Income Tax Officer vs Indsu Enterprises P. Ltd.

PER VIKAS AWASTHY, JM:

This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as 'the CIT(A)'] dated 16.03.2024, for Assessment Year 2011-12 deleting addition of Rs.40,00,000/-, amount allegedly credited in the bank account of the assessee as share application money.

Shri Manoj Kumar, representing the Department vehemently defending the assessment order submits that the assessee had received share application money from M/s. Silverlake Traders P. Ltd. The Assessing Officer (AO) granted multiple opportunities to the assessee to prove genuineness of the said transaction. The assessee failed to discharge its primary onus to establish genuineness of the transaction. M/s. Silverlake Traders P. Ltd., is a shell company and provides accommodation entries in the form of share application money. Therefore, the AO made addition of Rs.40,00,000/- u/s.68 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). The ld. DR prayed for reversing findings of the CIT(A) and upholding assessment order.

Per contra, Dr. Shashwat Bajpai, appearing on behalf of the assessee vehemently supporting the impugned order submits that there was no transaction relating to deposit of share application money Rs.40,00,000/- in the bank account of the assessee during FY 2010-11. The CIT(A), after examining the documents on record and after examining the provisions of section 68 of the Act, threadbare deleted the addition. He thus prayed for dismissing appeal of the Revenue.

Both sides heard, orders of the authorities below examined. The solitary issue in the instant appeal is with regard to genuineness of the transaction of amount Rs.40,00,000/- allegedly credited in bank account of the assessee as share application money. The AO has held the said transaction as accommodation entry. The CIT(A) has given a categoric finding of fact that there was no transaction of Rs.40,00,000/- in the bank account of the assessee during the period relevant to assessment year under appeal. Once there is no credit of Rs.40,00,000/- in the bank account of the assessee, provisions of section 68 of the Act in respect of such alleged transaction cannot be invoked. I find no infirmity in findings of the CIT(A) on this issue. Hence, the impugned order is upheld and appeal of the Revenue is dismissed.