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2019 (1) TMI 1089
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....in the circumstances of the case ?" 3. It is an undisputed position that during the Assessment Year 2008-09, the respondent-assessee had received money in the form of share capital/share premium as per the following details:- S.No. Name & Address of company from whom claim of share capital/share premium made Value of shares at Par (as claimed) Share Premium (as claimed) Total share holder's fund claimed to have been raised during the year 1 M/s Tejasvi Investment Pvt. Ltd. 13/34, WEA, IV Floor, Main Arya Samaj Road, Karol Bagh, New Delhi-110005 4,00,000 16,00,000 20,00,000 2 M/s Sai Baba Finvest Pvt. Ltd. 13/34, WEA, IV Floor, Main Arya Samaj Road, Karol Bagh, New Delhi-110005 6,40,000 25,60,000 32,00,000 3 M/s Bhavani Portfolio Pvt. Ltd. 13/34, WEA, IV Floor, Main Arya Samaj Road, Karol Bagh, New Delhi-110005 7,40,000 29,60,000 37,00,000 4 M/s Thar Steels Pvt. Ltd. 13/34, WEA, IV Floor, Main Arya Samaj Road, Karol Bagh, New Delhi-110005 4,00,000 16,00,000 20,00,000 5 M/s Tauras Iron & Steel Pvt. Ltd. 13/34, WEA, IV Floor, Main Arya Samaj Road, Karol Bagh, New Delhi-110005 8,50,000 34,00,00....
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....tial premium. (iii) The respondent-assessee had shown receipts of Rs. 16.38 lakhs and 'Nil' income in the year ending 31st March, 2008 and 31st March, 2007, respectively. There were no fixed assets and the respondent-assessee had incurred expenses amounting to Rs. 12.17 lakhs and 'Nil' in the year ending 31st March, 2008 and 31st March, 2007, respectively. (iv) share capital/share premium of Rs. 168 lakhs was after deposit shown as investment partly as advance for land and as advance to S.M. Udyog and Guruji Industries. FDR of Rs. 80 lakhs was obtained from Oriental Bank of Commerce. 6. Respondent-assessee was also asked to produce all papers relating to issue of shares; state, how the dealings had started with the shareholder companies; if directly, state the year/date since when they were known to each other; if indirectly, give the name of the introducer and state that since when the introducer was known including years of relationship; state, whether the applications for allotment of shares were received in one lot or on different dates and whether they were received by hand or post. If acknowledgement was issued, supporting evidence should be given; provide the proof ....
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....f this Court including CIT Vs. Oasis Hospitalities Pvt. Ltd. decided on 31st January, 2011. He held that once documents like PAN or bank account details were given, then the onus had shifted on the Assessing Officer and it was up to him to reach the shareholders. This burden could not be passed on to the assessee, merely on the ground that the summons issued to the shareholders were returned. Assessing Officer had issued notice Section 133 (6) of the Act and in response had received replies confirming the investment. The shareholder companies were incorporated and had invested money through banking channels, which was reflected in the books. Investment was proved by the bank statements that disclosed sufficient balance before cheques were issued. Accordingly, the three requirements i.e. identity of the investor, creditworthiness of the investors and genuineness of the transactions were satisfied. 10. Appeal preferred by the Revenue against the said deletion has been dismissed by the impugned order passed by the Tribunal, which records as under:- "4. In view of above citations, when we go through the orders of the authorities below, we find that there is no dispute that the as....
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....n dispute that extensive material was produced by the assessee in the present case to prove the identity, genuineness and creditworthiness of the companies who had subscribed to its shares. Among the materials produced were the Income Tax Returns and the PAN card details of the eight companies. Even if the Directors of these companies did not respond to the summons issued by the AO, it was not impossible for the AO to make proper enquiries to ascertain the genuineness of these entities and satisfy himself of their creditworthiness. As pointed out by the CIT(A), the AO failed to make any effort in that direction. He did not take to the logical end the halfhearted attempt at getting the Directors to appear before him. He did not even seek the assistance of the AOs of the concerned companies whose ITRs and PAN card copies had been produced. 14. The view taken by the CIT(A) that the AO failed to come up with the material to disprove what had been produced by the Assessee is certainly a plausible view in the facts and circumstances of the case. Likewise, the view taken by the ITAT concurring with the CIT(A) on facts cannot be said to be perverse. " CIT Vs. Victor Electrodes : "....
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....rporated by the Registrar of Companies, their identity stood established, genuineness of the transactions stood established as payments were made through accounts payee cheques/bank account; and mere deposit of cash in the bank accounts prior to issue of cheque/pay orders etc. would only raise suspicion and, it was for the Assessing Officer to conduct further investigation, but it did not follow that the money belonged to the assessee and was their unaccounted money, which had been channelized. 13. As we perceive, there are two sets of judgments and cases, but these judgments and cases proceed on their own facts. In one set of cases, the assessee produced necessary documents/evidence to show and establish identity of the shareholders, bank account from which payment was made, the fact that payments were received thorough banking channels, filed necessary affidavits of the shareholders or confirmations of the directors of the shareholder companies, but thereafter no further inquiries were conducted. The second set of cases are those where there was evidence and material to show that the shareholder company was only a paper company having no source of income, but had made substant....
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.... account of the assessee if the latter offers no explanation regarding the nature and source of the credit or the explanation offered is not satisfactory. It places no duty upon him to point to the source from which the money was received by the assessee. In A. Govindarajulu Mudaliar v CIT, (1958) 34 ITR 807, this argument advanced by the assessee was rejected by the Supreme Court. Venkatarama Iyer, J., speaking for the court observed as under (@ page 810): - "Now the contention of the appellant is that assuming that he had failed to establish the case put forward by him, it does not follow as a matter of law that the amounts in question were income received or accrued during the previous year, that it was the duty of the Department to adduce evidence to show from what source the income was derived and why it should be treated as concealed income. In the absence of such evidence, it is argued, the finding is erroneous. We are unable to agree. Whether a receipt is to be treated as income or not, must depend very largely on the facts and circumstances of each case. In the present case the receipts are shown in the account books of a firm of which the appellant and Govindaswa....
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....led to keep in view the material that was relied upon by the Assessing Officer. The CIT (Appeals) also fell into the same error. If such material had been kept in view, the Tribunal could not have failed to draw the appropriate inference." 12. The present case would clearly fall in the category where the Assessing Officer had not kept quiet and had made inquiries and queried the respondent-assessee to examine the issue of genuineness of the transactions. The Tribunal unfortunately did not examine the said aspect and has ignored the following factual position:- (a) The shareholder companies, 5 in number, were all located at a common address i.e. 13/34, WEA, Fourth Floor, Main Arya Samaj Road, Karol Bagh, New Delhi. (b) The total investment made by these companies was Rs. 1,51,00,000/-, which was a substantial amount. (c) Evidence and material on bogus transactions found during the course of search of Tarun Goyal. Evidence and material that the companies were providing accommodation entries to beneficiaries was not considered. (d) The findings recorded as mentioned in the assessment order, which read as under:- "1. From the finding of search, it is evident and un....