TaxTMI 
TaxTMI 
2015 (12) TMI 1185
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.... CM No.27018/2015 in ITA No.883/2015 CM No.30898/2015 in ITA No.962/2015 CM No.30900/2015 in ITA No.963/2015 CM No.30902/2015 in ITA No.964/2015 CM No.30905/2015 in ITA No.965/2015 CM No.30907/2015 in ITA No.966/2015 3. For the reasons stated therein, the delay in re-filing the appeals is condoned. 4. The applications stand disposed of. ITA Nos.871/2015, 872/2015, 873/2015, 874/2015, 875/2015, 876/2015, 883/2015, 962/2015, 963/2015, 964/2015, 965/2015 & 966/2015 5. These appeals by the Revenue are directed against the common impugned order dated 29th April, 2014 passed by the Income Tax Appellate Tribunal (ITAT) for Assessment Years (AYs) 2003-2004 to 2009-2010 in respect of the three Respondent-Assessees herein, i.e. SVP Builders (India) Limited (SVPB), SVP Developers Limited (SVPD) and SV Liquor India Limited (SVLI). In all these appeals, the only question urged by the Revenue for consideration is as under: "Whether the ITAT erred in deleting the addition under Section 68 of the Income Tax Act (Act) on the facts and circumstances of the present case?" 6. The background facts are that a search was conducted on 14th October, 2008 in the premis....
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....rder, i.e., upto 21 months thereafter. 9. As far as SVPB is concerned it was incorporated on 28th February, 2000 under the Companies Act, 1956. SVPD was incorporated on 9th February, 1996 and SVLI on 4th February, 1994. The said Respondents are engaged in the business of real estate and are regularly assessed to tax. 10. A statement of one Mr. Vijay Kumar Jindal was recorded on 15th October 2008, one day after the search operation took place. On 25th October 2010, notices were issued to the three Respondents in respect of the share capital year-wise for AYs 2003-2004 to 2009-2010 in the case of SVPB, for the years 2007-2008 and 2008-2009 in the case of SVPD (although it had not commenced business in those AYs) and AYs 2004-2005 to 2009-2010 in the case of SVLI. Further notice was issued under Section 142(1) of the Act to the three Assessees on 22nd November, 2010 (in the case of SVPB and SVPD) and 2nd December, 2010 in the case of SVLI. 11. On the basis of the replies filed by the Assessees, assessments were framed under Section 153A/143(3) of the Act and additions were made as unexplained cash credit under Section 68 of the Act. The findings of the Assessing Officer (AO) ....
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....eals) [CIT(A)] by orders dated 21st May 2012 dismissed the appeals of the Assessees, thereby sustaining the additions, the Assessees filed appeals before the ITAT. Allowing the appeals, the ITAT by its impugned order held as under: (i) The Revenue had been unable to deny the factual position that only 11 of the 20 companies in Table I had actually been searched. The material on record showed that directors of 18 companies of the 20 companies were examined by the AO in the course of the remand proceedings and found from the books of accounts that the share capital stands duly recorded in their books of accounts. Thus there was no justification for drawing an adverse inference particularly since no contrary material was placed on record by the revenue. (ii) The statements of Shri Bajrang Dubey and Shri Sachin Garg when carefully examined did not show that the investor companies did not exist or did not in fact subscribe to the share capital of the SVP Group companies. (iii) As far as Ganesh Buildtech was concerned, while no addition was made by the AO of the sum of Rs. 28 lakhs invested by it in Five Vision for AY 2006-07 and Rs. 1,57,27,500 in AY 2007-08, ....
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....under: "8.7 Having regard to the above judicial pronouncements rendered by the Hon'ble jurisdictional High Court, we now proceed to examine the evidence tendered by the four appellant companies to discharge their initial onus under section 68 of the Act. In the instant case, it is undisputed that all the 106 shareholders are corporate entries having been incorporated under the Companies Act. These shareholders are also assessed to tax. The documentary evidence for all the shareholders placed on record includes confirmation, affidavits of directions, returns of income of shareholders, bank statements of shareholders, board resolutions, certificate of incorporation and, Memorandum of Association of shareholder companies. The Assessing Officer issued summons under section 131 of the Act to such shareholders who then independently confirmed that they have only subscribed to the share capital of the appellant companies. No further investigation was carried out by the Assessing Officer during the course of assessment proceedings in respect of such share capital received by the appellant companies. The finding recorded in the order of assessment that the appellant the shareho....
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....the Revenue's appeals in the case of Five Vision, viz., that the Assessees had manipulated substantial funds movement through 'paper existence' of the investor companies; that the CIT(A) found that common directors repeatedly appeared in the list of directors of the Assessee Companies which showed that they belonged to the same group and were manipulating their books for the purpose of introduction of unexplained cash money and creating 5-6 steps of cheque transactions before the investment was made eventually in SVP Group of Companies; that the creditworthiness of three shareholding companies did not have any worthwhile share capital and their activities were only in the form of management of fund rotation in the garb of share application money invested in each other with a view to artificially inflate their creditworthiness; that the Assessee bought back its own shares at a very low price; that the shares allotted at the face value of Rs. 10/- were transferred in the names of individuals/concerns belonging to SVP Group at a meagre price ranging from Rs. 0.50 to Rs. 2.00 per share; that the persons available at the premises during the search of the Table-I companies denied the....
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....08-2009. The Profit and Loss Account of the aforesaid AYs showed that the only revenue received was interest from the banks. Therefore the allegation of "charging on-money" in cash and routing back of the same into the main stream in the form of share capital, etc., is incorrect. 19. The Respondents have placed before the Court charts to show the details of the investments made by the investor companies in each of them year-wise. The three companies appear to have been in existence much prior to the date of the search and commenced their business operations at least 5-6 years earlier thereto. It has been pointed out that as far as SVPB is concerned, the following details were furnished: "Details/Evidence of 20 share holders contributing Rs. 10,96,00,000/- of Table I in A.Y. 2003-04 to 2009-10 ; 12 share holders contributing Rs. 8,26,00,000/- of Table 11 in A,Y. 2003-04 to 2009-10; & 44 share holders contributing Rs. 15,85,50,000/- of Table III in A.Y. 2003-04 to 2009-10 and evidence filed before AO in respect of these shareholders." 20. As far as SVPD is concerned, the following details were furnished: "Details/Evidence of 16 share holders contributing Rs. 3....
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....ccounts. 24. As regards Table-III companies, notices were issued under Section 131 of the Act to which many of them responded confirming having made investments. The Assessees had been asked by the CIT (A) to produce 7 directors of the Table III companies. 6 directors appeared and their statements were recorded. They had confirmed that they had subscribed to the share capital of the Assessees. These directors had not only produced the books of accounts but showed that the source of investment was duly recorded therein. The Revenue on the other hand did not produce any further evidence to dispute the above evidence produced by the Assessees. 25. As far as Table II shareholders were concerned, if the Revenue was of the view that they were simply using the Assessees for parking their undisclosed income, then it was certainly open to the Revenue to make additions to the income of those Table-II companies. As far as Table-I shareholders was concerned, none of them denied having made the investment in the Assessee companies. The AO does not appear to have undertaken any particular investigation into the affairs of the Table-I, II or Table III companies apart from issuance of the no....
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....decisions of this Court in CIT v. Sophia Finance Ltd. (1994) 205 ITR 98 (FB) (Del), CIT v. Dolphin Canpack Ltd. 283 ITR 190, CIT v. Kamdhenu Steel & Alloys Ltd. 206 Taxman 254, Sarthak Securities Co. (P) Ltd. v. ITO 329 ITR 110, CIT v. Nipun Builders and Developers (2013) 350 ITR 407 (Del) and CIT v. N.R. Portfolio Pvt. Ltd. (2014) 206 DLT 97 (DB). 30. In sum, it was explained by this Court in CIT v. Five Vision Promoters Pvt. Ltd. (supra) that: "under Section 68 of the Act, the AO has jurisdiction to undertake enquiries with regard to the amount credited in the books of the accounts of an Assessee. This could be any sum whether in the form of sale proceeds or receipt of share capital money. First, the AO is to enquire whether the alleged shareholders in fact exist or not. The truthfulness of the assertion by the Assessee regarding the nature and the source of the credit in its books of accounts can be examined by the AO. Where the identity of the shareholders stands established and it is shown that they had in fact invested money in the purchase of the Assessee's shares, then the amount received would be regarded as capital. Where the Assessee offers no explanation at all o....