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TaxTMI 
TaxTMI 
TaxTMI 
2021 (2) TMI 1110
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...."the Tribunal"), in I.T.A.No.1635/Mds/2013 for the assessment year 2006-07. 2.The appeal was admitted on 06.12.2019, on the following substantial questions of law:- "1.Whether on the facts and circumstances of the case, the Appellate Tribunal is correct in law in shifting the responsibility of proving genuineness of share application money to the Assessing Officer even though a prima facie evidence against the assessee lies and the assessee failed to discharge his initial burden on this account? 2.On the facts and circumstances of the case, whether mere furnishing list of person who have claimed to have advanced towards share capital thus constitute sufficient compliance on the part of the assessee? and 3.Whether the Appellate Tribun....
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....tal advances were through banking channel, the assessee furnished Form No.2 prescribed in Section 75(1) of the Companies Act, 1956, in respect of the return of allotment of 88,24,200 shares having face value of Rs. 10/- per share amounting to Rs. 8,82,42,000/- and the shares were allotted in the subsequent financial year on 03.10.2006. Further, the CIT(A) pointed out that the assessee has enclosed list of the allottees as well as Form No.5 and evidence of payment of Rs. 18,00,500/- for increase in authorized share capital of the company from Rs. 3,00,00,000/- to Rs. 36,00,00,000/-. Further, after referring to the earlier decision of the Tribunal and the decision of this Court in CIT vs. Electro Polychem Ltd., [(2007) 294 ITR 661 (Madras)],....
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....the Act, which reads as follows:- "Section 68:- Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year." 8.In terms of the above provision, if the assessee offers no explanation about the nature and source of the amounts found credited in their books or the explanation offered by the assessee is not in the opinion of the Assessing Officer, satisfactory, the same so credited, may be charged to income tax, as the income of the as....
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.... the creditworthiness of the investors and genuineness of the transaction to the satisfaction of the Assessing Officer. While answering the said issue, the Hon'ble Supreme Court held that it is for the assessee to prove by cogent and credible evidence that the investments made in share capital are genuine borrowings, since the facts are exclusively within the assessee's knowledge. After referring to several decisions, the principles, which emerged there from, were summed up in paragraph 11 of the judgment on the following terms:- "11. The principles which emerge where sums of money are credited as Share Capital/Premium are : i. The assessee is under a legal obligation to prove the genuineness of the transaction, the identity of ....
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....scribers would not arise in the case on hand. Therefore, the above decision is a clear answer to the assessee's case, which would necessitate us to decide the same in favour of the Revenue. 13.We may also refer to the decision of the High Court of Calcutta in J.J.Development Private Ltd., vs. CIT, Calcutta IV [(2018) 100 taxmann.com 101 (Cal.)] wherein, it was held that when there was no plausible explanation that was furnished by the assessee to discharge the onus cast upon them and the identities of the alleged share applicants having not been established and the documents of the alleged share applicants carried by the assessee before the Assessing Officer did not reveal the investments that the assessee claimed such alleged applican....