2020 (1) TMI 776
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of both the sides were heard at length on the facts of ITA No. 3333/DEL/2017 for A.Y 2009-10 and on such concession, we have considered the facts in A.Y 2009-10. 4. Having heard the representatives of both the sides at length, the case records were carefully perused and with the assistance of the ld. Counsel, we have considered the relevant material evidences brought on record in the form of Paper Book in light of Rule 18(6) of ITAT Rules, 1962. 5. During the course of scrutiny assessment proceedings, from the details submitted by the assessee and material available with the department, the Assessing Officer found that during F.Y. 2008-09, the assessee has raised share capital money to the tune of Rs. 2.30 crores as follows: Sl. No. Name and address of the Company No. of Shares Nominal value of share (Rs.) Premium paid per share (Rs.) Dated of allotment 1. M/s Topline Finvest Pvt. Ltd., 2, Lal Bazar Street, 107C, Todi Chamber, 1s t floor, Kolkata-700 001 25,000l 2,50,000 (Rs. 10 per share) 47,50,000 (Rs. 190 per share) 30.03.2009 2. M/s Spardan Vani jya Pvt. Ltd., 9/12, Lai Bazar Street, Block E-, 4nd floor, Kolkata-700 001 25,000 2,50,000 (Rs. 10 per share) 47....
X X X X Extracts X X X X
X X X X Extracts X X X X
....plete the assessment. In its report, the INV Wing stated that most of the companies were found to be non-existent, therefore, further investigation did not bring any additional result and status of the report remains the same. The report further stated that these companies are jamakharchi companies of Kolkata, having no real business and formed for the purpose of providing accommodation entry in the form of share capital and unsecured loans mostly. 13. In the light of the aforestated notings/observations, the Assessing Officer made an addition of Rs. 2.30 crores in A.Y 2009-10 and Rs. 5.15 in A.Y 2010-11. 14. The findings of the Assessing Officer can be summarised as under: i) Notices u/s 133(6) were not served. ii) Confirmations of all the parties were not received. iii) Companies were asked to attend the proceedings through their directors but all the directors did not attend the assessment proceedings. iv) Statement of Shri Sharma is adverse as being director of the company, he had no knowledge of the shares purchased by the investor companies. 15. We find that vide reply filed on 22.02.2013, the assessee has furnished confirmation of accounts, bank statements, income....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. If Shri Sampat Sharma categorically admitted that he is a dummy director, nothing prevented the Assessing Officer to lift the corporate veil. Having failed to lift the corporate veil, we have to look at the transactions and not through the transactions. 21. Another adverse comment made by the Assessing Officer is in respect of returned income of the investor companies. In our considered opinion, substance over form should prevail. The returned income may be one of the factors, but it is not be all and and all. If the returned income is not sufficient to justify the credit worthiness of the share applicants, then the most important factor is to look at the net worth of the applicant. 22. The five applicant companies are namely, i) Basukinath vanijya Pvt Ltd ii) Midnight Agencies Pvt Ltd iii) Spardan Vanijya Pvt Ltd iv) Topline Finvest Pvt Ltd v) Kokila Export Pvt Ltd 23. The net worth of these companies are as under: i) M/S BASUKINATH VANIJA (P) LTD Address : 1A, GRANT LANE, 1st FLOOR, KOLKATA 700012 No. of shares : 25,000 PAN: AADCB2084K Sr. No. Cheque No./ RTGS Date Amount (Rs) i) RTGS 30.03.2009 50,00,000 TOTAL 50,00,0....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uditors of Company: Manabendra Bhattacharyya & Co Particulars As on 31.03.2009 As on 31.03.2008 Shareholders Fund Share capital 85,02,500 16,55,000 Reserve & Surplus 16,05,26,756 3,04,24,383 Total 16,90,29,256 3,20,79,383 Application of Funds Current Assets Loans & advances Stock of shares 14,43,57,000 1,61,47,000 Cash and bank balance 1,39,2625 49,280 Loans & Advances 1,28,70,884 57,45,237 Other Current Assets 10,70,0361 1,05,00,361 Less: Current Liabilities & Provisions Liabilities 2,005 2,003 Provisions 3,98,709 3,98,341 Total 4,00,714 4,00,344 Net Current Assets 1,68,92,0156 3,20,41,533 Deferred Revenue Expenditure 1,03,400 31,200 Preliminary Expenses 5,700 6,650 16,90,29,256 3,20,79,383 M/S TOPLINE FINVEST (PI LTD Address : 107C TODI CHAMBER 2, LAL BAZAAR STREET, KOLKATA, WEST BENGAL 700001 No. of shares : 25,000 PAN: AAACT9954B Payments made Via Sr. No. Cheque No./ RTGS Date Amount (Rs) 0 RTGS 30.03.2009 50,00,000 TOTAL 50,00,000 Return filed on 24.09.2009 Auditors of Company: Pawan Maun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....27. It would be pertinent to mention here that the applicant's premises were searched and not a single document was found during the course of search proceedings which could suggest that the assessee has purchased cheques by way of cash from these share applicant companies. Each of the shareholders from whom share capital was raised/received are duly identifiable corporate entities and assessed to tax as well. The entire share capital has been subscribed through banking channels and there was no material found during the search which proves that the money came from the coffers of the appellant company. Financial statements of each share holder company exceeds its net worth, thereby establishing the credit worthiness of the share applicant companies to make investment in shares of the applicant company. Further, each share holder has independently confirmed their investment in response to notices u/s 133(6) of the Act. 28. In our considered opinion, suspicion can be no basis to make addition. Moreover, the Revenue in the case of shareholder companies has accepted their independent identity, source of income and carrying on business of investments and disinvestments. Therefore, the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the assessee, the onus shifts on the assessee to further substantiate the facts. In the case in hand, the assessee did file net worth of all the share applicant companies and further corroborated the share transactions with master data filed with Registrar of Companies. 34. The other decisions relied upon by the ld. DR are also distinguishable on facts of the case in hand. 35. As mentioned at the beginning that the underlying facts in issues in A.Y 2010-11 are identical to those of A.Y 2009-10, for the sake of completeness we will extract the networth of share applicant companies for A.Y 2010-11 as under: SI. No. Name and address of the Company No. of Shares Nominal value of share (Rs.) Premium paid per share (Rs.) Dated of allotment 1. M/s Kokila Exports Pvt. Ltd., 9/12, Lai Bazar Street, Block E-, 2nd floor, Kolkata-700 001 12,500 1,25,000 (Rs. 10 per share) 23,75,000 (Rs. 190 per share) 30.03.2009 2. M/s Abhilasha Exports Pvt. Ltd., Saklat Palace, Kolkata-72 25,000 2,50,000 (Rs. 10 per share) 47,50,000 (Rs. 190 per share) 30.03.2009 3. M/s Ambika Vimcom Pvt. Ltd., 1, Mahindra Nath Roy Bye Lane, Howrah-711101 10,000 1,00,000 (Rs. 10 per share) 19,00,000 (....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 65,400 87,200 Profit & Loss Account 24,100.57 26,174.74 Total 11,33,00,000 11,33,00,000 M S SAHAJ TIE UP PRIVATE LIMITED Address: D/12, Lai Bazar Street, Block E, 2nd Floor Kolkata-700001 No of Shares: 10,000 PAN No. AAECR1291D Payments made Via Sr. No. Cheque No./ RTGS Date Amount (Rs) i) RTGS 05.09.2009 20,00,000 TOTAL 20,00,000 Bank Name: Axis Bank Auditors of the Company: Agrawal Singhania & Co. PARTICULARS As on 31.03.2010 As on 31.03.2009 Shareholders Fund Share capital 1,38,15,000 1,38,15,000 Reserve & Surplus 23,25,53,263 23,25,53,263 Total 24,63,68,263 24,63,68,263 Application of Funds Investment 24,03,00,000 - Current Assets Loans & advances Stock of shares 21,96,50,000 Cash and bank balance 41,65,522 12,64,145 Loans & Advances 13,64,702 1,94,74,476 Other Current Assets 1688804 1,58,93,117 Less: Current Liabilities & Provisions 1201899 99,81,815 Net Current Assets Preliminary Expenditure Deferred Revenue Expenditure 30,000 51998 Profit & Loss Account 21,135.54 16,342 Total....
X X X X Extracts X X X X
X X X X Extracts X X X X
....00,000 M/S TARKESHWAR COMMERCIAL PRIVATE LIMITED Address: 9/12, Lai Bazar Street, E Block, 4th Floor, Kolkata- 700001 No. of Shares: 10,000 PAN No. AADCT0358A Payments made Via Sr. No. Cheque No./ RTGS Date Amount (Rs) i) 894086 24.09.2009 2,000,000 Bank Name: Syndicate Bank Auditors of the Company: Pawan Maurya & Co. Net Worth of the Company PARTICULARS As on 31.03.2010 As on 31.03.2009 Shareholders Fund Share capital 5,810,000 5,810,000 Reserve & Surplus 108,490,000 108,490,000 Total 114,300,000 114,300,000 Application of Funds Current Assets Loans & advances Stock of Shares 90,470,000 101,000,000 Cash & Bank Balance 277,900.36 180,526 Loans & Advances 16,412,027 13,000,000 Other Current Assets 7,950,000 Total 115,109,927.36 114,180,526 Less: Current Liabilities & Provisions Liabilities 902,000 1,000 Provision 1,492 - Total 903,492 1,000 Net Current Assets 114,206,435.36 114,179,526 Preliminary Expenditure (To the extent not written off or adjusted) 5,320.20 7,093.60 Deferred Revenue Expenditure 65,400 87,200' Pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wrah, West Bengal - 711101 No. of Shares: 15000 PAN No. AABCD7985M Sr. No. Cheque No./RTGS Date Amount (Rs) i) 894086 05.09.2009 30,00,000 TOTAL 30,00,000 Bank Name: Axis Bank Auditors of the Company: Agrawal Singhania & Co. PARTICULARS As on 31.03.2010 As on 31.03.2009 Shareholders Fund Share capital 24,908,500 24,908,500 Reserve & Surplus 443,501,525.39 443,496,297.59 Total 468,410,025.39 468,404,797.59 Application of Funds Current Assets Loans & advances Stock of shares 444,282,971.97 442,261,455 Cash & Bank Balances 346,431.92 892,722.41 Loans & Advances 10,578,339 20,804,524 Total 468,807,742.89 473,458,701.41 Current Liabilities & Provisions Liability 502,264.50 5,190,691.82 Provision 6,453 11,212 Total 508,717.50 5,190,691.82 Net Current Assets 468,299,025.39 468,256,797.59 Miscellaneous Expenditure (To the extent not written off or adjusted) _________________________ 111,000 148,000 Deferred Revenue Expenditure Total 468,410,025.39 468,404,797.59 M/S PUSHPADANT INFRASTRUCTURE LIMITED Addres....