TaxTMI 
TaxTMI 
2014 (8) TMI 750
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of Rs. 50 lacs (as per its Balance sheet as on 31/03/2008). It was during the course of assessment proceedings observed to have raised capital of Rs. 616.925 lacs during the relevant year, including share premium of Rs. 517.50 lacs, i.e., at over 520% of the nominal value. Notices under section 133 (6), issued to 21 companies who had subscribed to the share capital as per details furnished by the assessee, yielded response from only one company, M/s. Om Procurement & Projects Ltd., which had made investment of Rs. 20 lacs, in the form of bank statement and acknowledgement of its return of income for the relevant year. Copy of share certificate(s), final accounts and the computation of income, also called for, were not furnished. One, Sh. Girish Chand Yadav, introduced as director of the six companies, representation from whom was sought by the Assessing Officer (AO), was produced by the assessee on 07/12/2010, and his statement recorded u/s. 131 of the Act in the presence of the assessee's representative, Shri Nishant S. Mehta, C.A. He, therein, averred to be in the business of Dalali (broking services) in textiles fabrics; to have invested Rs. 1 lac each in acquiring the said com....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the investigation as carried out by the AO during the assessment proceedings were also spelt out, whereby the addresses furnished were either found non-existing or as being only a transit camp, with no company existing. Only one address, of Om Procurement & Projects Ltd., was found to be of the relevant investor, though even in that case the nameboard at the entrance was of one, Sh. Dilip S. Mehta, a Chartered Accountant and a director in the said company, who was the person behind floating such bogus companies and involved in the racket of bogus billing and providing accommodation entries. Thirdly, the bank details of the investors revealed deposit on one day and its withdrawal on the same or the following day by way of share subscription, clearly impugning the genuineness of the investment. Then, again, a reference was made to the recalcitrant conduct of the assessee during the course of the assessment proceedings. The addition, it was submitted, was based on definite materials, and it stood proved beyond doubt that it was the assessee's own unaccounted money introduced as share capital and, accordingly, the assessee's claim, made with reference to the additional evidences, sou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....el) was pressed to meet the assessee's reliance on the decision of case of CIT vs. Lovely Exports P. Ltd. [2008] 216 CTR (SC) 195. Qua its appeal, the Revenue's contention was that the deletion had been directed by ld. CIT(A) without allowing an opportunity to the AO. Findings 4. We have heard the parties, and perused material on record. 4.1 The assessee before us has not in any manner repudiated the findings of the AO as per the assessment order, and the remand report called for by the first appellate authority, being in fact only a statement and dilation of the basis of his non satisfaction per the assessment order. There has been no reliance by the AO on the statements of the several persons recorded by the investigating authorities of the Department and the jurisdictional Assessing Officers, in arriving at his non satisfaction with the assessee's explanation as to the nature and source of the impugned credits under section 68. The matter is purely factual in-as-much as the said non-satisfaction is to be based on materials and evidences led by the assessee. The onus would fall on the Revenue only where the assessee discharges the initial onus on it, so that the Revenue, where....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oever on the antecedents of the investing companies, with as much as their addresses being unable to be corrected stated, as it turns out, by the assessee. The AO's findings in the matter are explicit and roundly stated per the assessment order as well as the remand report, and based on field enquiries at the addresses furnished by the assessee, which are only as specified in Form 2 (Return of Allotment) submitted by it with the Registrar of Companies. Why, for instance, are the addresses of the six companies, as clarified by Girish Chand Yadav, different from that furnished earlier by the assessee? The assessee does not explain the reason for the difference or furnish proof in respect of restated address, which, as it transpires, is only the residence of Girish Chand Yadav. A conspiracy and confabulation is immanent; the person produced, Sh. Girish Chand, a man of no means, much less a man of business, being only a front man. It is not open for the assessee to say that it is not aware of addresses or the whereabouts of the parties or they are not known to it, even as explained by hon'le court in Major Metals Ltd. (supra). Girish Chand Yadav, as pointed by ld. DR before us, is only....
X X X X Extracts X X X X
X X X X Extracts X X X X
....are, thus, in principle in complete agreement with the Revenue's case. 4.2 So, however, the ld. CIT(A) having relied on those statements as a matter of fact, to what extent his endorsement of the AO's findings has been guided by his reliance on those statements cannot be determined or segregated by any process known to or having the sanction of law, being a result of his own satisfaction, based on objective materials. For example, that the address stated by Girish Chand Yadav, located in a jhuggi jopadi area, was his residence is clarified by his statement dated 09/01/2009 and the statement u/s. 131 of Sangeeta J. Sawant. Similarly, Sh. Dilip Mehta, whose premises was the office address of Om Procurement and Projects Ltd., is involved in bogus billing and the companies stand floated by him and are only paper companies, and that Shri.Girish Chand Yadav was in fact his employee, is borne out by his statement dated 23/12/2008. The said statements are relevant material. In fact, the reliance by the Revenue, which may have exceeded its brief, thereon is not incorrect inasmuch as it is in possession of incriminating materials having a direct bearing on the subject matter of the assessme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....; the Revenue in repudiating the same; the assessee, again, in rebutting the same, so on and so forth, so that a final decision is taken upon consideration of the emerging factual matrix. The ld. DR before us also relied on the decision in case of Major Metals Ltd. (supra), besides drawing on certain facts, viz, the assessee having allotted shares subscribed to without premium; of the share allotments being not presumably backed by resolutions inasmuch as shares are allotted on regular basis, i.e., as when the money is received, and which is neither normative nor practical; of a mismatch between authorized share capital on record and that subscribed to - the latter being higher. These are relevant and inasmuch as they emanate from the material on record, we consider their consideration as only appropriate in law, which was pleaded by him alluding to the decision in the case of Hukum Chand Mills Ltd., 63 ITR 232 (SC) and Gilbert and Barker Mfg. Co. 111 ITR 529 (Bom). The contentions by the ld. DR in the matter stand reduced in writing, and placed on record, with a copy to the assessee. The Revenue shall also be at liberty to rely thereon. Decision 5. The matter is accordingly rest....