TaxTMI 
TaxTMI 
2022 (5) TMI 1379
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....ase Private Limited to Aasra Fincorp Private Limited, with effect from 25th April, 2019 , vide fresh certificate of incorporation pursuant to change of name, issued by Registrar of Companies, Ministry of Corporate Affairs, Government of India , Office of Registrar of Companies, Kanpur, Uttar Pradesh. The fresh certificate of incorporation issued by ROC, Kanpur , is placed on record in file. 2. The grounds of appeal raised by the assessee in its appeal in ITA No. 28/Alld./2020 for assessment year 2016-17, in memo of appeal filed with Income-Tax Appellate Tribunal, Allahabad Bench, Allahabad(hereinafter called " the tribunal") , reads as under:- " 1.That in any view of the matter addition as per the assessment order dated Dec 02, 2019 , the assessing officer by determining income of Rs. 20,00,000/- maintained in this respect of investment made by shareholder by ld. CIT(A) is totally incorrect and illegal. 2. That in any view of the matter investment of Rs. 10,00,000/- by Sanjeev Kumar who is one of the shareholder of the company and investment made through bank channel as well cash, assessed to tax, confirmation filled. In this way the appellant discharged the co....
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.... was filed by the same Director, CA Shri Ashok Singh requesting for adjournment of hearing before the Division Bench on 20th October, 2021, on the ground that the counsel of the assessee is not keeping well due to fever and cold , and When the case came up for hearing before Division Bench on 20th October, 2021, the Bench was pleased to grant adjournment to 15th November 2021. It is observed that similar letter dated 28.09.2021 verbatim was filed by the same Director , CA Shri Ashok Singh requesting for adjournment of hearing before the Division Bench on 29th September, 2021, on the ground that the counsel of the assessee is not keeping well due to fever and cold and when the case came up for hearing before Division Bench on 29th September, 2021, the Bench was pleased to grant adjournment to 20th October, 2021. The assessee has also sought several other adjournments whenever this appeal came for hearing before the Division Bench , on one pretext or other . The assessee sought adjournments on 24.02.2021, 16.03.2021 , 15.04.2021, 29.09.2021, 20.10.2021, 14.12.2021 , 21.12.2021 and 11.05.2022. The adjournment applications are placed on record in file. The assessee did not appear for h....
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....p; Sd/- (RAMIT KOCHAR) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER " This appeal was heard on 11.05.2022 by Division Bench of Allahabad-tribunal, in open Court hearings through Physical Hearing Mode. 4. The brief facts of the case are that the assessee is engaged in the business of Micro Finance. The assessee e-filed its return of income on 29th September, 2016, in form ITR-6 declaring taxable income of Rs. 74,380/-. The case of the assessee was selected for framing scrutiny assessment u/s 143(3) read with Section 143(2) of the 1961 Act, under CASS. The AO made additions to the returned income in the hands of the assessee, under Section 68 of the 1961 Act, to the tune of Rs....
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.... appellant proceedings to submit all the documentary evidence to prove creditworthiness of the lenders in respect of share capital introduced. Appellant submitted following documentary evidence in support of the same that is being discussed as below: Name and address of share Holder PAN ADHAR NO. Share Capital (Amount) ITR ACK NO AY M/s Stance Synegies Private Limited AAMCS7076B NA 25,00,000 839282671300915 2015-16 Ashok Kumar Singh BKTPS6791N 376286591313 30,00,000 478743760090215 2014-15 946609600060216 2015-16 621136270140217 2016-17 Sanjeev Kumar BBMPK2869K 582333258223 10,00,000 699680990240815 699583610240815 273794770190716 2014-15 2015-16 2016-17 Vinod Kumar Sharma BHGPS3027R 920327762220 10,00,000 746837340310317 2016-17 As per settled law the initial onus is on the appellant to establish genuineness of the transaction and credit worthiness of the investor u/s 68 of the Income Tax Act with supportive cognizance evidence. A-Proof of the identity of the creditor. ....
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....above. Lender has also filed agreement to purchase of the agricultural land and its subsequent cancellation agreement, which goes to prove the source of the amount invested in Shares of the company by its Director. Since the creditworthiness and source of cash withdrawn from bank is evident from the documents submitted, it is held that the ingredients of S. 68 are satisfied and this addition is deleted. With regard to capacity of Mr. Sanjeev Kumar appellant submitted that he is maintaining two bank accounts with ICICI and HDFC having account number 119601504352 and 02261050062963 respectively for last several years. He is employee with M/s. Godrej Boycee Manufacturing Company. He is drawing his income from salary. He is employee for 2012. He filed his ITR regularly. He has purchased plot of land at Lucknow in the November 2016 as mentioned in the chart. Details of income shown in his ITRs do not prove either the creditworthiness of the source of this cash invested by this lender in buying the shares of the appellant. In absence of any evidence to prove the source of cash invested by Mr. Sanjeev Kumar, his creditworthiness is held to be not proved. Hence the ingredients of ....
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.... under consideration , and sources of these cash investments could not be explained by both these investors. Further, it was submitted that both these investors do not have creditworthiness to invest Rs. 10 lacs each in cash , in the assessee company , towards share capital. The ld. Sr. DR submitted that income declared by these investors is meager which clearly suggest that they do not have creditworthiness to invest Rs. 10 lacs each in cash in the share capital of the assessee company, as detailed hereunder: Creditor's Name Gross Salary Investments for deduction u/s 80C etc. Net Salary Shri Sanjeev Kumar A.Y. 2012-13 1,60,000 ___ 1,60,000/- A.Y. 2013-14 X ___ ITR Not Filed A.Y. 2014-15 2,44,764 50,000 1,94,760/- A.Y. 2015-16 2,93,125 60,000 2,33,120/- A.Y. 2016-17 2,96,635 75,037 2,21,598/- Shri Vinod Kumar Sharma A.Y. 2016-17 2,86,000 17,500 2,68,500 The copies of ITR/details of income of both these investors were placed on record by ld. Sr. DR to evidence the contentions. Thus, prayers were made by Ld. Sr. DR to uphold the additions as were confirmed/upheld by ld. CIT(A). 7. We have ....
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....ce the amount is invested in cash by both these investors, the onus is very heavy on the assessee to prove with cogent evidences, the sources of generating cash for making investment in the share capital of the assessee company by these two subscribers as the said amount stood credited in books of accounts of the assessee ( Section 68 of the 1961 Act) , wherein in the instant case both the share holders namely Mr. Sanjeev Kumar and Mr. Vinod Kumar Sharma, have failed to explain the sources of cash invested in share capital of the assessee company during the year under consideration, in the proceedings conducted at all the three forums , namely AO, ld. CIT(A) and even before us. The ld. Sr. DR has brought on record the taxable income declared by both the subscribers which reflect that they have nominal income , which does not justify holding of cash of Rs. 10 lacs to invest in the assessee company , by both these subscribers to the share capital of the assessee company , and hence credit worthiness of both these subscribers did not stood proved. We are of the considered view that Section 68 of the Act creates a legal fiction which cast obligation on the assessee to explain to the sa....