Court or Tribunal should be convinced about identity, creditworthiness and genuineness of transactions — Onus to prove three factum is on Assessee as facts are within personal knowledge of Assessee — Mere production of incorporation details, PAN Nos or returns may not be sufficient when surrounding and attending facts predicate cover up — In present case, it was strange that Assessee in year 2001 felt need of obtaining affidavits from persons investing in shares to certify genuineness when there was no inquiry — Such fact raised suspicion on genuineness of transaction — Further shares were purchased at large premium and then sold at substantial loss in short span of time — Also assessee failed to produce persons who had invested in shares and show that these people were completely unrelated to Assessee and as such, all entries were merely accommodation entries — Thus, Assessee had not discharged onus satisfactorily and additions made by AO were sustained — Orders of CIT (Appeals) and ITAT in deleting addition unsustainable — Substantial question of law answered in favour of Appellant and against Respondent Assessee — Appeal allowed.
Name of Assessee also figured as one of parties involved in taking such accommodation entries — AO noticed that assessee received substantial share application money along with premium which was not proved by assessee as genuine — AO made addition u/s 68 — CIT(A) deleted addition and Tribunal upheld CIT(A)’s order — Hence Revenue is in appeal — Held, in case of CIT v NR Portfolio Pvt Ltd, it was held that when Assessee does not produce evidence or tries to avoid appearance before AO, it necessarily creates difficulties and prevents ascertainment of true and correct facts as AO is denied advantage of contention or factual assertion — Court or Tribunal should be convinced about identity, creditworthiness and genuineness of transactions — Onus to prove three factum is on Assessee as facts are within personal knowledge of Assessee — Mere production of incorporation details, PAN Nos or returns may not be sufficient when surrounding and attending facts predicate cover up — In present case, it was strange that Assessee in year 2001 felt need of obtaining affidavits from persons investing in shares to certify genuineness when there was no inquiry — Such fact raised suspicion on genuineness of transaction — Further shares were purchased at large premium and then sold at substantial loss in short span of time — Also assessee failed to produce persons who had invested in shares and show that these people were completely unrelated to Assessee and as such, all entries were merely accommodation entries — Thus, Assessee had not discharged onus satisfactorily and additions made by AO were sustained — Orders of CIT (Appeals) and ITAT in deleting addition unsustainable — Substantial question of law answered in favour of Appellant and against Respondent Assessee — Appeal allowed.
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