AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (8) TMI 1413
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....me of share applicant Share Application money received Ekta Commodities Supply (P) Ltd. 15,00,000/- Index Commodities Dealer (P) Ltd. 15,00,000/- Rameswar Retailers (P) Ltd. 20,00,000/- Ishunand Trading (P) Ltd. 15,00,000/- Unicon Merchants (P) Ltd. 15,00,000/- Jemco Vanijya (P) Ltd. 25,00,000/- Doyen Marketing (P) Ltd. 15,00,000/- Everlike Computers (P) Ltd. 3,75,000/- Total: Rs.1,23,75,000/- The assessee produced the following details before the ld AO to justify the receipt of share application money as genuine in nature :- (a) Name and address of the share applicant (b) Income tax return acknowledgement of share applicant for the Asst Year 2006-07 (c ) Audited financial statements for the year ended 31.3.2006 for each of the share applicants. (d) Copy of the bank statements of share applicants from where the payments were made to the assessee company. (e) Copy of certificate of incorporation of share applicants (f) Confirmation from the share applicants in detailed letter form containing the necessary documents filed with ROC proving the existence of the share applicant companies. (g) Source for share applicants for making payment of share application ....
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.... nothing but assessee's own unaccounted money. Accordingly, it was added to the total income of the assessee. 4. Before the ld CITA it was submitted that the assessee is a Non-Banking Finance Company (NBFC) engaged in the business of granting loans and advances and making investment in shares. It was submitted that despite filing of complete details about the share applicants before the ld AO, the ld AO did not make any attempt to properly verify the transactions. It was submitted that the three ingredients for any cash credit i.e identity of the share applicants, genuineness of transactions and creditworthiness of share applicants were duly proved as under:- "i) Identity - All the share applicants were available at the given address. All are body corporates registered with Registrar of company. Further, all are assessed to I Tax. The notices U/s. 133(6) of the Income Tax Act, 1961 were served on the parties on their respective addresses and all the relevant documents regarding the payment of Share Application were filed before the A.O vide the letter dated 15.12.08 by the assessee. ii) Genuineness & creditworthiness: 1) All share application money are received by way of A/....
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....ional reported in (2015) 375 ITR 123 (Cal) (c ) CIT vs Nova Promoters and Finlease (P) Ltd reported in (2012) 342 ITR 169 (Del) (d) CIT vs Navodaya Castles Pvt Ltd reported in (2014) 367 ITR 306 (Del) (e) CIT vs Active Traders (P) Ltd reported in (1995) 214 ITR 583 (Cal) (f) CIT vs Nivedan Vanijya Niyojan Ltd reported in (2003) 263 ITR 623 (Cal) (g) Bisakha Sales (P) Ltd vs CIT reported in (2015) 152 ITD 750 (Kol Trib) (h) Subhalakshmi Vanijya (P) Ltd vs CIT reported in (2015) 155 ITD 171 (Kol Trib) He argued that the decision of the Hon'ble Supreme Court in the case of Lovely Exports was rendered in the context of a Public Limited Company and whereas in the instant case, the assessee is a private limited company. 6. In response to this, the ld AR argued that the ld AO had made a wild allegation that the share applicants are merely paper companies without bringing any material on record. He had stated that after detailed enquiry made by him, he had drawn to such conclusion. But what enquiries were carried out by him were not brought on record by him in the order. The entire details of the share applicants duly proving their identity, creditworthiness and genuineness ....
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....a vs ITO in ITA No. 19/Kol/2013 dated 10.9.2014 (Kolkata Trib) (p) ITO vs Gold Mohur Profiles Ltd reported in (2015) 45 CCH 344 dated 18.12.2015 (Delhi Trib) (q) Kainya & Associates Pvt Ltd vs DCIT reported in (2015) 45 CCH 0021 dated 10.8.2015 (Mumbai Trib) (r ) CIT vs Mitul Krishna Kapoor in ITA No. 333 of 2009 dated 9.6.2016 (Hon'ble Calcutta High Court) (s) CIT vs Divine Leasing & Finance Ltd reported in (2008) 299 ITR 268 (Hon'ble Delhi High Court) The ld AR also distinguished the case laws relied upon by the ld DR and argued that they are factually distinguishable and are not relevant to the facts of the instant case. 7. We have heard the rival submissions and perused the materials available on record including the detailed paper book filed by the assessee containing the complete details of all the share applicants as detailed supra. We find that the assessee was in receipt of share capital including share premium during the asst year under appeal as under:- 7.1. It is not in dispute that the assessee had furnished the following documents relating to the share applicants before the lower authorities :- (a) Name and address of the share applicants (b) Income tax ....
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....ccount. From the said bank account, account payee cheques were issued to the assessee company towards investment in share capital by them. Hence the source of source for share applicants also is explained in the instant case by the assessee though it is not required to be proved by the assessee as per law. We find that none of the documents pertaining to the share applicants which were filed before the ld AO were found to be ingenuine or non creditworthy by the ld AO. We find that the ld AO had made a wild allegation that these share applicant companies are mere paper companies without bringing any cogent material and evidences on record. We find that the ld AO had not brought any material or evidence on record which would indicate that the share applicants are mere benamidars / fictitious persons or that any part of the share capital represented the assessee's own income from undisclosed sources. 7.3. Now it would be relevant to deal with the various case laws relied upon by the ld DR on the impugned issue. We find that in the case of CIT vs Korlay Trading Co. Ltd reported in (1998) 232 ITR 820 (Cal), Only PAN was filed in this case and no other details were filed and hence the H....
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.... relied upon by the tribunal was overturned by the Hon'ble Delhi High Court. Hence the ratio laid down thereon cannot be made applicable to the facts of the instant case. 7.5. We find that the assessee had given the complete details about the share applicants clearly establishing their identity, creditworthiness and genuineness of transaction proved beyond doubt and had duly discharged its onus in full. We find that the issue is squarely covered by the co-ordinate bench decision of this tribunal in the case of ACIT vs Global Mercantile (P) Ltd reported in (2016) 157 ITD 924 (Kolkata Trib) which had rendered the decision after duly considering the decisions of the Hon'ble Supreme Court in the case of CIT vs Lovely Exports (P) Ltd reported in (2008) 216 CTR (SC) 195 and decision of Hon'ble Jurisdictional High Court in the case of CIT vs Roseberry Mercantile (P) Ltd in GA No. 3296 of 2010 in ITAT No. 241 of 2010 dated 10.1.2011 . Infact the issue is squarely covered by the decision of the Hon'ble Calcutta High Court in the case of CIT vs Roseberry Mercantile (P) Ltd supra wherein the questions raised before their lordships and decision rendered thereon is as under:- "On the facts an....