TaxTMI 
TaxTMI 
2019 (1) TMI 16
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....tances of the case the ld. CIT(A) has erred in not allowing the set off of carried forward losses against the income determined for the year. 2.1 During the case of hearing, the ld.AR of the assessee has not pressed the Ground No. 1. Hence, the same is dismissed being not pressed. 3.1 In the written submission, the ld.AR of the assessee has mentioned the Ground No. 3 and 4 of the assessee as consequential. Hence, the same do not require any adjudication by us. 4.1 At the outset of the hearing, the ld.AR of the assessee vide its application dated 27-06-2018 prayed hereunder to admit the additional evidence under rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963. ''1. With reference to above subject we would like submit that during the course of assessment proceedings as well as appellate proceedings due to nonavailability of time we could not submit the vital and necessary evidences in support of our claim regarding share application money received from Shri Jagjeet Singh Gabha which is bank statement. At the time of assessment proceeding the share applicant was not in India and is residing abroad. Therefore we could not produce the bank statement. Now we ....
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....ing Photostat copies of cheques and certificate from Bank before AAC . AAC refusing to admit additional evidence. AAC should have considered evidence produced by assessee regarding loan. (v) CIT Vs. Gani Bhai Wahab Bhai 232 ITR 900 (MP) - There is no prohibition for taking additional evidence at the appellate stage, the only condition being that the Department should not be prejudiced and should be given reasonable opportunity to rebut this additional evidence. In this case, no such request was made by the representative of the Department whether they disputed this certificate or not. Therefore, there is no illegality committed by the Tribunal which accepted the certificate of 46 per cent of the yield. In this view of the matter, the additional evidence entertained by the Tribunal cannot be said to be bad. (vi) Smt. Surinder Kaur Vs. ITO (2008) 118 TTJ 710 (Luck) - Where additional evidence sought to be produced before Tribunal was a certificate relating to assessee's claim for deduction of a sum and if was relevant to decide claim of assessee, same was to be admitted for substantial cause and to enable tribunal to pass appropriate order in matter. (v....
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....shareholder's fund, the earned profit of the company is 12065 GBP and has shown dividends issued at 14000 GBP to Shri Jagjit Singh Gabba urf Shri Jeetji. This consistency is also seen in the previous years. These statements show that Shri Jagjit Singh urf Shri Jeetji who is also owner of Quick Forex Transfer Limited is far beyond the creditworthiness of making advance to the assessee in share capital and security premium in the year relevant to Assessment Year 2013-14. Merely proving the identity of the creditor does not discharge the onus of the assessee if the capacity of creditworthiness of the creditors is not proved. Further, the assessee company has not filed any evidence regarding his wife's income. It is also worthwhile to say that the assessing officer when starts enquiry specifically to satisfy himself of the source of such credit and if during the enquiry he is satisfied that the entries are not genuine then he has every right to add the said sum represented by such credit entry as income of the assessee. However, satisfaction must not be illusory or imaginary but must have been derived from the relevant facts and evidences and on the basis of proper enquiry of all mater....
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....''The assessee is a private limited company and is engaged in the liquor business. Return was filed on 19.09.2013 declaring total income of Rs. Nil. The Learned Assessing Officer has completed the assessment on 16.03.2016 u/s 143(3) of the Income Tax Act, 1961 determining total income at Rs. 85,23,000/- inter alia making the addition of Rs. 85,23,000/- u/s 68 of the Income Tax Act, 1961 in respect of share application money of Shri Jagjit Singh Gabha. The addition made by the Learned Assessing Officer and confirmed by the Learned CIT(A) is unjust, unlawful and illegal. The same is assailed as under: - 2. Share application money of Rs. 85,23,000/- of Shri Jagjit Singh Gabha is genuine: - It is submitted that during the course of assessment proceedings the assessee submitted that the share application money of Rs. 85,23,000/-received from Shri Jagjit Singh Gabha was genuine. It was submitted before the Learned Assessing Officer that Shri Jagjit Singh Gabha was a British Citizen. In support of this a copy of passport was submitted. Copy of which is available on paper book page number 3 to 7. This establishes the identity of share applicant. It was further submitted t....
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....bha as one person company namely Quick Forex Transfer Ltd for the period ending 31.03.2013 & 31.08.2014 have also been furnished. These financial statements established beyond doubt that Shri Jagjit Singh Gabha was having income so as to deposit the share application money. The financial capacity and capability is proved. The company was owned by him is engaged in the activity of money transfer and exchange bureau. It is submitted that the entire funds have come from London in the account of the assessee. Thus the assessee has discharged his onus of proving the genuineness of the share application money. In the facts and circumstances there was no case either with the Learned Assessing Officer for making the addition or with the Learned CIT(A) for confirming the same. The addition was made by the Learned Assessing Officer as he totally failed to appreciate the facts of the case. It is worthwhile to quote on the order of the Learned Assessing Officer as why he rejected the share application money received, the assessee has not filed any evidence regarding his wife 3. Provisions of section 68 are not applicable: - It is submitted that in para 5.2 the Learne....
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....(2001) 251 ITR 263],the Hon'ble Supreme Court has affirmed the view of Delhi High Court in the case of CIT Vs. Stellar Investment Limited :(1991) 192 ITR 287 (Del.) that reads as under :- "It is evident that even if it be assumed that the subscribers to the increased share capital were not genuine, nevertheless, under no circumstances, can the amount of share capital be regarded as undisclosed income of the assessee. It may be that there are some bogus shareholders in whose names shares had been issued and the money may have been provided by some other persons. If the assessment of the persons who are alleged to have really advanced the money is sought to be reopened, that would have made some sense but we fail to understand as to how this amount of increased share capital can be assessed in the hands of the company itself." (emphasis supplied) The learned counsel for the appellant-revenue is not in a position to dispute the proposition aforesaid. In view of the above, we have no hesitation in upholding the objection of the learned counsel for the respondent that the question as formulated does not arise in this case because so far as the assessee com....
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....gister etc. it would constitute acceptable proof or acceptable explanation by the assessee (5) the Department would not be justified in drawing an adverse inference only because the creditor/ subscriber fails or neglects to respond to its notices; (6) the onus would not stand discharged if the creditor / subscriber denies or repudiates the transaction set up by the assessee nor should the AO take such repudiation at face value and construe it, without more, against the assessee; (7) the AO is duty bound to investigate the creditworthiness of the creditor/ subscriber, the genuineness of the transaction and the veracity of the repudiation. It is for Parliament to introduce legislation if the duty presently resting on the Department is thought to be too onerous. The Court ought not to twist the language of a statute to remove the burden of proof altogether from the Department even though it has the necessary wherewithal to discharge it.'' (v) CIT vs Steller Investment Ltd (2001) 251 ITR 263 (SC) :- Even if it is assumed that the subscribers to the increased capital were not genuine, under no circumstances could the amount of share capital be regarded as undisclosed income of ....
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....ble to Indian Income-tax. Therefore, there is no question of a remittance into the country being subjected to Income-tax in India (Para 2). If the money has been brought into India through banking channels or in the form of assets like plant and machinery or stock-in-trade, for which the necessary import permits had been obtained, no question at all are asked by the ITOs as to the origin of the money or assets brought in (Para 3). It is pertinent to mention that ld.AR of the assessee relied on the decision of ITAT Delhi Bench dated 12th April 2013 in the case of Russian Technology Centre (P) Ltd. vs DCIT, Circle - 13, New Delhi (ITA No.4932, 4933, 5390 & 5391/Del/2011) wherein the bench observed as under:- ''13......In our considered opinion the conflict between the provisions is only with reference to the onus and not to the issue of taxability of income. The onus is shifted under ss. 68 or 69 only with reference to the income which is otherewise taxable in the hands of non-resident under section 5(2). Therefore, the issue whether the income of non-resident is taxable or not is still to be decided with reference to the provisions of section 5(2) and the provisions of sect....
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.... the Revenue as to the matter of proving the identity and creditworthiness of the person providing share application money. The relevant observation of the Hon'ble Court is as under:- ''16. The aforesaid judgement has been followed by all the judgements relied on by the appellants relates to the period prior to the judgement of Lovely Exports. As the Apex Court has specifically held that if the identity of the person providing share application money is established then the burden was not on the assessee to prove the creditworthiness of the said person. The position of the present case is identical. It is not the case of any of the parties that M/s. Alliance Industries Limited, Sharjah is a bogus company or a non-existent company and the amount which was subscribed by the said company by way of share subscription was in fact the money of the respondent assessee. In the present case, the assessee had established the identity of investor who had provided the share subscription and it was established that the transaction was genuine though as per contention of the respondent the creditworthiness of the creditor was also established. In the present case, in the light of th....