×Latest Case Laws on Income Tax by various High Courts of India
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17-01-2019, NDR PROMOTERS, Section 260A, 68, 132, HIGH COURT OF DELHI
This appeal by the Revenue under Section 260A of the Income Tax Act, 1961 („Act‟, for short), in the case of NDR Promoters Pvt. Ltd. relates to Assessment Year 2008-09 and arises from the order dated 3rd March, 2019 passed by the Income Tax Appellate Tribunal („Tribunal‟, for short).
2. The appeal was admitted for hearing vide order dated 17th January, 2018 on the following substantial question of law:-
“Whether the ITAT fell into error in upholding the deletion directed by the CIT (A) in respect of the amount of Rs.1,51,50,000/- brought to tax under Section 68 of the Income Tax Act, 1961, in the circumstances of the case ?”
3. It is an undisputed position that during the Assessment Year 2008-09, the respondent-assessee had received money in the form of share capital/share premium as per the following details:- Issue raised in this appeal relates to first five companies, who had invested Rs.1,51,50,000/- as share application money with premium as per details given in above table.
4. The Assessing Officer vide assessment order dated 30th December, 2010, made an addition of Rs.1,51,50,000/- recording that the aforesaid companies were „creation‟ of and de facto operated by one Tarun Goyal, Chartered Accountant, who had set up about 90 companies/firms including the aforesaid 5 companies for providing accommodation entries. Paper work was perfect but there were chinks, which had revealed that the true nature of the transactions was to convert illegitimate money by providing bogus or accommodation entries. These evidences and details collected and ascertained during the course of search under Section 132 of the Act conducted by the Investigation Wing in the case of Tarun Goyal, had revealed that the registered office of 90 companies was located at 13/34, Main Arya Samaj Road, Karol Bagh and their former office was at 203, Dhaka Chambers, 2069/39, Naiwala, Karol Bagh, New Delhi. These companies were not carrying on any genuine business activities. Directors of these companies were employees of Tarun Goyal, who were working as peons, receptionists etc. Entries in the books were bogus. Modus operandi in such cases is well known, money is circulated by first depositing cash in the bank account of one such company, and thereupon it is transferred/circulated within the group companies before cheque is issued to the beneficiary.
5. The Assessing Officer had asked the respondent-assessee to produce Directors of the shareholder companies for examination after recording:-
(i) most of the directors in their statement recorded by the Investigation Wing had admitted that they had signed documents/papers on direction of Tarun
(ii) shares of face value of Rs.10/- were issued at a premium of Rs.40/- (total Rs.50/-). There was no justification and reason for a third person to purchase shares in the respondent-assessee and to pay substantial premium.