AI Drafter 
TaxTMI 
TaxTMI 
2019 (10) TMI 118
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....king restoration of both cases. This tribunal's co-ordinate bench's order dated 10.04.2019 accepted the said petitions. It is in this backdrop of facts that the instant appeal(s) have again come up for hearing. The registry has already sent RPAD notice. We thus proceed ex parte against this taxpayer. 2. We have gone through assessee's pleadings in these two cases involving revision and consequent penalty proceedings. Learned CIT-DR invites our attention to the CIT's detailed discussion holding the assessee's share capital / premium (supra) to be unexplained cash credits as under:- The assessment in the case was completed u/s. 143(3)/147 on 29.03.2014 on an assessed income of Rs. 1,18,990/- against returned of income of Rs. 2372/- On perusal of the assessment records, P&L A/c, Balance sheet & other documents it is seen that this is 16th year of the assessee company; there are investments in unquoted- shares of various companies totaling to Rs. 15,07,20,000/-; it was also seen that share premium was received by the assessee totaling to Rs. 12,64,29,455/- during the year under consideration, on share capital of Rs. 1,97,00,000/-. The P&L A/c and the Balan....
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....e last ITR submitted by the assessee company for the A.Y 2014-15) by speed post (No.EW921149687IN). However, neither any attendance nor any written submission in response to the notice was made. On verification *of track events of Indian Post through-e- track record, it is seen that the notice was delivered on 21/09/2015. It is thus legitimate to assume that the assessee has deliberately failed to make submissions with respect to the issue involved and the relevant facts which are mentioned elaborately in the notice dt.17/09/2015. This assumption gets strengthened by the fact that during the assessment proceeding u/s. 143(3)/147, the assessee had made appearance & submissions in response to the notice sent to the same address. The evasive and transient approach of the assessee is perspicuous. Thus, in the prevailing facts and circumstances, it is legitimate to conclude that despite adequate opportunity the assessee did not produce relevant material or credible explanation in support of its claim. From the above narrated facts, the conclusion that emerges is that the assessee received the notice dt.17/09/2015 which elaborately outlined the relevant facts. Yet the a....
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....ce of any history of the concern to generate substantial return on capital to prompt them to pay unusually high share premium of the face value. How the share premium has been fixed of face value is not forthcoming. These are the parameters relevant for establishing genuineness of the transaction (N. R. Portfolio P. Ltd 42 Taxmann.com 339 Delhi) which in absence of any credible explanation by the assessee remains disproved. The provisions of Sec 68 of the LT Act 1961 are attracted. 4 While the AO made certain enquiries, it was restricted to ascertaining the claim of transaction no enquiry was made to ascertain whether the investors had the capacity to make the impugned investments and whether the transactions were genuine. No enquiry was made to rule out the possibility of the transaction being collusive and sham and the activity being an attempt to launder back unaccounted income. No enquiry has been made to ascertain whether the investors had sufficient income of their own to enable them to have the capacity to make the impugned investment. The AO has not even examined the bank accounts to find out whether there was any deposit immediately before issuing cheque to the as....
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....ther receipt of share capital was a taxable event prior to 1st April, 2013 before introduction of Clause (VII b) to the Sub-section 2 of Section 56 of the Income Tax Act; whether the concept of arms length pricing in a domestic transaction before introduction of Section 92A and 92BA of the Income Tax Act was there at the relevant point of time are not questions which arise for determination in this case. The assessee with an authorised share capital of Rs. 1.36 crores raised nearly a sum of Rs. 32 crores on account of premium and chose not to go in for increase of authorised share capital merely to avoid payment of statutory fees is an important pointer necessitating investigation. Money allegedly received on account of share application can be roped in under Section 68 of the Income Tax Act if the source of the receipt is not satisfactorily established by the assessee. Reference in this regard may be made to the judgement in the case of Sumati Dayal -Vs- CIT (supra) wherein Their Lordships held that any sum "found credited in the books of the assessee for any previous year, the same may be charged to income tax....". We are unable to accept the submission that any further investig....
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....picion held that this was or could be a case of money laundering. We as a matter of fact have discussed this issue in great detail and need not reiterate the same. The order passed by the Commissioner is by no means an act of substituting his own views to that of the assessing officer. It is true that the assessing officer had requisitioned the necessary details by his notice u/s.142(1) but he thereafter did not apply his mind thereto. The judgement in the case of J. L. Morrison (India) Ltd. has no manner of application because in that case the question essentially was whether the receipt was of a capital or revenue nature. The facts and circumstances were not in dispute. Moreover the view taken by the assessing officer was not shown nor was held by the Court to be an erroneous view. Whereas in this case we have demonstrated in some detail as to why is the order of the assessing officer erroneous and prejudicial to the revenue. The judgement in the case of Malabar Industrial Co. Ltd. (supra) and Max India Ltd. do not apply to the facts of this case for reasons already discussed by us. From the judgement of the learned Tribunal in the case of Subholaxmi, placed before us in....