TaxTMI 
TaxTMI 
2019 (2) TMI 1910
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....e assessee in both the grounds of appeal is against the deletion of addition of Rs. 1,00,00,000/- by Ld. CIT(A) as made by the AO under section 68 of the Act towards unexplained share application money where the identity, genuineness and creditworthiness of the lenders were not proved. 3. The facts in brief are that assessee filed the return of income on 21.10.2007 declaring an income of Rs. 1,01,22,230/- which was processed under section 143(1) of the Act. Subsequently, the case of the assessee was reopened under section 147 read with section 148 by issuing notice dated 21.03.2014 wherein AO noted that following receipt of information from DGIT, Investigation, Mumbai to the effect that the search on Pravin Kumar Jain group on 01.10.2010....
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.... account along with enclosures from time to time. The AO observed on the basis of said documents that during the year the assessee raised share capital and share premium accountas there was an addition of Rs. 1,00,00,000/- and accordingly assessee was asked to submit the details of the said share capital and share premium received during the year which was replied by the assessee vide letter dated 07.10.2014 submitting a copies of confirmation of shareholder and various other documents evidencing the transactions. The AO also issued notices under section 133(6) to 8 parties out of which only notice was served to five parties and in respect of remaining three the postal authorities returned the letter with the remarks "not known and left". H....
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....missions. This leads to the inescapable conclusion that the AO could not think of any further material to ask for and proceeded to reject the appellant's claims, relying upon the information/material, which he never even brought to the notice of the appellant for any rebuttal. The unequivocal conclusion is that all the 3 ingredients having been satisfied, the impugned share application money have to be treated as explained satisfactorily and the AO was not justified in having disregarded overwhelmingly supportive evidence. No cogent material was adduced by him to show that loans were unexplained. Therefore, the impugned addition of under the heading share application money as made in the assessment order, fails on several counts - (1) r....
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....s. Even the statement recorded of the directors of these companies revealed that no business was being done and only it was a conversion racket by charging commission only. The Ld. D.R. submitted that the mere filing of evidences would not automatically prove that the money flowed from these entries in the form of share capital and premium were genuine and thus the order of Ld. CIT(A) is full of infirmities and should be reversed. 6. The Ld. A.R., on the other hand, the ld AR defending the order of CIT(A), vehemently argued that the order takes into account all the legal and factual aspects. The ld AR submitted that the mere general admission on the part of the directors of the companies who invested money in the assessee company would n....
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.... Tribunal, Hyderabad in the case of M/s, Komal Agrotech Pvt. Ltd. v. I.T.O. Hyderabad wherein the ITAT held that the addition made under Section 68 is bad in law. These Companies are the assessee's Shareholders. It is further submitted that the Hon. Bombay High Court in the case of M/s. Gagandeep Infrastructure Ltd. 394ITR 680 (Born) held that the proviso to Section 68 would not be applicable to Share Premium prior to 01.04.2013 and hence addition made u/s. 68 is directed to be deleted. The Jurisdictional High Court consistently following this decision and hence it is prayed that the departmental appeal be dismissed. The assessee relies on the following decisions:- 1. Komal Agrotech Pvt. Ltd. v. I.T.O. (ITAT Hyderabad) ....
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....filed various evidences such as share application forms along with letters of acceptance, confirmation letters, copies of PAN numbers, copies of ITR acknowledgment, balance sheets, profit and loss accounts, master data of companies from MCA website, copies of bank accounts to evidence the transactions through banking channels, copies of MA & AA and share certificates of all the companies. We further find that all these transactions were entered into through banking channels and these companies are active on the website of Ministry of Corporate Affairs. Despite the filing all these information with the AO, he did not conducted any verification or investigation to dig out the truth but acted on the information supplied by the investigation wi....