TaxTMI 
TaxTMI 
2017 (4) TMI 719
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....edited in the P& L account as sales. 3. Whether on the facts & in the circumstances of the case, the Ld. CIT(A) has erred in holding that the assessee had submitted all books of account before the Assessing Officer, when he had clearly failed to do so." 2. Brief facts of the case are that assessee is a private limited company who filed its return of income on 31/ 10/ 2007 showing income of Rs. 1231/-, consequently, the return of income of the assessee was picked up for the scrutiny and several notices were issued by the Ld. assessing officer for verification of increase in share capital from Rs. 5.78 lakhs to Rs. 10.78 lakhs and share premium from Rs. 90.82 lakhs to Rs. 185.82 lakhs and consequently increasing the investment from 96.20 Lacs to 196.20 Lacs. During the course of assessment proceedings assessee was asked to prove the identity, genuineness and creditworthiness of the persons from whom share capital/share premium has been received. The Ld. assessing officer further noted the facts pertaining to the assessment year 2006 - 07 wherein the assessee has stated in earlier years before the appellate authority that assessee can produce all the principal officers of such s....
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....s and further Rs. 6 Lacs in cheques. Assessee filed with respect to the details of the shareholders stating therein address and number of shares allotted to them as on 31st of March 2007. It also furnished the confirmation of eight persons. With respect to corporate entities, it submitted the copy of acknowledgement of the return, share application forms their PAN card, resolution passed by the Board of Directors and certificate of incorporation of the companies. Thereafter assessee relied upon plethora of case laws to substantiate its case. On considering the submission of the assessee, Ld. CIT (A), relying upon the decision of the Hon'ble Delhi High Court in CIT versus or Oasis Hospitality Private limited dated 31/01/2011, discussed the whole issue and ultimately held that assessee has discharged its onus on submitting the copies of the balance sheet etc and income tax return of the companies as well as the individuals. It was further held that the genuineness of the transaction is also verified from the copy of the share application forms filed as shares were allotted to the share applicants. It was also the contention of the Ld. CIT (A) appeal that if, AO had any doubt about th....
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....peal about the production of those persons before him by the appellant and how he has examined them. Therefore, the order of the Ld. CIT appeal is totally bald and deserves to be quashed. He further submitted that the Ld. CIT (A) has not at all cared to look at the strange facts of the case wherein in a non- discreet company which is just earning Rs. 1 231/- as is total income, absolutely unknown person having invested huge capital at huge premiums where there is no scope of even returning of the capital. He stated that this is a fake transaction by which, in the books of accounts of the appellant, money from persons of no means have been introduced in cash. His main contention was that that the genuineness of the transaction are otherwise proved from the single instance that how the premium is determined and how and why those shareholders have invested in such a non-discreet company which does not have any business and even where the share capital introduced by them cannot be recovered is itself shows that transactions are ingenuine. He further submitted that even after 10 years, the original share application money was received in 2007 - 2008 and till to date there is no informat....
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....6. We have carefully considered the contention of the Ld. departmental representative as well as considered the orders of the lower authorities. Facts of the case have already been stated above. However, it is important to note that during the year the appellant company had received share application money of Rs. one crore from 17 subscribers, 8 individuals and 9 corporate entities, out of which Rs. 94 Lacs have been received in cash and only Rs. 6 Lacs have been received by cheque. The shares have been allotted at a premium of Rs. 190/ per share against the book value of Rs. 10 per share. Before the Ld. assessing officer, the appellant has filed confirmation, which was undated along with the copies of the income tax return acknowledgement from those share subscribers. The Ld. assessing officer has noted that the subscriber showed income in the range of Rs. 2629/- to Rs. 153200/- . To examine the correctness of the information submitted by the assessee, the Ld. assessing officer issued summons under section 131 to the principles officer of the subscribing companies which remained uncomplied with. Therefore, as a last resort Ld. assessing officer deputed inspector to make local enqu....
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....icants do exist' has really perplexed us. Assessee has submitted before the Ld. CIT (A) the confirmation of 8 individuals along with the copy of acknowledgement of return of income, receipt of share application forms and PAN card. Similar details with respect to the corporate subscribers were also submitted along with the certificate of incorporation of the companies. No doubt the assessee has submitted the basic details with respect to 8 individuals and 9 corporate entities. The Ld. assessing officer has prepared a chart at page No. 8- 10 of his order about the amount invested by these persons and page No. 6 to page No. 8 wherein the manner of depositing sum with the company and income shown in the return of income by them and the persons who control those companies is also mentioned. Chart Showing the names of the subscribers , name of the directors of subscribers, Income shown and manner of deposit is as under :- S. No Name of the Indl/company Name of Director/lndl as Per confirmation Income as per copy of ITR Acknowledgement Amount claimed to have been received 1. Aapki Marketing P.Ltd.,B-1521,Snastri Nagar, Delhi-52 Naveen Garg 14,1447- 9,00,000/-....
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....ccounts to the ld CIT (A). It is also not known that how CIT (A) got satisfied with the existence of cash in the books of the companies when they are known entry providers. There is not a single word in the order of the ld CIT (A) about the source of such cash and reasons for depositing them with the assessee at huge premium when they do not have any other sources of income. Only reason why Ld. CIT appeal has deleted the addition is that when basic details have been furnished by the assessee before the Ld. assessing officer, he did not make any further enquiry and therefore the addition made by the Ld. assessing officer is held to be invalid. We do not agree with it, the Ld AO has made attempt to examine the shareholders by issuing summons, as well as by deputing inspector to find make local inquiry and at last also summoned the directors of the company but none of them remained present. Even assessee who boosted of producing the directors in earlier assessment years, also did not produce them. Furthermore, all the persons who did not care to appear before the assessing officer throughout the assessment proceedings, spanning over a period of one and half year, suddenly appears befo....