TaxTMI 
TaxTMI 
2022 (2) TMI 1088
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....see could not submit the details regarding creditworthiness and genuineness of the party from where share premium was received.'' 2. The Appellant prays that the order of the CIT (Appeals) on the above grounds be set aside and that of the AO be restored. 3. Brief facts of the case are that M/s Kleem Consultancy Pvt. Ltd., formerly known as Crystal Acqua Bottling Pvt. Ltd. (hereafter referred to as the assessee or appellant) is a private limited company engaged in the business of bottling, distribution and selling aerated drinks and other allied items. The assessee filed its return of income for A.Y. 2008-09 on 30.09.2008 declaring total income of Rs. NIL. The return was processed u/s.143(l). Case was reopened by issuing notice u/s 148 of the Act after recording reasons. The reassessment was completed u/s. 143(3) r.w.s. 147 on 30.03.2016 assessing total income at Rs. 1,50,00,000 after making additions of Rs. 1,50,00,000 u/s. 68 of the IT Act. 4. During course of assessment proceedings, the AO noticed that the appellant had allotted the share capital of Rs. 10 per share at a premium of Rs. 90 per share to the investing entity. AO asked the assessee to justify t....
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.... all the details has been filed your goofself is requested not to make addition of share premium amount u/s 68 of IT. Act. the IT Act, 1961." 6. Thereafter, AO observed that assessee has not discharged primary onus satisfactorily and observed that the bank statement of the investor, justification and share premium etc, was not provided with, hence the assessee has also failed to prove capacity and creditworthiness of creditors. The AO was also was not satisfied with the working of share premium amount. He also referred to the surrounding circumstances and ITAT Kolkata decision in the case of Bisakha Sales Pvt.Ltd vs CIT in ITA No. 1493/Kol/2013. He also referred to other case laws and concluded as under:- " In view of the discussion as above, the gist of the facts that emerge are recapitulated hereunder for the sake of ready reference and ease of understanding: - (i) The Identity, capacity and creditworhtiness of the share subscribers could not be established by the assessee. (ii) Funds not utilized in assessee's business as mentioned in the MOA- Funds diverted for investment in shares. (iii)It has been observed the major sales and purchas....
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....udgment that such information need not be from external source. CIT and anr. vs. Rinku Chakraborty 56 DTK 227 (Kar) and Kalyanji Mavji and Company vs. CIT 102 ITR 287 (SC). It is also pertinent to mention that for reopening of completed assessment u/s.148, tangible material need not be from outside the return of income. It can be obtained from the return of income or evidences on record itself. The reference may be had of ACIT vs Kanga & Company (2010) - TIOL 464 ITAT Mumbai. It is also relevant to mention that information obtained in assessment proceedings of subsequent year, can also be utilized for reopening of the completing assessment refer Raymond Woolens Mills Ltd. vs. ITO and Other 236 ITR 34 (SC) and Revathy C.P. Equipment Ltd. vs. DCIT AND ors. 241 ITR 856 (Mad). In the light of these facts and discussions earlier, I do not find merits in the contention of the appellant and the reopening of the assessment is upheld. This ground of appeal is dismissed." 8. On the merits, ld.CIT(A) noted that submission of the assessee and various case laws relied upon by the assessee. The ld.CIT(A) observed that AO reopened the case and also discussed that shares of face value of Rs. 10....
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....genuineness of the transactions are established as under. In these circumstances, it can be said that the appellant had discharged the onus cast upon it to establish the identity and creditworthiness of the creditors as well as genuineness of the transactions. Therefore, the onus shifted to the AO to prove the contrary. However, the A.O. has not brought any evidence on record in order to controvert the claim of the appellant, other than relying on case laws-without reference to the facts of the case. There is no finding by the AO that the evidences produced by the appellant were untrustworthy or lacked credibility. In other words, the AO did not make any attempt to discharge his burden of proof to rebut the evidences produced by the appellant or to bring any contrary material on record. Thus, the appellant's contention that it had discharged onus of establishing the identity and creditworthiness of the investor companies and genuineness of the transactions with the help of relevant supporting evidences which could not be disproved by the AO appears to be correct. It is seen that the Assessing Officer did not bring specific incriminating evidence to show that appellant had given....
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....that notice u/s. 133(6) has not been respond. We note that it is not the case that AO has issued any summons to the said party and that the company has been found to be defunct as per the Registrar of the company website. It is also not the case that income tax department in the duly acknowledged return of income filed by the said company has found anything suspicious in that company's account. Despite noting that sales and purchases of the said company was to the tune of Rs. 15 crores . The AO found the same to be suspicious. He also noted from the balance sheet that investing company has sufficient funds. But he found the same also to be suspicious as it comprised of share application money received and loans. We note that the assessment year was involved is 2008-09. The extant provisions of section 68 did not provide for the assessee to satisfy the AO regarding the source of source. The amendment was brought into the statute by Finance Act, 2012 w.e.f. 1.04.2013, which provided that in case of share capital and share premium receipt, it will be necessary for the assessee to satisfy the AO about the nature and source of credit of the person from whom, such sum is received. Since,....
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....o to Section 68 of the Act has been introduced by the Finance Act, 2012 w.e.f. 1st April, 2013 and therefore it would be effective only from Assessment Year 2013-14 onwards and not for the earlier assessment years. In the above decision, reliance was placed upon the decision of the Apex Court in Lovely Exports (supra) in the context of the pre-amended Section 68 of the Act. In the above case, the Apex Court while dismissing the Revenue's Appeal from the Delhi High Court had observed that, where the Revenue urges that the money has been received from bogus shareholders then it is for the Revenue to proceed against them in accordance with law. This would not entitle the Revenue to invoke Section 68 of the Act while assessing the respondent for not explaining the source of its source. In any event, the impugned order of the Tribunal has raised a finding of fact that the respondent had discharged the onus which is cast upon it in terms of the pre-amended Section 68 of the Act by filing the necessary confirmation letters of the creditors, their Affidavits, their full address and their pan. 9. Thus, the Tribunal has rendered a finding of fact which is not shown to be perverse. I....