TaxTMI 
TaxTMI 
2022 (5) TMI 1005
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....of Rs.9,30,00,000/- received by the appellant from various shareholders." 2. This is the second round of appeal before us. The relevant facts are that the Assessing Officer found during the year under consideration, share capital of the company was increased from Rs.3,25,80,000/- to 12,55,80,000/- showing an increase of Rs.9,30,00,000/-. On being asked to explain, it was contended that the increase in share capital was contributed by ten shareholders in amounts ranging from Rs.60,00,000/- to Rs.1,25,00,000/-. Various enquiries have been conducted by the department which have been detailed in the assessment order. One pertinent point which has been brought out is that all the ten shareholders who subscribed to the share capital of Rs.9,30,00,000/-, inturn have received respective amounts from a concern M/s. Portal India and it is further explained that the shares held by such shareholders have been pledged with M/s. Portal India against the loans raised. In the course of assessment proceedings, assessee furnished affidavits of the shareholders supporting contribution in the share capital, copies of bank accounts of the socalled shareholders to the assessee company. That in the firs....
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....e share holders towards share capital of the assessee, etc. The Assessing Officer required the assessee to produce the shareholders, but only the directors of the assessee and one individual, Shri Yashwant Gujar were produced. A statement under section 131(1) of the Act of Shri Yashwant Gujar was recorded, who deposed that he had never signed any affidavit confirming the transaction and also submitted that the signatures in the affidavit submitted in his name by the assessee company did not match with his signatures as appearing in the return of income filed by him or on his PAN card. Inquiries were also conducted to verify the existence of M/s Portal India, and the said party was not found at the stated address and even the PAN .number was also found to be incorrect. The Assessing Officer also conducted enquiries with the bank in which the assessee company, M/s Portal India and the ten shareholders maintained the bank accounts. It was found that the bank account of the shareholders and the assessee company were opened in the said bank only for the purpose of the impugned transaction. After considering the result of the verification exercise, the Assessing Officer found it unreliab....
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....A) was directed by the Tribunal to examine the three elements of section 68 of the Act, i.e.(1) Identity, (2) Credit Worthiness and (3) Genuineness of the transaction in respect to the share capital introduced in the company. The ld. CIT(A), in the second round, had issued notices to the assessee to file written submissions through speed post which were returned as 'unclaimed'. Thereafter, the AO was directed to serve the notice. The AO, when he sent the notice through the Ward Inspector, could not find the premises at the given address. Thereafter, the AO was directed to serve the notice through Affixture by Ward Inspector at the last known address. The notice was served through Affixture by the Ward Inspector. The proof of service is on record with the department. In response to this notice also, none appeared. However, one letter seeking adjournment was filed dated 07-01-2016 by the Managing Director stating that she was unwell. Thereafter a letter dated 15- 01-2016 was issued which was once again served by Affixture through Ward Inspector requesting the assessee to produce the party for verification of genuineness of the transaction on 03-02-2016. On the appointed date, none ap....
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....urchase of the portal software. The date of transaction is also the same. Further, it was also found by the AO that the bank account of M/s. Portal India and the lone shareholder who appeared, i.e. Yashwant R. Gujar is the same, i.e. 1658. All the transactions had taken place in the same bank account as per material on record. The assessee has neither furnished any satisfactory reply to the AO nor before the CIT(A) explaining the bonafideness of the transaction. The ld. CIT(A) further held at para 5 as follows : "5. Adverting to the fact in the instant case, it is evident that the explanation offered by appellant is not satisfactory. The appellant has not produced any substantiating documents/evidence to verify the source of receipt of share capital and therefore, it has been rightly held by the Assessing Officer that the amount received as share capital is not bona-fide transactions. In the present case, the AO after considering all tangible material on record, has arrived that the share capital was sham or bogus. Further, the appellant neither before the AO nor before me could produce any substantiating document to prove the genuineness of transactions. The appellant could not ....
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....hree ingredients for the purposes of the section. Before us also, the ld. AR could not prove the merits of the case. He only relied on the submissions made before the ld. CIT(A) in the first round of appeal where his case was allowed. But that becomes irrelevant now since the order of the ld. CIT(A) in the first round has already been overturned by the Tribunal in its order dated 25-05-2012 in ITA No.216/PUN/2010 (supra). Even the case laws placed on record by the ld. AR are substantially different on facts and are not applicable to the facts and circumstances in respect of the present assessee. Admittedly, the assessee has not been able to prove the identity nor the assessee was able to prove the credit worthiness nor the genuineness of the transaction. Therefore, the prima-facie onus of the provisions of the Act has not been discharged by the assessee. 6. We find the Hon'ble Delhi High Court has rendered numerous judgments to the effect that the assessee has to prove the identity, credit worthiness and genuineness of the transaction. To illustrate, we would like to quote some of the judgments of the Hon'ble High Court infra. In the case of Tulip Engineering Pvt. Ltd. (2015) 92 C....
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.... before the AO at the relevant time. The materials on record disclosed that some information from at least two individuals indicated that the money had not been given by them. In view of the fact that concurrently the lower authorities held against the assessee and given the intensive factual nature of the evidence, no substantial question of law arises. The appeal is accordingly dismissed. " 8. Similar proposition has been laid down by the Hon'ble Delhi High Court in the case of Nipun Builder and developers Pvt. Ltd 214 Taxman 429 dated 07-01-2013 and also in the case of N. Tarika Properties Investment Pvt. Ltd. 221 Taxman 14 dated 28-11-2013. 9. We further find that the Hon'ble Apex Court in the case of P. Mohan Kala & Others 291 ITR 278 has held as under : " 15 When and in what circumstances Section 68 of the Act would come into play? That a bare reading of Section 68 suggests that there has to be credit of amounts in the books maintained by an assessee; such credit has to be of a sum during the previous year; and the assessee offer no explanation about the nature and source of such credit found in the books; or the explanation offered by the assesses in the opinion of the A....