TaxTMI 
TaxTMI 
2020 (8) TMI 406
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....t along with return, the ld.AO came to know that the assessee has received share application money of Rs. 2.00 crores from 28 persons/entities. He has noted the details viz. names of persons from whom such money was received and the amount received by the assessee from each individual. Therefore in a brief assessment order the ld.AO recorded that the assessee failed to discharge onus cast upon it by virtue of section 68, and made addition of Rs. 2.00 cores. He determined taxable income at Rs. 2,75,91,120/- as against returned income of Rs. 75,91,117/-. Dissatisfied with the assessment order, the assessee carried the matter in appeal before the ld.CIT(A). Assessee had filed application for permission to lead additional evidence. Such application was allowed and the assessee was permitted to place on record additional evidence. The ld.CIT(A) provided opportunity of hearing to the ld.AO for admission of such evidence and for rebutting evidence submitted by the assessee. The AO has submitted two remand reports, which are being reproduced by the ld.CIT(A) in para-2.4 and para-7.7 of the impugned order. On the comments of the AO, the ld.CIT(A) took explanation of the assessee also. After....
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....f Income, Relevant extract of Bank Statement of Syndicate Bank (PBP No. 15 to 22) 2. Atul L. Rathod B-1/2, Shayona City, Part-1, Ghatlodia, Ahmedabad ADSPR7042N 7,50,000/- 03/05/2013 Confirmation, Share Application form, PAN Card, ITR Ack., Statement of Income, Relevant extract of Bank Statement of Vijaya Bank (PBP No. 23 to 30) 3. Atul L. Rathod-HUF B-1/2, Shayona City, Part-1, Ghatlodia, Ahmedabad AAHHA6717M 7,50,000/- 26/04/2013 Confirmation, Share Application form, PAN Card, ITR Ack., Statement of Income, Relevant extract of Bank Statement of Vijaya Bank (PBP No. 31 to 38) 4. Bharat Chimanbhai Patel 8,Haridarshan Tenament, Ghodasar, Ahmedabad ARLPP4162E 7,50,000/- 30/05/2013 Confirmation, Share Application form, PAN Card, ITR Ack., Statement of Income, Relevant extract of Bank Statement of Bank of Baroda (PBP No. 39 to 46) 5. Bharat Kantilal Vaidya B-2, Shayona City, Part-1,Ghatlodia, Ahmedabad ACCPV7442B 5,00,000/- 10/04/2013 Confirmation, Share Application form, PAN Card, Relevant extract of Bank Statement of Canara Bank (PBP No. 47 to 51) 6. Dahyabhai P. Suthar B-1/12, Shayona City, ....
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..../- 06/04/2013 Cheque cleared on 08/04/2013 in ICICI CC A/c No. 2451000150. 16. Mehul D. Suthar B-1/12, Shayona City, Part-1, Ghatlodia, Ahmedabad BMWPS6239J 5,00,000/- 10/04/2013 Confirmation, Share Application form, Relevant extract of Bank Statement of Vijaya Bank (PBP No. 109 to 112) 17. Neeraj J. Parikh 6, Shaswat Bungalow, Satellite, Ahmedabad AASPP5826F 12,50,000/- 08/05/2013 Share Application form, PAN Card. Cheque cleared in ICICI Bank CC A/c 2451000150 on 10/05/2013. (PBP No. 113 to 114) 18. Rachna Patel A-1, RamKrishna Apartments, Hirawadi, Saijpur Bogha, Ahmedabad CCRPP5743E 7,50,000/- 30/05/2013 Confirmation, Share Application form, PAN Card, ITR Ack., Statement of Income, Relevant extract of Bank Statement of Bank of Baroda, Aadhaar card (PBP No. 115 to 124) 19. Rajesh M. Makwana C/80/956, Shreenath Appartments, Nava wadaj, Ahmedabad AJPPM9595G 7,50,000/- 23/05/2013 Share Application form, PAN Card, (PBP No. 125 to 126) 20. Rajesh M. Makwana HUF C/80/956, Shreenath Appartments, Nava wadaj, Ahmedabad AAKHR1360Q 7,50,000/- 07/05/2013 Confirmation, Share Applicat....
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....ort to the CIT(Appeal). No verification of bank details of depositors, no inquiry from the A.O. of the depositors on the basis of return receipt furnished, etc was made and the entire addition u/s 68 has been justified simply because share applicants did not respond to the summons issued. Further he has not discussed anything with regard to the fact that no money was received during the year and there was only journal entry without receipt of money and the facts of non receipt of money in this year are amply proved from the bank slips of subsequent year by which these cheques were deposited and the respective entries appearing in the Bank Statements of subsequent year. The Ld. CIT(Appeals) has also neither discussed anything regarding non receipt of money during this year, nor has given any finding in this regard and the appeal order is silent on this core issue. He based his finding by extensively quoting from the decision of Nova Promoters, but didn't appreciate the decision of Oasis Hospitalities Private Limited mentioned in this very decision pointing out that when assessee produced PAN, Bank Account, Copies of ITR Returns, primary onus of assessee is discharged and ad....
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....r the source of these amounts." In the case of assessee also, no proper inquiry has been made and all the evidence placed on record have simply been rejected out of doubt and suspicion. 5.) Ranchhod Jivabhai Nakhava TA No. 50 of 2011 Gujarat High Court. 6.) M/s. Dataware Private Limited - ITA No. 263 of 2011 GA No. 2856 of 2011 - Calcutta High Court. 7.) For alternative submission which can be taken by the assessee, decision relied upon is Ghai Lime Stone Com. - High Court of M.P. 144 -ITR - 140 8.) When amount is not received, addition u/s 68 cannot be made. Decisions relied upon are: i) M/s Luxmi Foodgrains Private Limited - ITAT Bench "A" Chandigarh - ITA NO. 316/CHD/2019 - A.Y. 2013-14 dated 07/11/2019. ii) Jatia Investment Co. - 206 ITR 718 - High Court of Calcutta. iii) Bhagvat Marcom Private Limited - ITA No. 223 (Kol) - 178 ITD -684. iv) Mahendrakumar Agarwal - ITAT - Jaipur -142 TTJ (J.P.)(UO) -35. v) Orissa Corporation Private Limited - 159 ITR 78 (Supreme Court) 5. On the other hand the ld.DR relied upon the orders of the Revenue authorities. He submitted that the AO has made reference to....
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....Canara 24/05/2013 20 Rajesh M Makwana (HUF) 900755 750,000 Vijaya 08/05/2013 21 Reena N Parikh 254502 1,000,000 ICICI 01/05/2013 23 Savan Dineshbhai Contractor 386522 250,000 Canara 10/04/2013 Savan Dineshbhai Contractor 386523 500,000 Canara 09/05/2013 24 Shakuntalaben V Patel 907206 750,000 Vijaya 17/05/2013 25 Shanabhai Rothod 959287 500,000 Vijaya 20/04/2013 26 Shree Shiv Enterprise 687889 1,000,000 Union Co-Op 08/04/2013 27 Vishnubhai Gandabhai Prajapati 148927 500,000 Union Co-Op 08/04/2013 28 Vishnu G Patel 397963 750,000 Canara 20/05/2013 Total Amount (Rs.) 2,00,00,000 7. On page 7 para 7.7, the ld.CIT(A) took note of identical details that contained the date of presentation of cheque also. In order to avoid the repetition, we observe that presentation of cheques is just one or two days before its clearance, i.e. in the case of Shri Alpesh C. Gajjar cheque was encashed on 4.6.2013. It was presented in the bank of assessee on 3.6.2013. Similar is the effect in other cases. There is a var....
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....res as exceeds the fair market value of the shares: 7. A perusal of this section would reveal that the expression "receive" employed in this clause would indicate that the assessee should have actually received the amounts, and not a notional one, because in various authoritative pronouncements it has been construed that the amounts should have been actually received. ITAT, Kolkatta Bench has considered identical aspect, and made following discussion: "6. We have considered the rival submissions and also perused the relevant material available on record. It is observed that its shares were issued by the assessee-company during the year under consideration at premium to certain companies in lieu of the shares held by the said companies and there was thus no inflow of cash involved in these transactions. The said transactions were entered into in the books of account of the assessee-company by way of journal entries and it did not involve any credit to the cash amount. The learned DR at the time of hearing has not brought anything on record to rebut or controvert this position. He however has contended by relying on the decision of Hon'ble Madhya Pradesh High Co....
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....the matter reached to the Hon'ble Calcutta High Court, it was held by their lordship that when the cash did not pass at any stage and since the respective parties did not receive cash nor did pay any cash, there was no real credit of cash in the cash book and the question of inclusion of the amount of the entry as unexplained cash credit could not arise. In our opinion, the ratio of this decision of the Hon'ble Jurisdictional High Court in the case of Jatia Investment Co. (supra) is squarely applicable in the facts of the present case and the ld. CIT(A) was fully justified in deleting the addition ITA No No.316/Chd/2019 made by the AO u/s 68 by holding that the said provision was not applicable." 8. Since assessee has not received actual consideration, it has only received cheques which have not been encashed, therefore, the proposition laid down in the above order of the ITAT, Kolkata Bench is clearly applicable on the facts of the present case. We allow the appeal of the assessee and delete the addition." 8. The ld.DR during the course of hearing was unable to controvert the proposition laid down in these two judgments. In the present case also no actual money....