Anubhav Sharma ORDER
N.K. Billaiya, Member (A)
1. This appeal by the Revenue is preferred against the order of the ld. CIT(A) - 2, New Delhi dated 30.06.2017 pertaining to Assessment Year 2012-13.
2. The solitary grievance of the Revenue is that the ld. CIT(A) erred in deleting the addition of Rs.10.89 crores made by the Assessing Officer u/s 68 of the Income-tax Act, 1961 [the Act, for short]
3. The representatives of both the sides were heard at length, the case records carefully perused and we have duly considered the documentary evidences brought on record in the form of Paper Book in light of Rule 18(6) of ITAT Rules.
4. Briefly stated, the facts of the case are that while scrutinizing the return of income for the year under consideration, the Assessing Officer found that the assessee has received share application money amounting to Rs.10.89 crores from 19 share applicants as under:
5. The Assessing Officer found that the shares have not been allotted by the assessee. The assessee was asked to submit the details in respect of share applicants. The assessee submitted confirmations of share application money alongwith tax particulars and respective bank statements. The Assessing Officer issued notice under section 133(6) of the Act at the addresses provided by the assessee and out of 19, 5 notices were received unserved with the remarks as under:
6. The Assessing Officer deputed an Income tax Inspector to make field enquiry about share applicants situated at Delhi. The inspector submitted his report as under:
7. Copy of the report was provided to the assessee. The assessee was asked to furnish current addresses. The assessee filed a letter alongwith details of current addresses of the 7 share applicants. On the basis of new addresses provided by the assessee, again, an Inspector was deputed to make field enquiries and the Inspector submitted a report that no such companies are situated at the given addresses.
8. On the basis of this report, the Assessing Officer formed a belief that these companies were operated by a single person and these were not in existence, but operated by some entry provider, who issued cheques in favour of the beneficiaries in lieu of cash.
9. The Assessing Officer further observed that though the alleged money was received through banking channel, but did not reflect the credit worthiness of the share applicants. Even their respective bank accounts do not reflect their credit worthiness or genuineness of the transactions.
10. The Assessing Officer finally drew the following conclusion on his appraisal of the facts:
"I it is clearly evident from the above discussion that none of these companies/persons were engaged in any worthwhile business activity. Even the enquiries conducted by the inspector have confirmed that no business is being carried out by these companies.
II. Examination of bank accounts of these share applicants clearly evidence that these share applicants were acting as conduit to transfer funds from one entity to another in the garb of share application money/capital and share premium. The astounding volume of transactions reflected in these bank accounts, as well as, the recurring pattern of credit of funds into these accounts from some source followed by its immediate transfer to some other entity forms clear proof that these bank accounts were utilized just to confer semblance of genuineness to credit introduced in the books of the assessee.
III. These share applicants, which the assessee has claimed to have received such huge transactions, do not any functional business activity, their annual i........