TaxTMI 
TaxTMI 
2021 (1) TMI 735
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....e investing companies was not proved? Whether on the facts and circumstances of the case the Ld. CIT(A) erred in not considering the factual findings given by the A.O. in remand report that M/s. Alken Management and Financial Services Pvt. Ltd., and M/s. Shree Ganesh spinners Ltd., had admitted to be nothing but accommodation entry providers and therefore, the transactions with these parties could not be accepted as being genuine?. 2. The brief facts of the case are that the assessee company is engaged in the business of construction, erection and infrastructure facilities. The assessee filed the return of income on 15.10.2010 with total income of Rs. 46,34,400/-.Subsequently, the case was selected for scrutiny and notice u/s. 143(2) and 142(1) of the Act were issued. In response to the notices, the Ld. AR of the assessee appeared from time to time and submitted details and the case was discussed. The A.O. on the perusal of the financial statements found that the assessee company has issued 2,58,750 non-cumulative convertible preference shares of face value of Rs. 100/- each at premium. The preference share capital including the share premium raised during the financial....
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....ditworthiness of the investors/shareholders and genuineness of transaction and no evidence was filed to substantiate the investments. The A.O. finds that inspite of giving several opportunities to the assessee and the summons issued to the shareholders along with questionnaire, were not complied. Further the A.O. deputed the inspector to the addresses provided by the investors and the report was called for. As per the inspector's report, the shareholders were not present at the addresses provided and no person has appeared on behalf of the investors. Considering the fact of non availability of information and also non compliance of summons u/s. 131(1) of the Act and no information was submitted in respect of notices issued u/s. 133(6) of the Act, the A.O. dealt on the information submitted by the assessee and wants to verify the identity of shareholders. The A.O. observed that the creditworthiness and genuineness of the transaction were not proved. The A.O. also observed that inspite of providing ample opportunities the assessee has failed to prove the identity of the shareholders. In the course of the assessment proceedings the assessee filed a letter dated 09.01.2013 with the....
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....e investments with evidences. Hence, the A.O. treated the investments as unexplained cash credits u/s. 68 of the Act and assessed the total income of Rs. 31,51,34,410/- and passed the order u/s. 143(3) of the Act dated 30.03.2013. 4. Aggrieved by the order, the assessee has filed an appeal with Ld. CIT(A), the Ld. CIT(A) dealt on the grounds of appeal and submissions of the assessee and findings of the A.O. The CIT(A) in the course of appellate proceedings dealt on the facts and the written submissions of the Assessee in support of the claim. The Ld AR submitted that the assessee has discharged its duty by submitting the information and the onus lies on the A.O. to make enquires. We consider it appropriate to refer to the written submissions at page 2 to 8, para 5 of the order which is as under:- 5. During the course of appellate proceedings, a written submission was filed, the relevant part of which is summarized as under: "Disallowance u/S. 68 of the Act amounting to Rs. 31,05,00,000/- On the facts and circumstances of the case and in law the LAO erred in making addition u/s. 68 of the Act, Rs. 31,05,00,000/- received as preference share capital including ....
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....lso coordinated with the parties and requested them to comply with the notices received by them. 2.07 As per LAO, the appellant company failed to produce shareholders and thus failed to prove identity and creditworthiness of the shareholders and failed to prove genuineness of the transaction thereby failed to fulfill the conditions u/s. 68 of the Act and made additions of Rs. 31,51,34,408 as unexplained cash credit. Our Submission Identity of the Shareholders:- 2.08 As per the Ld. AO, appellant company failed to prove the identity of the shareholders because the appellant company did not produce them or failed to ensure their compliance for verification of the transactions and also relied on the report of the inspector who could not find the shareholders on the address provided by the appellant company. 2.09 The appellant company has submitted various documents as stated above. The appellant company is also submitting before Your Honour copy of acknowledgement of return of income, confirmation for making payment to the appellant company and copy of PAN card. 2.10 The above shareholders are company and regularly assessed to Incom....
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....assessee in proving the creditworthiness of the subscriber companies. Instead the assessee took an adamant, attitude and failed to comply with the direction of the Assessing Officer.... The assessee thus took a very extreme stand which was not justified; certainly, it did nothing worthwhile to discharge the onus to prove the creditworthiness of the subscribing companies" 2.16 The facts of the above case are not similar with that of the appellant company. The appellant company had requested shareholders to comply with the notices issued to them. Also, the above documents submitted by appellant company prove the identity of the shareholders. 2.17 Thus, the appellant company has proved the identity of the shareholder and fulfilled the first requirement of establishing the identity u/s. 68 of the Act. Creditworthiness of Shareholders:- 2.18 The LAO has relied on the statement recorded u/s. 131 on oath of Shri Jagdish Kumar Gupta, Director of J. Kumar Infraprojects Limited in which he has stated that that the said company has received bogus funds in the form of share application money pending allotment as on 31.03.2006 from a few com....
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.... cash and bank balances of Rs. 20,20,673/-. The above details prove the credibility of the company. Therefore, the appellant has proved identity, creditworthiness and genuineness by filing copy of PAN card, financial statements, bank statements, confirmations, etc. of the shareholders. ii. Aiken Management and Financial Services Private Limited - Rs. 2,50,80,000/- The financial statement of the above company reveals the following: Equity share capital of Rs. 5,00,000/- with high reserves and surplus of Rs. 13,93,05,664/- Fixed assets of Rs. 18,43,348/- The company has huge investments of Rs. 9,95,64,379/- The company has huge investments of Rs. 9,95,64,379/-. The above details prove the credibility of the company. Therefore, the appellant has proved identity, creditworthiness and genuineness by filing copy of PAN card, financial statements, bank statements, confirmations, etc. of the shareholders. iii. Priority Traders Private Limited (Known as Choice exterior and Interio Pvt. Limited - Rs. 2,50,80,000/- The financial statement of the above company reveals the following: * Equity share capital of Rs. 1....
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....uineness by filing copy of PAN card, financial statements, bank statements, confirmations, etc. of the shareholders. vii. Epson Trading Private Limited - Rs. 4,00,80,000/- The financial statement of the above company reveals the following: * Equity share capital of Rs. 1,31,00,000/- with high reserves and surplus of Rs. 8,14,00,000/- Fixed assets of Rs. 22,05,812/- The company has cash & bank balance of Rs. 33,12,096/- The company has investment of Rs. 7,92,30,000/- The company has huge sales & operational income of Rs. 34,90,08,267/- The above details prove the credibility of the company. Therefore, the appellant has proved identity, creditworthiness and genuineness by filing copy of PAN card, financial statements, bank statements, confirmations, etc. of the shareholders. viii. Lilac Medicines Private Limited - Rs. 2,00,40,000/- The financial statement of the above company reveals the following: Equity share capital of Rs. 1,30,50,000/- with high reserves and surplus of Rs. 4,71,67,413/- The company has investment of Rs. 7,90,40,000/- The above details prove the credibility ....
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.... identity and creditworthiness of the shareholders, genuineness of the transaction is also not substantiated. 2.27 The copies of confirmations of shareholders are submitted before Your Honour Whereby the shareholders have confirmed the investment made in appellant company's shares. This shows that the transactions are genuine. 2.28 The Ld AO has relied upon Vijay Kumar Taiwar v. CIT (2011) 330 ITR I Wherein it is held that: 2.29 the authorities below, below, in particular the Tribunal, have observed in unison that the assessee did not produce any evidence to rebut the presumption drawn against him under section 68 of the Act, by producing the parties in whose name the amounts in question had been credited by the assessee in his books of account. In the absence of any cogent evidence, a bald explanation furnished by the assessee about the source of the credits in question viz., realization from the debtors of the erstwhile firm, in the opinion of the Assessing Officer, was not satisfactory. It is well settled that in view of section 68 of the Act, where any sum is found credited in the books of the assessee for any previous year, the same may be charge....
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....uineness of the investors/shareholders has issued summons u/s. 131 of the Act in some of the cases it was returned back by the postal department and in some other cases no reply was received. The assessee has filed the information in respect of these investments, but there was no reasonable explanations submitted, therefore the A.O. was not satisfied with the reply. Further, CIT(A) dealt on the facts that the A.O. has verified from the website of ROC, MCA that the preference shareholders continued with the assessee company till 31.03.2012 which is not disputed. And also the statement of Shri Jagdish Kumar Gupta, Director of JK Infra projects Ltd., where one of the investor of the assessee company was also investor and providing the only accommodation entries. The CIT(A) has also dealt on the findings of the A.O. in the appellate proceedings. During the appellate proceedings, the assessee has submitted the various documents by way of additional evidences as under:- "a. Copy of special resolution authorizing the directors of the appellant company to allot the preference shares. b. Form 2 submitted online to MCA c. Acknowledgment of return of income and fina....
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....and report on judicial decisions, the CIT(A) has considered the facts that the assessee has not filed the information before the A.O. in the assessment proceedings for various reasons including important details i.e. register and documents which were destroyed in fire on 23.12.2011 and the same was brought on record by the A.O. The assessee cannot be barred from filing the evidence, which goes to the root of the case. Further, the CIT(A) has observed at page 6.3.2 of the order that the A.O. has made addition with no proper evidences or information was filed or available on record. The assessee does not have enough time to file the information as it has to be collected, and the assessee also brought on record that some of the information and details were destroyed in fire on 23.12.2011 and the same is a just and reasonable cause. The appellate authority relied on the decision of the Hon'ble Jurisdictional High Court and has admitted the additional evidence and forwarded to the A.O. On receipt of the information by letter dated 28.01.2015, from CIT(A), the A.O. in the remand proceedings has issued notice u/s. 133(6) of the Act on the 11 preference shareholders calling for the inf....
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....nsactions are as under: "6.5.1 Identity of shareholder a. As per the AO, appellant company failed to prove the identity of the shareholders because the appellant company did not produce them or failed to ensure their compliance for verification of the transactions and failed to furnish any evidence to prove the identity of the said preference shareholders. AO also relied on the report of the inspector who could not find some of the shareholders on the addresses provided by the appellant company. b. Merely not producing shareholders before the AO would not mean that the appellant company has not proved the identity of the shareholders. Ld. AO failed to consider other documentary evidences such as copy of acknowledgement of return of income, balance sheet, bank account details of the shareholders, confirmations of shareholders etc. which were submitted during assessment proceedings proving the identity of the shareholders. The appellant company has also filed share application forms received from shareholders and copy of correspondence with the shareholders. It was contended that shareholders were not under command of appellant. They were not ready to come ....
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....Ltd. (now known as Yantra Natural Resources Ltd.), but it does not prove that the said companies has made bogus investment in the appellant company also. No such confession is available for investment in appellant company. Also, there is no evidence put on record as to what was the nature of statements given by the said Mr. Shirish Chandrakant Shah and how is it directly or indirectly linked with the appellant. 6.5.3 Genuineness of the transaction a. AO stated that since appellant company had failed to prove the identity and creditworthiness of the shareholders, genuineness of the transaction is also not substantiated. b. Although the mere fact that transaction have been taken through the banking channel would not constitute evidence of the genuineness of the transactions, however the fact cannot be ignored that the relevant books of accounts of the shareholders and their confirmation were also submitted. Further during the remand proceedings all the shareholders, except one, replied to the notice u/s. 133(6) and explained their source of investment also. Thus, genuineness of the transaction cannot be doubted. C. Further the AO had stated that no....
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....s. Alken Management and Financial Services Private Limited (Rs. 2,50,80,000) it is seen that the company was incorporated on 14.04.1996 as per PAN card and is therefore an old company. The financial statement of the said company reveals the following: i. Equity share capital of Rs. 5,50,000 with huge reserves and surplus of Rs. 13,93,05,664. ii. Fixed Assets are disclosed at Rs. 18,43,348 and the company has huge cash and bank balance of Rs. 23,03,875. iii. The Company has huge investments of Rs. 9,95,64,379 and has given loans & advances of Rs. 4,06,21,633. iv. During the year, the Company also has a substantial turnover of Rs. 2,28,41,793 and profit during the year (before tax) was Rs. 9,19,440. b. This proves the capacity to make investment in the appellant company and also issue shares at premium. The said company is holding shares till date of the appellant company. Thus, there is no rotation of money. c. With regards the observation of the AO that during the course of search and seizure action u/s. 132 of the Act in the case of M/s. J Kumar Infraprojects Ltd. (formerly known as J Kumar & Co) and its associate cases on 25.0....
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.... also proves the genuineness of transaction and creditworthiness. Hence addition made in the assessment is not correct. IV. Shree Ganesh Spinners ltd., a. In the case of M/s. Shree Ganesh Spinners Limited (Rs. 3,50,40,000) (now known as Yantra Natural Resources Limited) it is seen that the company was incorporated on 01.09.1988 as per PAN card. It is therefore an old company. It is also a listed entity. The financial statement of the said company reveals the following: i. Equity share capital of Rs. 45,06,53,000. ii. Fixed Assets are disclosed at Rs. 69,59,272 and the company has huge cash and bank balance of Rs. 1,58,19,748. iii. The Company has huge investments of Rs. 132,04,52,150 and has given loans & advances of Rs. 10,89,49,168. iv. During the year, the Company also has a turnover of Rs. 69,35,995 and profit during the year (before tax) was Rs. 28,89,124. b. This proves the capacity to make investment in the appellant company. The said company is holding shares till date of the appellant company. Thus, there is no rotation of money. c. With regards the observation of the AO that during the course of searc....
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..../s. 133(6) of the Act. It has confirmed the shares as investment as shown by the appellant. Balance sheet for year ending on 31-3-2010 is filed before the AO and the same shows the same figures as stated herein above. In view of this, other observations of the AO are not relevant, though the appellant has satisfactorily replied to them also. d. This not only proves the identity of party but also proves the genuineness of transaction and creditworthiness. Hence addition made in the assessment is not correct. vi. Hindustan Continental Limited a. In the case of M/s. Hindustan Continental Limited (now known as Azure Exirn Services Limited) (Rs. 4,50,00,000) it is seen that the company was incorporated on 07.01.1993 as per PAN card. The Company is an old company. The financial statement of the said company reveals the following: i. Equity share capital of Rs. 9,95,96,000 with high reserves and surplus of Rs. 66,12,089. ii. Fixed Assets are disclosed at a substantial amount of Rs. 1,16,22,400 and the company has cash and bank balance of Rs. 2,92,42,892. iii. The Company has huge investments of Rs. 7,86,40,000 and has given loans & adv....
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....has satisfactorily replied to them also. d. This not only proves the identity of party but also proves the genuineness of transaction and creditworthiness. Hence addition made in the assessment is not correct. viii. Lilac Medicines Private Limited a. In the case of M/s. Lilac Medicines Private Limited (Rs. 2,00,40,000) it is seen that the company was incorporated on 02.01.2008 as per PAN card. The financial statement of the said company reveals the following: i. Equity share capital of Rs. 1,30,50,000 with high reserves and surplus of Rs. 4,71,67,413. ii. Fixed Assets are disclosed at Rs. 13,34,251 and the company has cash and bank balance of Rs. 1,58,154. iii. The Company has huge investments of Rs. 7,90,40,000 and has given loans & advances of Rs. 2,10,88,084. iv. During the year, the Company also has. a substantial turnover of Rs. 2,45,46,810 and profit during the year (before tax) was Rs. 3,67,142. b. This proves the capacity to make investment in the appellant company and also issue shares at premium. The said company is holding shares till date of the appellant company. Thus, there is no rotation of money....
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....PAN card. The financial statement of the said company reveals the following: i. Equity share capital of Rs. 44,31,900 with high reserves and surplus of Rs. 42,88,71,076. ii. The company has huge cash and bank balance of Rs. 19,25,148. iii. The Company has huge investments of Rs. 77,80,47,000 and has given loans & advances of Rs. 2,73,00,000. iv. During the year, the Company also has a turnover of Rs. 49,590 and profit during the year (before tax) was Rs. 10,716. b. This proves the capacity to make investment in the appellant company and also issue shares at premium. The said company is holding shares till date of the appellant company. Thus, there is no rotation of money. c. Also, the party has made its submissions before the AO in response to notice u/s. 133(6) of the Act. It has confirmed the shares as investment as shown by the appellant. Balance sheet for year ending on 31-3-2010 is filed before the AO and the same shows the same figures as stated herein above. In view of this, other observations of the AO are not relevant, though the appellant has satisfactorily replied to them also. d. This not only proves the ide....
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....ent proceedings. The principal officers of the company were also not produced at the time of assessment. During appellate stage it was specifically inquired about non-availability or non-service of notice at the time assessment. During appellate proceedings additional evidences in form of confirmation and latest postal addresses were submitted by the appellant which were forwarded to the A.O. for conduction further necessary inquiries. During remand proceedings, the Ld. AO once again issued notice u/s. 133(6) on the latest address which were duly complied by the subscriber of shares alongwith all necessary details which were called by the A.O. All the subscribers of shares furnished audited financials alongwith other necessary details a called by the A.O. The Ld. AO had not doubted the genuineness of documents furnished in response to notices issued u/s. 133(6) and he has not pointed out any discrepancies in them. Therefore, the only basis on which AO made addition u/s. 143(3) about non-services of notice issued u/s. 131/133(6) is no more valid because not only notices were served but complied by the recipients. The A.O. had not pointed out any defects in the information received i....
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....which goes to the root of the case duly supported by the evidences. Further the assessee could not submit the details before the A.O. though the opportunity was provided as the records were destroyed on 23.12.2011 in a fire accident, which was mentioned in the course of the assessment proceedings and the revenue has also not disputed. Further, the Ld. AR submitted that in respect of 11 investors who have made investments in the assessee company, were considered on similar issues in the sister concern case, of Hon'ble Tribunal decision in ITO Vs. City gold Pvt. Ltd., dated 31.01.2018 for the Assessment Year 2012-13 where the revenue appeal was dismissed. Whereas in the case of DCIT Vs. City gold Farming Pvt. Ltd. in the assessee's own case, the Ld CIT(A) has relied on his earlier decision and granted relief to the assessee. The contentions of the Ld. AR, that in respect to non compliance of summons u/s. 131(1) of the Act by the investor companies issued to prove the identity, creditworthiness and genuineness of the transaction, the Ld AR submitted that the assessee has filed the information on 14.02.2012, 09.01.2013 and 23.01.2013 to justify the premium and also the creditwo....
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....d financial statements, pan card copies and confirmations and investments in preference shares. The assessee has cooperated in submitting this information and complied with the directions. Whereas, in respect of two companies which made investments in the assessee company, the A.O. has submitted that in case of J Kumar and Company, search was conducted and a statement was recorded explaining that these two companies are only accommodation entry providers and such statement was never put to the assessee for cross examination. The A.O. has disputed all the material facts, irrespective of submitting all the details filed by the investors, the assessee could not substantiate that the investor companies are having the creditworthiness and the transactions are genuine. The Ld. AR submitted that these companies are still active and filed the copies of existence with supporting company master data, which discloses the CIN number, companies name, address and details of last balance sheet filed by the investor companies as per the website of Ministry of Corporate Affairs (MCA). Further, the latest status of investors filed by the assessee on 17.06.2019 based on the Ministry of Corporate Affa....
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....y the Ld CIT(A). On perusal of the CIT(A) order, we find that the CIT(A) after receiving written submissions of the additional evidence under Rule 46A of the IT Rules has forwarded the additional evidences to the file of the A.O. for his comments and called for the remand report on 25.01.2015. Whereas, the A.O. on the receipt of the information from the appellate authority office has issued notice u/s. 133(6) of the Act to all the relevant shareholders to file the details of copy of acknowledgment of return of income for the A.Y. 2010-11, copy of the balance sheet and profit and loss account including notes and schedules for the F.Y. 2009-10 relevant to the A.Y. 2010-11, copy of the PAN card and the confirmation of application for subscription to the non cumulative convertible preference shares. In compliance, all the 11 investors have filed the details and complied with the directions of the A.O. in the remand proceedings. Further, the A.O. has made his observations in the remand report that the assessee and investors have cooperated in submitting the information and the assessee was provided opportunity to substantiate the objections raised by the A.O. At this point of time, we c....
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....peal raised by the revenue on identity, genuineness of the transaction and creditworthiness, the Ld. AR has submitted that the assessee has filed the details to substantiate the ingredients of Sec. 68 of identity, genuineness of transaction and creditworthiness of investors, we find that the CIT(A) has dealt on the disputed issue in his order elaborately and relied on the decisions of the Coordinate Bench of Hon'ble Tribunal and the Hon'ble High Court decisions and came to a conclusion that the assessee has satisfied the ingredients required u/s. 68 of the Act. The Ld. AR referred to the paper book at page 1 to 7 in respect of remand report and submitted that the assessee's company investors who have contributed to the preference shares have submitted the details. Whereas, the A.O. observed that the information submitted does not satisfy the requirements u/s. 68 of the Act. The Ld. AR submitted that in assessee's own case for the A.Y. 2012-13 the Hon'ble Tribunal in ITA No. 4751/M/2015, A.Y. 2012-13 dated 14.04.2017 has remanded the matter to the file of the A.O. as the CIT(A) has not called for any report for verification of the details, the relevant operative ....
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.... has confirmed the order of the CIT(A) on granting the relief except one company where the name has been struck off. We find that in assessee's sister concern in the case of ITO Vs. City Gold education Pvt. Ltd. in ITA 4742/Mum/2015, for the A.Y. 2010-11, the Tribunal on the similar issue, where the remand report was called for and relied on the decisions and the fact of existence of these companies from the list submitted by the assessee has dealt at page 32 para 7 to 11 of the order and confirmed the CIT(A) order and dismissed the revenue appeal as under: "7. We find that the AO proceeded to discredit the investors of the assessee, which is completely erroneous. The AO was looking for proof beyond doubt and proceeded on an element of suspicion that the amounts of investments are really those of the assessee, which have been ploughed back by the assessee. But the settle principle of law is that any amount of suspicion however, it strong might be, is no substitute for proof. Suspicion is not sufficient enough to lead to the conclusion that the investments received by the assessee company are all manipulated receipts and on that basis he can record a finding that the ex....
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....th effect from 1st April, 2013. Thus it would be effective only from the Assessment Year 2013-14 onwards and not for the subject Assessment Year. In fact, before the Tribunal, it was not even the case of the Revenue that Section 68 of the Act as in force during the subject years has to be read/understood as though the proviso added subsequently effective only from 1st April, 2013 was its normal meaning. The Parliament did not introduce to proviso to Section 68 of the Act with retrospective effect nor does the proviso so introduced states that it was introduced "for removal of doubts" or that it is "declaratory". Therefore it is not open to give it retrospective effect, by proceeding on the basis that the addition of the proviso to Section 68 of the Act is immaterial and does not change the interpretation of Section 68 of the Act both before and after the adding of the proviso. In any view of the matter the three essential tests while confirming the pre-proviso Section 68 of the Act laid down by the Courts namely the genuineness of the transaction, identity and the capacity of the investor have all been examined by the impugned order of the Tribunal and on facts it was found satisfi....
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....of these voluminous documentary evidence, only because those persons had not appeared before the Assessing Officer would not negate the case of the Assessee. The judgment in case of Gagandeep Infrastructure (P.) Ltd. (supra) would be applicable in the facts and circumstances of the present case" 10. We have also made enquiry from the learned Sr. Departmental Representative, whether the investors or this company is a Shell company or in the list prepared by Ministry of Corporate Affairs, Govt. of India. The learned Sr. DR, stated that this information is not available with the department. Further, we made enquiry from the learned Counsel for the assessee whether this company has been strike off from the Registrar Of Companies or not, the learned Counsel stated that it is very much on the register of Registrar Of Companies. In view of these facts, we reach to a conclusion that this is existing company and even the investors are existing. 11. In view of the above facts and circumstances of the case, we are of the view that CIT(A) has rightly deleted the addition and we confirm the same. This issue of revenue's appeal is dismissed." 16. We find that the assesse....
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....nce on the co-ordinate bench decision of this Tribunal in the case of Gagandeep Infrastructure supra, wherein it was held that the amendment to Section 56(2)(viib) and proviso to Section 68 of the Act are only prospective in nature and applicable only from A.Y. 2013-14 onwards and not earlier. We find that this judgment has been subsequently approved by the Hon'ble Jurisdictional High Court. We find that the Ld. DR vehemently relied upon the decision of Hon'ble Delhi High Court in the case of Navodaya Castles (P) Ltd., reported in 50 taxmann.com 110. We hold that the decision of Hon'ble Jurisdictional High Court would bind this Tribunal. Hence, in view of the aforesaid observations and various decisions of Hon'ble Jurisdictional High Court relied upon by the ld. CIT(A) while granting relief to the assessee, we do not deem it fit to interfere in the said order of the ld. CIT(A). Accordingly, ground No. 2 raised by the revenue is dismissed. 10. In the result, appeal of the revenue is dismissed". 17. We find that the Ld. AR has substantiated his arguments with the judicial decisions and the material facts with the evidences which cannot be disputed and the ....
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....IT v. Orbital Communication (P) Ltd. (2010) 327 ITR 560 (Delhi) iv. CIT v. Shree Rama Multi Tech Ltd. (2013) 34 taxmann.com 177 (Gujarat) v. CIT v. Orissa Corpn. (P.) Ltd. (1986) 25 TAXMAN 80F (SC) vi. CIT v. Apex Therm Packaging (P.) Ltd. (2014) 42 taxmann.com 473 (Guj) vii. CIT vs. Morani Automotives (P.) Ltd. (2014) 45 taxmann.ccm 473 (Rajasthan) viii. CIT v. Nipuan Auto (P.) Ltd. (2014) 49 taxmann.com 13 (Delhi) ix. CIT v. Vacmet Packaging (India) (P.) Ltd. (2014) 45 taxmann.com 204 (Allahabad) x. CIT v. Misra Preservers (P.) Ltd. (2013) 31 taxmann.com 214 (Allahabad) xi. CIT v. Expo Globe India Ltd. (2014) 51 taxmann.com 208 (Delhi) xii. ACIT vs. Bahubali Dyes Ltd. (2015) 55 taxmann.com 357 (Delhi - Trib) 18. The CIT(A) accepts that these companies actually exist and have capacity to make investments in assessee company as it was proved in the case of the investigation at Ahmedabad and Baroda. The CIT(A) also observed that the assessee has discharged his onus of burden of proof in respect of identity of investor, creditworthiness and genuineness of the transaction. We find the Jurisdictional Ho....
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....hich could have established their credit worthiness. In that view of the matter, Assessing Officer took the view that funds aggregating Rs. 34 Crores introduced in the return of income in the garb of share application money was money from unexplained source and added the same to the income of the assessee as unexplained cash credit under Section 68 of the Act. 18. In the first appellate proceedings, it was held that assessee had produced sufficient evidence in support of proof of identity of the creditors and confirmation of transactions by many documents, such as, share application form etc. First appellate authority also noted that there was no requirement under Section 68 of the Act to explain source of source. It was not necessary that share application money should be invested out of taxable income only. It may be brought out of borrowed funds. It was further held that non-responding to notice would not ipso facto mean that the creditors had no credit worthiness. In such circumstances, the first appellate authority held that where all material evidence in support of explanation of credits in terms of identity, genuineness of the transaction and creditworthiness of the....
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....k account of these three companies that they had the funds to make payment for share application money and copy of resolution passed in the meeting of their Board of Directors. (iv) Regarding source of the source, Assessing Officer has already made enquiries through the DDI (Investigation), Kolkata and collected all the materials required which proved the source of the source, though as per settled legal position on this issue, assessee need not to prove the source of the source. (v) Assessing Officer has not brought any cogent material or evidence on record to indicate that the shareholders were benamidars or fictitious persons or that any part of the share capital represent company's own income from undisclosed sources. Accordingly, no addition can be made u/s. 68 of the Act. In view of above reasoned factual finding of CIT(A) needs no interference from our side. We uphold the same." 21. From the above, it is seen that identity of the creditors were not in doubt. Assessee had furnished PAN, copies of the income tax returns of the creditors as well as copy of bank accounts of the three creditors in which the share application money was depos....