TaxTMI 
TaxTMI 
2022 (2) TMI 32
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....ciating that Assessee had proved the identity, creditworthiness and genuineness of the shareholders by filing documentary evidences and gave satisfactory explanation in terms of first proviso to Section 68 and both parties responded to notice u/s 133(6) and filed all the details and Vipul Vidur Bhatt has retracted his statement and hence, addition u/s 68 of Rs. 53,00,000/- may be deleted. 1.1 The Ld CIT (A) failed to appreciate that AO did not provide cross examination of Mr Vipul Vidur Bhatt thereby violating principles of natural justice and hence, addition u/s 68 of Rs. 53,00,000/- may be deleted. 1.2 The Ld CIT(A) erred in not admitting additional evidence u/r 46A though Assessee had given cogent explanation for admitting the additional evidence and hence, addition u/s 68 of Rs. 53,00,000/- may be deleted. II. Addition u/s 68 of Rs. 4,66,50,000/- being share-application/loan received from M/s Shyam Alcohol & Chemicals Ltd. 2.The Ld CIT(A) erred in making addition of share application money/loan Rs. 4.66,50,000/- received from M/s Shyam Alcohol & Chemicals Ltd u/s 68 without appreciating that said amount represented repayment of loan and thus ....
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....g the course of recording of statement u/s 132(4) of the Act on 09.02.2016 that he and his associate concerns were providing bogus accommodation entries only. Accordingly, the AO called upon the assessee to prove the genuineness of these transactions with documentary evidences. In response , the assessee filed before the AO various evidences comprising copies of ITRs, confirmations from investors, bank statements of investors evidencing receipt of payments through banking channels and share application forms etc. The AO also issued notice under section 133(6) of the Act to these investors to verify the genuineness of these transactions independently and the investors have duly replied to the said notices issued by the AO furnishing all the details sought by the AO with respect to investments in shares by the two entities. The AO, however, was not satisfied with the genuineness of the transactions of subscriptions of share capital and share premium by these two parties on the ground that Shri Vipul Vidur Bhatt during the course of search has admitted to be engaged only in providing accommodation entries and thus added Rs. 53,00,000/- to the income of the assessee under section 68 of....
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....e, explanation furnished by the appellant regarding the source m nature of the sums credited are deemed to be not satisfactory Therefore, the AO was justified in treating the sum of Rs. 53,00,000/as unexplained credit u/s 68 of the Act. Therefore, I confirm the addition made by the AO. In the result, the ground of appeal No. 1 is dismissed." 6. The Ld. A.R. submitted before the Bench that the order passed by the Ld. CIT(A) upholding the order of AO is wrong and against the provisions of the Act as both the authorities below have overlooked and ignored the evidences filed by the assessee as well as by the investors namely M/s. Sampada Chemicals Ltd and M/s. P. Saji Textile Ltd. The Ld. A.R. submitted that assessee has raised money by way of share capital and share premium by issuing 8,500 equity shares of face value of Rs. 10/- each at a premium of Rs. 225/- per share to M/s. Sampada Chemicals Ltd. and by issuing 56,000 equity shares of face value Rs. 10/- each partly paid up (Rs. 2.50 paid up) at premium of Rs. 225/- to M/s. P. Saji Textile Ltd on the basis of valuation report as per rule 11(UA) which was prepared on the basis of net asset value method. The Ld. A.R. submitted th....
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....hich has been retracted since then and therefore has no evidentiary value in the eyes of law. The Ld. A.R. relied on the decision of Hon'ble Delhi High Court in the case of CIT vs. Sunrise Systems Pvt. Ltd. (2014) 361 ITR 206 (Del-HC) wherein it has been held that addition on the basis of retracted statement was bad in law. Going a step further, the Ld. Counsel of the assessee submitted that if the share capital and share premium has been received by the assessee from bogus shareholders whose names and addresses along with ITRs, confirmations and various other evidences were given to the AO, then the AO is free to proceed against those investors and reopen their independent assessments in accordance with law and this amount can not be added in the hands of the assessee under section 68 of the Act as unexplained cash credit as has been held in the case of CIT vs. Lovely Exports Pvt. Ltd. (2008) 216 CTR 195 (SC). The Ld. A.R. submitted that the Hon'ble Bombay High Court has also followed this decision in the case of Gagandeep Infrastructure Pvt. Ltd. (2017) 394 ITR 680 (Bom.) as well as in CIT vs. Orchid Industries Pvt. Ltd. (2017) 397 ITR 136 (Bom.) by laying down same ratio. The Ld....
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....n a view on these transactions and the plea of the assessee that the statement has been retracted and Shri Vipul Vidur Bhatt has filed an affidavit before the Ld. CIT(A) will not convert these non genuine transactions in the genuine ones. The Ld. D.R. therefore prayed that the appeal of the assessee on this issue may kindly be dismissed. 8. After hearing the rival parties and perusing the material on record, we find that the assessee has raised share capital and share premium from two parties namely M/s. Sampada Chemicals Ltd. of Rs. 20,00,000/- by issuing 8,500 equity shares of Rs. 10/- at a premium of Rs. 225/- per share and Rs. 33,00,000/- from M/s. P. Saji Textile Ltd. by issuing 56,000 equity shares of Rs. 10/- each partly paid up (Rs. 2.5 paid up) at a premium of Rs. 225/-. During the course of assessment proceedings the assessee filed the ITRs, confirmations, bank statements of the investors besides filing the evidences of these transactions being carried out through banking channel and share application forms etc. We also note that the AO has issued notices under section 133(6) of the Act to these investors in order to verify the genuineness of the investments which have....
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....coordinate Benches of the Tribunal in the cases namely ITO vs. MJD Financial Services Pvt. Ltd., ITO vs. Celebrity Life Space Pvt. Ltd. and M/s. Moraj Realty Pvt. Ltd. vs. DCIT have deleted the additions made by the AO on account of unsecured loans from companies belonging to Shri Vipul Vidur Bhatt including some of the present investors. In view of these facts and the ratio laid down by the various judicial forums, we are inclined to set aside the order of Ld. CIT(A) and direct the AO to delete the addition as the assessee has proved all three ingredients of section 68 of the Act i.e. identity, creditworthiness of the investors and genuineness of the transactions. The ground no. 1 is allowed. 9. The issue raised in ground No.2 is against the confirmation of addition of Rs. 4,66,50,000/- by Ld. CIT(A) as made by the AO under section 68 of the Act in respect of share application/unsecured loans received from M/s. Shyam Alcohol Chemical Ltd. 10. The facts in brief are that during the course of assessment proceedings the AO observed that assessee has received unsecured loan from M/s. Shyam Alcohol Chemical Ltd. during the year under consideration. The AO noted that the debits an....
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....s appearing in one of the two ledgers of M/s. Shyam Alcohol and Chemicals Ltd. in appellant's books are as under (as per confirmation filed by the appellant): Date Amount (in Rs.) 07.12.2013 27,00,000 10.12.2013 27,00,000 10.12.2013 25,00,000 10.12.2013 25,00,000 10.12.2013 25,00,000 11.12.2013 22,00,000 12.12.2013 2,00,000 13.12.2013 17,00,000 14.12.2013 12,50,000 19.12.2013 25,00,000 19.12.2013 25,00,000 20.12.2013 15,00,000 21.12.2013 11,00,000 23.12.2013 18,00,000 26.12.2013 25,00,000 30.12.2013 10,00,000 31.12.2013 30,00,000 02.01.2014 45,00,000 06.01.2014 15,00,000 07.01.2014 8,00,000 08 01.2014 11,00,000 11.01.2014 10,00,000 11.01.2014 6,00,000 13 01.2014 10,00,000 13.01.2014 10,00,000 28.01.2014 25,00,000 01.02.2014 15,00,000 Total 4,66,50,000 5.4.7 Therefore, the appellant's contention that there was no fresh cash credit in the account of M/s. Shyam Alcohol and Chemicals Ltd. is not correct. As regards the genuineness of the source of the cas....
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....aring for the Appellants was unable to point out that any of such findings arrived at by the authorities below were on the basis of misleading of evidence or failure to examine any material documents whilst coming to such conclusions. Under the guise of the substantial question of law, this Court in an Appeal under Section 260A of the Income Tax Act cannot re-appreciate the evidence to come to any contrary evidence. Considering that the authorities have rendered the findings of facts based on documents which have not been disputed, we find that there are no substantial question of law which arises in the present Appeal for consideration. "(emphasis supplied) 5.49 Therefore, in that case the Hon'ble High Court did not decide any question of law. Even otherwise, the fact of that case is totally different from this case. In this case, the director of the company (Shri Vipul Vidur Bhatt) from whom the money was received himself admitted that he used to give bogus entries of loan, share application money etc. 5.4.10 Considering the facts mentioned above, I confirm the addition of Rs. 3,76,50,000/- made by the AO and also make further addition (enhancement) of Rs. 9....