TaxTMI 
TaxTMI 
2020 (12) TMI 102
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....ct reads as under:- "(6) The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision". 3. Shri S. K. Tulsiyan, the Learned Authorised Representative (in short, the 'Ld. AR') of the assessee assailing the impugned order of the Ld. CIT(A) contended that the Ld. CIT(A) has enhanced the addition from Rs. 84 lakhs to Rs. 21.38 cr. (enhanced Rs. 20.54 cr.) in a haste, without even enquiring the veracity of the voluminous documents and the statement recorded by AO which were available in the assessment folder. So, according to Ld. A.R the impugned action of Ld. CIT(A) is arbitrary, whimsical and against Rule of Law. According to Ld. AR, though the Ld. CIT(A) enjoys coterminous powers of AO, he while discharging his first appellate jurisdiction has to record his factual finding by disproving the finding/conclusion of Assessing Officer, if he has to differ from the view taken by the Assessing Officer. According to Ld. AR, the Ld. CIT(A) while adjudicating the appeal of the assessee against the addition of Rs. 84 lakhs as ordered by AO, had in fact sent th....
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....the Ld. AR even though the power of the Ld. CIT(A) is co-terminus with that of the AO and if he nurses any doubt about the investigation carried out by the AO or about the veracity of the documents collected by the AO, then he was duty bound to issue notices u/s. 131 of the Act and summon the shareholders as well as the director of the assessee company, which he has not done and therefore, the enhancement of addition made by the Ld. CIT(A) in the hands of the assessee is arbitrary and therefore, the same should be deleted. 4. Per contra, Shri Vijay Shankar, Learned CIT, DR vehemently opposing the plea of the Ld. AR contended that the Ld. CIT(A) had fixed the appeal of the assessee on six (6) occasions and the assessee did not bother to attend/appear before the Ld. CIT(A). According to the Ld. DR the reason that assessee did not receive any notice cannot be a ground to challenge the impugned order of the Ld. CIT(A), when the notices were issued at the address given by assessee. According to the Ld. DR, the Ld. CIT(A) has co-terminus power as that of the AO. And even though the documents have been collected by the AO for taking a favorable view of assessee in respect of share capi....
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.... AO was rightly interfered by the Ld. CIT(A) and, therefore, he enhanced the addition as per law. Therefore, he does not want us to interfere with the impugned order of the Ld. CIT(A). 5. In his rejoinder, the Ld. AR of the assessee drew our attention to the notice(s) issued by the AO dated 18/12/2014 u/s. 142(1) and section 142(2) of the Act, which is found mentioned at page 17 PB-1 and pursuant to the same, the assessee by letter had filed the relevant documents to substantiate the queries raised by the AO, which is placed at pages 17 to 55 of the P.B-I. The Ld. AR of the assessee drew our attention to section 131 notice dated 10/2/2015 to the director of assessee (supra), which is mentioned at pages 56-57 of the P.B-II and took us through the section 133(6) notice issued to all the thirty eight (38) shareholders/share applicants, which companies have subscribed to the shares of the assessee company which are found placed in PB-II. The Ld. AR of the assessee drew our attention to the copies of the respective responses/replies of the shareholders/share applicants which were directly given to the AO pursuant to his notice u/s. 133(6) of the Act which are found placed in PB-II....
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....hout making any enquiry to upset the decision of the Assessing Officer was arbitrary, whimsical and therefore have to be set aside and the Assessing Officer's order need to be restored as well as deleting Rs. 84 lakhs added by AO. So, according to Ld. AR, the action of Ld. CIT(A) to enhance without disproving the finding of fact which the AO has drawn to be satisfied about the nature and source of share capital collected by the assessee company from thirty six (36) companies to the tune of Rs. 20.54 cr., without any enquiry is arbitrary exercise of power for which there is no sanction of law and so is untenable. According to him, the assessment is that of AY 2012-13 and the amendment of section 68 of the Act took place, wherein provision of bringing in the share premium was made by insertion of amendment in section 68 of the Act with effect from 01-04-2013 and is not applicable in this relevant AY. 6. Further on the point of taxation in respect of share premium it was pointed out by the Ld. AR that as per definition of income as provided under section 2(24) of the Act at the relevant point of time of (i.e. AY 2012-13) did not define as income, any consideration received for issu....
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....e of CIT Vs. order dt. 7-8-2018 98 taxmann.com 47 Mumbai Tribunal in DCIT Vs. Infrastructure P. Ltd & Green Infra Ltd reported in 38 taxmann. Therefore, according to the Ld. AR though the face value of each share was to the tune of Rs. 10, which was allotted at a premium of Rs. 1900/- per share, amount of Rs. 21,38,00,000/- was collected from said thirty eight (38) companies, which have been thoroughly enquired by the AO during the assessment proceedings. The Ld. AR drew our attention to the voluminous paper book (843 pages), and stated that all those documents were submitted before the AO by the assessee as well as by said thirty eight (38) share applicants. Therefore, according to the Ld. AR, the AO during the scrutiny assessment proceedings u/s. 143(3) after calling for information/explanation and after perusal of the documents placed before him has duly summoned Mr. Manish Kr. Dubey, the erstwhile director of the assessee company for the AY 2012-13 and after questioning him and thereafter recorded his statement in detail has taken a conscious view / decision has accepted Rs. 20.54 cr. out of total Rs. 21,38 crores assessee received as share capital. Thus, the share capital coll....
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....the AO at Rs. 84 lakhs to Rs. 21.38 crs, thereby enhanced total amount of Rs. 21.54 crs. It was brought to our notice by the Ld. AR that even though the Ld. CIT(A) fixed the appeal on six (6) occasions, first three (3) notices were posted to the earlier address which got changed, but this fact of change of address was brought to the notice of AO as well as Ld. CIT(A) and, therefore, assessee company cannot be faulted for non-service of notice. According to the Ld. AR when the assessment order was passed on 30-03-2015 itself, the assessee has changed its address from 6/3 Ola Bibi Tala Lane, Howrah-711104, which was informed to the AO vide a letter dated 14-01-2015. However, the AO while passing the assessment order has wrongly reflected the old address on the body of the assessment order, whereas the assessee has changed its address to 21 Hemanta Basu Sarani, Fifth Floor, Room No. 506, Kolkata-700 001 (New address from 14/1/2015 referto page-7 of the P.B-1). However, according to the Ld. AR, at the new premises i.e. 21, Hemanta Basu Sarani, there arose a dispute between the landlord and the assessee. So, the landlord played mischief on the assessee and thereby kept the assessee i....
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....andate of section 251(2) of the Act to provide reasonable opportunity to the assessee. Therefore we note that the impugned order was passed enhancing the income without giving proper / reasonable opportunity to the assessee. 9. Be that as it may be, we note that the ld. CIT(A) has passed the impugned order after going through the assessment folder which contained the order-sheet maintained by Assessing Officer in assessee's case and the statutory notices issued by Assessing Officer and replies filed by the assessee and the thirty eight (38) share-applicants / shareholders as well as the recorded statement of assessee company's director on oath u/s 131 of the Act. We note that reply of assessee is found placed at 17-55 (PB-I) and the notices issued by AO & replies of thirty eight share applicants, copies of which are found placed at PB-II (Page-1 -843) and from a perusal of these documents, we note that all of them have filed inter alia, their respective PAN Card, ITR acknowledgment, Certificate of Incorporation issued by ROC evidencing their identity, Bank Statements evidencing the genuineness of the money transactions and Audited Accounts for the year evidencing their high net-....
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....ssing Officer was wrong in arriving at the finding of fact about identity, creditworthiness and genuineness of the thirty six (36) share applicants. In other words, when the Ld. CIT(A) perused the documents kept in the assessment folder and still if he felt that he was not satisfied with the replies filed by the share applicant companies, then he could have insisted on the personal attendance of the Directors of the share applicant companies by exercising his plenary powers and issue summons u/s 131 of the Act to the Directors of the share applicant companies and examine them on oath. However, we note that no summons/notices were issued by the ld. CIT(A) to the share subscribers in the present case. It is settled that the first appellate authority has plenary powers in disposing of an appeal and the scope of his power is coterminus and co-extensive with that of the Assessing Officer. A perusal of section 131 of the Act reveals that it empowers the Commissioner (Appeals) to issue summons u/s 131 of the Act. Section 131 of the Act reads as follows: 131. (1) The Assessing Officer, Deputy Commissioner (Appeals), Joint Commissioner, Commissioner (Appeals), Principal Chief Commi....
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.... and not "shall". Thus the unsatisfactoriness of the explanation does not and need not automatically result in deeming the amount credited in the books as the income of the assessee as held by the Supreme Court in the case of CIT v. Smt. P. K. Noorjahan [1999] 237 ITR 570. We note that against the said decision of Hon'ble Gujarat High Court the special leave petition filed by the Revenue has also been dismissed by the Hon'ble Apex Court. 12. Coming to another case wherein the main plank on which the AO made the addition u/s 68 of the Act was because the lenders/creditors [ like directors of share subscribing companies] did not turn up before him, in such a case that is Dy. CIT v. Rohini Builders [2002] 256 ITR 360 /[2003] 127 Taxman 523 the Hon'ble Gujarat High Court relying on the Hon'ble Apex Court ratio in the case of Orissa Corpn. (P) Ltd. 159 ITR 78, has held that onus of the assessee (in whose books of account credit appears) stands fully discharged if the identity of the creditor is established and actual receipt of money from such creditor is proved. In case, the Assessing Officer is dissatisfied about the source of cash deposited in the bank accounts of ....
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....ess prove the affairs of such third party, which he is not even supposed to know or about which he cannot be held to be accredited with any knowledge. In this view, the Hon'ble Court has laid down that section 68 of Income-tax Act, should be read along with section 106 of Evidence Act. The relevant observations at page 260 to 262, 264 and 265 of the report are reproduced herein below:- "While interpreting the meaning and scope of section 68, one has to bear in mind that normally, interpretation of a statute shall be general, in nature, subject only to such exceptions as may be logically permitted by the statute itself or by some other law connected therewith or relevant thereto. Keeping in view these fundamentals of interpretation of statutes, when we read carefully the provisions of section 68, we notice nothing in section 68 to show that the scope of the inquiry under section 68 by the Revenue Department shall remain confined to the transactions, which have taken place between the assessee and the creditor nor does the wording of section 68 indicate that section 68 does not authorize the Revenue Department to make inquiry into the source(s) of the credit and/or sub-c....
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....ablish the genuineness of the transaction as well as the creditworthiness of his creditor, the burden of the assessee to prove the genuineness of the transactions as well as the creditworthiness of the creditor must remain confined to the transactions, which have taken place between the assessee and the creditor. What follows, as a corollary, is that it is not the burden of the assessee to prove the genuineness of the transactions between his creditor and sub-creditors nor is it the burden of the assessee to prove that the sub-creditor had the creditworthiness to advance the cash credit to the creditor from whom the cash credit has been. eventually, received by the assessee. It, therefore, further logically follows that the creditor's creditworthiness has to be Judged vis-a-vis the transactions, which have taken place between the assessee and the creditor, and it is not the business of the assessee to find out the source of money of his creditor or of the genuineness of the transactions, which took between the creditor and sub-creditor and/or creditworthiness of the sub- creditors, for, these aspects may not be within the special knowledge of the assessee. " **********....
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.... far as the appellant is concerned, he has established the identity of the creditors, namely, Nemichand Nahata and Sons (HUF) and Pawan Kumar Agarwalla. The appellant had also shown, in accordance with the burden, which rested on him under section 106 of the Evidence Act, that the said amounts had been received by him by way of cheques from the creditors aforementioned. In fact the fact that the assessee had received the said amounts by way of cheques was not in dispute. Once the assessee had established that he had received the said amounts from the creditors aforementioned by way of cheques, the assessee must be taken to have proved that the creditor had the creditworthiness to advance the loans. Thereafter the burden had shifted to the Assessing Officer to prove the contrary. On mere failure on the part of the creditors to show that their subcreditors had creditworthiness to advance the said loan amounts to the assessee, such failure, as a corollary, could not have been and ought not to have been, under the law, treated as the income from the undisclosed sources of the assessee himself, when there was neither direct nor circumstantial evidence on record that the said lo....
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....and after verification, he can call for further explanation from the assessee and in the process, the onus may again shift from the Assessing Officer to assessee. 16. In the case before us, the appellant by producing the loan-confirmation-certificates signed by the creditors, disclosing their permanent account numbers and address and further indicating that the loan was taken by account payee cheques, no doubt, prima facie, discharged the initial burden and those materials disclosed by the assessee prompted the Assessing Officer to enquire through the Inspector to verify the statements." 16. In a case where the issue was whether the assessee availed cash credit as against future sale of product, the AO issued summons to the creditors who did not turn up before him, so AO disbelieved the existence of creditors and saddled the addition, which was overturned by Ld. CIT(A). However, the Tribunal reversed the decision of the Ld. CIT(A) and upheld the AO's decision, which action of Tribunal was challenged by the Hon'ble High Court, Calcutta in the case of Crystal Networks (P.) Ltd. v. Commissioner of Income-tax 353 ITR 171 wherein the Tribunal's decision was overturned an....
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....aken the trouble of examining of all other materials and documents, viz., confirmatory statements, invoices, challans and vouchers showing supply of bidis as against the advance. Therefore, the attendance of the witnesses pursuant to the summons issued, in our view, is not important. The important is to prove as to whether the said cash credit was received as against the future sale of the product of the assessee or not. When it was found by the Commissioner of Income-tax (Appeals) on facts having examined the documents that the advance given by the creditors have been established the Tribunal should not have ignored this -fact finding. Indeed the Tribunal did not really touch the aforesaid fact finding of the Commissioner of Income-tax (Appeals) as rightly pointed out by the learned counsel. The Supreme Court has already stated as to what should be the duty of the learned Tribunal to decide in this situation. In the said judgment noted by us at page 464, the Supreme Court has observed as follows: "The Income-tax Appellate Tribunal performs a judicial function under the Indian Income-tax Act; it is invested with authority to determine finally all questions of fact. The Tri....
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...." of the transaction and whether such transaction has been accepted by the Assessing officer of the creditor but instead of adopting such course, the Assessing officer himself could not enter into the return of the creditor and brand the same as unworthy of credence. So long it is not established that the return submitted by the creditor has been rejected by its Assessing Officer, the Assessing officer of the assessee is bound to accept the same as genuine when the identity of the creditor and the genuineness" of transaction through account payee cheque has been established. We find that both the Commissioner of Income Tax (Appeal) and the Tribunal below followed the well-accepted principle which are required to be followed in considering the effect of Section 68 of the Act and we thus find no reason to interfere with the concurrent findings of fact recorded by both the authorities." 18. Our attention was also drawn to the decision of the Hon'ble Supreme Court while dismissing SLP in the case of Lovely Exports as has been reported as judgment delivered by the CTR at 216 CTR 295: "Can the amount of share money be regarded as undisclosed income under....
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....r hearing the learned counsel for the appellant and after going through the decision of the Supreme Court in the case of Cl. T. vs. M/s. Lovely Exports Pvt. Ltd. [supra], we are at one with the Tribunal below that the point involved in this appeal is covered by the said Supreme Court decision in favour of the assessee and thus, no substantial question of law is involved in this appeal. The appeal is devoid of any substance and is dismissed. 20. Our attention was drawn to the decision of the Hon'ble High Court, Calcutta in the case of Commissioner Of Income Tax vs M/s. Nishan Indo Commerce Ltd dated 2 December, 2013 in INCOME TAX APPEAL NO.52 OF 2001 wherein the Court held as follows: "The Assessing Officer was of the view that the increase in share capital by Rs. 52,03,500/- was nothing but the introduction of the assessee's own undisclosed funds/income into the books of accounts of the assessee company. The Assessing Officer accordingly treated the investment as unexplained credit under Section 68 of the Income Tax Act and added the same to the income of the assessee. Being aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (....
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....giving the assessee adequate opportunity of representation and/or hearing. Learned Tribunal agreed with the factual findings of the learned Commissioner and accordingly the learned Tribunal dismissed the appeal of the Revenue and affirmed the decision of the learned Commissioner. Mr. Dutta appearing on behalf of the petitioners cited judgment of the Division Bench of this Court in Commissioner of Income Tax Vs. Ruby Traders and Exporters Limited reported in 236 (2003) ITR 3000 where a Division Bench of this Court held that when Section 68 is resorted to, it is incumbent on the assessee company to prove and establish the identity of the subscribers, their credit worthiness and the genuineness of the transaction. The aforesaid judgment was rendered in the context of the factual background of the aforesaid case where, despite several opportunities being given to the assessee, nothing was disclosed about the identity of the shareholders. In the instant case, the assessee disclosed the identity and address and particulars of share allocation of the shareholders. It was also found on the facts that all the shareholders were in existence. Only nine shar....
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....arties who had allegedly advanced the fund. In our opinion, both the Commissioner of Income-tax (Appeals) and the Tribunal below were justified in holding that after disclosure of the full particulars indicated above, the initial onus of the assessee was shifted and it was the duty of the Assessing Officer to enquire whether those particulars were correct or not and if the Assessing Officer was of the view that the particulars supplied were insufficient to detect the real share applicants, to ask for further particulars. The Assessing Officer has not adopted either of the aforesaid courses but has simply blamed the assessee for not producing those share applicants. In our view, in the case before us so long the Assessing Officer was unable to arrive at a finding that the particulars given by the assessee were false, there was no scope of adding those money under section 68 of the Income- tax Act and the Tribunal below rightly held that the onus was validly discharged. We, thus, find that both the authorities below, on consideration of the materials on record, rightly applied the correct law which are required to be applied in the facts of the pre....
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.... CIT(A) after fixing the case (6) six times on the 6th occasion (31.03.2017) finding that the assessee did not respond / appear before him, enhanced the addition by Rs. 20.54 crores. The main grievance raised by the ld. A.R is that the ld. CIT(A) who enjoys co-terminus powers as that of the Assessing Officer had any doubts about the investigative skills of AO, then he ought to have exercised his powers available u/s 250(4) of the Act and should have summoned all the directors of the 38 investor companies by issuing summons u/s 131 and could have independently called for details by issuing notice u/s 133(6) of the Act which unfortunately the ld. CIT(A) has not bothered to do and after having gone through the documents collected by the AO in the assessment folder which contained all the documents referred in paper book II (pages 843) has doubted the genuineness of the share capital raised by the assessee company and has enhanced the addition which according to the ld. A.R is arbitrary and whimsical. We find force in the arguments of the ld. A.R that even if the assessee did not appear for whatever reason it had given in the Affidavit for not receiving the notice, the ld. CIT(A) had e....
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....respect of money credited in its books of account of the assessee company and did not draw any adverse inference against the assessee company and being satisfied accepted the share capital raised by the assessee to the tune of Rs. 20.54 crores. This view of Assessing Officer is in consonance with the ratio decidendi of judicial precedents laid by Hon'ble Supreme Court and Hon'ble High Courts. However, we note that the Assessing Officer however was not satisfied with the share capital raised by the assessee from M/s. Omeshwar Tracom Pvt. Ltd. Rs. 54 lakhs and M/s. Harmony Vanijya Pvt. Ltd. Rs. 30 lakhs and thus made the addition of Rs. 84 lakhs against the assessee u/s 68 of the Act. 24. We note that it is not the case of the Ld. CIT(A) that on scrutiny of bank statement of share applicants he came to know that there was cash deposit in the investor companies just before they transferred the share capital and premium to assessee company. And it is not the case of the Ld. CIT(A) that the identity, creditworthiness and genuineness of the transaction found to have been accepted by the AO during the assessment proceedings is based on wrong appreciation of evidence or based on bogus/f....
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....AACCJ5212E Yes 18. Jagriti Commodities Pvt Ltd AABCJ7810P Yes 19. Jai MatadiCommosalesPvt Ltd AACCJ5211H Yes 20. Joyful Tie up Pvt Ltd AACCJ7267K Yes 21. Jubilee VincomPvt Ltd AACCJ6266E Yes 22. Lighthouse Merchants Pvt Ltd AACCL1461F Yes 23. Magnetic Barter Pvt Ltd AAHCM5948D Yes 24. Matarani Consultancy Pvt Ltd AAHCM3465D Yes 25. Mindpower Exports Pvt Ltd AAHCM5756D Yes 26. NishakarTracomPvt Ltd AADCN5112G Yes 27. OmeshwarTracomPvt Ltd AABC04186D Yes 28. ParamatmaVinimayPvt Ltd AAFCP1334G Yes 29. PramodanahVinimayPvt Ltd AAGCP3907L Yes 30. Ragini Creations Pvt Ltd AAFCR5328C Yes 31. SamvritahVanijyaPvt Ltd AAQCS8669G Yes 32. Sarawar Projects Advisory Pvt Ltd AAQCS1529M Yes 33. Savile distributors Pvt Ltd AAICS7476H Yes 34. Shambhunath Barter Pvt Ltd AAQCS8672M Yes 35. Sincere VintradePvt Ltd AAQCS0605L Yes 36. SnehaVinimayPvt Ltd AAQCS7675G Yes 37. Tassel VincomPvt Ltd AAECT0667P Yes 38. Violet Advisory Pvt Ltd AADCV7386C Yes ....
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....e up Pvt Ltd 440 439 17,31,50,231 448 60,00,000 21. Jubilee VincomPvt Ltd 461-462 455 26,37,55,943 470 1,15,00,000 22. Lighthouse Merchants Pvt. Ltd. 483 486 20,72,00,225 493 1,18,00,000 23. Magnetic Barter Pvt Ltd 507 509 15,30,00,250 516 45,00,000 24. Matarani Consultancy Pvt Ltd. 530 529 17,88,00,265 537 20,00,000 25 Mindpower Exports Pvt. Ltd. 546 549 17,94,00,266 559 40,00,000 26. NishakarTracomPvt Ltd. 569-570 571 10,80,04,799 580 83,00,000 27. OmeshwarTracom Ltd. ltd. 590 589 15,19,00,311 597 54,00,000 28. ParamatmaVinimay Pvt. Ltd. 615-616 614 25,68,00,375 623 39,00,000 29. PramodanahVinimay Pvt. Ltd. 634 647 8,23,00,470 642 4,00,000 30. Ragini Creations Pvt. Ltd. 656 657 12,13,00,521 663 40,00,000 31. SamvritahVanijya Pvt. Ltd. 675 677 26,31,81,792 683 95,00,000 32. Saraswar Projects Advisory Pvt. Ltd. 696-697 695 17,33,00,366 705 85,00,000 33. Savile distributors Pvt. Ltd. 719 720 14,86,47,378 ....
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....spersions on the AO's action based on suspicious and conjectures cannot be accepted and so we reverse his actions of enhancement made and restore the assessment order. For completeness, we would like to examine / discuss about each share subscribers totaling thirty eight based on the documents filed by the share applicant companies before Assessing Officer infra:- I. M/s Aditi Vintrade Pvt. Ltd.: On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 1-23 of share applicant which is a Private Limited Company, and which has Permanent Account No. AAJCA1785C and its Net-worth as on 31.03.2012 (in total)- Share Capital & Reserves is to the tune of Rs. 21,90,00,232/- (PB-2 page 17) and the investment made in the assessee-company including the share premium comes to only Rs. 67,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of Rs. 27,00,000/- on 16.12.2011 through cheque and deposited an amount of Rs. 40,00,000/- on 17.12.2011 through cheque (PB-2, Page-8). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment....
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....led ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 24-47) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN and Income-Tax Return. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there was no cash deposit in its Bank A/c before they....
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....ere is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. IV. M/s Alexa Finvest Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 68-88 of share applicant which is a Private Limited Company, and which has Permanent Account No. AAFCA 7011 R and its Networth as on 31.03.2012 (in total)- Share Capital & Reserves is to the tune of Rs. 18,66,00,351/- (PB-2 page 82) and the investment made in the assessee-company including the share premium comes to Rs. 48,00,000/-. The payment has been made by this entity to assessee through banking channels and deposited an amount of Rs. 48,00,0....
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....on 22.12.2011 by NEFT, deposit amount of Rs. 35,00,000/- took place on 26.12.2011 through NEFT and deposit amount of Rs. 55,00,000/- took place on 17.01.2012 through NEFT (PB-2, Page 49-50). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 89-110) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN and Income-Tax Return. This share applicant has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel. The share applicant had furnished the source of investment made in the assessee-company after getting summon issued under section 131 of the Act. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and w....
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....rom this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. VII. M/s Bluesky Merchants Pvt. Ltd. : On a perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 134-163 of share applicant which is a Private Limited Company, and which has Permanent Account No. AAECB 6089 K and its Networth as on 31.03.2012 (in total)- Share Capital & Reserves is to the tune of Rs. 23,09,01,793/- (PB-2 page 157) and the investment made in the assessee-company including the share premium comes to Rs. 1,05,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of Rs. 38,00,000/- on 30.11.2011 through cheque and deposited an amount of Rs. 30,00,000/- on 05.12.2011 through cheque and deposited an amount of Rs. 37,00,000/- on 07.1.22011 through cheque (PB-2, Page 147-148). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger acco....
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....vice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 164-186) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee c....
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....A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. X. M/s Eagle Dealtrade Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 207-226 of share applicant which is a Private Limited Company, and which has Permanent Account No. AACCE 6122 G and its Networth as on 31.03.2012 (in total)- Share Capital & Reserves is to the tune of Rs. 24,61,02,003/- (PB-2 page 219) and the investment made in the assessee-company including the share premium comes to Rs. 40,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of Rs. 40,00,000/- on 27.12.2011 through ....
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....29.11.2011 through cheque which was adjusted on 20.12.20111. The payment for share application money was made by this party through banking channels and deposit amount of Rs. 40,00,000/- (21,00,000+ 19,00,000/-) took place on 20.12.2011 through cheque (PB-2, Page 234). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 227-257) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 ....
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....see-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. XIII. M/s Fraternity Vanijya Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 280-310 of share applicant which is a Private Limited Company, and which has Permanent Account No. AABCF 8814 F and....
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....d Company, and which has Permanent Account No. AACCG 5504 G and its Networth as on 31.03.2012 (in total)- Share Capital & Reserves is to the tune of Rs. 19,40,50,184/- (PB-2 page 340) and the investment made in the assessee-company including the share premium comes to Rs. 62,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of Rs. 62,00,000/- on 16.02.2012 through cheque (PB-2, Page 334). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 324-346) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prov....
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.... channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO not to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant was erroneous/perverse and we find that this share subscriber has discharged its burden to prove its identity, creditworthiness and genuinety of the share transaction which we draw on the strength of the documents referred to supra and so we accept the claim of assessee in-respect of Rs. 30,....
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....ra and so we uphold the action of AO in respect of this share applicant. XVII. M/s Jaganmata Sales Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 368-388 of share applicant which is a Private Limited Company, and which has Permanent Account No. AACCJ 5212 E and its Networth as on 31.03.2012 (in total)- Share Capital & Reserves is to the tune of Rs. 25,40,00,570/- (PB-2 page 382) and the investment made in the assessee-company including the share premium comes to Rs..50,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of Rs. 25,00,000/- on 15.12.2011 through cheque (PB-2, Page 373). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 368-388) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This ....
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....ants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot b....
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....share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. XX. M/s Joyful Tie Up Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 432-453 of share applicant which is a Private Limited Company, and which has Permanent Account No. AACCJ 7267 K and its Networth as on 31.03.2012 (in total)- Share Capital & Reserves is to the tune of Rs. 17,31,50,231/- (PB-2 page 448) and the investment made in the assessee-company including the share premium comes to Rs. 60,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of Rs. 60,00,000/- on 27.01.2012 through cheque (PB-2, Page 440). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2....
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....pany, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 454-477) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow....
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....ind that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. XXIII. M/s Magnetic Barter Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 500-522 of share applicant which is a Private Limited Company, and which has Permanent Account No. AAHCM 5948 D and its Networth as on 31.03.2012 (in total)- Share Capital & Reserves is to the tune of Rs. 15,30,00,250/- (PB-2 page 516) and the investment made in the assessee-company including the share premium comes to Rs. 45,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited a....
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....his entity to assessee through banking channels and had deposited an amount of Rs. 20,00,000/- on 10.12.2011 through cheque (PB-2, Page 530). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 523-543) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share ap....
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.... investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. XXVI. NishakarTracom Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 565-582 of share applicant which is a Private Limited Company, and which has Permanent Account No. AADCN 5112 G and its Networth as on 31.03.2012 (in total)- Share Capital & Reserves is to the tune of Rs. 10,80,04,799/- (PB-2 page 580) and the inv....
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.... 4186 D and its Networth as on 31.03.2012 (in total)- Share Capital & Reserves is to the tune of Rs. 15,19,00,311/- (PB-2 page 596) and the investment made in the assessee-company including the share premium comes to Rs. 54,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of Rs. 54,00,000/- on 27.02.2012 through cheque (PB-2, Page 590). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 583-605) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, ....
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....that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO....
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....ocuments referred to supra and so we uphold the action of AO in respect of this share applicant. XXX. M/s Ragini Creations Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 648-669 of share applicant which is a Private Limited Company, and which has Permanent Account No. AAFCR 5328 C and its Networth as on 31.03.2012 (in total)- Share Capital & Reserves is to the tune of Rs. 12,13,00,521/- (PB-2 page 663) and the investment made in the assessee-company including the share premium comes to Rs. 40,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of Rs. 40,00,000/- on 30.01.2012 through cheque (PB-2, Page 656). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 648-669) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Retur....
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.... is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditwor....
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....of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. XXXIII. M/s Savile Distributors Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 712-733 of share applicant which is a Private Limited Company, and which has Permanent Account No. AAICS 7476 H and its Netorth as on 31.03.2012 (in total)-Share Capital & Reserves is to the tune of Rs. 14,86,47,378/- (PB-2 page 727) and the investment made in the assessee-company including the share premium comes to Rs. 45,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of Rs. 45,00,000/- on 31.12.2011 through cheque (PB-2, Page 719). This share applicant company has filed ID Proof of its Directors, ITR acknow....
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.... applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 734-755) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no c....
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.... through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital and premium raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. XXXVI. M/s SnehaVinimay Pvt. Ltd. : On perusal of the paper book-2, it reveals that the documents in respect of this share applicant are placed at page 779-800 of share applicant which is a Private Limited Company, and which has Permanent Account No. AAQCS 7675 G and its Networth as on 31.03.2012 (in total)- Share Capital & Reserves is to the tune of Rs. 12,79,88,731/- (PB-2 page 793) and the investment made in the assessee-company including the share premium com....
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....t made in the assessee-company including the share premium comes to Rs. 40,00,000/-. The payment has been made by this entity to assessee through banking channels and had deposited an amount of Rs. 40,00,000/- on 22.02.2012 through cheque (PB-2, Page 808). This share applicant company has filed ID Proof of its Directors, ITR acknowledgment, Allotment Advice issued by the assessee company, ledger account of the assessee in its books, Bank Statements, explanation of source of the funds as well as financial statements (PB-2, page 801-822) and thus it is noted that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing its PAN, Income-Tax Return and ROC details. This share applicant, we note has regularly filed its Income Tax Return. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel, so assessee has discharged its onus/burden to prove their creditworthiness and genuineness. Moreover, the share applicant had furnished the source of investment made in the assessee-company after getting summons from AO under section 131 of the Act. I....
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....ny after getting summons from AO under section 131 of the Act. It is noted from source of funds, that the funds for investment in the assessee company was received by the share applicant through cheque/banking channel. And we have carefully gone through the Bank Statement of the share applicant company and find that there is no cash deposit in its Bank A/c. before they subscribed/transferred the amount to assessee company and that both the inflow and outflow of funds for investment in the assessee was effected through normal banking channels. Thus, the action of AO to be satisfied about the identity, creditworthiness and genuineness of the share capital raised from this share applicant cannot be found to be perverse and we find that this is an inference which can be drawn on the strength of the documents referred to supra and so we uphold the action of AO in respect of this share applicant. 26. From the details as aforesaid which emerges from the paper book filed before us as well as before the lower authorities, it is vivid that all the share applicants are (i) income tax assessee's, (ii) they are filing their return of income, (iii) the share application form and allotment let....
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....hem to subscribe to the assessee company as share application. Hence the source of source of source is proved by the assessee in the instant case though the same is not required to be done by the assessee as per law as it stood/ applicable in this assessment year. The share applicants have confirmed the share application in response to the notice u/s 133(6) of the Act and have also confirmed the payments which are duly corroborated with their respective bank statements and all the payments are by account payee cheques. 28. We also note that recently the ITAT Kolkata in several cases has deleted the addition on account of share application in similar circumstances. The relevant portion of the decisions are as follows: (a) The Ld ITAT Kolkata. in DC IT Vs Global Mercantiles Pvt.Ltd in ITA No. 1669/Kol/2009 dated 13-01-2016. In this the decision the Ld. Tribunal held as follows: "3.4. We have heard the rival submissions and perused the materials available on record including the detailed paper book filed by the assessee. The facts stated hereinabove remain undisputed are not reiterated herein for the sake of brevity. We find that the assessee had given the complet....
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.... this appeal of the Revenue is as to whether the Learned CIT(A) is justified in deleting the addition u/s 68 of the Act made in respect of allotment of shares to 20 individuals for an amount of Rs. 57,00,000/- in the facts and circumstances of the case. 4. 1. The brief fact of this issue is that the assessee had received share application monies from 20 individuals in the earlier year which were kept in share application money account. During the asst year under appeal, the assessee allotted shares to these 20 individuals out of transferring the monies from share application money account to share capital account. The details of 20 individuals are reflected in page 6 & 7 of the Learned CIT(A) order. The Learned AO asked the assessee to produce the shareholders before him. He found that the assessee did not do so but furnished copies of pay orders used for payments to the assessee company and also furnished income tax particulars and balance sheets of all the shareholders. The Learned AO on analyzing all the balance sheets observed that the shareholders have paltry income and small savings and none of them have any bank account and huge cash balances were shown in their han....
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....ted as it appears to be a genuine and bonafide error of omission on the part of the Revenue from not raising this ground in the original grounds of appeal filed along with the memorandum of appeal. Moreover, it does not require any fresh examination of facts. Hence the same is admitted herein for the sake of adjudication. 4.4. 1. We find from the details available on record that the share application monies from 20 individuals in the sum of Rs. 57,00,000/- has been received by the assessee during the financial year 2004-05 relevant to Asst Year 2005-06 and only the shares were allotted to them during the asst year under appeal. Admittedly[TT1] no monies were received during the asst year under appeal and hence there is no scope for invoking the provisions of section 68 of the Act. Hence we hold that the order passed by the Learned CITA in this regard does not require any interference. Accordingly the ground no. 3 raised by the Revenue is dismissed. (b) The ITAT Kolkata in R.B Horticulture & Animal Projects Co. Ltd, ITA No. 632/Koll2011 dated 13-01-2016. In this the decision the Ld. Tribunal held as follows: "6. We have heard the Le....
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....lved in this appeal. The appeal is devoid of any substance and is dismissed." 6.2. We find that the issue is also covered by the decision of Hon'ble Delhi High Court in the case of CIT vs Value Capital Services P Ltd reported in (2008) 307 ITR 334 (Del) , wherein it was held that: "In respect of amounts shown as received by the assessee towards share application money from 33 persons, the Assessing Officer required the assessee to produce all these persons. While accepting the explanation and ITA No. 632/KoI12011--C-AM M/s. R.B Horticulture 6 & Animal Proj. Co. Ltd the statements given by three persons the Assessing Officer found that the response from the others was either not available or was inadequate and added an amount of Rs. 46 lakhs pertaining to 30 persons to the income of the assessee. The Commissioner (Appeals) upheld the decision of the Assessing Officer. On appeal, the Tribunal set aside the order of the Commissioner (Appeals) and deleted the additions. On further appeal: Held, dismissing the appeal, that the additional burden was on the department to show that even if the share applicants did not have the means to make the inves....
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....ants as long as they affirm the address. The applicants were duly incorporated bodies under the Companies Act. 1956 since long. They have been regularly filing their returns of income under the Income Tax Act and are being assessed by the Revenue since long. Some of them are even registered as Non-Banking Financial Companies with Reserve bank of India. They have been filing returns regularly with Registrar of Companies and RBI since long. The letters might have been received at their old addresses because in case of change in the address, people instruct the incumbents at old addresses not to refuse the receipt of letters and receive the same. Just because, a letter was received at the old address instead of present address, it cannot be said that the identity of the applicant has not been verified. All of these companies had duly replied to notice u/s. 133(6) and confirmed the transaction with all the evidences. The AO has not raised any objection on any of the information furnished before him. The AO has not asked the respective Company applicants also to explain the alleged discrepancy in the address. The AO has not brought any material on account of record to disbelief the evid....
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....A) deleted the addition made by the AO observing as follows "6) I have considered the submission of the appellant and perused the assessment order. I have also gone through the details and documents filed by the appellant company in the course of assessment: proceedings vide letter dt. 3-10-2007. On careful consideration of the facts and in law I am of the opinion that the AO was not justified in making, the addition aggregating to Rs. 54,00,000/- u/s.68 of the Act being the amount of share application money by holding that the appellant company has failed to prove the identity, and creditworthiness of The creditors as well as the genuineness of transactions. It is observed that all the three share applicant companies i.e. M/s. Shree Shyam Trexim Pvt. Ltd., M/s Navalco Commodities Pvt. Ltd. and M/s. Jewellock Trexim Pvt. Ltd. had filed their confirmations wherein each of them confirmed that they had applied for shares of the appellant -company. All the three companies providedthe cheque number, copy of bank statements and their PAN. It is observed that these companies also filed, copies of their return of income and financial statements for as well as copy of their assessment order....
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....d it is seen that for A Y.2004-05 Shree Shyam Trexim Pvt. Ltd., was assessed by ITO, Ward- 9(4), Kolkata and the order of assessment u/s/143(3) dated 25.01.2006 is placed in the paper book. Similarly Navalco Commodities Pvt. Ltd., was assessed to tax u/s 143(3) for A Y.2005-06 by I TO, Ward- 9(4), Kolkata by order dated 20.03.2007. Similarly Jewellock Trexim Pvt. Ltd was assessed to tax for A Y.2005-06 by the very same ITO- Ward- 9(3), Kolkata assessing the Assessee. In the light of the above factual position which is not disputed by the Revenue, it cannot be said that the identity of the share applicants remained not proved by the assessee. The decision of the Hon'ble Allahabad High Court as well as ITA T Kolkata Bench on which reliance was placed by the learned counsel for the assessee also supports the view that for non production of directors of the investor company for examination by the AO it cannot be held that the identity of a limited company has not been established. For the reasons given above we uphold the order of CIT(A) and dismiss the appeal of the Revenue. " 29. Reliance in this regard is also placed on the decision of the Delhi High Court in the case of CIT ....
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.... filed sufficient documentary evidences to establish the identity and creditworthiness of the share applicant and the genuineness of the transaction. The AO however chose to sit back with folded hands till the assessee exhausted all the evidence in his possession and then merely reject the same without conducting any inquiry or verification whatsoever. The Court thus held that the decision of CIT Vs Novo Promoters & Finlease (P) Ltd (342 ITR 169) was not applicable to the facts of the case. Instead it was held that the issue in hands was on the lines of the decision of the Supreme Court in the case of CIT Vs Lovely Exports Pvt Ltd (319 ITR 5). Accordingly the addition made under Section 68 on account of share application was deleted. The Hon'ble High Court reproduced the High Court order in CIT vs. Gangeshwari Metal P.Ltd. in ITA no. 597/2012 judgement dated 21.1.2013, wherein the Hon'ble High Court after considering the decisions in the case of Nova Promoters and Finlease Pvt. Ltd. 342 ITR 169 and judgement in the case of CIT vs. Lovely Exports 319 ITR 5 (SC) held as follows:- "As can be seen from the above extract, two types of cases have been indicated. One in which....
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....hable and fall in the second category and are more in line with facts of Lovely Exports (P) Ltd. (supra). There was a clear lack of inquiry on the part of the Assessing Officer once the assessee had furnished all the material which we have already referred to above. In such an eventuality no addition can be made under Section 68 of the Income Tax Act 1961. Consequently, the question is answered in the negative. The decision of the Tribunal is correct in law" 30. In the case of Finlease Pvt Ltd. 342 ITR 169 (supra) in ITA 232/2012 judgement dt. 22.11.2012 at para 6 to 8/ it was held as follows. "6. This Court has considered the submissions of the parties. In this case the discussion by the Commissioner of Income Tax (Appeals) would reveal that the assessee has filed documents including certified copies issued by the ROC in relation to the share application affidavits of the directors, form 2 filed with the ROC by such applicants confirmations by the applicant for company's shares, certificates by auditors etc. Unfortunately, the Assessing Officer chose to base himself merely on the general inference to be drawn from the reading of the investigation report and the sta....