TaxTMI 
TaxTMI 
TaxTMI 
2020 (2) TMI 424
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....nese, Ferro Silicon etc. During the course of assessment proceedings, the Assessing Officer observed that the assessee company has received share capital from the following entities/concerns:- S. No. Name of company Share application Share premium Total amount 1 Sesum Marketing Pvt. Ltd. 60/1, Chowringhee Road, Kolkata-200020(wb) 60,000 29,40,000 30,00,000 2 Sundram Consultants Private Limited P-41, Princeep Street, 6th Floor, Kolkata-700072 (WB) 100,000 49,00,000 50,00,000 3. In order to verify the identity & creditworthiness of the investor company, M/s Sesum Marketing Pvt. Ltd and the genuineness of transaction, information was sought u/s 133(6) from the said investor company. No reply was received from the said company, however, the assessee company submitted the copy of the income tax return and audit report of the investor company for the A.Y 2012- 13. On perusal of the same, the Assessing Officer observed that the returned income of said investor company was only Rs. 2,61,780/-. Further, income tax returns for earlier two years were also examined through ITDMS of Income Tax Department and it was observed by the Assessing officer that in view of the....
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.... the assessee had introduced its own unaccounted cash in form of share application money/share premium through these companies based at Kolkata and the same were treated as unexplained cash credit u/s 68 of the Act and brought to tax in the hands of the assessee company. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) who has held that in view of the facts discussed by the Assessing Officer and basis the outcome of the enquiries conducted by the Assessing Officer, the assessee has failed to explain satisfactorily the nature and source of the credit of Rs. 80,00,000/- made by the AO u/s 68 of the Act and the addition so made by the AO was confirmed. Against the said findings, the assessee is in appeal before us. 6. During the course of hearing, the ld. AR submitted that in support the discharging initial onus cast on the assessee company, it has furnished the following documents before the lower authorities: "S. No. Nature of documents 1. Copy of Companies Audit Report, Tax Audit Report and Other Financial statements for year ended 31.03.2012 2. M/s Sesun Marketing (P) Limited (a) Copy of Certificate of Registration with RBI for No....
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....turns and has filed a confirmation letter with the AO for the source of the funds out of which amount has been invested in the share capital of the assessee company and the fact that the amount have been paid to the assessee company through banking channels towards subscription of share capital and in support, copy of bank statement was also submitted. It was further submitted that as per the company's audit report for year ended March, 2012, it has paid up share capital of Rs. 1,97,00,000/- besides reserves and surpluses of Rs. 12,64,25,246/- and the company's income from operation for the year under consideration is Rs. 18,01,115/-. Thus complete identity, genuineness of transaction & credit worthiness of the investor company has been proved. It was further submitted that as per share valuation of the assessee company, net worth of the assessee company is worth Rs. 500/- and accordingly the share of Rs. 10/- each have been issued at a premium of Rs. 490/- per share thus looking at high capital appreciation, the investor company has decided to invest in the assessee company and there is thus no basis for alleging that there was no basis for making investment in the assessee compan....
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....ordingly submitted that where the complete details in form of nature of credit, identity and creditworthiness of investor companies & mode of transaction was well evidenced by assessee before the AO and mere doubt and suspicion in the mind of the Assessing officer cannot justify the addition of the share capital in the hands of the assessee company and bringing the same to tax thus defeating the whole purpose of seeking fresh investment where such funds are again blocked and cannot be used for business purposes. It was further submitted that there was no basis with the AO besides mere suspicion to hold that the amount so received is assessee's own unaccounted cash in form of share application money/share premium through these companies based at Kolkata and thus, there was no basis to treat share capital as unexplained cash credit u/s 68 of the Act. 10. Per contra, the ld. DR relied on the findings of the Assessing Officer. It was submitted by the ld. DR that the Assessing Officer has carried out necessary verification in terms of issuance of notice u/s 133(6) and also issuing commission u/s 131(1)(d) of the Act and basis such inquiry and investigation has given a finding that the ....
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....e companies were also regularly filling their income tax returns with the Income Tax Department and have been reporting operating revenues from their regular business activity of financing and investment. Further, information sought by the AO u/s 133(6) have been submitted by M/s Sundrm Consultants Pvt Ltd. Given the same, mere non-appearance of Directors especially where no summons was issued by the AO cannot be held against the assessee. Regarding issue of commission u/s 131(1)(d) to ACIT Circle 35, Kolkata, in his report, he has stated that the inspecting authority has reported that nobody was found at the address and basis the same, he has submitted his report stating that identity, creditworthiness and genuineness of the transaction not confirmed. In this regard, the ld AR has submitted that there has been a change in the address of these two companies as apparent from their filings with the ROC and there has been no further enquiry conducted by the Assessing officer. Therefore, as far as the identity and existence of these investor companies are concerned, their registration and regular filings with the appropriate regulatory authorities duly demonstrate the same. Regarding ....