TaxTMI 
TaxTMI 
2018 (1) TMI 389
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....ring the year under consideration, the assessee-company has received fresh share application money of Rs. 10,63,50,000 from M/s. Jaisri Properties Exports Pvt. Ltd., The assessee was asked to furnish evidence in support of the genuineness of the share application money. The assessee in support of the genuineness of the share application received from the Investor Company, filed name of the party, address, PAN, bank statement, confirmation of the Investor and ITR of the Investor for the year under consideration. The A.O. further noted that audited accounts of the investor was not filed. The A.O. noted from the bank statement of the party, mostly for the date of transaction and a day or two prior to the date of transaction, there are high value transactions in those bank statement. There are numerous credits appearing in the bank account. The Investor filed return of income at Rs. 2,80,610. Therefore, financial capacity is not proved. In the absence of balance sheet, source of the credit entry was not proved. A.O, therefore, was of the view that creditworthiness of the Investor Company has not been proved. Mere production of the documentary evidence would not prove the genuineness of....
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....ource". And that all the above Investors were based in Kolkata. 8.1. There is no doubt that the initial burden/onus of proving the identity, creditworthiness and genuineness of a transaction rest with the Appellant. Once the Appellant discharges this obligation, the onus to examine the transaction, shifts to the AO. 8.2. In the instant case, the Appellant had proved the identity, creditworthiness and genuineness of share applicants, by submitting their Name, Address, PAN, Bank Statements and Balance Confirmations and ITR acknowledgements. The Appellant is not expected to keep the audited balance sheets of third parties in its possession. 8.3. It is seen that A.O. had called upon the Appellant to provide "assessment particulars" of investors vide questionnaire dated 21.01.2015. The Appellant had duly provided the assessment particulars. In fact, the Appellant had even provided the ITRs of investor. 8.4. The investor is assessee and moreover it is a corporate entity. The information including balance sheets and audited accounts are available in public domain on the portals of Registrar of Companies/ Ministry of Corporate Affairs. Thus, non-submissi....
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....d upon the decision of the Hon'ble Supreme Court in the case of CIT vs. Orissa Corporation Pvt. Ltd., 159 ITR 78 and other decisions in the written submissions. 7. We have considered the rival contentions and perused the material on record. In this case, the assessment under section 143(3) have been passed on scrutiny assessment. The A.O. from the books of account of the assessee-company found that assessee-company has received fresh share application money of the impugned amount from M/s. Jaisri Properties Exports Pvt. Ltd., The A.O. asked the assessee-company to prove the genuineness of the transaction in the matter with supporting documentary evidence. The assessee- company filed confirmation of the Investor Company along with its particulars, bank statement and copy of the income tax return filed with the Department. The A.O. noted that there were high value transactions conducted by the Investor Company. The Investor Company has filed return of income at Rs. 2,80,610 and copy of the balance sheet is not filed. The assessee-company has filed copy of the balance sheet before the authorities below. Copy of the same is also filed in the paper book. Page-53 of the paper book is ....
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....ence is to be discarded or it is proved that it has "created" evidence, the Revenue is supposed to make thorough probe before it could nail the assessee and fasten the assessee with such a liability under s.68; AO failed to carry his suspicion to logical conclusion by further investigation and therefore addition under s.68 was not sustainable." 7.3. Judgment of Hon'ble Delhi High Court in the case of CIT vs Vrindavan Farms P.Ltd. etc. in ITA No.71/2015 dated 12.08.2015 (Delhi) in which it was held as under : "The sole basis for the Revenue to doubt their creditworthiness was the low income as reflected in their return of income. It was observed by the ITAT that the AO had not undertaken any investigation of the veracity of the documents submitted by the assessee, the departmental appeal was dismissed by the Hon'ble High Court. 7.4. Decision of Hon'ble Delhi High Court in the case of CIT vs. Laxman Industrial Resources Pvt. Ltd., ITA.No.169 of 2017 dated 14th March, 2017, in which it was held as under : "The CIT(A) took note of the material filed by the assessee and provided opportunity to the AO in Remand proceedings. The AO merely objected to the material furnish....
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....s genuine. Though the assessee's contention was that the creditworthiness of the creditor was also established, in this case, the establishment of the identity of the investor alone was to be seen. Thus, the addition was rightly deleted. CIT v. LOVELY EXPORTS P. LTD. [2009] 319ITR (St.) 5 (SC) applied." 7.8. Decision of Hon'ble Delhi High Court in the case of CIT vs. (i) Dwarakadhish Investment P. Ltd., (ITA.No. 911 of 2010) and (ii) Dwarkadhish Capital P. Ltd., (ITA.No.913 of 2010) (2011) 330 ITR 298 (Del.) (HC), in which it was held as under : "In any matter, the onus of proof is not a static one. Though in section 68 of the Income Tax Act, 1961, the initial burden of proof lies on the assesses yet once he proves the identity of the creditors/share applicants by either furnishing their PAN number or income-tax assessment number and shows the genuineness of transaction by showing money in his books either by account payee cheque or by draft or by any other mode, then the onus of proof would shift to the Revenue. Just because the creditors/share applicants could not be found at the address given, it would not give the Revenue the right to invoke section 68. One must....