TaxTMI 
TaxTMI 
2019 (12) TMI 691
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....icer to explain the source of share premium amount of Rs. 15,67,92,000/- received during the year under consideration. As noted by the Assessing Officer in the assessment order, the assessee, however, failed to comply with the said requirement. The Assessing Officer, therefore, treated the entire share premium amount of Rs. 15,67,92,000/- received by the assessee-company during the year under consideration as unexplained cash credit and addition to that extent was made by him to the total income of the assessee under section 68. 3. The addition of Rs. 15,67,92,000/- made by the Assessing Officer under section 68 by treating the share premium amount as unexplained cash credit was challenged by the assessee in the appeal filed before the ld. CIT(Appeals). During the course of appellate proceedings before the ld. CIT(Appeals), the following submissions in writing were made on behalf of the assessee in support of its case on this issue:- "During the year, the assessee raised share capital of Rs. 27,80,000/- and securities premium of Rs. 15,67,92,000/- by allotting 2,78,000 shares at a face value of Rs.I0/- per shares and premium of Rs. 564/-per share. Detailed list of allot....
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....essing Officer. c. The appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground of appeal. d. The Assessing Officer made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. The appellant's case is clearly falling under exception (d) to Rule 46A. It is further submitted that it is the right of Board of Directors of the company to decide the premium amount. The Board of Directors in the meeting held on 25.03.2014 resolved to issue the shares at a face value of Rs. 10/- per share and premium of Rs. 564/- per share. A copy of the Board Resolution is enclosed at page 2 of the paper book. More so, the premium charged was duly corroborated by the Networth of the company. Further, the company was not required to prove the genuineness, purpose or justification for charging premium of shares. To buttress the contention of the assessee, reliance is placed on the judgment of the Hon'ble Mumbai Tribunal in the case of ACIT vs. Gagandeep Infrastructure M. Ltd. (2014) 40 CCH 0128 Mum. Tri....
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....er has omitted to include the amount of share capital with the premium of Rs. 15,67,92,000/-. It is not to presume that the Assessing Officer has not disputed the amount of share capital of Rs. 27,80,000/-. Regarding submission of the Valuation Report under Rule 11UA, it appears that the same was submitted on the date of assessment order but definitely after the finalization of the assessment order. Further, the same has no bearing on the addition u/s.68 in light of failure on the part of the assessee to substantiated the creditworthiness/source of fund in the hands of the share-subscribers. Para No. 5- The submission of the assessee that the assessment was made without giving sufficient opportunity to the appellant to adduce evidence relevant to ground of appeal is not factually correct. There was utter non- compliance on the part of the assessee as noted hereinbefore. The assessee was informed about the non-compliance on the part of share- subscribers and was asked to show cause as to why the amount of share premium claimed to have been received not to be added back u/s.68 of the Act. The assessee had filed Valuation Report under Rule 11UA [though after the completion of....
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....see to prove the creditworthiness/source of fund in the hands of the investors. Para No.8 -Cash Credits- The main contention of the assessee was that the inflow and outflow of fund was made through banking channels and the investor companies were income-tax assessee, it is submitted that there were numerous decision against the above submission of the assessee. The befitting reply to the observations of the assessee lies in the observations of the Hon'ble Calcutta High Court in the case of M/s. Rajmandir Estates (P) Ltd.[supra]. The above comments may kindly be noted with the fact that the assessee did not furnish any documentary evidence before the Assessing Officer about the creditworthiness of the investors vis-a-vis genuineness of the transactions, in spite of the fact that the assessee was given reasonable opportunity of being heard". 5. The remand report submitted by the Assessing Officer was sent by the ld. CIT(Appeals) to the assessee-company for its comments/rejoinder. The assessee was also called upon by the ld. CIT(Appeals) to show-cause as to why even the amount of Rs. 27,80,000/- received during the year under consideration on account of sha....