Case Law Details
ITO Vs Randeep Investment (P) Ltd. (ITAT Mumbai)
Conclusion:
Addition made under section 68 on account of share capital received by assessee as unexplained credit was to be deleted in absence of any material or inquiry conducted by AO that the issuing companies were non-existing entities or a paper company and AO had not brought material on record to dislodge the veracity of the evidences filed by assessee.
Held:
AO noted that Shri SK Gupta was providing accommodation entries to various beneficiaries through different mediators by charging commission and assessee had provided cash to obtain credit entry in the Name of the company controlled by Sh. S K Gupta which represented assessee’s income from undisclosed sources. Therefore, AO made addition under section 68 by reopening of assessment on account of share capital received by assessee as unexplained credit. It was held AO did not carry out any sort of prima facie inquiry nor he had issued any notices u/s 133(6) to the companies to examine the veracity of assessee’s claim that nature and source of credit had been proved and the identity, creditworthiness and genuineness of the transaction had been established. AO had to bring some material on record to dislodge the veracity of the evidences filed by assessee. In absence of any inquiry, such a material or documents filed by the assessee could not be discarded. AO had simply relied upon the information received from Investigation Wing, without even carrying out any prima facie inquiry so as to show that assessee’s contention or material filed by him could not be relied upon. In absence of any material or inquiry conducted by AO that these were non-existing entities or a paper company and there being no rebuttal from the side of department, addition made u/s 68 was directed to be deleted.
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