JHM Developers Private Limited vs Income Tax Officer 13(3)

PER VIKAS AWASTHY, JUDICIAL MEMBER:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 12.03.2026, for Assessment Year 2012-13.

Shri Devesh Poddar, appearing on behalf of the assessee submits that during the period relevant to assessment year under appeal, the assessee had sold unlisted shares to following companies:

To prove genuineness of transaction of sale of shares, the assessee had furnished copy of ITR, bank statement & Audited Statement of accounts of the aforesaid three companies. The shares were sold in the normal course of business and the receipts from sales of shares was duly reflected in the books of assessee. The shares sold were of unlisted company and were purchased by the assessee during AY 2008-09 and 2009-10. The purchase of shares were never disputed. The investment in said shares is duly reflected in the books of assessee. The Assessing Officer (AO) has made addition solely on the grounds that the notices issued u/s.133(6) of the Income Tax Act,1961 (hereinafter referred to as ‘the Act’) to the said companies were not responded. The assessee has discharged its onus in proving identity, creditworthiness of the purchaser and genuineness of the transaction. Hence, no addition can be made u/s.68 of the Act in hands of the assessee. The ld. Counsel further stated that addition of Rs.36,000/- u/s.69C of the Act has been made merely on presumption that the assesses has paid commission @2% for procuring accommodation entry. The ld. Counsel prayed for reversing findings of the CIT(A) and the AO and deleting the addition.

Per contra, Shri Nirmal Nangia, representing the department reiterated findings of the AO and the CIT(A). The ld. DR submits that the notices sent to the parties who had allegedly purchased shares were received back unserved. No confirmation from the purchasers or any other document relating to purchase of shares was furnished by the assessee. He thus, prayed for upholding the addition.

Both sides heard, orders of the lower authorities examined. The assessee in appeal has assailed the addition of Rs.18,00,000/- u/s.68 of the Act and addition of Rs.36,000/- u/s.69C of the Act. There were credit of amounts aggregating to Rs.18,00,000/- in the bank account of assessee, the said amounts were credited by following companies:-

The case of Revenue is that the aforesaid amount received by the assessee is assessee’s own money from undisclosed sources and the assessee has only received accommodation entry from the aforesaid paper companies.

The assessee in order to discharge its onus u/s.68 of the Act has furnished copy of ITR, bank statements and audited statement of accounts of the three companies to whom shares were sold by the assessee. The solitary reason for rejecting assessee’s explanation is that the notices u/s.133(6) of the Act issued to the above said three entities remained un-responded. A perusal of the assessment order reveals that no comments, negative or otherwise have been recorded by the AO on the Income Tax return, bank statement and audited statement of accounts of all the three companies furnished by the assessee. There is no wishper in the assessment order that the audit accounts furnished does not reflect creditworthiness of the companies to make payment for purchase of the shares. Since, the assessee placed on record ITRs and bank statements of the said companies, the assessee was able to prove identity and creditworthiness of the companies. The assessee has allegedly purchased shares of unlisted company in AY 2008-09 and 2009-10, which were now sold to the above mentioned three companies. It is not in dispute that the purchase of shares was accepted as genuine in the year of purchase, now in the year of sale, no question can be raised on genuineness of shares. No addition can be made merely for the reason that the notices issued u/s.133(6) of the Act were not responded by the third party. The assessee has placed on record relevant documents to discharge its onus u/s.68 of the Act, hence, the addition of Rs.18,00,000/- is directed to be deleted.

In so far as, the addition of Rs.36,000/- u/s.69C of the Act is concerned the same is consequential to the addition made u/s.68 of the Act above. Since, the said addition is directed to be deleted, the addition of Rs.36,000/- would not survive.

In the result, impugned order is set aside and appeal of the assessee is allowed.