TaxTMI 
TaxTMI 
2021 (5) TMI 186
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..... CIT(A) erred in confirming the passing assessment order without providing opportunity to rebut the material relied by Ld Assessing Officer during the reassessment proceedings examination which is against the principal of natural justice and hence the said order is liable to be quashed. 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming addition in respect of the Share Capital and Share Premium of Rs. 3,22,75,000/- as unexplained cash credit u/s. 68 of the Income Tax Act, 1961 without corroborative evidences. 5. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not permitting of business loss of Rs. 25,879/- 6. On the facts and circumstances of case and in law, Ld. CIT(A) erred in confirming initiation of penalty proceeding u/s.274 r.w.s 271 (1) (c) of Income Tax Act 1961. 7. On the facts and circumstances of the case and law the Ld. CIT (A) erred in set-asiding for fresh calculations of interest under section 234A, 234B and 234C of the Income Tax Act, 1961. As evident, the assessee is aggrieved by confirmation of certain addition of unexplained cash credit u/s 68. In grou....
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....pts were alleged to be bogus in nature. The shares of face value of Rs. 10/- each were stated to be issued at premium of Rs. 90/- per share to 16 entities during the year as detailed in para 3.1.5 of the assessment order. 4.2 During the course of survey u/s 133A on 09/10/2014, Shri Rajesh Agarwal, an associate of the assessee group, in his statement under oath u/s 131, made admission of sum of Rs. 11.13 Crores as undisclosed income of the group. However, the said statement was retracted immediately on 16/10/2014 by submitting an affidavit that the statements were extracted by applying undue influence without there being any incriminating evidences on record. 4.3 The findings of search operations revealed that entities of Shri Rajesh Agarwal received unsecured loan / share application money of around 30 Crores from various Kolkata based parties. Shri Rajesh Agarwal was stated to be director of around 28 entities including that of assessee. The assessee is stated to have received total sum of Rs. 322.75 Lacs from 16 entities during this year as detailed in para 3.1.5 of the assessment order. The notices issued u/s 133(6) to all these entities to confirm the transactions remaine....
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....eve that income had escaped assessment in the hands of the assessee. Accordingly, the legal grounds challenging reassessment proceedings were dismissed. The reasons that triggered reassessment proceedings have already been extracted in para 6.0 of the impugned order and we have also perused the same. 5.3 On merits, the assessee assailed the quantum addition by way of elaborate submissions which have been extracted in para 7.1 of the impugned order. The assessee drew attention to the documents submitted by the assessee with respect to each of investor entities to establish their identity, creditworthiness and genuineness of the transactions in terms of requirements of Section 68. It was submitted that each and every shareholder confirmed the stated transactions and therefore, findings rendered by Ld.AO run contrary to the provisions of Sec. 68. The assessee maintained that by submitting these details, it had discharged the primary onus of proving the stated transactions. All the investor entities had sufficient funds to invest in the assessee company. Reliance was placed on catena of judicial pronouncements to support the said submissions. These have already been tabulated in ass....
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....quiry made by the AO. This also is incorrect as the AO had in-depth information not only about the 16 companies which have invested in the assessee company but also about the 67 companies which have invested in the said 16 companies. The AO had made exhaustive enquiry and analysis before reaching to this conclusion. The Learned Counsel has also alleged that the Third Party Unilateral Act cannot be the basis of addition but the addition, in this case, has been made not on the basis of Third Party Unilateral Act but on the basis of the assessee's own admission supported by other corroborative evidences. In the light of these facts and circumstances, the addition made by the AO is confirmed. The grounds of appeal are dismissed. Aggrieved the assessee is in further appeal before us. Our findings and Adjudication 6. Upon careful consideration, as rightly pointed out by Ld. AR, the issue is squarely covered in assessee's favor by the earlier decision of coordinate bench of this Tribunal in assessee's own case for AYs 2011- 12 & 2012-13, ITA Nos. 631 & 632/Mum/2019 common order dated 12/03/2020. The relevant findings of the bench were as under: - 7. We have carefully....
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....porate entity. The creditworthiness of the entities would stand satisfied by the financial statements of the investor entities, which are also placed on record. The genuineness of the transactions would stand proved by the fact that the transactions were duly supported by share application form, share certificates, copy of board resolution and by the fact that ultimately the shares were allotted to all these entities. The assessee has tabulated the net worth of all these entities in the following manner: - No. Name of Investor Amount of Share Capital invested Share Capital of investor entity Reserves of Investor entities Net worth of investor entities 1 Limelight Dealcom P. Ltd. 15,00,000 16,85,000 3,01,30,806 3,18,15,806 2 Classic Commotrade P. Ltd. 5,00,000 6,51,800 2,70,49,015 2,77,00,815 3 Divy Prakash Suppliers Pvt. Ltd. 25,00,000 1,00,02,450 33,68,50,695 34,68,53,145 4 Goldy Dealcom P. Ltd. 25,00,000 7,21,000 3,04,44,166 3,11,65,166 5 Nextgen Tradecom P. Ltd. 20,00,000 57,65,000 10,76,35,000 11,34,00,000 6 Rexnox Trexim P. Ltd. 18,00,000 1,15,57,100 15,93....
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.... the surrounding circumstances to find out the reality of the documents produced before them. However, we find that no such inquiries have been made by the authorities except for the allegations that the share capital was bogus in nature. Nothing was brought on record that to substantiate the fact that the assessee's unaccounted money was routed in the books in the garb of share capital. 8.6 The entirety of facts and circumstances as enumerated hereinabove do not convince us to concur with the stand of Ld. CIT(A). The impugned additions, in our considered opinion, could not be sustained under law in the light of binding judicial pronouncements as enumerated by us in the opening paragraphs. Therefore, we delete the same. Consequently, the set-off of losses, as allowable under law, would be available to the assessee. Ground Nos. 4 stand allowed. Ground No.5 stand allowed for statistical purposes. Ground Nos. 6 to 8, being consequential in nature, would not require any specific adjudication on our part. 8.7 So far as the legal grounds are concerned, we find that the original return was processed u/s 143(1) and the only requirement in law to trigger assessment was tha....
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.... (i) Share Application Form (ii) Copy of Cheque (iii) Copy of Cheque Deposit Slip (iv) Copy of investor's Bank Statement (v) Copy of Share Certificate Counterfoil (vI) Copy of source of funds certificate (vii) Copy of Audit Report along with financial statements of the investor entity (viii) Copy of ITR acknowledgement of the investor entity (ix) Copy of PAN Card (x) Copy of Certificate of incorporation of investor entity (xi) Memorandum & Articles of Association of investor entity (xi) Company Master Data showing status as active (xii) Copy of Board Resolution (xiv) Copy of RBI certificate of registration Upon perusal of these documents, it could be said that the primary onus as casted on the assessee in terms of the requirement of Section 68, was duly fulfilled and the onus was on revenue to controvert the evidences furnished by the assessee. However, we find that nothing has been brought on record by the revenue to substantiate the fact that the assessee's unaccounted money was routed in the books in the garb of share capital. It is trite law that no addit....