TaxTMI 
TaxTMI 
2019 (10) TMI 631
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....ication money of M/s On Track Trading Ltd purportedly under section 68 of the IT Act is illegal and arbitrary. 3. That the appellant having submitted relevant evidences with regard to the amount invested by the said investing foreign company, it is not lawful and proper to confirm addition on the ground of its want of proof of credit worthiness of the said investing company which is illegal and arbitrary. 4. That non consideration of the application of the proviso to section 68 of the IT Act effective from 01.04.2013 relied upon by the appellant was not considered by Ld. CIT (Appeal) is inconsistent with the relevant statutory provisions. 5. That the decision rendered by the Hon'ble Apex Court relied by the Ld. CIT (Appeal) in Sum....
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....y details except Form No.2 which provided details of allotment but no details regarding from where and how investment came. The AO found that funds appearing in the name of M/s.On Track Trading Ltd. are not detailed by the assessee. The AO deduced that creditworthiness of this investing company is not satisfactory and therefore he did not accept the same. Since the beneficiary of such fund flow is none other than the assessee company, the sum of Rs. 4,31,15,000/- found credited in the books of the assessee in the impugned financial year was taken by AO as unexplained income and is charged to Income-tax u/s.68 of the Act. 3. Feeling aggrieved with the order of AO, the assessee appealed before the CIT(A) and the CIT(A) after considering the ....
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....R relied on the orders of authorities below. 7. After hearing both the sides and perusing the entire material available on record along with the orders of authorities below, we find that during the course of assessment proceedings the assessee could not furnish any details except Form No.2 which provided details of allotment but no details regarding from where and how investment came. The AO found that the creditworthiness of the investing company is not proved by the assessee, therefore, he treated the sum credited in the books of the assessee as unexplained and charged the same u/s.68 of the Act. The CIT(A) from the verification of all the documents placed by the assessee during the appellate proceedings, found that amount had come in fo....
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....of creditworthiness of the investing company. The appellant during appeal hearing submitted statement of accounts of the investing company for the month of August,2008 only. From the perusal of such documents it is found that there has been payment to Gopalpur Ports Ltd. on 01.8.2008 amounting to 5,00,000$ and on 25.8.2008 amounting to 500000$. From this copy of one month statement which is neither authenticated nor signed by the appellant it is observed that there has been multiple number of time deposits in USD in the account of the investing foreign company during the month of October,2008. It also appears that during the month of August,2008 there has been no major outgoing from the investor foreign company account except for payment of....
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.... or bogus company, the Department is free to proceed to reopen the individual assessment of the foreign investing company in accordance with law. The appellant referred to the decision of CIT v. Lovely Exports Pvt. Ltd. (2010) 14 SSC 761 (SC). The facts of the case are entirely different from those of the case of appellant In the case of Lovely Exports supra the Hon'ble Supreme Court found that the shareholders are numerous persons of Indian origin who have submitted confirmation along with other details regarding their investments. On the contrary in the case of the appellant company the foreign investor is not an Indian national, has not produced any confirmation or Income-tax payment details, did not prove its creditworthiness for ad....
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....roduced any credible evidence so that the creditworthiness of the share applicants can be proved. In view of this, we are of the opinion, that the assessee could not satisfy the one of the ingredients as envisaged in Section 68 of the Act for discharging his liability. Even before us also the assessee could not bring any cogent material that the assessee has fulfilled the ingredients of the provisions of Section 68 of the Act. The other contention of ld. AR of the assessee is with regard to applicability of proviso to Section 68 of the Act effective from 01.04.2013. On careful perusal of both the assessment and appellate order, we do not find that any of the authorities below have questioned about the source of source to the assessee so as ....