TaxTMI 
TaxTMI 
TaxTMI 
2021 (5) TMI 186
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....t 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 ground nos. 1 to 3, the assessee has challenged the validity of reassessment proceedings. 2. The ....
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....ed 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 However, the said statement was retracted immediately on 16/10/2014 by submitting an affidavit that the statements were extracted by applying undue influence without there being any incriminating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 remained un-served / un-responded. 4.4 In the above background, summon u/s 131 were issued to Shri Rajesh Agarwal ....
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....ssment 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 assessee's submissions as extracted in the impugned order. Therefore, the assessee submitted that additions as made by Ld. ....
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....n 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 heard the arguments advanced by respective representatives and perused relevant material on record including documents placed in the paper-book. ....
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....ere 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 15,93,97,977 17,09,55,077 7 Rajlaxmi Dealcom P. Ltd. 18,00,000 60,10,000 11,22,95,755 11,83,05,755 8 Vanilla Tie-up P. Ltd. 15,00,000 13,50,000 6,12,92,898 6,26,42,898 9 Kamakhya Goods P. Ltd. 24,00,000 7,72,000 3,29,46,126 3,37,18,126 10. Camellia Commercia P Ltd 10,00,000 8,32,280 3,58,97,644 3,67,29,924 ....
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....tances 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 that Ld. AO certain reasons to believe that certain income escaped assessment in the hands of the assessee. We find that Ld. AO was clinched with tangible information from investigation wing which suggested possible escapement of income in the hands of the assessee. In our opinion, nothing more was required at this stage since Ld. AO had sufficient reasons to form such a belief. Therefore, we do not find much substance in assessee's legal grou....