TaxTMI 
TaxTMI 
2022 (1) TMI 784
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....assessee was dismissed way back in 2017 and no application for revival of that appeal has been filed by the assessee. 2. Similarly, in response to the notice of hearing in the Revenue's appeal, none has come present on behalf of the assessee, therefore with the assistance of the ld.DR, we have gone through the record carefully, and proceeded to decide the appeal ex parte qua the assessee respondent. 3. In the first ground of appeal, the Revenue has pleaded that the ld.CIT(A) has erred in deleting the addition of Rs. 3,85,44,666/- which was added by the AO under section 68 of the Income Tax Act, 1961. 4. Brief facts of the case are that during the course of scrutiny assessment, it revealed to the AO that the assessee has received share application money amounting to Rs. 3,85,44,666/- received from one Shri Sanjay Gupta, Director of the assessee-company. In a questionnaire, the assessee was asked to furnish details of the share application money received during the year along with confirmation, bank statements, copy of income-tax returns and the balance sheet of the persons who gave share application money. In response to that, the assessee vide letter dated 9.12.2011 submit....
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....his returned income for the Asstt.Year 2009-10 showed only Rs. 47.00 lakhs and his balance sheet under "proprietor's capital showed minus (-)Rs. 14,72,194/-. Besides that unsecured loans from "Others" showed in the balance sheet at Rs. 77,25,30,551/- for which there was no proper explanation. The ld.DR further has drawn our attention to the fact that said Shri Sanjay Gupta made payment of Rs. 2 crores to the assessee on 29.7.2008, while he received exactly the same amount in four equal instalments of Rs. 50 lakhs through the bank on 28.7.2008, whose whereabouts were not known. Similarly, Rs. 1.75 crores paid by Shri Gupta to the assessee on 1.8.2008, was received to this account on the same day through the demand draft. Therefore, looking to overall facts of the case, genuineness and credit-worthiness of giver of the funds were not established by the assessee. It is a fit case for invocation of provisions of section 68 of the Act, and the ld.AO justified the same by making the impugned addition, which deserves to be upheld. 7. We have heard the ld.DR and also gone through the material available on record. It is pertinent to note that section 68 of the Income Tax Act contemplates....
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....sa Infrastructure. What is interesting to note is that Sh. Sanjay Gupta's ITR for AY 2009-10 shows his returned income at only Rs. 47,00,000. A perusal of his Balance Sheet shows (-)Rs. 14,72,194/- as Proprietor's Capital. An amount of Rs. 77,25,30,551 is seen as unsecured loans from "Others" in his Balance Sheet. No explanation whatsoever has been furnished for these by the assessee's AR for these observations. Sh. Gupta's Balance Sheet shows investments of over Rs. 76 crore. Evidently, most of these investments have been financed through unsecured borrowings by Sh. Gupta. As against these huge unsecured borrowings, Sh. Gupta is showing only a token amount of Rs. 22 lacs as interest payment Prima facie, most of this amount seems to have been paid for the secured loans of Rs. 1.61 crore. Thus, Sh. Gupta seems to have access to very low interest bearing loans amounting to Rs. 77 crore on which negligible interest payments are needed. It remains unclear as to who are the actual lenders to Sh. Gupta at such rates or interest. No explanation is offered on this count by the AR of the assessee. Furthermore, the Bank Statement of Sh. Sanjay Gupta shows a very strange patte....
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....that if the A.O. is not satisfied with the source of share application money in the hands of Shri Sanjay Gupta, it will be appropriate to initiate proceedings in the case of Shri Sanjay Gupta, but for this reason addition in the hands of the appellant company cannot be made. 3.4 It is also a matter of record that the appellant has received share application money from Shri Sanjay Gupta. The identity of Shri Sanjay Gupta had been conclusively established vide various documents placed before the A.O. It is an established proposition of law that in case of share application money, the appellant has to establish identity of the person from whom share application money is received. In case of share application money the appellant is not required to establish the genuineness of transaction and creditworthiness of the creditor for the purpose of sec.68 of Income-tax Act, 1961. Reliance in this regard is placed on CIT vs Lovely Exports Pvt. Ltd. 216 CTR (S.C) 195. Since the identity of Shri Snjay Gupta is established beyond doubt, accordingly, I hold that addition against share application money received from Shri Sanjay Gupta cannot be made in the hands of the appellant company. ....
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....e received back the same amount through DD. Therefore, the AO was of the view that though identity of giver of the fund was made to know, but it did not demonstrate genuineness and the credit-worthiness of said Shri Gupta, and therefore, it was a clear cut case for introduction of unaccounted money in the books of the assessee and an ingenious way for legitimizing unaccounted money. However, the ld.CIT(A) did not appreciate this finding of the ld.AO. From the material available on record, we find that no sufficient material to support claim of the assessee that impugned transaction was genuine and creditor's credit-worthiness to give such an amount. The trail of transactions as noted by the AO from the bank statements would not gauge any authenticity of the impugned transactions so as to allow claim of the assessee. However, a perusal of the finding extracted (supra) would reveal that the ld.CIT(A) was of the view that the Director has contributed this amount towards share application money, and he has taken loan of Rs. 77 crores which was raised by him at very lost cost. This observation was not convincing enough. The objection of the AO is that financial health of the director wa....
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....ors. 11. Brief facts of the case are that during the assessment proceedings the assessee shown sundry creditors, trade creditors and creditors for capital goods and creditors for expenses and others to the tune of Rs. 3,48,78,284/-. The ld.AO sought for details in this behalf, viz. party-wise details of sundry creditors outstanding as on 31.3.2007, 31.3.2008 and 31.3.2009 along with their confirmations. Since the assessee failed to submit details with explanation, and therefore, addition to the extent of Rs. 3,48,78,284/- was made to the total income of the assessee. Aggrieved assessee preferred appeal before the first appellate authority. On the basis of certain details submitted by the assessee before the ld.first appellate authority, the ld.CIT(A) called for remand report from the AO. However, the ld.AO was not convinced with the evidence produced before the ld.CIT(A) by the assessee, and he observed that these details did not reflect whether any actual transactions took place or not. Therefore, veracity and genuineness of the details could not be verified, more so in the absence of PAN/TAN or the addresses of the parties. He further observed that mere submissions of ledger a....
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....lined to agree with the contentions of Ld.A.R. In view of above facts, I hold that the appellant has established the genuineness of sundry creditors of Rs. 3,25,05,162/-. Accordingly, addition to the extent of Rs, 3,25,05,162/-(3,48,78,284 - 23,73,122/-) is deleted. Appellant will get relief to this extent. 7.5 In the remand report, the A.O. observed that in case of M/s. Goyal Power Systems, the appellant had not furnished confirmation. This way the address, PAN or TAN of this party was not before the A.O. This way the A.O. was prevented to make necessary enquiries in respect of this credit Accordingly, the A.O. was of the opinion that sundry creditor outstanding in the name of this party is not genuine. In response to this the appellant vide its rejoinder submitted that the A.O. has not asked for confirmation from this party during the remand report proceedings. It is also submitted that addition against sundry credit of Rs. 17,44,800/- outstanding against this party cannot be made u/s.41(1) of the I.T.Act. 7.6 I have carefully considered the facts available on record. It is seen that the appellant vide its letter dated 27.4.2012 categorically submitted that comp....