PCIT Vs Esspal International Pvt. Ltd. (Rajasthan High Court)
Rajasthan High Court held that addition on account of bogus accommodation entries merely based on admission of assessee in absence of any corroborative evidence unjustified. Thus, addition held as unsustainable.
Facts- A search was conducted at the residence and offices of Shirish Chandrakant Shah and also at the residences of his employees and associates and it was detected that he was engaged in providing accommodation entries of share capital, share premium, share application money, unsecured loans, long term capital gains, short term capital gains etc. in lieu of cash received by him. Accordingly, a notice u/s. 148 of the Income Tax Act, 1961 was issued to him on 10th November 2014 for initiating the reassessment proceedings on the ground of escapement of income to the tune of Rs.2,90,00,000/-. On completion of the assessment u/s. 143(3) read with Section 147 of the Income Tax Act, 1961, the total income assessed was Rs.3,75,06,610/- by making additions on account of bogus share application money and commission for bogus accommodation entries.
The assessment order dated 22nd March 2016 passed under section 143(3)/147 of the Income Tax Act, 1961 was challenged by the respondent by filing Appeal No.119/2016-17 which was allowed by an order dated 15th March 2018. This appellate order was put to challenge by the Income Tax Department.
