TaxTMI 
TaxTMI 
2019 (7) TMI 1725
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.... 25-11-2006 declaring total income of Rs. 1,24,691/-. This case was re-opened by issuing notice u/s.148 of the Act on 26-03-2013 which has been duly served upon the assessee. 4. During the course of re-assessment proceedings, the Assessing Officer observed that the transactions shown by the assessee with M/s. Mahasagar Securities P Ltd. (Now M/s. Alag Securities Pvt.Ltd.) were sham as the said entity was not engaged in any genuine business but engaged in fraudulent billing activities and in the business of providing bogus speculation profit/loss, short term/long term capital gain/loss, share application money, commodities profit/loss on commodity trading (through MCX). As per records available, the appellant was in receipt of share application money of Rs. 10,00,000/-during FY 2005-06 (AY 2006-07) and the same was treated as undisclosed income u/s.68. Accordingly, the impugned re-assessment order was passed u/s. 143(3) r.w.s.147 on 11-03-2014 determining the total income at Rs. 11,24,6907-. 5. In this regard assessee submitted all necessary details. However, the Assessing Officer proceeded on investigation carried out in the case of Mr. Mukesh Choksi. He proceeded to make the....
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....s. 143(3) r.w.s. 147 on 30-03-2016 determining the total income at Rs. 88,76,600/-. 9. Upon assessee's appeal learned CIT(A) noted that the assessee has given all necessary details. Placing reliance upon several case laws and also decision for A.Y. 2006-07. Learned CIT(A) himself concluded as under :- "At the outset, it has been stated by the Ld.AO that the details of alKthe share applicants were provided before the Ld.AO vide its letter dated 02-03-2016, detailing the Bank Statement, PAN, ITR etc. Apart from the case laws related upon in AY 2006-07, Ld.AR has further placed reliance on the decision of Hon'ble Mumbai Bench of ITAT in the case of Green Infra Ltd, v. ITO [ITS-420- ITAT-2013 (Mum)], where it was held that the addition on account of share application money cannot be made in the hands of the company u/s.68 in AY 2012-13. Reliance was placed by the Ld.AR on the decision of Hon'ble Supreme Court in the case of Divine Leasing & Finance (Supreme Court) 299 ITR 268 [ITA No. 53/2005]. As the facts containing in the present year are the pari material with the facts obtaining in appellant's own case for A.Y. 2006-07 (supra), for the detailed reason given the....
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....in; b) Name, Address, PAN, Income-tax Jurisdiction, etc. of the Investor's companies; c) Certificate of Incorporation of the Investor's companies; d) Form of application for equity shares filled by the Investor's companies, e) Copy of Audit Report and Balance-Sheet of the Investor's companies. B) The Company's Master Data, Income-tax Jurisdiction details and financials of the Investor's companies proved the identity as well as financial capacity i.e. creditworthiness of the Investor's companies. Hence, the aforesaid documents have proved the identity of the shareholders. II. To prove the creditworthiness of the subscribers The appellant has submitted the Balance Sheet, Profit & Loss a/c and Return of Income for share applicants. The financials of the Investor's companies proved the identity as well as financial capacity i.e. creditworthiness of the Investor's companies. Further, the Appellant submit the details of share capital, reserve and surplus, networth of the investor's companies as under: A.Y 2010-11 Sr. No. Name of investor's companies A....
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.... entries of Share money and Premium money given by them to the appellant company along with copy of board resolution, resolving the decision of investment into appellant company." 15. Further, we note that honourable jurisdictional High Court has expounded that amendment in section 68 for examination of the share applicants is effective from assessment year 2013-14. Furthermore honourable jurisdictional High Court has also held that provisions of section 56 (vii) with regard to examination of share premium is also effective from assessment year 2013-14. Hence these provisions of the act cannot be invoked in the present assessment year. In the present assessment year assessee has submitted that it has submitted all the information and documents. Not specific defect in the same has been pointed out by the assessing officer. Assessing officer has solely gone on the investigation done in the case of third parties. As a matter of fact, no summons were issued by the assessing officer to the share applicants the present case. For assessment year 2006-07, even notice under section 133(6) were not issued. In this regard we may gainfully refer to the following case laws and the propositio....