TaxTMI 
TaxTMI 
TaxTMI 
2020 (2) TMI 71
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.... of their Directors and various documents/books of accounts etc were found and seized during the course of search. During the pre-search enquiries it was found that unaccounted income earned by the ABW group was rooted back in the books of accounts of the different companies of the group through bogus share capital and the share premium. Enquiries were conducted to find out the shareholding pattern of the group companies which indicated that share capital/share premium of the companies were prima facie bogus and received from the companies which are bogus and are only paper companies. While examining the seized material of the group of cases in the capacity of the Assessing Officer of the person searched, learned Assessing Officer found documents belonging to the assessee company in this case also, and therefore, after recording the satisfaction note on 19/1/2014 indicating that the said documents belong to the assessee company and that action under section 153C of the Act was required. Said documents were examined in the capacity of the Assessing Officer of the person other than the searched person and a fresh satisfaction note was prepared on 22/1/2014 indicating the satisfaction....
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....legence Bioinnovations P Ltd Amritdham, Suite 5 & 6, Nityanand Nagar, Bakultala Kolkata 100,000 1,000,000 19,000,000 20,000,000 2 Stocknet International P Ltd Kolkata 100,000 1,000,000 19,000,000 20,000,000 Total 200,000 2,000,000 38,000,000 40,000,000 4. After noticing that the no business activities were going on at the address as given in respect of the investor companies and denoting the result of the fieldenquiries which provides that the said companies were just paper concerns which have been used for providing accommodation entries through share capital and share premium, learned Assessing Officer issued notice under section 142 (1) of the Act requesting the assessee company to provide the identity of the parties, their creditworthiness and the genuineness of the transactions. A questionnaire was also issued along with such notice. 5. Assessee's contention was that all the shareholders are corporate entities registered with the Registrar of Companies and duly assessed to tax and that entire money was received by cheques and PAN of the parties were given. Assessee further contended that it has filed complete evidence to establish the identit....
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....thorough reappraisal of the material before her, Ld. CIT(A) issued notice for enhancement under section 251 (2) of the Act for all these assessment years 2010-11, 2011-12 and 2012-13 giving an opportunity of being heard to the assessee. 9. CIT(A) found that the assessee was required by the learned Assessing Officer to substantiate its claim with regard to the share capital and share premium by way of queries and was specifically asked to provide the shareholding pattern of the company, the details of share capital, share application, share transfer, name and address of shareholders and also to provide the identity and creditworthiness of the investors and also genuineness of the transaction while drawing the specific attention of the assessee towards the findings of the investigation wing, Mumbai in the case of the so-called share investors that are common to it and the Ganga Dhar S Shetty group, and which was found to be bogus. Assessee is also required to produce the persons claimed as investors before the learned Assessing Officer for examination and verification of documentary evidences. 10. It is the finding of the Ld. CIT(A) that in response to the various queries raised by....
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....s on which the share premium at par value of Rs. 10/-was completed at the rate of Rs. 190/-per share and the assessee did not care to explain the circumstances in which the various private entities, unrelated to it, found such a proposition attractive to commit funds running into crores of rupees, more particularly on the face of the fact that such investors had not received any written on their substantial investment, as reflected in the books of the assessee. Further considering the nonappearance of the investors before the Assessing Officer to reiterate and establish their claim, given their substantial investments in the assessee company, Ld. CIT(A) held that the test of identity of the parties was failed, the test of creditworthiness is also a complete failure and test for genuineness of the share capital and share premium contributions also collapsed on account of nonappearance of the parties before the Assessing Officer. 13. Ld. CIT(A) further found that while computing the disallowance for the assessment year 2010-11, learned Assessing Officer considered the disallowance of Rs. 11.45 crores but omitted to consider the investment relating to Sidh Housing Developers Company,....
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....NRA Iron and Steel (P) Ltd ( 2019) 412 ITR 161, mere filing of the documents does not absolve the assessee of the responsibility of proving the three ingredients of section 68, namely, the identity and creditworthiness of the shareholders and the genuineness of the transaction. Ld. DR submitted that the authorities below consistently observed that though the assessee had completed the paperwork meticulously, no reasons are afforded for non-production of the parties. She submitted that record must be had to the fact that field queries revealed that such companies were just and proper concerns which were used for providing accommodation entries through share capital and the share premium. She drew our attention to the reasons recorded by the learned Assessing Officer at paragraph No. 3.2 of his order as to the status of these companies. She further submitted that the authorities below consistently observed that the nonappearance of the investors before the Assessing Officer to reiterate and establish their claims, given their substantial investments in the assessee company, is yet another relevant fact that militates against the claim of the genuineness of the share subscriptions. Sh....
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....persons. Without doing so, the assessee cannot insist that merely because certain documents are filed, the identity and creditworthiness of the parties and the genuineness of the transaction, ipso facto, shall be taken to have proved. 19. It is legitimate for the learned Assessing Officer to make enquiries relating to find answers to the questions like - whether the two parties are related or known to each other, or mode by which parties approached each other? whether the transaction is entered into through written documentation to protect investment? whether the investor was an angel investor? what is the quantum of money invested? how the party believed the credit-worthiness of the recipient? what is the object and purpose of payment/investment? whether the share applicant is in existence and an independent entity? how the financial capacity of the share applicant to invest funds is proved? how the source of funds from which the high share premium was invested is dealt with by the assessee? why the investor companies had applied for shares of the Assessee Company at a high premium? in case the field enquiry conducted by the AO revealed that the investor companies were found to b....