AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (5) TMI 419
X X X X Extracts X X X X
X X X X Extracts X X X X
....(A) who was pleased to delete the same. Aggrieved, the Revenue is before us. 3. We have heard rival submissions and carefully perused the material available on record. Assailing the order of the Ld. CIT(A) the Ld. DR has submitted that Ld. CIT(A) has granted relief mainly by relying on the Hon'ble Supreme Court's decision in CIT vs. Lovely Exports Ltd. (2008) 216 CTR 195(SC). However, according to Ld. DR, the said decision is not applicable in the instant case as Lovely Exports Ltd. was a Public Limited Company and the assessee M/s. Gateway Enclave Pvt. Ltd. is not a public limited company. According to him, it is a well-settled legal position that every case depends on its own facts and the ratio of any judgement cannot be seen divorced from its facts. The Ld DR drew our attention to Hon'ble Calcutta High Court's decision in the case of CIT vs. Mithan International (2015) 277 CTR 65 (Cal) / 375 ITR 123 (Cal) wherein their Lordships has examined the decision of M/s. Lovely Exports Ltd. and has expressed the view which is reproduced as under: "This reasoning must apply a portion to large scale subscriptions to the shares of a public company where the latter may have no materi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... therefore the assessee cannot simply furnish details and remain quiet even when summons issued to the shareholders u/s.131 ... 30 . ................. what we perceive and regard as correct position of law is that the Court or Tribunal should be convinced about the identity, creditworthiness and genuineness of the transaction. The onus to prove the tree factum is on the assessee as the facts are within the assessee's knowledge. Mere production of incorporation details PAN nos. or the fact that third persons or company had filed income tax details in case of a private limited company may' not be sufficient when surrounding and attending facts predicate a cover up. These facts indicate and reflect proper paper work or documentation but genuineness, creditworthiness, identity are deeper and obtrusive. Companies no doubt are artificial or juristic persons but they are soleless and are dependent upon the individuals behind them who run and manage the said companies. It is the persons behind the company who take decisions, controls and manage them." 5. The Hon'ble Delhi High Court in CIT vs. Navodaya Castles Pvt. Ltd. (2014) 367 ITR 306 (Del) held that share capital in cas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....judgments of Hon'ble Jurisdictional High Court and Hon'ble Supreme Court to support the order of ld. CIT(A) which decision we will discuss infra while adjudicating the appeal and he does not want us to interfere with the order of the ld. CIT(A). 11. Having heard both sides and perused the records, we note that the assessee had raised share capital of Rs. 25,100/- during the year and also the share premium of Rs. 1,25,24,900/-. When asked by the AO to explain the nature and source of the share capital and share premium raised by the assessee, the assessee filed before the AO the details of the six corporate bodies which subscribed the share capital along with the share premium. Before the AO, the assessee had filed paper book to substantiate the share capital along with the share premium. The documents furnished before the AO, inter alia, included - (i) Copies of acknowledgement of filing of Income Tax Return of shareholders, (ii) The statement of source of funds, (iii) Audited financial statements, (iv) Copies of relevant bank statements in respect of accounts from which share application monies were paid, (v) PAN, address of share subscribers for the year ended 31.03.2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assessee. It is evident that each share applicant had substantial resources of their own compared with the total investible funds available with each share applicants and that investment made in the equity shares and the assessee company was not significant. We note that the AO did not point out any defect or infirmity in the documents placed on record by the assessee as well as the share subscribers. Thus the creditworthiness of the aforesaid share subscribers cannot be disputed. 13. We note that the assessee had produced the aforesaid documents to explain the nature and source of the share capital along with share premium of the six corporate shareholders. We note that the AO had accepted the share capital subscribed by these six corporate entities. However, without pointing out any defects has whimsically without giving any reason by a cryptic order has added the entire share premium which was also given by the very same six corporate entities u/s 68 of the Act. The Ld. AR brought to our notice that the similar additions were made by the Assessing Officer in five cases wherein the AO accepted the share capital but added the share premium which action of the AO was not uphel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e paper book. The ld. AO had not found any falsity or any adverse inference of the said documents. We find that the Ld. CIT(A) had placed heavy reliance on these documents and had granted relief to the assessee. All the share subscribers are duly assessed to income tax and the transaction with the assessee company are duly routed through banking channels and are duly reflected in their respective audited balance sheets which are also placed on record before us. In any case, once the receipt of share capital has been accepted as genuine within the ken of section 68 of the Act, there is no reason for the ld. AO to doubt the share premium component received from the very same shareholders as bogus. We held that all the three necessary ingredients of section 68 had been duly complied with by the assessee with proper documentary evidences. We find that notices issued u/s 133(6) have been duly complied with. The only grievance of the ld. AO was that the assessee could not produce the directors of the share subscribing companies. In our considered opinion, for this reason alone, there cannot be any addition u/s 68 of the Act as held by the Hon'ble Supreme Court in the case of CIT vs. Oris....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssue of applicability of section 68 of the Act was not urged by the Revenue before the Tribunal. (b) It is a settled position in law as held by this court in CIT v. Tata Chemicals Ltd. [2002] 122 Taxman 643/256 ITR 395 (Bom.) that in an appeal under section 260A of the Act, the High Court can only decide a question if it had been raised before the Tribunal even if not determined by the Tribunal. Therefore, no occasion to consider the question as prayed for arises. (c) In any case, we may point out that the amendment to section 68 of the Act by the addition of proviso thereto took place with effect from April 1, 2013. Therefore, it is not applicable for the subject assessment year 2012-13. So for as the pre-amended section 68 of the Act is concerned, the same cannot be invoked in this case, as evidence was led by the respondentsassessees before the Assessing Officer with regard to identity, capacity of the investor as well as the genuineness of the investment. Therefore, admittedly, the Assessing Officer did not invoke section 68 of the Act to bring the share premium to tax. Similarly, the Commissioner of Income-tax (Appeals) on consideration of facts, found that section 68 of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt to the assessment year 2012-13. Similarly, the amendment to section 68 of the Act by addition of proviso was made subsequent to previous year relevant to the subject assessment year 2012-13 and cannot be invoked. It may be pointed out that this court in CIT v. Gagandeep Infrastructure (P.) Ltd. [2017] 80 taxmann.com 272/247 Taxman 245/394 ITR 680 (Bom.) has while refusing to entertain a question with regard to section 68 of the Act has held that the proviso to section 68 of the Act introduced with effect from April 1, 2013 will not have retrospective effect and would be effective only from the assessment year 2013-14. (c) In view of the above, question No. B as proposed also does not give rise to any substantial question of law as it is an issue concluded by the decision of this court in Vodafone India Services (P.) Ltd. (supra) and in the apex court in G. S. Homes and Hotels (P.) Ltd. (supra). Thus not entertained. Therefore, all the six appeals are dismissed. No order as to costs." 3.3.2. In view of the aforesaid observations in the facts and circumstances of the case and respectfully following the judicial precedent relied upon hereinabove, we hold that the Ld. CIT(....