TaxTMI 
TaxTMI 
2022 (5) TMI 727
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....under section 143 sub section 3 r w s 147 of income tax Act which is passed against the principal of natural justice 4. The Ld. CIT(A) erred in confirming the addition of Rs. 82,50,000/- received on account of Share Capital and Share premium and thereby erred in confirming and treating the same as unexplained cash credit in view of section 68 of the Income Tax Act,1961 5. The Ld. CIT(A) erred in confirming the charging of interest under section 234A, 234B, and 234C of the Income Tax Act 1961. 6. The Ld. CIT(A) erred in confirming the initiation of the penalty proceeding under section 271(1)(c) of the Income Tax Act 1961. 7. The Assessee craves leave to add further grounds or to amend or alter the existing grounds of appeal on or before the date of hearing." 3. The brief facts of the case are that the assessee company filed its return of income on 30.09.2009 declaring total income to the tune of Rs. Nil and current year loss of Rs.1,52,636/-. Thereafter, the case of the assessee was reopened u/s 147 of the Act, after taking due approval of the higher authorities on the basis of this fact that the income chargeable to tax had escaped assessment ....
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.... have not been pressed by the Ld. Representative of the assessee, therefore, these issues are being decided in favour of the revenue against the assessee being not pressed. ISSUE NO. 3 6. We have heard the argument advanced by the Ld. Representative of the parties and perused the record. At the very outset, the Ld. Representative of the assessee has argued that the issue has duly been covered by the decision of Hon'ble ITAT in the sister concern cases such as M/s. Shiva Shakti Enclaves Pvt. Ltd. Vs. DCIT Central Range-7(3). ITA. No.629/Mum/2019, M/s. Bini Builders Pvt. Ltd. Vs. DCIT-Central Range-7(3). ITA. No.631 & 632/Mum/2019, M/s. Bini Builders Pvt. Ltd. Vs. DCIT-CR-7(3). ITA. No.630/Mum/2019, M/s. Moongipa & Inf. Ltd. Vs. DCIT-CR-7(3). ITA. No.627/Mum/2019 & M/s. Moongipa Development and Infrastructure Ltd. Vs. DCIT Central Range-7(3). ITA. Nos. 625 & 626/Mum/2019. However, on the other hand, the Ld. Representative of the revenue has refuted the said contention. The copy of order dated 05.05.2021 in the case of M/s. Bini Builders Pvt. Ltd. Vs. DCIT-CR-7(3). ITA. No.630/Mum/2019 is on the file in which the Hon'ble ITAT has given the following finding as under: - ....
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.... The assessee's own bank statement was also placed on record which would show that all the transactions have taken through banking channels. Upon careful consideration of these documents, we find that so far as the identity of the investor entities are concerned, the same stand proved by certificate of incorporation which is held to be conclusive proof of registration of a corporate 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 ....
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....y on the basis of suspicion, conjectures or surmises. 8.5 The Ld. DR has relied upon the case of Hon'ble Supreme Court in Sumati Dayal Vs CIT (80 Taxman 89) & Durga Prasad More (82 ITR 540 26/08/1971). No doubt that the revenue authorities were not required to put blinkers while looking at the documents produced before them. They were entitled to look into 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 assesse....
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....ties i.e. (i) M/s Gorsia Marine Equipment Pvt. Ltd.; (ii) M/s Sitaram Investment Pvt. Ltd.; (iii) M/s Marudhar Suppliers Pvt. Ltd., we find that the assessee had furnished similar sufficient documentary evidences as follows: - (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 a....
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....prove the fulfilment of three ingredients of Sec. 68 viz. (i) identity of the investor; (ii) creditworthiness of the investors; & (iii) genuineness of the transactions. 8.2 To demonstrate fulfillment of these ingredients, the assessee had during the course of assessment proceedings as well as appellate proceedings, furnished following broad documentary evidences with respect to all the 11 entities: - (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 Audit Report along with financial statements of the investor entity (vii) Copy of ITR acknowledgement of the investor entity (viii) Copy of Certificate of incorporation of investor entity (ix) Memorandum & Articles of Association of investor entity (x) Company Master Data showing status as active (xi) Copy of Board Resolution The assessee's own bank statement was also placed on record which would show that all the transactions have taken through banking channels. Upon care....
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....at the sole basis of making impugned addition is the statement of one of the directors as recorded during the course of survey proceedings u/s 133A. However, this statement has been retracted within a span of 7 days. It is settled law that statements recorded during the course of survey proceedings would not have much evidentiary value unless the same are backed by credible evidences. This position has been settled by Hon'ble Supreme Court in the case of CIT V/s S.Khader Khan & Sons (25 Taxmann.com 413). The CBDT instructions No. F.No.286/98/2013-IT (Inv. II) dated 18/12/2014 also discourages confessional statements without any credible evidences. No incriminating material is shown to have been found during the course of survey proceedings. 8.4 We also find that learned CIT(A) has gone by irrelevant considerations to confirm the impugned additions. The object clause of the investor entities would have no relevance vis-à-vis proposed additions in the hands of the assessee u/s 68. It is trite law that no additions could be made merely on the basis of suspicion, conjectures or surmises. 8.5 The Ld. DR has relied upon the case of Hon'ble Supreme Court in Sumati....