, A, IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A, CHANDIGARH BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER & SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA No No.1170/CHD/2017 / Assessment Year : 2010-11 M/s. Gala Finance and Investment Ltd, SCO-19, Master Chamber, Feroze Gandhi Market, Ludhiana. ITO, Ward-VII(1), Ludhiana. ./PAN No.: AABCG 9655R /Appellant /Respondent " /Assessee by : Shri Ashwani Kumar, CA " / Revenue by : Shri Manoj Kumar, Sr.D.R. " /Date of Hearing: 25/10/2018 " /Date of Pronouncement : 18 /01/2019 /Order PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER The present appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-3, Ludhiana (in short CIT(A) dated 31.5.2017 passed u/s 250(6) of the Income Tax At, 1961 (hereinafter referred to as Act ) .
2. Ground No.1 raised by the assessee reads as under:
1. That order passed u/s 250(6) of the Income Tax Act, 1961 is against law and facts on the file in as much as the Ld. Commissioner of Income Tax(Appeals)-3, Ludhiana was not justified to arbitrarily uphold the action of the Ld. Assessing Officer in resorting to provisions of Sec.148 of the Income Tax Act, 1961
3. The assessee in the above ground has challenged the validity of the assessment framed u/s 148 of the Act. The Ld. counsel for assessee drew our attention to the reasons recorded for issuance of notice u/s 148 placed in the Paper Book filed before us at pages 18 to 20 as under: The assessee has filed its return of income for asstt. year 2010-11 on 15-10-2010 declaring its income at Nil. The undersigned is in possession of information that the assessee, M/s Gala Finance and Investment Ltd. SCO 19 Master Chambers, Ludhiana has obtained accommodation entry of Rs.1,00,00,000/- on 22.05.2009 through RTGS from Axis ITA No.1170/CHD/2017 Bank Ltd. from a Company M/s Shalini Holding Ltd., C- 4/152, First Floor, Sector-6, Rohini, New Delhi, against cash through a middle man Mr. Ravindra Arya. Hence, the amount of Rs.1,00,00,000/- is required to be brought to tax in the hands' of the assessee Company for A.Y. 2010-11., It is further found that this group has given accommodation entries to 12 persons and for a total amount of 14.95 Crs. during the accounting year 2005-06 to 2010-11 relevant to A.Y. 2006-07 to 2011-12 from M/s Shaini Holdings Ltd. and others dummy companies floated by Sh. Surender Kumar Jain and Sh. Virendra Kumar Jain(entry providers). A search/ survey was conducted by the Income Tax department on the business premised/ residences of Sh. Surendra Kumar Jain and Sh. Virendra Jain who were engaged in the business of providing accommodation entries by TRGS/Cheques/PO/DD in lieu of cash to a large numbers of companies through various paper and dummy companies floated for the purpose.
2. The information received by the undersigned has been examined carefully and after due application of my mind I have reasons to believe that by reason of omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment income chargeable to tax amounting to Rs.1,00,00,000/- has escaped assessment and it is a fit case for the issue of Notice u/s 148 read with section 147 of the I.T. Act, 1961.
4. Referring to the same Ld. counsel for the assessee stated that the aforesaid reasons were not sufficient for assumption of jurisdiction u/s
148 of the Act to reopen the case of the assessee since the belief arrived at by the Assessing Officer (in short referred to as AO) of income escaping assessment was based merely on surmises and conjectures and the A.O. in fact had no reason to believe that any income of the assessee company had escaped assessment. Referring to the reasons recorded the Ld. counsel for assessee stated that the same reveals that the A.O. concluded that the income to the extent of Rs.1 crore had escaped assessment on the basis of information received that the assessee company had obtained accommodation entry of Rs.1 crore through RTGS from Axis Bank from a company M/s Shalini Holding Ltd. which was a dummy company floated by Shri Surinder Kumar Jain and Varinder Kumar Jain on whom search and survey was conducted by the Department and it was revealed that they were providing accommodation entry in lieu of cash to a large number of companies. The Ld. counsel for assessee contended that it is not known as to how the A.O. came to the ITA No.1170/CHD/2017 conclusion that M/s Shalini Holding Ltd. is a company floated by S/Shri Surinder Kumar Jain and Varinder Kumar Jain and on perusal of various statements of S/Shri Surinder Kumar Jain and Varinder Kumar Jain, there is no mention of M/s Shalini Holding Ltd. in the same. Further the Ld. counsel for assessee contended that the evidence in any case in the possession of the A.O. is on the alleged unilateral admission of a third party during the course of search u/s 132 of the Act and this cannot by itself lead to the conclusion of escapement of income. That there is no tangible or direct evidence to the effect that the income of the assessee had escaped assessment.
5. The Ld. DR, on the other hand, heavily relied upon the findings of the CIT(A) while rejecting this ground raised before him. Our attention was drawn by the Ld. DR to para 4.4 of the order as under: 4.4 I have gone through the submission of the appellant and the submission of the assessing officer in the assessment order. It is seen that the appellant raised objection on the initiation of proceeding u/s 148 of the Act at the time of assessment proceedings, however the assessing officer has in detail dealt with the objection of the appellant in the assessment order itself. After careful consideration of the facts I am not inclined to agree with the contention of the appellant as Apparently the assessing officer has also delved the objection of the appellant for initiation of 148 at the time of is meant in detail. It is seen that the Department received information received from the DDIT(lnv.), Unit Vl(2), New Delhi that the appellant had obtained accommodation entry of Rs. 1,00,00,0007- on 25.05.2009 through RTGS from Axis Bank, from a company M/s Shalini Holding Ltd, C4, 152, first Floor, Sec-6, Rohini, New Delhi against cash through a middle man Mr. Ravinder Arya. As per information, the company i.e. M/s Shalini Holding Limited is a dummy company floated by Sh. Surinder Kumar Jain & Sh. Varinder Kumar Jain whose residential as well as business premises were searched by the Investigation Wing, New Delhi. These persons found to be engaged in providing accommodation entries by RTGS/cheques/PO/DD in lieu of cash to a large number of companies through various paper and dummy companies floated for the purpose. Therefore, the AO initiated the re- assessment proceedings and issue notice u/s 148 of the Act after recording the reasons u/s 147 for the Act. I have also carefully gone through the assessment order and the information received by the Department from investigation Wing as per report of the assessing officer received in this office on 15.03.2017. After careful consideration of all the facts I am of the opinion that assessing officer has followed all the procedure laid down by section148 of the Act. The ITA No.1170/CHD/2017 information received by the Department makes a strong basis for the assessment assessing officer were having reason to believe that income has escaped. The information sent by the DDIT(lnv.), Unit Vl(2), New Delhi that the appellant had obtained accommodation entry of Rs. 1,00,00,0007- on 25.05.2009 through RTGS from Axis Bank, from a company M/s Shalini Holding Ltd, C4, 152, first Floor, Sec-6, Rohini, New Delhi against cash through a middle man Mr. Ravinder Arya. As per information, the company i.e. M/s Shalini Holding Limited is a dummy company floated by Sh. Surinder Kumar Jain & Sh. Varinder Kumar Jain whose residential as well as business premises were searched by the Investigation Wing, New Delhi. It is very clear that the information is very clear and self-contained which states that the assessee has taken accommodation entry M/s Shalini Holding Limited which is a dummy company floated by Sh. Surinder Kumar Jain & Sh. Varinder Kumar Jain. It is seen that there is knowingly ambiguity in the information received by the assessing officer, therefore, the reasons to believe derived by the assessing officer is legally and factually correct. Therefore, it doesn't call for any interference at this stage. There are several legal pronouncement pertaining to the rejection of courts and other courts in this regard.
6. Referring to the same, the Ld. DR pointed out that the CIT(A) had stated that the information in the possession of the A.O., as reproduced in the reasons recorded, was sufficient to form belief of escapement of income of the assessee. The Ld. DR pointed out that the CIT(A) had gone through the information received from the Investigation Wing and had noted that it made a strong basis for the A.O. to have reason to believe that the income had escaped assessment. The Ld. DR pointed out that the Ld.CIT(A) had mentioned that the information was very clear and self contained, stating that the assessee had taken entry from M/s Shalini Holding Ltd. which was a dummy company floated by S/Shri Surinder Kumar Jain and Varinder Kumar Jain and there is no ambiguity in the information and, therefore, the CIT(A) had held the reasons recorded by the A.O. to be legally and factually correct. The Ld. DR stated that the CIT(A) had, therefore, rightly dismissed the ground raised by the assessee challenging the jurisdiction assumed by the A.O. to frame assessment u/s 148 of the Act.
7. We have heard the rival contentions and carefully perused the orders of the authorities below. We do not find any infirmity in the order ITA No.1170/CHD/2017 of the CIT(A). As rightly mentioned by the CIT(A) that the information in the possession of the A.O. that the assessee had received entry from one M/s Shalini Holding Ltd. of Rs.1 crore through RTGS from Axis Bank Ltd., which was based on information collected during search by the Investigation Wing of the Department, at the premises of S/Shri Surinder Kumar Jain and Varinder Kumar Jain, was a clear information and cannot by any stretch be said to be vague. Further the A.O. had mentioned that he had verified the fact of the assessee having received Rs.1 crore from M/s Shalini Holding Ltd. Therefore, it is clear that the A.O. had received information from the Investigation Wing which was co- related with the facts on record before him and thus it is evident that the A.O. had duly applied his mind and formed the reasonable belief of income having escaped assessment in his possession. The contention of the Ld. counsel for assessee that the belief was based on surmises and conjectures is, therefore, rejected. Further the contention of the Ld. counsel for assessee that there was no direct evidence of the income escaping assessment, we hold, merits no consideration since for the purpose of reopening there only has to be a reasonable belief of income having escaped assessment and not a conclusive finding on the same, which can be arrived at after making necessary enquiries during assessment proceedings. In view of the above, we uphold the order of the Ld.CIT(A) in upholding the action of the A.O. in assuming the jurisdiction u/s 148 of the Act to frame assessment in the present case. Ground of appeal No.1 raised by the assessee is, therefore, dismissed.
8. Ground No.2 challenging the merits of the addition upheld by the Ld. CIT(A) reads as under:
2. That she was further not justified to arbitrarily uphold the addition of Rs.1.00 crores made by the Ld. AO by treating the amount received from M/s. Shalini Holdings Ltd. on account of trade advance as income from undisclosed sources by resort to provisions of Section 68 of the Income Tax Act, 1961. ITA No.1170/CHD/2017
9. The brief facts relating to the issue as reproduced in paragraph 5.1 and 5.2 of the CIT(A) order are that during the assessment proceedings, the AO observed that there were sundry creditors of Rs.1,14,77,437/-. The appellant was asked to furnish the complete names and addresses of sundry creditors exceeding of Rs.5,00,000/- with their names, PAN, amount and name of Range where they were assessed. He was also requested to furnish confirmation with respect to sundry creditors. The appellant submitted following details: Further, the AO observed that the appellant had received Rs. 1,00,00,000/-during the year under consideration through RTGS from M/s Shalini Holding Limited, New Delhi. The AO asked to furnish confirmation from the said three parties namely M/s Shalini Holding Limited, M/s MTL Shares & Stock Brokers Ltd. and M/s Fidelity Commodity Traders Ltd. to prove the genuineness of transactions. The appellant produced the two creditors namely M/s MTL Shares & Stock Brokers Ltd. and M/s Fidelity Commodity Traders Ltd. but failed to produce the creditor namely M/s Shalini Holding Limited. After detailed consideration of submission of the appellant, the AO made disallowance of Rs. 1,00,00,000/- as per detailed enquiry ,mentioned at Para No. 5.5 to Para 6. During the appellate proceedings the assessee contended that it had proved the identity, creditworthiness and the genuineness of the transaction with the documentary evidences and further that the amount advanced was in the nature of the business advance received for the purchase of shares from the assessee company and against which the shares had been sold and the balance advance outstanding was Name & address Amount
1. M/s Shalini Holding Limited, 209, 2nd Floor, 6/41, Sunder Kiran Building WES, Karol Bagh, New Delhi- 110005. Rs. 23,70,987/-
2. M/s MTL Shares & Stock Brokers Ltd., SCO- 19, Feroze Gandhi Market, Ludhiana. Rs. 22,63,948/-
3. M/s Fidelity Commodity Traders Ltd., 3219, Nai Abadi, Gaushala Road, Sirhind. Rs. 57,29,425/- ITA No.1170/CHD/2017 Rs.23,70,987/- and since the purchase shares of the assessee company or even the sale transaction had not been doubted and further the gain earned by the assessee on the sale of shares had been duly accepted meaning thereby that the transaction of sale of share to M/s. Shalini Holdings of the assessee company having been duly accepted there was no reason to doubt the amount of Rs.1 crore received by the assessee from the said company. Reliance was placed on numerous case laws. The written submissions to this effect were filed by the assessee which was sent to the Assessing Officer for his comments, who reiterated his findings in the assessment order and after considering the order of the Assessing Officer who had relied upon the appraisal report in the case of search conducted on Shri S.K. Jain and Shri V.K. Jain and further on the gaps or discrepancies in the statement of one of the director of the assessee company recorded during the assessment proceedings. Ld. CIT(A), therefore, held that the documents were not sufficient enough to prove the identity, creditworthiness and genuineness of the transaction and the information gathered by the Assessing Officer sufficiently proved that the said entry was a bogus accommodation entry.
10. During the course of hearing before us, Ld. Counsel for the assessee reiterated the contentions made before the lower authorities. The main crux of the contention of the Ld. Counsel for the assessee were two fold:
i) that the identity, creditworthiness and the genuineness of the transaction had been adequately proved with documentary evidences filed. Drawing our attention to the written submission filed before the Ld. CIT(A) and reproduced at paragraph 5.3 of his order. Ld. Counsel for the assessee contended that the identity of M/s. Shalini Holdings had been proved by filing the following documents:
(i) Confirmation.
(ii) Copies of Income Tax Returns. ITA No.1170/CHD/2017
(iii) PAN
(iv) Certificate of incorporation
(v) Memorandum of Articles of Association
(vi) Copy of ledger account of the said amount
(vii) Copy of bank statement of M/s. Shalini Holdings.
11. Ld. Counsel for the assessee submitted that M/s. Shalini Holdings being a company was duly incorporated under the Companies Act and documentary evidences to this effect having been filed there could not be doubt with respect to the identity of the said company vis--vis the creditworthiness. Ld. Counsel for the assessee further contended that the transaction had taken place through banking channels and there was no cash deposited in the bank account of M/s. Shalini Holdings immediately before the amount was advances to the assessee company. Further the sufficiency of the balance in the bank account of M/s. Shalini Holdings had been demonstrated and being not required to prove the source of source of the depositor and no cash having been received immediately before the making of the advance, there was no reason to doubt the creditworthiness of the depositor and the onus of the establishing the creditworthiness had thus been duly established by the assessee. Ld. Counsel for the assessee therefore contended that the identity and creditworthiness of the transaction having been duly established, the genuineness also stood established and there was no reason to doubt the same. ii) The next contention raised by the Ld. Counsel for the assessee was that the said transaction of Rs.1 crore was made on account of sale of various shares and securities by the assessee to M/s. Shalini Holdings Ltd. in the normal course of business and a sum of Rs.23,70,987/- was thereafter outstanding as at the end of the impugned year as advanced against the shares, with the balance having been set off against the sale of shares to M/s. Shalini Holdings. Ld. Counsel for the assessee pointed out that the said fact had been brought to the notice of the Assessing ITA No.1170/CHD/2017 Officer during the assessment proceedings, which fact finds mention in paragraph 5.3 of the Ld. CIT(A) order and the said facts were also pointed out to the Ld. CIT(A), in response to the remand report filed by the Assessing Officer during the appellate proceedings. Our attention was drawn to the submissions made before the Ld. CIT(A) vide letter dated 17.05.2016 reproduced at page no.38 of the order as under: In continuation to our earlier submissions, the following is submitted for Your Honour's kind consideration and necessary adjudication. Vide the earlier submissions, the appellant company has strongly agitated against the action of the Learned Assessing Officer in making an addition of Rs. 1.00 crore by resort to the provisions of Section 68 by holding that the credit in the books of accounts of the appellant company is not fully explained. At the outset, it is respectfully submitted that it is wrong to term this credit as a cash credit as this amount had been received on account of sale proceeds of shares which is evident from the perusal of copy of account. The amount otherwise also stands reflected under the head "Sundry Creditors" and not under the head "Share Capital/Share Application Money/Unsecured Loan". Your Honour will appreciate that the every credit has to be viewed vis-a-vis the nature it represents and merely because the amount has been received from a particular company cannot be hit by the provisions of Section 68. The appellant company has already made detailed submissions even with respect to the addition made u/s 68 but fact of the matter is that looking to the facts and circumstances of the case, no addition was warranted by resort to provisions of Section 68 as this amount was received in the course of business only. It may further be submitted that the Learned Assessing Officer had fully accepted the purchases, sales, other expenses and receipts of the appellant company and no defect has been noticed or pin-pointed in the maintenance of the books of accounts of the appellant company by the Learned Assessing Officer. Copy of Balance Sheet of the appellant company is enclosed for facility of reference. Copies of detailed submissions made vide letters dated 27.12.2013, 20.01.2014 and 29.01.2014 before the Learned Assessing Officer in respect of the credit of Rs. 1.00 crore are also enclosed for Your Honour's kind perusal. It is respectfully prayed that while adjudicating the appeal, the submissions made above may also kindly be considered and the appeal be adjudicated accordingly.
12. Ld. Counsel for the assessee contended that the Revenue Authorities had not doubted the purchases, sales and other expenses relating to the said transaction, and therefore, having accepted the said transactions there was no occasion or reason to doubt the amount of Rs.1 crore received from M/s. Shalini Holdings.
13. Ld. D.R., on the other hand, relied upon the order of the lower authorities. Further written submissions were also filed before us dated 26.02.2018 and the main thrust of the arguments of the learned DR was that the information in the possession of the Revenue authorities ITA No.1170/CHD/2017 adequately proved that the said amount was only an accommodation entry. Our attention was drawn to the appraisal report in the case of Shri Surendra Jain and Shri Virendra Jain reproduced at paragraph 5.9.1 of the Ld. CIT(A) order and it was pointed out from the same that it clearly indicated that the assessee had received accommodation entry of Rs.1 crore from M/s. Shalini Holdings Ltd. Our attention was drawn to the modus operandi outlined in the said report pointing out therefrom that while the search operation conducted in the case of Shri S.K. Jain and Shri V.K. Jain and the post search inquiries revealed that they had formed various bogus companies for giving accommodation entries which were introduced through cash received which were later on channelized in various dummies companies through banking channel ultimately being received in the hands of the beneficiaries. Our attention was drawn to Annexure-A of the appraisal report in which the transaction of Rs.1 crore in the assessee company received through M/s. Shalini Holdings was also mentioned as one of the transaction undertaken by Shri V.K. Jain & Shri S.K. Jain through intermediary Mr. Ravindra Arya.Ld. DR further pointed out that despite the fact documentary evidences proving the identity, creditworthiness, genuineness of the M/s. Shalini Holdings had been filed, but the fact that the director of the creditor company , Shri Anil Prakash, failed to give satisfactory replies to the queries regarding source of income,sources of income shown in the return of income, company formation, transactions made by M/s. Shalini Holdings with the assessee and other concerns as mentioned in the statement of bank accounts of M/s. Shalini Holdings and also the fact that the said director had failed to produce the complete information including books of account, the assessee had failed to discharge the primary onus by establishing the identity of the subscriber.The creditworthiness also it was also pointed out by the learned DR, was not proved since there was nominal credit balance of Rs.5,61,462/- in the account of the creditor and the amount of Rs.1 crore was credited in the ITA No.1170/CHD/2017 account immediately before it was advanced to the assessee. The said amount of Rs.1 crore was received by M/s. Shalini Holdings from M/s. Dhanguru Financial Solution, which the DDIT Investigation Unit VI-2 had intimated, was a dummy paper company floated by Shri S.K. Jain and Shri V.K. Jain. Ld. DR further pointed out that the income of the subscriber as per the P&L account was very small and therefore the creditworthiness was also doubtful.Reliance was placed on a number of case laws in this regard as under: (i.) CIT vs Nova Promoters & Finlease (P) Ltd.(2012) 18 Taxman.com 217(Delhi) (ii.) CIT vs. NR Portfolio (P) Ltd, 263 CTR 456 (Del) (iii.) CIT vs. Nipun Builders and Developers, (2013) 350 ITR 407 (Del) (iv.) CIT vs. Maf Academy P. Ltd, 361 ITR 258 (Del) (v.) CIT vs. Jansampark Advertising & Marketing Pvt. Ltd., (2015) 375 ITR 373 (vi.) ITO vs. Paramount Intercontinental Pvt. Ltd.,(2017-LL-0207-80) dated 7-2-
14. We have heard the rival contentions and carefully gone through the orders of the authorities below and have also considered the various case laws cited before us. The issue before us relates to the treatment of Rs.1 crore received by the assessee during the year from M/s. Shalini Holdings Pvt. Ltd. as unexplained and as only an accommodation entry in its books. The facts which are not disputed is that the said amount was received from M/s. Shalini Holdings on 25.05.2009 through RTGS from Axis Bank. It is also not disputed that against the said amount received during the year the balance outstanding at the end of the year is Rs.23,70,987/-. The assessee had explained that the said amount was received from M/s. Shalini Holdings for the purchase of shares from the assessee company and while the balance was settled against the said transaction of sale of shares and advance of Rs.23,70,987/- remained at the end of the year. Copy of account of M/s. Shalini Holdings in the books of the assessee was filed, confirmation of M/s. Shalini Holdings in this regard was filed. All the above facts contended by the assessee, we find, have not been controverted by the Revenue at any stage. Further we ITA No.1170/CHD/2017 find that the Revenue has not doubted the purchase of shares by the assessee company which have been sold to M/s. Shalini Holdings. The Revenue has also not doubted the sale of shares of M/s. Shalini Holdings by the assessee company. It is therefore obvious and clear that the Revenue has not doubted the genuineness of the transaction of purchase and sale of shares against which the impugned advance of Rs.1 crore was received. In fact,during the course of hearing before us, a question was raised to the Ld. Counsel for the assessee at bar, whether any profits were earned from the said transaction to which our attention was drawn to the financial statements of the assessee company placed in the paper book and pointed out therefrom that the profit on the sale of shares was duly included in the books of account of the assessee company. We find that the Revenue has not even doubted and had in fact accepted this fact by accepting the profits returned by the assessee company. Having at no stage doubted the genuineness of the transaction of purchase and sale of shares by the assessee company ,in the course of which it received the impugned sum of Rs. 1 crore from M/s Shalini Holdings, we fail to understand how then the amount received could be said to be unexplained. Or for that matter accommodation entry only. From what we can understand about the terminology of the accommodation entry it means a bogus entry in the books of account of a person, shown in the name of some other person to accommodate and to bring in the books of accounts the own income of the impugned person, camouflaging it in the name of some other person. It is in effect an entry to accomodate own income of an assessee in its books of account not directly and truthfully, but in the name of some other person and not by way of any income. In the present case the assessee having demonstrated that against the advance of Rs.1 crore received, shares were sold to M/s. Shalini Holdings, which fact has not been doubted by the Revenue, we fail to understand how the said transaction can be termed as accommodation entry. ITA No.1170/CHD/2017
15. Even otherwise, the assessee has filed confirmation of balance outstanding in the name of M/s. Shalini Holdings and has also proved the identity of the said entity by way of filing documentary evidences in the form of PAN, return of income for the impugned assessment year and the copy of certificate of incorporation of the said company. The creditworthiness also we agree has been proved by the fact that the amount was transferred through RTGS i.e., through banking channel and there was no cash deposit prior to the transfer of the said amount from M/s. Shalini Holdings to the assessee.
16. The entire case of the Revenue, we find rest on the appraisal report prepared by the investigation department of the Revenue on account of search conducted on Shri V.K. Jain and Shri S.K. Jain which mentions the inference and conclusion drawn from the search conducted at Shri
V.K. Jain and Shri S.K. Jain has the said two companies the accommodation entries providers and describing the modus operandi by which the accommodation entries were provided by them and the Annexure forwarded along with the appraisal report mentioning the name of M/s. Shalini Holdings as one of the companies being run by Shri S.K. Jain and Shri V.K. Jain providing entries of Rs.1 crore to the assessee company i.e., Gala Finance and Investment Ltd. Further the Revenue has relied upon the statement recorded of one of the Director of M/s. Shalini Holdings pointed out that he was not even aware about the basic facts relating to the assessee company nor transaction of the assessee company. All the above information only creates a suspicion about the transaction carried out, but suspicion alone cannot form the basis for making any addition and in the present case the assessee having discharged its onus of proving the genuineness of the transaction by providing all documentary evidences establishing the identity and the creditworthiness of the creditor and having demonstrated adequately ITA No.1170/CHD/2017 that the money was not received on account of any share application or share capital but was in lieu of sale of shares to the creditor, which fact has not been controverted by the Revenue, the doubt and suspicion created by the information in the appraisal report or derived from the statement recorded by the director, we hold is not sufficient to treat the impugned amount received as accommodation entry or unexplained credit in the books of the assessee. Also the reliance placed by the Ld.DR on various case laws as cited before us, are we find, of no assistance since they are all distinguishable on facts, as the amount received in those cases was in the form of share application money whose genuiness remained unproved, while in the present case the amount has been received on account of sale of shares, which transaction has not been doubted by the Revenue. The addition therefore made of Rs.1 crore is directed to be deleted and the ground raised by the assessee is therefore allowed.
17. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open Court on 18/01/2019 Sd/- Sd/- (SANJAY GARG) (ANNAPURNA GUPTA) / Judicial Member / Accountant Member Dated: 18/01/2019 " ,/ Copy of the order forwarded to : / The Appellant / The Respondent -/ CIT - ()/ The CIT(A) , , 1/ DR, ITAT, CHANDIGARH / Guard File / By order, / Assistant Registrar