AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (4) TMI 930
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....peals, they were heard together and are disposed of by this common for the sake of convenience and brevity. 3. Representatives of both the sides fairly agreed that since the underlying facts are identical, the appeal in the case of Bake Bihari Real Estate Trade Pvt. Ltd. in ITA No. 52/Raipur/2017 may be taken as the lead case and on such concession, we heard the representatives on the facts of ITA No. 52/Raipur/2017. 4. The bone of contention is the share application money received along with the share premium from three subscribers companies. The names of the three subscribers companies along with their respective directors and the directors of the appellant companies can be understood from the following:- Bankebihari Realtrade (P) Ltd.....
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....ned transaction is not between strangers. 6. During the course of the scrutiny assessment proceedings and in order to verify the identity, genuineness of transaction and the capacity of the subscribers, the A.O. issued notices u/s. 133(6) of the Act to the share applicant companies which were returned unserved. The A.O. formed a belief that the share applicant companies are non-est. 7. We find that the Assessing Officer and the First Appellate Authority has completely ignored the direct evidences which justify the share application money and the share premium. The direct evidence are in the form of confirmations by the share applicant companies, their bank accounts, and most importantly one of the directors Shri Rajesh Agarwal attended th....
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....cer. The Hon'ble High Court of Chhattisgarh which is the Jurisdictional High Court, in the case of Venkateshwar Ispat (P) Ltd. has held that "in respect of share application money, Department is free to proceed to reopen shareholders individual assessments in accordance with law, but it cannot be regarded as undisclosed income of the assessee company." The Hon'ble High Court further found that in subsequent year, the shareholders investment was confirmed during the assessment proceedings. 11. In the statement of Shri Rajesh Agarwal which was examined by the A.O. on 20.03.2015 he has given the new address of the share applicant companies and the A.O. did not make any further enquiry and assumed that the companies do not exist at the new add....
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....so added subsequently effective only from 1st April, 2013 was its normal meaning. The Parliament did not introduce to proviso to Section 68 of the Act with retrospective effect nor does the proviso so introduced states that it was introduced "for removal of doubts" or that it is "declaratory". Therefore it is not open to give it retrospective effect, by proceeding on the basis that the addition of the proviso to Section 68 of the Act is immaterial and does not change the interpretation of Section 68 of the Act both before and after the adding of the proviso. In any view of the matter the three essential tests while confirming the pre-proviso Section 68 of the Act laid down by the Courts namely the genuineness of the transaction, identity an....
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....hat a company with zero balance sheet could garner Rs. 490 per share premium its subscribers. Such transaction may raise eyebrows but considering the subscribers to the assessee company, the test for the genuineness of the transaction goes into oblivion. It was an undisputed fact admitted by the Revenue authorities that 10,19,000 equity shares has been subscribed and allotted to IDFC PE Fund-11 which company was a Front Manager of IDFC Ltd., in which company Government of India was holding 18 percent of shares. The contributors to the IDFC PE Fund-II were all public sector undertakings. Therefore, to raise eyebrows to a transaction where there was so much of involvement of the Government directly or indirectly did not make any sense. No dou....