TaxTMI 
TaxTMI 
2020 (12) TMI 984
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....eived the money and later on which had been found that they were not having any financial worth of their own. 2. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any grounds of appeal at any time before or during the hearing of this appeal. 2. The brief facts of the case are that assessee filed its return of income digitally on 21.9.2012 declaring an income of Rs. 1,32,57,610/- in the computation of income. The AO selected the case of the assessee for scrutiny and issued notice u/s. 143(2) of the Income Tax Act (in short "Act") on 6.8.2013. The AO issued notice u/s. 143(2) of the Act on 15.11.2014 alongwith a questionnaire dated 15.11.2012 calling upon the assessee to file pending details as per questionnaire dated 12.92.2014, justify share premium received, and specifically informing the assessee that no personal appearance of Authorised Representative was requested to file the details on 25.11.2014. In response to the same, the AR of the assessee filed all the documentary evidences as required by the AO in the notice which was examined by the AO and lastly not agreed with the averments made by the Assessee and finally made the ....
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....of the I T Act and the judgments delivered in the cases of CIT vs. Divine Leasing & Finance Ltd. 299 ITR 268 (Del), CIT vs. Sophia Finance Ltd. (1994) 205 ITR 98 (Del) (FB), CIT vs. Dolphin Canpack Ltd. 283 ITR 190, CIT vs. Lovely Exports Pvt. Ltd. 216 CTR 195, it was held that the initial burden is upon the assessee to explain the nature and source of share application money received by it. The Court further observed that in case the investor / shareholder is an individual, some documents will have to be filed or the said shareholder will have to be produced before the assessing officer to prove his identity. If the creditor / subscriber is a company then details in the form of resolution or PAN identity, etc can be furnished. As regards the genuineness of the transaction to be demonstrated, the Court held that by showing that the assessee had in fact received money from the said shareholder and the money came from the corpus of that very shareholder, the genuineness was duly established. The Division Bench also held that when the money is received by cheque and is transacted through banking or other undisputable channel, the genuineness of the transaction would be proved. Other d....
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....are applicants. The copies of the bank statements of the share subscribers wherein the transactions are reflected as well as the fact that they are assessed to income tax, alongwith copies of their final accounts wherein investments made by them in the appellant company are not only shown but constitute a small portion of their total investments, establish the creditworthiness of the parties concerned. The incomes of the four shareholders for the year under appeal may have been meagre, as pointed out by the Assessing Officer, but creditworthiness of a party is not gauged merely from income of a particular year. The balance sheets of the four shareholders companies reveal that they had ample share capital to invest in the appellant company. In fact, the Income Tax scrutiny assessments of all four share subscribers were completed in March, 2015, a few days after the finalization of the impugned assessment order and in three of the four cases, the returns filed by them have been accepted, thereby implying that the Assessing Officer of those three companies have accepted the fact of their investment in the appellant company. In the fourth case, namely that of Purus Builders Pvt. Ltd., ....
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.... under section 131 at the instance of the assessee, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they were creditworthy or were such who could advance the alleged loans. There was no effort made to pursue the socalled alleged creditors. In those circumstances, the assessee could not do anything further. In the premises, if the Tribunal came to the conclusion that the assessee has discharged the burden that lay on him, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion is based on some evidence on which a conclusion could be arrived at, no question of law as such arises." 3.2.3 Then, as held by the Hon'ble Delhi High Court in the case of CIT vs. Value Capital Services Pvt. Ltd. in ITA No.348/2008, "there is an additional burden cast on the revenue to prove that the investment made by the share applicants actually emanated from the coffers of the assessee, so that the amount was to be treated as undisclosed income. As observed by the ld. CIT(A), in the present case, the AO did not bring anything on record to the ef....