TaxTMI 
TaxTMI 
TaxTMI 
2022 (9) TMI 1025
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....rcharge paid thereon, to re-open any assessment or reassessment made under the Income-tax Act or the Wealth-tax Act, 1957 (27 of 1957), or claim any set off or relief in any appeal, reference or other proceedings in relation to any such assessment or reassessment?. 2.Whether on the facts and in circumstances of the case and as per law, the ld. CIT(A) was justified in deleting the addition made by the Assessing Officer of bogus Share Application money on relying on the CBDT Circular no.29 of 2016 by ignoring the fact that the disclosure on account of fictitious liability can only be made by the assessee only? 3.Whether on the facts and in circumstances of the case and as per law, the ld. CIT(A) was justified in deleting the addition made by the Assessing Officer of bogus Share Application money on relying on ethe CBDT Circular no. 29 of 2016 and merely appreciated that the directors and its relative have filed Form of IDS, ignoring the facts that such investment has been shown by the declarant in their respective balance sheet or not?. 4. Whether on the facts and in circumstances of the case and as per law, the ld. CIT(A) was justified in deleting the addition made by the Asse....
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....notice are recorded in para-5 of the assessment order. The Assessing Officer noted that assessee has received share capital on share of Rs.10/- at a premium of Rs.490/- per share from all the investor companies and that all the fifteen companies were not having creditworthiness to finance such huge amount. 3. The assessee filed its reply on 17.03.2015. The contents of reply filed by assessee are referred in para-5.1 of the assessment order. In the reply, the assessee contended that they have already furnished the document & evidence to prove the nature of source of sum received i.e., details of share applications and share premium, share application form, certificate of the company showing the source of investment made, resolution passed by the investor company to invest the fund, bank statement of the investor company, copy of the PAN card of the respective investor-company, copy of acknowledgment of the income tax return (ITR) filed by the respective investor-company, directors report, audit report of the respective investor-company, Memorandum of Article of Association and audit report of assessee-company. By furnishing such document, the assessee has proved the identity of the....
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..... On the identity of the investors, the Assessing Officer concluded that all the companies are existing only on paper as well as orchestrated arrangement. The arrangement has been made by filing reply in dak / tapals, however on physical inquiry they were not found at the given address. Thus, the identity of investors was not proved. On the submission of assessee that share capital was received through baking channel. The Assessing Officer concluded that mere routing the transaction through banking channel is not sacrosanct and it is a just a colourable device. So the mere fact is that the investors received funds from banking channel and in turn invested in assessee-company through banking channel is of no consequence in determining the genuineness and creditworthiness. The assessing officer also held that on perusal of bank statement of investor companies, he found one characteristic invariably emerges that consistently in all the cases, same pattern of equivalent deposits was made immediately prior to the issue of cheque of investment in the share application, which proved that accounts are irrigated with need based temporary creditworthiness required the funds. From the pattern....
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....e share capital / share premium amounting to Rs.2.50 crores was made by the directors / family members through and in the name of so-called fifteen companies have accepted under IDS- 2016. The assessee also furnished copy of application form of IDS-2016 and form-3 & 4, issued by competent officer. On the basis of such submission, the assessee submitted that share capital / share premium were duly explained i.e., investment was actually made by the directors / family members out of their income / funds, which have been declared under IDS- 2016 and which has been accepted by the Department. 6. The Ld. CIT(A) after considering the submission of the assessee called for remand report from Assessing Officer, directing him to verify the share capital / share premium added under section 68 of the Act and the claim of assessee that the directors / shareholders of assessee-company made declaration under IDS-2016. The Assessing Officer furnished his remand report vide letter dated 07.02.2018. The contents of the remand report of Assessing Officer is referred to in para- 6.1.3 of the order of Ld. CIT(A), wherein the Assessing Officer reported that on verification of details, he noted that the....
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..... The declaration disclosed in the IDS-2016 was made in the following manner: Sr. No. Name of Director Family Member/Relative (Real Investor) Amount declared under IDS Scheme,2016(Rs) Declared amount invested in the form of share capital/share premium of Appellant company held in the names of following companies 1 Sarika Agrawal (Tulsyan) 50,00,000 Zigma Dealmark P Ltd. Rs.10,00,000 Plazma Tradecom P Ltd. Rs.10,00,000 Devang Commercial P Ltd. Rs.20,00,000 Target Vincom P Ltd. Rs.10,00,000 2 Nishadevi Manojkumar Tulsyan 50,00,000 Aspolight Vincom P.Ltd.Rs.20,00,000 Fastmove Vintrade P. Ltd. Rs.15,00,000 Apollo Vintrade P Ltd. Rs.15,00,000 3 Niraj Agarwal (HUF) 43,00,000 Rupa Tradecom P.Ltd. Rs.28,00,000 Santusthi Vanijya P Ltd. Rs.15,00,000 4 Chanadevi 47,00,000.00 Axiom Commodeal P Ltd. Rs.25,00,000 Adhunik Dealmark P Ltd. Rs.22,00,000 5 Manish Kumar Tulsyan (HUF) 25,00,000.00 Santusthi Mercantile P. Ltd.Rs.15,00,000 Deep Commosales P Ltd. Rs.10,00,000 6 Niraj Kumar Agarwal 35,00,000.00 Access Trade Link P. Ltd. Rs.25,00,000 Surya Deal Trade P Ltd. Rs.10,00,000 9. The ld CIT(A) further held that the aforesaid directors / family members, themselves have ....
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....lier years can be taken into account to explain the transaction of subsequent years also. On the aforesaid basis, the Ld. CIT(A) deleted the addition of Rs.2.50 crores made under section 68 of the Act. Aggrieved by the order of Ld. CIT(A) the Revenue has filed present appeal before the Tribunal. 11. We have heard the submission of Ld. Senior Departmental Representative (Ld. Sr. DR) for the revenue and Ld. Authorized Representative (AR) for the assessee and have gone through the orders of lower authorities carefully. The Ld. Sr-DR for the revenue submits that Assessing Officer made the addition under section 68 of the Act against the share premium / share capital received by assessee-company from Kolkata based companies and all the companies through which the assessee received share capital / share premium were paper based companies. The Assessing Officer after making full-fledged inquiry made the addition. The Ld. CIT(A) accepted the version of assessee that the directors / family members declared the similar income under IDS-2016. The Ld. CIT(A) has not gone through the root of the case and not verified the fact that such investments have been shown in the balance-sheet of the co....
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..... Ltd. (for short to as 'GL') as undisclosed cash received of assessee, since the said amount was disclosed by GL under Income Declaration Scheme-2016 and the same was accepted by the Department, pursuant to which GL has paid penalty, assessing same amount in the hands of assessee would amount to "double taxation". The ld. AR for the assessee submits that it is settled position in law that same income cannot be taxed twice. The ld. AR for the assessee further submits that similar additions were made in case other assessee including Peninsula Builders Pvt. Ltd. [PAN No. AACCP 6860G], Shree Laxmi Fashions Private Limited [PAN No. AAGCS3719R] and in Prime Embroideries Private Limited [PAN No. AAFCP 5361D], on account of share application from Kolkata based entities by the Assessing Officer. Those directors in the said investor company made declaration in the IDS-2016 and paid required tax due and penalty. The addition in the assessment order was deleted by Ld. CIT(A) in order dated 09.06.2017, 23.05.2017 and 09.06.2017 respectively and no further appeal is filed by Department in the said cases. The ld. AR for the assessee submits that if the Revenue has not challenged the similar addi....
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....rthy and genuineness of transaction is not proved by the assessee. The assessing officer also held that mere transfer of share premium through banking channel is not sufficient to prove the transaction as genuine. We find that before ld CIT(A) the assessee took plea that the directors of the assessee-company and /or their relatives filed application under IDS-2016, wherein they have admitted that the investment by way of share premium is made by them through Calcutta based entity, and that it was their unaccounted income. The IDS-2016 applications of all the family members of the directors were accepted by the Principal Commissioner-1 & 2, Surat and that they have paid the due tax and the amount of penalty demanded/ calculated by the department. The ld. CIT(A) deleted the addition by taking view that the investment and complete nexus of undisclosed income made through fifteen companies by the director's / family members vis-à-vis fifteen companies are totally established. The declaration of IDS-2016 made by directors / family members cover the entire addition made by the Assessing Officer and the nexus of unaccounted income declared by promoters / directors in respect of sou....
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....ssessing officer while filing appeal has not raised dispute or grounds of appeal that due tax, cess or penalty on the declared income is not paid by all such directors / family-members of directors of the assessee-company. 19. We find that Hon'ble jurisdictional High Court in the case of M.R. Shah Logistic (P) Ltd. (supra) on almost similar set of facts and on similar question of law allowed the appeal of that assessee by holding that where Assessing Officer held share application money received by assessee-firm from (GL) as undisclosed by the said (GL) under IDS-2016, which was accepted by the Department, pursuant to which that assessee had paid penalty, assessing the same amount in the hands of assessee would amount to "double taxation" and deleted the entire addition. The relevant finding of the decision of Hon'ble High Court is extracted below; "11. We have also perused the scheme. Section 183 of the Finance Act, 2016 ("the Act of 2016" for short) pertains to declaration of undisclosed income. Sub-section(1) of section 183 envisages declaration to be made by any person within specified time, of any income chargeable to tax for which he had failed to furnish return or he ....
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.... mind and certain immunities. 13. In the present case, same amount which the Assessing Officer wishes to tax in the hands of the petitioner company by resorting to reopening of assessment was declared by Garg Logistics Pvt. Ltd. under such declaration. Declaration was accepted by the competent authority pursuant to which Garg Logistics Pvt. Ltd. in three instalments also deposited the entire amount of tax with surcharge and penalty. Any attempt on part of the Assessing Officer to assess the same income in the hands of assessee would amount to charging the same income twice. 14. This Court in case of B. Nanji Enterprise Ltd. v. Dy. CIT [2017] 84 taxmann.com 155/249 Taxman 599 (Gujarat) noticed that cash was seized from the bank lockers of assessee company during search action. The Assessing Officer added such sum by way of undisclosed cash receipt of the assessee. Director of the company had filed settlement application owning up such amount as his undisclosed income and paid tax on such income. The Court held that the department should not levy tax from the company again. 15. In case of Pr. CIT v. Kanubhai Maganlal Patel [2017] 79 taxmann.com 257 (Gujarat), the Court noticed ....