AI Drafter 
TaxTMI 
TaxTMI 
2019 (8) TMI 102
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....ons : (1). Share application money of the assessee company has increased from Rs. 24,50,000/- to Rs. 1,31,50,000/-. The identity and creditworthiness of the persons from whom money has been accepted needs detailed verification. (2). Fixed assets of the assessee company have increased from Rs. 1,42,82,380/- to Rs. 1,75,22,202/-. (3). Following requires verification of the genuineness and correctness: (a). Salary and wages paid amounting to Rs. 11,34,125/- (b). Creditors amounting to Rs. 1,31,15,424/- (4). The assessee has shown income of Rs. 5,32,602/- even when gross receipts of the company has increased from 7,16,66,316/- to Rs. 12,79,02,891/- which requires detailed verification. 2.1 The assessee was called upon by the AO to prove identity, genuineness and creditworthiness of the share application money/share premium of Rs. 1,31,50,000/-. The assessee was also asked to produce the (i) copy of bank account in which the share premium money was credited, (ii) copy of bank account of share applicants and (iii) copy of Income-tax return of share applicants. In response to the show ause notice, the assessee filed the reply and su....
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....e issue of receiving Rs. l,31,50,000/- as share application money (with share capital and share premium) was discussed. It was asked whether there had been a valuation of the shares of the assessee company. The AR submitted that no valuation had been done. Rather, it was a tentative approximate value of the shares that was calculated based on the norms of the market. • The AR was asked whether the assessee company had projected any expansion plans, or was in need of cash / working capital because of which taking such an amount as share premium was necessitated. To this, Shri Chetram Goyal responded that the assessee company was not in need of cash, but the amount so received was utilized in working capital of the company. It was only an investment opportunity presented by his uncle, and the assessee company responded by taking such investments. • The details about the investors were also asked. Shri Chetram Goyal informed that all the investing concern belong to the same community, and might be related to each other. Case discussed and adjourned sine die." Based on the above said conclusion, the Assessing officer made and confirmed the addition....
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.... 1961 as unexplained credits." 3.1 Thereafter, the Commissioner discussed the order passed by the Assessing Officer and reproduced the order in para 5.1.5 to 5.6 as under : "5.1.5. Now, from the discussion in the assessment order, it would appear that the Assessing Officer has disbelieved the genuineness of the transactions in respect of receipt of share application money aggregating to Rs. 1,31,50,000/- from the aforesaid ten parties treating the transactions as suspicious. The non-compliance with notices under sec. 133(6) of the Act by the parties lent support to the Assessing Officer to hold that the entries relating to share application money remained unexplained. However, whether the credit entries represented the income of the appellant company has to be examined strictly in the light of the provisions of section 68 of the IT Act. Whether the appellant company discharged its onus proof is to be judged from the material evidence brought on record. 5.1.6. In this case, the appellant company had filed (i) application forms for share application money; (ii) Copy of Assessee's Bank Account in which the share application money was credited; (iii), Names and....
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....nt, it is abundantly clear that the appellant company had discharged its onus of proving the ingredients of genuine credits under section 68 of the IT Act, 1961. Even in the case of Shree Balaji Sainath Build well Pvt. Ltd, the appellant company had filed confirmation and other documents to establish the identity and genuineness of the transaction of deposit of share application money of Rs. 2,00,000/-. Neither during assessment proceedings, nor during remand proceedings, did the Assessing Officer put this issue to the appellant or undertake further enquiry to show that money has been introduced by the appellant in the garb of share application money and share premium." The basis of grant of relief to the assessee is that during the remand proceedings, all the share applicants have confirmed to have share applications except Shree Balaji Sainath Buildwell Pvt. Ltd. It was further reported that the share applicants were in existence which was confirmed by Income-tax Officer, Morena for the assessment year 2012-13. 4. The ld. DR had made various legal submissions and had submitted that neither the identity of the share applicants nor the genuineness of the transactions have bee....
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.... mentioned as under : 6.1 From the order of the Assessing Officer for A.Y. 2012-13, it is clear that the Assessing Officer in the F.Y. 2011-12 had examined the existence of the share applicants which was subject matter of the present appeal. 7. We have heard the rival contentions, perused the records and have also gone through the decisions cited by both the parties. At this stage, it would be sufficient to mention here that for the purpose of adjudicating the list pending before us what is necessary to determine is whether the assessee has discharged the onus cast upon him by virtue of section 68 of the Act or not. Essentially, this is a question of fact and therefore, it has to be decided based on the facts available on record and the judicial decisions cited by both the sides will be considered under the narrow compass. The ld. CIT(A) sent letter to the Assessing Officer along with the documents and written submissions for submitting the remand report. The Assessing Officer had submitted the remand report and in the remand report, it was mentioned that the letters were sent to all the 10 share applicants and all the applicants have confirmed to have confirmed to have made ....
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....issuance of notices u/s. 133(6) of the Act, the share applicants, their confirmations, ITRs etc. were examined/verified and kept on record. In view of the above, in our considered opinion, nothing has been brought on record by the Assessing Officer or by the ld. DR before us which shows that the share applications made were not in accordance with law. Therefore, the addition deleted by the ld. CIT(A) is required to be declared void. In fact, the Assessing Officer is bestowed with ample powers u/s. 133(6) as well as section 142(2) of the Act. The Assessing Officer should have exercised all his powers at his ends and should have made enquiries and brought on record some cogent material contradicting the confirmations made in the remand report as well as subsequent assessment order for the assessment year 2012-13. Nothing has been brought on record and therefore, we do not find any perversity or illegality in the order passed by the ld. CIT(A). Our view is supported by the decision of Delhi High Court in the matter of fair Finvest Ltd., 357 ITR 146 (Del). The relevant finding of Hon'ble High court in paragraph No. 6 is as under : 6. This Court has considered the submissions o....