TaxTMI 
TaxTMI 
2019 (2) TMI 248
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....the fact that the statement of witness recorded was not concluded due to non-cooperation of the deponent, and hence, no adverse inference could be drawn out of it. 3. Whether on the facts and in the circumstances of the case, the ld.CIT(A) erred in concluding that no opportunity has been provided to the assessee for cross examination of witness, while he has also concluded that opportunity for cross examination did not advance the case of the AO. 4. The appellant prays that the order of the ld.CIT(A) on the grounds be set aside and that of the Assessing Officer be restored. 5. The appellant craves leave to add, amend or alter all or any of the grounds of appeal which may be necessary. 2. The brief facts of the case are that assessee is engaged in the business as general merchants and trader in goods and commodities on ready or forward basis, commission agents, buying and selling agents, etc. During the year, the assessee has shown income from house property and income from business and the return of income for the year under consideration was filed on 28.09.12 declaring total income of Rs. 4,00,323/-. Subsequently the case was selected for scrutiny and after serving statutor....
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.... in the contention of the appellant that the investment being a share capital is a capital receipt and therefore cannot be considered as income in the hands of the appellant. The credits fall within the scope of section 68 which is a deeming provision. Several case laws including those of the Apex Court and High Court have considered credits made to capital account of the assessee's to be covered under the provisions of section 68 and therefore deemed income. The rule for application of section 68 is that the identity and credit worthiness of the investor/lender /creditor has to be established and the genuineness of the transaction has to be established. 4.10. The Apex Court upheld the addition u/s 68 in the case of credits as share capital in the case of N. Tarika Property Invest. (P.) Ltd. v. Commissioner of Income-tax*[2014] 51 taxmann.com 387 (SC) by dismissing the SLP filed by the appellant. 4.11. In the remand report called the assessing officer was clearly given a free hand to bring in any evidence that specifically linked the appellant company receiving share capital money in lieu of cash. No specific person was specified and it was stated as a general proposition t....
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.... 50,00,000 2,30,51,700 3,43,358 6 M/s.Ramdev Shares & Securities Pvt. Ltd. Now known as Koina Trading P. Ltd 1,00,00,000 2,97,72,514 21,69,240 7 M/s. Jasol Maa Share Trading 1,00,00,000 4,11,30,413 5,32,200 8 Yashita Trading Pvt. Ltd. 95,00,000 41,58,066 Plus share application money 40,00,000 (-) 42177 9 Ashrita Trading Co. Pvt. Ltd. 85,00,000 50,83,061 Plus share application money 50,00,000 (-) 40,851 10 Accurate Multitrade Pvt. Ltd. 25,00,000 42,28,354 Plus share application money 40,00,000 (-) 2,460/- TOTAL 5,75,00,000 In the case of Koina Trading Pvt. Ltd., copy of assessment order u/s 143(3) for AY 12-13 passed by ITO 14(2)(2) was also filed. 4.14. It can be seen from the observation of the Assessing Officer that he has only referred to the information related to the outcome of search in the case of Shri Pravin Kumar Jain Group who were providing accommodation entries but the Ld.Assessing Officer has failed to demonstrate any such evidence that the appellant has in reality obtained any accommodation entries. There is no direct specific mention of the appellant by the director or key persons of the investor company. There....
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....PAN/ GIR numbers and had also given the cheque numbers, name of the bankers. The Assessing Officer ought to have found out their details through PAN cards, bank reholders. Thus, the view taken by the Tribunal could not be faulted. (iii) The Hon'ble Supreme Court of India in the case of CIT vs. Orissa Corporation reported in 159 ITR 78 (SC) has held as under: "That in this case the respondent had given the names and addresses of the alleged creditors. It was in the knowledge of the Revenue that the said creditors were income-tax assessee's. Their index numbers were in the file of the Revenue. The Revenue, apart from issuing notice under section 131 at the instance of the respondent, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they are creditworthy. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the respondent could not do anything furtheyn the premises, if the Tribunal came to the conclusion that th.ne Respondent had discharged the burden that lay on it, then, it could not be said that such a conclusion was unreasonable or perverse ....
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....of share certificate, bank statement, memorandum of articles, copy of share application money, audited balance sheet and P&L a/c of these parties were filed. These are similar details as were filed in case of three other companies for asst. yr. 2005-06. We have already disposed of the appeal for asst. yr. 2005-06 whereby we have held that the assessee has discharged its onus by filing necessary details and further have relied on the decisions of Hon'ble Supreme Court and Hon'ble Delhi High Court alongwith various other decisions of Tribunal and have held that addition cannot be made under S. 68 in the hands of the assessee company. Therefore, in view of the same reasoning, we cancel the entire addition made and confirmed by the lower authorities here also. The above decision of ITAT also related to Mr.MukeshChoksi's case of investment in share application money. On perusal of above case it is clear that if a bogus shareholder has invested the money and if appellant receives such money as share application money and appellant during assessment proceedings provides the details like name &address of the corporate entity, PAN No., ROC No., then ITAT held that this may be re....
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....raveen Jain, but could not point out any portion of the statement of the said Praveen Jain to link the investor companies. Apart from this, even no evidence has been brought on record to link the assessee company with the said Praveen Jain. More so, there was no evidences to show that there was any cash trail in respect of the amounts received by the assessee company from the investors. We noticed that though the AO was specifically asked to furnish specific incriminating evidences, but the AO was unable to pin point the specific evidences which could clearly show that the share application money was received in lieu of cash. It is an admitted fact that the investor companies were assessed to tax and had filed their returns of income. The notices u/s 133(6) were complied with by the parties and copy of bank statement, ledger account, share application form, board resolution authorizing investments, income tax return and audited accounts of the investor companies were filed before the assessing officer and Ld. CIT(A). We also considered the investment and the corresponding source of funds of investor as seen from the copy of their audited accounts for FY 2006-07, which are tabulated....
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....tion money is received by the assessee company from alleged bogus share holderswho's name are given to the Assessing Officer then the department is free to proceed to reopen their individual assessments in accordance with law but it cannot be regarded as undisclosed income of assessee company". 8. The Hon'ble Bombay High Court in the case of CIT v/s Creative World Teleflims Ltd 333 ITR 100 has held as under: "If the share application money is- received by the assessee company from alleged bogus share holders who's name are given to the Assessing Officer then the department can always proceed against them and if necessary reopen their individual assessments. Held, dismissing the appeal, that there was no dispute that the assessee had given the details of names and addresses of the shareholders, their PAN/ GIR numbers and had also given the cheque numbers, name of the bankers. The Assessing Officer ought to have found out their details through PAN cards, bank reholders. Thus, the view taken by the Tribunal could not be faulted. 9. The Hon'ble Supreme Court of India in the case of CIT vs. Orissa Corporation reported in 159 ITR 78 (SC) has held as under: "That i....