TaxTMI 
TaxTMI 
2020 (2) TMI 250
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....0,000/- (Rs. 1,00,00,000/- on account of share capital and premium and Rs. 57,00,000/- on account of unconfirmed unsecured loans). 2.1 Aggrieved, the assessee approached the Ld. First Appellate Authority who deleted both the above mentioned additions. Now the department is before the Tribunal challenging the deletion of addition made by the Ld. CIT (A) and has raised following grounds of appeal: - "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) had erred in deleting the addition of Rs. 1,57,00,000/- on account of unconfirmed share capital/premium and unsecured loan u/s 68 of the I.T. Act, 1961, ignoring the fact that the assessee had failed to discharge its onus of establishing the identity, genuineness and creditworthiness of source of the funds received." 2.2 For the sake of completeness, particulars of both the above mentioned additions as described by the Assessing Officer (AO) in the assessment order are reproduced below: "Unconfirmed share capital/premium A perusal of the assessee's Balance Sheet reveals that the assessee company has received share capital/share premium during the year amounting to Rs....
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....ed 14-10-2014 along with complete details of share applicants/lenders, their income tax particulars and confirmations. However, the AO being not satisfied with such information had issued notices u/s 133(6) of the Act to each of the share applicants/lenders. In response to such notices, replies were submitted by all the share applicants/lenders which included the acknowledgment of ITRs for A.Y. 2012-13; confirmed copy of account of the parties; source of investment made by them and also the bank account details. From these details, the AO has observed that the share applicants/lenders were not having sufficient income as per the ITRs filed by them and that they were having meagre income. It was further submitted that some of the notices issued by the AO u/s 133(6) of the Act were initially returned back by the postal authorities with remarks 'no such person on mentioned floor or room no' and 'unclaimed'. Thereafter, the assessee had submitted the fresh addresses and replies were received. It was further submitted that the AO had also made inquiries through the inspector of income tax in some of the cases who had reported that at the specified addresses the companies....
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....BI Page 184 3. M/s RKG Finvest Ltd. Page 80 Letter dated 15-10-2014 asking the same information as above Page 81 submitting all the information Reply dated 28-10-2014 Page 82 For the period of 01-04-2011 to 31-03-2012 Pages 83-84 Acc. No. 024810 200000 5265 Page 107A Dated 29-09-2012 Pages 85-107 Pages 216 to 218 Pages 182 to 183 Assessment Order dated 08-08-2014 Repayment Pages 212 to 215 Certificate of NBFC issued by RBI Page 185 EVIDENCE OF SHARES AND PREMIUM S. No. Names 133(6) Reply Bank Account ITR Audited Others 1. M/s VemuriFinvest Pvt. Ltd. Page 108 Letter dated 05-01-2015 (a) Copy of details of transactions during 01-04- 2011 to 31-03- 2012 (b) Copy of bank statement (c) Source (d) Assessment particulars Page 109 Reply dated 13-01-2015 Page 110 Kotak Mahindra Bank Page 111 Dated 30-03-2013 Page113-125 2. M/s Bhavtarani Sales Pvt. Ltd. Page 126 Letter dated 05-01-2015 Page 127 Reply dated 12-01-2015 Page 128 IDBI Bank Customer ID. 72845907 Page 129 Dated 19-09-2012 Page 130-140 3. M/s Chatur....
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....sked the assessee vide letter dated 20-03-2015 to produce Principle Officers/ Directors of the share applicant companies/lenders companies. He submitted that the said notice was served on the assessee only on 24-03-2015 and the date was given for 26-03-2015. He submitted that when the assessee had already placed on record the evidences to prove the three factors necessary for proving the genuineness of the credit and AO had also collected the information directly, then the addition could not be made merely on the basis that the assessee had failed to produce the directors physically and for such proposition of law the Ld. AR relied upon the decision of the Hon'ble Delhi High Court in the case of Principal Commissioner of Income-tax-8 v. Softline Creations (P) Ltd [2016] 387 ITR 636 (Delhi). 4.3 The Ld. AR further submitted that it is not even the case of the AO that the parties were not traceable because in response to the notices issued by the AO u/s 133(6), the parties have directly submitted the replies. The Ld. AR further relied upon the decision of the Hon'ble Supreme Court in the case of Principal Commissioner of Income Tax vs. Himachal Fibers Ltd [2018] 259 Taxman....
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....l of them are assessed to tax. The AO conducted independent inquiry by sending notices u/s 133(6) which were dully served on all of these four companies who confirmed the amount of investment and also submitted the required details. In respect of inquiries conducted by inspector, the Ld. AR drew our attention towards the finding rendered by the Ld. CIT (A) in Para 4.1.5 wherein it is brought on record that in the case of M/s Vemuri Finvest Pvt. Ltd., the inspector visited at the old address. Fresh address was provided by the assessee vide letter dated 15-12-2014 on which the notice was duly served which was sent by AO u/s 133(6) and compliance was also made. Similarly, in the case of M/s Toor Finance Company Ltd. it was submitted that the employee of the said company was present at the address visited by the inspector and the person to whom the inspector contacted also confirmed the existence of the company. The said company is NBFC registered with RBI. Thus, it was submitted by the Ld. AR that in view of the evidence/s submitted by the assessee before the AO and also the evidence/s collected by the AO directly from the parties, the assessee had duly discharged the onus cast on it ....
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....ndra Bank RTGS 25,00,000/- 19.04.2011 Kotak Mahindra Bank RTGS 25,00,000/- 19.04.2011 Kotak Mahindra Bank RTGS 25,00,000/- Bank account statement evidencing the payment of Share application money is enclosed. 3. Source of Our Investments made: Rs. 35,00,000/- from Hamraj Financial Consultants Pvt. Ltd. on 18.04.2011 Rs. 25,00,000/- from Ideal Vintrade Pvt. Ltd. on 18.04.2011 4. Our Pan: AAACV3615M, Ward 26(2), C.R. building, New Delhi Copy of the income tax returns filed for the A.Y. 2011-12 and 2012-13 with Balance sheet, profit & loss account and its annexures are attached herewith. We hope that your good self shall find the same in order. We shall be glad to furnish further information or elucidation as desired" 5.2 The above mentioned reply has been received directly by the AO on 21-01-2015 as per seal affixed by the office of the AO. From the above reply it is evident that the investment made by the share applicant has been confirmed and also the source from where the investment has been made and also the PAN and the ward where the share applicant is being assessed is also mentioned. The cop....
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....ad given loan of Rs. 35,00,000/- (Thirty Five Lacs only) to Commitment Financial Services Pvt. Ltd. during the financial year 2011-2012, We further confirm that total loan outstanding receivable as on March 31, 2012 From M/s Commitment Financial Services Pvt. Ltd. Was Rs. 35,00,000/- and out of total interest receivable for the said financial year aggregating to Rs. 69,619/- was outstanding receivable from them. Copy of the ledger account of M/s Commitment Financial Services Pvt. Ltd. For the period 01.04.2011 to 31.03.2012 is attached herewtih. 2. Copy of bank statement is attached herewith. 3. We had given loan to M/s Commitment Financial Services Pvt. Ltd. From our own fund. 4. Copy of Income Tax Return along with audit report and balance sheet alongwith its annexures is attached herewith. 5. We hope your high office will find the above in order. However, in case your high office require any further formation we shall be glad to furnish the same upon hearing from you. 5.6 Along with reply, confirmed copy of account is placed at page 38. Copy of bank account of creditor is placed at page 39 and copy of ITR for A.Y. 2012-13 showing income of ....