TaxTMI 
TaxTMI 
2021 (4) TMI 161
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....perusal of the balance sheet as on 31.03.2012 and annexure thereto, found that the assessee company, during the year, has issued 2,59,460 shares @ Rs. 900/- per share (face value of Rs. 10/- + Rs. 890/- premium per share) and has raised a total amount of Rs. 23,35,14,000/- in the form of share capital and share premium from three entities, the details of which are as under:- S. No. Name of Entity Amount Received (In Rs.) Details of Amount 1. M/s global Merchandisers Pvt. Ltd., 12, Ring Road, Lajpat Nagar-IV, New Delhi-24 6,78,54,600 75,394 shares @ Rs. 900 per share (Rs. 10 face value + Rs. 890 share premium on each share) raising Rs. 7,53,940/- as Share Capital & Rs. 6,71,00,660/- as share premium 2 M/s Kabir Commodities Pvt. Ltd., 5, Central Avenue, 1^st Floor, Maharani Bagh, New Delhi-65 1,24,69,500 13,855 shares @ Rs. 900 per share (Rs. 10 face value + Rs. 890 share premium on each share) raising Rs. 1,38,550/- as Share Capital & Rs. 1,23,30,950/- as Share Premium. 3 M/s D.D. Resort Pvt. Ltd. 12, Ring Road, Lajpat Nagar-IV, New Delhi-24 15,31,89,900 1,70,211 shares @ Rs. 900 per share (Rs. 10 face value + Rs. 890 share premium on ....
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....rious details furnished by the assessee, the AO noted that prima facie, the companies, namely, M/s Global Merchandisers Pvt. Ltd., M/s Kabir Commodities Pvt. Ltd. appeared not to be genuine parties and the genuineness of the transactions entered with them is also doubtful. He noted that the revenue operations are negligible but they have raised huge share capital/share premium. The funds of these companies have been further invested in other companies as share capital/share premium, the assessee being one of such companies. According to the AO, raising of share capital through charging of unrealistic and unjustified share premium is a key ingredient of accommodation entry operations. He further noted from the copies of their bank statements furnished that majority of debit/credit entries of identical or equal amounts appears to be on account of round tripping of money before passing on to beneficiaries like the assessee. He, therefore, inferred that the assessee has taken credit entries of Rs. 3,41,40,000/- from these two companies, the details of which are as under: 1. M/s Global Merchandisers Pvt. Ltd. Share Application Money received during F.Y. 2011-12 Rs. 1,75,00,0....
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.... the submissions of the appellant, order of the assessment made by the Assessing Officer and the material evidences placed on the record, it emerges from the facts that the appellant has received share application money from M/s Global Merchandisers (P) Ltd. and M/s Kabir Commodities (P)Ltd. It is evident from the case records that the appellant has filed the copies of the final accounts i.e. balance sheet and profit and loss account of the subscribers during the assessment proceedings. The company has received a sum of Rs. 1,75,00,000/- from M/s Global Merchandisers (P)Ltd. It is clear from the balance sheet of the subscriber that the company is having a balance sheet of Rs. 151 crores. The company has purchased shares of other companies as stock in trade as well as for the investment purposes. The non current investments have decreased from Rs. 22.9 crores to Rs. 12.4 crores whereas the loans and advances have increased from Rs. 39.3 to 63.5 crores. The inventory of the investments have decreased from 82.2 crores to 75.2 crores. It is clear from the information as discussed above that the company was having a liquidity during the year and the share application money has ....
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.... the assessee for the A.Y. 2011-12 was reopened by issue of notice u/s 148 dated 29th March, 2018 on the ground that the assessee has received share application money during the year under consideration on unjustified premium. The case of the assessee was reopened after the order for A.Y. 2012-13 was passed. He submitted that the AO, in the order passed u/s 147/143(3) has accepted the share application money and share premium received by the assessee. Even for A.Y. 2013-14, there is no addition and the returned income of Rs. 12,42,470/- has been accepted in the order passed u/s 143(3) of the Act. Since the assessee has received the share application and share premium from the group companies who are assessed u/s 143(3) of the Act, therefore, there is no justification on the part of the AO to make the addition and the ld.CIT(A) was fully justified in deleting the addition. He also drew the attention of the Bench to the following statements made before the CIT(A):- "From the details as pointed out above it can be seen that there are receipts as well as repayments. Even if the deposits are treated as non- genuine in that case also the net of receipts and payment can only be a....
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....enuineness of transactions was filed during the course of assessment proceedings vide submission dated 09.03.2015 which is placed in the paper book at...... Page No.___. 3.8 It is also to be submitted that the name of company namely M/s Kabir Commodities Pvt. Ltd., was changed to M/s Raj Darbar Commodities Pvt. Ltd. (copy certifying change of name is part of the paper book on Page no. -). Further an amount of Rs. 2,49,55,000/- was received from the same company and also the payment of Rs. 4,05,10,000/- was made in the immediately succeeding year i.e. AY 2013-14. Copy of ledger account of M/s Kabir Commodities Pvt. Ltd. in the books of appellant is part of the paper book on page -. On the basis of evidence filed in AY 2013-14, the genuineness has been accepted by the AO and no addition on this account is made. Copy of the assessment order of the appellant for the AY 2013-14 is made part of the paper book on page no.... Copy of the assessment order of M/s Rajdarbar Commodities Pvt. Ltd. for the AY 2013- 14 is made part of the paper book on page no.____" 11. The ld. Counsel also drew the attention of the Bench to the various submissions made before the CIT(A) and submitted....
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....ore passing on to beneficiaries like the assessee. It is also his objection that receipt of share capital through charging of unrealistic and unjustified share premium is a key ingredient of accommodation entry operations. We find, the ld.CIT(A) deleted the addition, the reasons of which have already been reproduced in the preceding paragraphs. 13. We do not find any infirmity in the order of the CIT(A) in deleting the addition. Perusal of the details submitted in the paper book as well as in the submissions made before the CIT(A) reveals that in the case of M/s Global Merchandisers Pvt. Ltd., the receipts are to the extent of Rs. 175 lakhs whereas the repayments have been made to the extent of Rs. 1,53,30,400/-. Therefore, there is net receipt of Rs. 21,69,600/- only. From the various details furnished by the assessee, we find, the amount of Rs. 175 lakhs was received from M/s global Merchandisers Pvt. Ltd. through banking channels and the company, during the impugned assessment year has a balance sheet of the size of Rs. 151 crores. The total turnover of the said investor is Rs. 7,21,25,000/-. Similarly, in the case of M/s Kabir Commodities Pvt. Ltd., the amount has been re....
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....f full sales amount on the basis of consistent method of accounting followed by the appellant. 2. The learned CIT (Appeals), erred in law and on facts in summarily confirming the aforesaid disallowance of Rs. 83,36,756/- without taking into consideration detailed submissions on facts and law made by the appellant and without dealing with them. 3. The learned CIT (Appeals), erred in law and on facts by confirming disallowance of premium paid on re-purchase amounting to Rs. 21,00,000/- without taking into consideration detailed submissions on facts and law made by the appellant and without dealing with them. 4. The appellant craves for liberty to add fresh ground(s) of appeal and And also to amend, alter and modify any of the grounds of appeal." 16. Facts of the case, in brief, are that during the course of assessment proceedings, the AO asked the assessee to justify the expenses with documentary evidence. However, according to the AO, the assessee could not justify the following expenses:- a) Premium on repurchase - Rs. 21,00,000/-. No details and justification has been filed in this regard. As the expense claimed on account of premium paid for....
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.... CIT(A) in sustaining the addition of Rs. 83,36,756/- on account of site development expenses debited to the P&L Account, whereas ground of appeal No.3 relates to disallowance of Rs. 21,00,000/- being premium on repurchase of plots. 19.1 The ld. Counsel for the assessee submitted that no opportunity of being heard was allowed by the AO regarding disallowance of Rs. 83,36,756/- being provision for site development expenses and the disallowance of Rs. 21 lakhs being premium on re-purchase. So far as the premium on re-purchase of Rs. 21 lakhs debited to the P&L Account is concerned, he submitted that such premium became payable on account of re-purchase of plots already booked by three persons the details of which are as under:- "1. Global Merchandisers Pvt. Ltd. - Rs. 16,00,000/- 2. Sh. Devi Das Garg - Rs. 2,50,000/- 3. Smt. Kusum Lata - Rs. 2,50,000/- Total - Rs. 21,00,000/-" 20. He submitted that the above three persons had booked plots in the projects being developed by the assessee. They requested to cancel the booking as there was an upside on the resale. The persons who have booked the plots have been paid the premium....
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.... The ld. Counsel for the assessee also drew the attention of the Bench to the Notes to Accounts forming part of the audited accounts, copy of which is placed at page 238 of the paper book and which read as under:- 22. He submitted that the order of the ld.CIT(A) is not at all a speaking order. He has not considered the details furnished before him, therefore, both the additions made by the AO should be deleted. 23. The ld. DR, on the other hand, heavily relied on the order of the AO and the CIT(A). 24. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. We find, the AO in the instant case made an addition of Rs. 21 lakhs on account of premium on re-purchase of plots and addition of Rs. 83,36,756/- on account of provision for site development expenses against sale of plots on the ground that the assessee failed to justify the above mentioned expenses to his satisfaction. We find, the ld.CIT(A) sustained both the additions, the reasons of which have already been reproduced in the preceding paragraphs. So far as the premium of re-purchase is concerned, it is the submi....
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....r statistical purposes. The decision was pronounced in the open court on 17.03.2021. ============= Document 1 "g) Details of Income determination are under: Particulars Total Advances received Sales (Based 55% & above advances received against plot booking) Sundry Debtors Amount (Rs.) As At 2011 Amount (Rs.) As At 2012 140111847.50 152826890.00 100042931.00 213848053.00 1605255.00 23779246.50 Advances received for 55% and above 83990381.00 149999890.00 56121466.50 2827000.00 h) Advances from customers (Based on less than 55% advances received against plot booking) Development expenses are the expenses which will be incurred by the company on the development of the site in terms of the roads, infrastructure laying of pipelines for sewage system, laying of the poles of electricity and gas pipeline etc. The estimated provisions has been made in terms of the present estimates made by the term of architects and the profitability of the project has been worked out after making provisions of the estimates and the promises made with investors. The escalation in terms of the cost and esti....