PR. COMMISSIONER OF INCOME TAX V. M/S SKYWAYS INDUSTRIAL ESTATE COMPANY (P) LTD.

ITA/82/2020

AI Insights

The case revolves around an appeal by the Pr. Commissioner of Income Tax, Jaipur-2 against M/s Skyways Industrial Estate Company (P) Ltd., concerning the addition of Rs.3,98,00,000 as unaccounted cash introduced in the form of share capital. This addition was initially made by the assessing officer under Section 68 of the Income Tax Act, 1961, suspecting it to be a result of bogus accommodation entries. The CIT (Appeals) later deleted these additions, leading the revenue to appeal before the Income Tax Appellate Tribunal, which upheld the CIT's decision. The core issue was whether the Tribunal was correct in dismissing the revenue's appeal without sufficient appreciation of the evidence provided by the Investigation Wing, Kolkata, regarding the entry provider racket.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 727867 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 14-02-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: NIKHIL SIMLOTE
• Keywords: Accommodation entries; Bogus entries; Entry provider; Income Tax; Investigation Wing; Share capital
• Section: 68

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 82/2020 Pr. Commissioner Of Income Tax, Jaipur-2, Jaipur. ----Appellant Versus M/s Skyways Industrial Estate Company (P) Ltd., F-42, Shri Nath Tower, Central Spine, Vidhyadhar Nagar, Jaipur. ----Respondent For Appellant(s) : Mr. Nikhil Simlote on behalf of Mr. R.B. Mathur (Senior Advocate) For Respondent(s) : HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON'BLE MR. JUSTICE SUDESH BANSAL Judgment 14/02/2022 This appeal is filed by the revenue to challenge the judgment of the Income Tax Appellate Tribunal. Following question is presented for our consideration:- (i) Whether on the facts and circumstances of the case and in law the ITAT was correct in dismissing appeal of the department on the issue of the addition of Rs.3,98,00,000/- made u/s 68 of the IT Act, 1961 without appreciating the fact that the assessee has introduced its unaccounted cash amounting to Rs.3,98,00,000/- in the form of share capital through the racket of entry provider operating in Kolkata, information of which was provided by the Investigation Wing, Kolkata.” The documents on record would suggest that for the assessment year 2012-13 the assessing officer had made addition of a sum of Rs.3.98 crores in the hands of the assessee in terms of Section 68 of the Income Tax Act, 1961 (‘the Act’ for short). According to the assessing officer this related to bogus (2 of 3) [ITA-82/2020] accommodation entries by way of share application money. The assessee carried the matter in appeal. The CIT (Appeals) allowed the appeal and deleted the additions, upon which the revenue preferred further appeal before the Tribunal. Tribunal by impugned judgment dismissed the revenue’s appeal making following observations:- “2.4 We have considered the rival submissions as well as the relevant materials available on record. The AO has proceeded to make the addition u/s 68 of the Act in respect of share application money received ITO, Ward- 4(2), Jaipur vs M/s. Skyways Industrial Estate Company Pvt. Ltd., Jaipur by the assessee from M/s. Abhishek Advisory Pvt. Ltd. by referring to the search and survey action carried out by the DGIT (Inv.) Kolkata, in para 3.1 as under:- ''3(1). A search and survey action was carried out in the case of Shri Anand Sharma, Kolkata (entry provider) and his Group by the DGIT(Inv.), Kolkata on 02-07-2013 when various incriminating documents were seized and impounded. The search action resulted into collection of evidences and other findings which conclusively proved that Shri Anand Sharma through a web of concerns run and operated by him, is engaged in providing accommodation entries of various nature like bogus unsecured loans, bogus share application and bogus sales etc.'' It is clear that the AO has proceeded on the basis of the statement of Shri Anand Sharma recorded by Investigation Wing, Kolkata during search and survey action carried out on 02-07-2013. There is no dispute that in his statement recorded by the Investigation Wing, Kolkata, Shri Anand Sharma has admitted that he is engaged in providing the accommodation entries in respect of share application money, unsecure loans etc. However, in the entire statement Shri Anand Sharma has not stated that M/s. Abhishek Advisory Pvt. Ltd. is one of the concerns / companies controlled or managed by him in providing such accommodation entries. It can thus be seen that CIT (Appeals) and Tribunal have concurrently found no evidence of introduction of assessee’s own money through bogus share application entries. The prime reliance of the revenue on the statement made by one Shri (3 of 3) [ITA-82/2020] Anand Sharma which was recorded by the Investigation Wing, Kolkata did not incriminate the assessee company. As recorded by the Tribunal the said Shri Anand Sharma has nowhere stated that M/s Abhishek Advisory Pvt. Ltd. is one of the concerned companies controlled or managed by him in providing accommodation entries. The entire question is thus based on appreciation of the evidence. No question of law arises. Income Tax appeal is dismissed. (SUDESH BANSAL),J (AKIL KURESHI),CJ Brij Mohan Gandhi/27 "