TaxTMI 
TaxTMI 
2019 (1) TMI 1192
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....before the AO to prove the creditworthiness of investors and genuineness of the transaction." 2. The ld. AR submitted that the assessee filed its return of income on 27.11.2008 declaring total income of Rs. 4,40,810/-. A notice u/s 148 of IT Act was issued on 05.01.2015. The reason recorded for issuance of notice states that during the course of proceedings u/s 147 of IT Act, 1961 for the AY 2009-10, information was received from the Director of Income Tax (I&CI), Jaipur that assessee has issued 47,500 equity shares of Rs. 10/- each at premium of Rs. 170/- per share, totaling to Rs. 85,50,000/- which was found unreasonable by the Directorate. As per Form No.2 submitted by assessee company to ROC, the date of allotment of share is 01.10.2007, hence the matter relates to AY 2008- 09 and not AY 2009-10. Therefore, share premium of Rs. 80,75,000/- and share capital of Rs. 4,75,000/- has escaped assessment within the meaning of section 147 of IT Act, 1961. Thereafter, various notices were issued to assessee to verify the genuineness of share capital in response to which assessee furnished various documents. Notice u/s 133(6) was also sent to 18 companies from whom share capital money....
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....re premium during the year under consideration and to furnish the basis of valuation/ working of the share price and share premium rates at which such subscription were received by the assessee. In response to the same, the assessee vide letter dt. 09.03.2016 submitted that it has provided all the documents like share application form, company master data as per official website of Ministry of Corporate Affairs, ITR/ copy of PAN card/bank statements on 07.01.2016. All the companies are having PAN and registered under the Companies Act having CIN. Perusal of company master data downloaded from official website of MCA shows that status of company is active or in one or two cases the company is amalgamated in another company. With regard to genuineness of transaction, it was submitted that all the transactions are routed through banking channels and details of cheque no., cheque date, name of bank is mentioned on the share application form. All the cheques are cleared in the bank account of the company and same are reflected in the bank statement. Creditworthiness of the company is proved from the Balance Sheet downloaded from MCA website which shows that these companies are having....
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....and these companies in response to notice u/s 133(6) has shown their inability to furnish the same as the same is not available with them though all other evidences in support of investment has been filed. Thus, only because the bank statement of these 15 companies is not furnished cannot lead to a conclusion that AO has not made proper enquiry when all other evidences in support of the investment made by these companies are called for and examined by the AO before accepting the genuineness of the transaction. Even after insertion of Explanation 2 to section 263 w.e.f 01.06.2015, the revisionary powers u/s 263 cannot be exercised only to find fault in the assessment order or to make more enquiry as perceived by him. In this connection reliance is placed on the decision in case of Torrent Pharmaceuticals Ltd. Vs. DCIT ITA No.164/Ahd/2018 order dt.08.08.2018 (Ahd.)(Trib.) and Amira Pure Foods Pvt. Ltd. Vs. PCIT (2017) 51 CCH 473 (Del.) (Trib.). 8. Per contra, the ld. DR vehemently argued the matter and relied on the order of the ld. CIT. Our attention was drawn to the following findings of the ld. CIT which are reproduced as under:- "On considering the reply filed by the ....
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.... payment made through cheques, only proves the identities of such companies. However, the genuineness of the transactions as well as creditworthiness of the companies having been invested in the equity shares of the assessee company verify only in the cases of 3 investing companies which have also provided copies of its bank statements narrating the sources of funds out of which the investment made in the assessee company. Thus, the genuineness of transactions as well as the creditworthiness of the remaining 15 companies which have also been claimed to be invested in the equity shares of the assessee company are still pending for making necessary verification in this case. Thus, from the above discussion made, I hold that the assessment order u/s 148/143(3) passed by the Assessing Officer on 30.03.2016 is based on non making proper verification/examination of the genuineness of transactions as well as creditworthiness of the investing companies on the basis of any substantive evidences of the source of the funds available with them provided either by the assessee company or by such companies, accordingly, the assessment made by the Assessing Officer is erroneous as well as....
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.... examine what the AO has done to verify these transactions. He has issued notices u/s 133(6) to these 18 companies and thereafter, asked the assessee vide letter dated 1.3.2016 to furnish necessary documents to establish the identity, genuineness and creditworthiness of the transacting parties who have contributed to share capital/ share premium during the year under consideration and to furnish the basis of valuation/ working of the share price and share premium rates at which such subscription were received by the assessee. In response to the same, the assessee vide letter dt. 09.03.2016 submitted that it has provided all the documents like share application form, company master data as per official website of Ministry of Corporate Affairs, ITR/ copy of PAN card/bank statements on 07.01.2016. It was further submitted that all the companies are having PAN and registered under the Companies Act having CIN, all the transactions are routed through banking channels and creditworthiness of the companies are proved from the Balance Sheet downloaded from MCA website which shows that these companies are having huge amount of share capital and reserve & surplus and huge amount of investmen....