TaxTMI 
TaxTMI 
2020 (12) TMI 768
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....T(A) erred in confirming the assessment order passed u/s. 143(3) of the Income Act 1961 by the lxi. Assessing Officer is against the principal of natural justice, hence bad-in-law. 3. On the facts and circumstances of the case and in law, the IA. CIT(A) erred in deleting addition in respect of the Share Capital and Share Premium of Rs. 50,00,000/- as unexplained cash credit u/s. 68 of the Income Tax Act, 1961 without corroborative evidences. 4. On the facts and circumstances of the case and in law, the IA. CIT(A) erred in not permitting of partly business loss of Rs. 2,00,000/- as against the total loss of Rs. 3,14,419/- 5. On the facts and circumstances of case and in law, Ld. CIT(A) erred in confirming initiation of penalty proceeding u/ s.274 r.w.s. 271 (1) (c) of Income Tax Act 1961. 6. On the facts and circumstances of the case and law the Ld. CIT (A) erred in set a siding for fresh calculations of interest under section 234A, 2343 and 234C of the Income Tax Act, 1961. 7. The Assessee craves leave to add further grounds or to amend or alter the existing grounds of appeal on or before the date of hearing." 4. Brief facts of the ca....
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....ed on the assessee. In response the assessee, vide letter dated 06.06.2016, of Mis Vasudeo Agarwal, Advocate requested for an adjournment. Notice under section 142(1) of the Act, calling for details was issued on 21.09.2016 and was served on the assessee on 23.09.2016. In response to the notices Shri Basudev Agarwal CA and the authorized representative of the assessee attended from time to time along with Shri Yogesh Dave, Accountant of the assessee, filed details called for and discussed the case. The details filed by the assessee vide letter filed in this office on 17.10.2016 are placed on record." 5. Thereafter, the notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. It was observed that the issued share capital of the assessee stood at Rs. 43,00,000/- comprising of 430,000 equity shares of Rs. 10/- each. The assessee during the year issued 50,000/- equity shares of Rs. 10/- each. These shares were issued at a premium of Rs. 90 per share. Accordingly, the assessee issued share capital as on 31.03.2009 stood at 480,000/- equity shares at Rs. 10/- each. The assessee has also obtained share premium of Rs. 45,00,000/- during the year under considerati....
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.... Ld.AO run contrary to the provisions of Sec. 68. The assessee maintained that by submitting these details, it had discharged the primary onus of proving the stated transactions. All the investor entities had enough funds to invest in the assessee company. Reliance was placed on catena of judicial pronouncements to support the said submissions. These have already been tabulated in assessee's submissions. Therefore, the assessee submitted that additions as made by Ld. AO were uncalled for in the light of documentary evidences furnished by the assessee. 6.4 The Ld. CIT(A), at para 7.3 of the impugned order, noted that the assessee had submitted share application form, copy of cheque, cheques deposit slips, copy of assessee's bank statement, copy of share certificates, copy of source of funds, copy of board resolution, certificate of incorporation, copy of Memorandum of Association (MOU) etc. with respect to 11 investor entities. However, the same would not prove the genuineness of the transactions. It was observed that investor entities did not have any genuine business activity which was evident from the fact that main object of the investor entities contained all activity ....
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....d by respective representatives and perused relevant material on record including documents placed in the paper-book. We have also deliberated on various judicial pronouncements as cited before us. We have already appreciated the settled legal position regarding addition u/s 68 as enumerated by us in the opening paragraphs. Our adjudication to the subject matter of appeal would be as given in succeeding paragraphs. 8.1 Upon careful consideration, the facts that emerges are that the assessee has issued 20.70 Lacs shares to as many as 11 corporate entities during the year as tabulated in para 5.3 above. As evident from documents on record, these shares were issued at face value of Rs. 10/- per share. The Share Capital of the assessee increased by Rs. 207 Lacs during the year under consideration. In the light of settled legal position as enumerated by us in the opening paragraphs, it is quite evident that the primary onus was on assessee to prove the fulfilment of three ingredients of Sec. 68 viz. (i) identity of the investor; (ii) creditworthiness of the investors; & (iii) genuineness of the transactions. 8.2 To demonstrate fulfillment of these ingredients, the assessee had ....
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....ntiary value unless the same are backed by credible evidences. This position has been settled by Hon'ble Supreme Court in the case of CIT V/s S.Khader Khan & Sons (25 Taxmann.com 413). The CBDT instructions No. F.No.286/98/2013-IT (Inv. II) dated 18/12/2014 also discourages confessional statements without any credible evidences. No incriminating material is shown to have been found during the course of survey proceedings. 8.4 We also find that learned CIT(A) has gone by irrelevant considerations to confirm the impugned additions. The object clause of the investor entities would have no relevance vis-à-vis proposed additions in the hands of the assessee u/s 68. It is trite law that no additions could be made merely on the basis of suspicion, conjectures or surmises. 8.5 The Ld. DR has relied upon the case of Hon'ble Supreme Court in Sumati Dayal Vs CIT (80 Taxman 89) & Durga Prasad More (82 ITR 540 26/08/1971). No doubt that the revenue authorities were not required to put blinkers while looking at the documents produced before them. They were entitled to look into the surrounding circumstances to find out the reality of the documents produced before them. H....
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.... Total Amount Share Capital of IC Reserves of IC Networth of IC Investment/Networth % 1 M/s. Apar Finlease P. Ltd. 25000 250000 2250000 2500000 58766750 501024508 559791258 0.40 2 M/s. Kamakhya Goods P. Ltd. 20000 200000 1800000 2000000 772000 32945132 33717132 5.34 3 Nextgen Tradecom Pvt. Ltd. 30000 300000 2700000 3000000 5765000 107635000 113400000 2.38 4 30000 300000 2700000 3000000 18103500 262279986 280383486 0.96 5 M/s Rexnox Trexim P Ltd 37000 370000 3330000 3700000 8742100 105906608 114648708 2.90 6 M/s. SSA Motor Finvest p ltd. 30000 300000 2700000 3000000 29603000 241298676 270901676 1.00 7 M/s. Priyamvada Finvest P ltd. 25000 250000 2250000 2500000 29288000 218600132 247888132 0.91 8 M/s. Motocab Finance P Ltd. 25000 250000 2250000 2500000 21230000 328020767 349250767 0.64 9 M/s. Balaji Dealcom P Ltd. 25000 250000 2250000 2500000 9035000 80426195 89461195 2.52 10 M/s. Deepa Holding....
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....pellant company along with copy of board resolution, resolving the decision of investment into appellant company. To prove the genuineness of the transaction the assessee produced the confirmation, bank statement, financial of the lender. Nothing came into noticed that the transaction were found bogus. Retracted statement of Shri Rajesh Agarwal was not liable to be relied upon the unless corroborated by the sufficient evidence on record. Moreover no opportunity of being heard was given to the assessee. However, in support of this contention, the Ld. Representative of the assessee has placed reliance upon the following law.:- 1. CIT Vs. Loverly Exports Pvt. Ltd. (2008) 216 CTR 195 (SC) 2. PCIT Vs. Himachal Fibers Ltd. (2018) 98 taxmann.com 173 (SC) 3. PCIT Vs. Bharat Securities P. Ltd. (2020) 13 taxmann.com 32 (SC) 4. PCIT Vs. Rohtak Chain Co. P. Ltd. (2019) 110 taxmann.com 59 (SC) 5. PCIT Vs. Ami Industries Pvt. Ltd. 1231 of 2017 6. CIT Vs. Gagandeep Infrastructure Pvt. Ltd. ITA. No.1613 of 2014 (Bom) 7. CIT Vs. Orchid Industries Pvt. Ltd., I. T. Appeal No. 1433 of 2014 8. Jasamrit Constructions Pvt. Ltd. Vs. I....