TaxTMI 
TaxTMI 
2017 (1) TMI 247
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....allotment of shares vide order dated 30.12.2011. 02. The Revenue has only raised the following two grounds both are with respect to the above subject matter which read as under:- 1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the additions made u/s. 68 of the Act amounting to Rs. 5,20,00,000/- without appreciating the fact that shares applicant companies did not possess financial capability and creditworthiness. 2. On the fact and in the circumstances of the case, the Ld. CIT(A) has erred in not appreciating the findings of the AO coming out of enquiries conducted during the assessment proceedings regarding creditworthiness of the above share applicants. 03. The brief facts....
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.... bank account of the share holders and further the Annual Reports of these Companies was showing nominal income of Rs. 8,000/- to Rs. 10,000/- ranging up to few Lakhs of Rupees. Therefore, he doubted the creditworthiness of the Companies and genuineness of the transactions. The return of income was assessed u/s. 143(3) of the I.T. Act at Rs. 14,58,068/- to Rs. 5,34,58,068/- vide order dated 30.12.2011. The assessee challenged the order before the Ld. First Appellate Authority who deleted the addition and, therefore, the Revenue is in appeal before us. 04. Ld. DR submitted that the AO has made the addition as immediately before issuing of the cheques the money is deposited in the Bank Account of the shareholders and they are having very l....
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....idences were given U/r 46A which included chart-showing availability of funds with such companies vis-a-vis investments and orders U/s 143(3) for such companies, thus showing the creditworthiness, which remained unrebutted, by the AO during the course of remand proceedings. Hence, when notices U/s 133(6) stood served and were responded positively by the shareholders, wherein no discrepancy was pointed out, the onus of the assessee stands fully discharged. He therefore submitted that, on the basis of enquiry done at asstt. stage as well as at appeal's stage, all the ingredients of sec. 68 stands fully satisfied. He further submitted that When there is no negative information on record, no notice U/s. 133 (6) received back un-served, all ....
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....submitted the confirmations, copies of Income Tax Returns, Bank Statements and Affidavit of all the parties, which are listed in Form No. 2, filed with the Registrar of Companies, before the AO, therefore, he has discharged initial burden cast upon the assessee, as per the provisions of Section 68 of the I.T. Act, 1961. As assessee has expressed its inability to produce the parties, the AO issued notice u/s. 133(6) to all the 17 shareholders who responded by confirming the transactions, therefore now it cannot be found fault with the assessee for nonproduction of the creditors. Ld. AO had two options of verifying the correctness of the claim of the assessee by exercising powers u/s 131 or 133(6) of the act and he has chosen provision of sec....
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....companies. However, when the assessee has submitted detailed Chart of funds available with these companies, it cannot be said not creditworthy merely because return of income shows small income. The creditworthiness is further governed by the amount of investments and the size of the balance sheets of those companies. In the present case, the assessee has shown that these companies were having capacity to deposit money with the appellant. In the present case, the AO has not pointed out any evidence which shows that amount invested by these companies were not owned by these companies and the money belong to the assessee. Needless to say that when the assessee has furnished the confirmations, Income Tax Returns, Bank Statements of Borrowers, ....