TaxTMI 
TaxTMI 
2020 (11) TMI 596
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....tion Money of Rs. 7,50,00,000/- received during the year as Unexplained Cash Credit and added to total income under section 68 of the Income Tax Act 1961 even though no incriminating documents and/or material of alleged cash paid to the Share Applicants (Investor Companies) were found during the course of search action/proceedings. The learned Assessing Officer has just acted mechanically relying upon third party statement and reference many by the Investigation Wing without taking cognizance of the seized material in his possession and other details and documents submitted by the Appellant during the assessment proceeding pertaining to the share application money received which were sufficient enough to establish the identity and capacity of the share applicants and genuineness of the transactions. The learned Assessing Officer has erred in rejecting the Retraction Statement of the Director of the Group merely on the ground that it was sworn after 10 months of the original statement given by him without appreciating the reasons for delay recorded in the Affidavit and reached to conclusion just because the Appellant did not produce the Director of the Share Applicant Companies. ....
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....ered with the Registrar of the Companies, Mumbai, Maharashtra, under The Companies Act, 1956. The assessee company is engaged in the business of builders, developers and advancing of loans, advances and making Investments. The assessee company had filed its Return of Income on 27.08.2012 declaring total loss of Rs. 42,067/-. The Return was processed u/s 143(1) of the Act 1961 accepting the returned income. The assessee company's case was then selected for scrutiny proceedings. During the course of the assessment proceedings, the assessee had furnished all the information asked for by the Ld. Assessing officer for verification of share application money received during the year. Thereafter, a search action was conducted under section 132 of the Act on 05.11.2014 at the residential and business premises of Vardhman group. The case was then centralized with DCIT CC2(3), Mumbai on 26.08.2015 and notice under section 153A was issued. In response to notice under section 153A of the Act, the assessee filed return of income and notice under section 143(2) of the Act was issued. Subsequently the case was centralized with DCIT CC2(2), Mumbai. Since notice under section 153A of the Act was is....
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....usiness Pvt. Ltd. AABCJ6245N 30,000 Cheque 9,000,000 300,000 8,700,000 4,592,000 5 Sumukh Commercial Pvt, Ltd. AACCC7400M 15,000 Cheque 4,500,000 150,000 4,350,000 4,912,500 6 Anchal Properties Pvt. Ltd. AAGCA0681A 30,000 Cheque 9,000,000 300,000 8,700,000 4,872,500 7 Yash V Jewels Limited AAACY1119P 15,000 Cheque 4,500,000 150,000 4,350,000 42,517,500 8 Atharv Business Pvt Ltd. AAACF9430A 15,000 Cheque 4 ,500,000 150,000 4,350,000 4,160,000 9 Olive Overseas Pvt. Ltd. AACCR4512K 15,000 Cheque 4,500,000 150,000 4,350,000 19,637,000 10 Sanjivani Enviro Protection Ltd. AADCS3433P 15,000 Cheque 4,500,000 150,000 4,350,000 9,215,000 11 Raghunandan Rayons Ltd. AABCR1177R 15.000 Cheque 4,500,000 150,000 4,350,000 27,928,610 12 Ansh Merchandise Pvt. Ltd. AABCN8176E 15,000 Cheque 4,500,000 150,000 4,350,000 4,815,000 13 Kush Hindustan Entertainment Ltd. AACCK3597M 15,000 Cheque 4,500,000 150,000 4,350,000 31,750,000 14 Josh T....
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....tor companies c. copies of forms of application for equity shares filled by the Investor companies d. Copies of allotment advices given by the assessee to the Investor companies e. Copies of Director Report, Audit Report, Profit & Loss Account and Balance Sheet of the Investor companies f. Copies of bank statement/Confirmations of the Investor companies showing amount paid to the assessee; g. Copy of Form No. 2 filed with Registrar of Company towards allotment of shares In order to prove creditworthiness assessee filed details showing financial strength of the investor companies which are reproduced as under: Sr. No. Name of the Investor Company * Share Capital Rs. * Reserves And Surplus Rs * Total Net Worth Rs. * Total Value of Shares Applied in the Assessee Company Do Share application money paid % of Total Net worth 1 Javda India Impex Ltd. 45,000,000 (28,336,978) 16,663,022 3,000,000 18.00% 2 Vanguard Jewels Ltd. 40.000.000 (17.200.452) 22,799,548 4,500,000 19.74% 3 Casper Enterprises Pvt. Ltd. 4,611,500 (42,786,817) (38,175,317) 4,500,000 -1 1 .79....
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.... as well as the departmental representative, we find that the case of the assessee is squarely covered by the decision of the coordinate bench of the Tribunal in the following cases: 1. Diwali Mercantile Pvt. Ltd. (formerly known as Diwali Capital and Finance Pvt. Ltd.) (supra) 2. DCIT vs. Blue Stock Investments Pvt. Ltd. (supra) 3. ITO vs. M/s. Diwali Developers Pvt. Ltd. (supra) We note that the cases were decided by the co-ordinate bench of the Tribunal in sister concerns involving the similar issue. In all the above cases the issue is decided in favour of the assessee. For the sake of convenience, the operative part of the decision in ITA No.2091/M/2018 is reproduced as under: "8. We have heard rival contentions and gone through the facts and circumstances of the case. We have noticed from the assessment order that the AO has issued notice under section 133(6) of the Act to the above mentioned share applicants to verify the transactions. In response to the said notice, of the share applicant filed the details called for and the relevant details are as under: - "i) details of investment made by them by way of share application i....
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.... filed along with relevant documents for establishing identity of the parties and genuineness of transaction. We also noted that the AO was excessively influenced by the information received from DDIT, Investigation Wing, Mumbai regarding search action conducted in the case of one Shri Praveen Kumar Jain and his group and the statement recorded of Shri Praveen Kumar Jain. The AO has not independently proved that the share application money is bogus and not travelled through bank account. It is a fact that these companies are duly registered under the Companies Act, 1956 and still active except one company i.e. Navlakha Agrex Pvt. Ltd., which is Amalgamated. The assessee as before us also filed the following details: - (i) The details of share applicants inter alia the name and addresses of the share applicants; (ii) PAN of share applicants; (iii) The copy of bank statement of the appellant of the banking account in which the account payee cheques received from share applicants were deposited and credited to its account; (iv) The details of investment made by share applicants inter alia, cheque No. and date of cheque, and the bank on which the sai....