Facts of the Case/Proceedings before AO
1. The assessment for AY 2011-12 completed on 30-03- 2015, did not abate consequent to the second search. The AO thereafter initiated proceedings u/s 153A for AY 2011-12 on 05-11-2016 and notices u/s 143(2) & 142(1) of the Act were issued calling for details/information.
2. The AO relied on statements of third parties and observed that the share capital of Rs.35.50 crores raised by the assessee in the earlier year/s and its deployment in acquiring shares of other bodies corporate were bogus and made addition u/s 69 of the Act
Proceedings before CIT(A)
The CIT(A) vide its detailed order deleted the said addition. Aggrieved by which department filed an appeal.
Proceedings before ITAT
Arguments of DR
- An entry operator had admitted under oath on several dates, that the assessee company was originally controlled and managed by him through dummy directors who functioned as per his directions.
- the assessee had availed accommodation entries towards raising equity capital, making investments, and thereafter to sell investments through these entry operators.
- The cash flow showed that there were cash deposits at the 5th to 7th layer of the transaction trail which raised serious doubts on the creditworthiness of the purchasers of the investments.
Arguments of AR
