TaxTMI 
TaxTMI 
TaxTMI 
2022 (11) TMI 191
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.... (2) That the Ld. CIT(A) having admitted that appellant submitted documents relating to identity, creditworthiness and genuineness of all the three shareholders is erred in confirming the action of Assessing Officer who considered share capital as unexplained cash credit u/s 68 of the Act. (3) That the appellant craves leave to add, alter, adduce or amend any ground or grounds on or before the date of hearing of the appeal." 3. Brief facts of the case are that the assessee is a private limited company. Nil income declared in e-return filed in the year 2012-13 on 13.12.12. Case selected for scrutiny through CASS for the reason large share premium received followed by serving notice u/s 143(2) and 142(1) of the Act. The ld. Assessing Officer observed that the assessee company was incorporated on 09.06.2011 and during F.Y 2011-12 issued its shares to primarily different private limited companies against high share premium. During the year, the assessee company received a total sum of Rs.2,77,00,000/- including share capital of Rs.3,76,000/- and share premium of Rs.2,73,24,000/-. The ld. Assessing Officer in the assessment order discussed the decision of this Tribunal in the case....
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.... capital, reserve and surplus making the alleged investment in the share capital of the assessee company. The ld. counsel for the assessee also submitted that one of the reasons for the alleged addition by the Assessing Officer was non-appearance of the director of the assessee company and shareholder company for which it is humbly submitted that failure on the part of the director to appear in person in compliance to notice u/s 131 of the Act may at the best suggest the levy of penalty for non-appearance but the same cannot disregard the documents regarding identity, creditworthiness and genuineness. In this regard, reliance was placed on the judgment of jurisdictional High Court in the case of Exoimp Resources (India) Ltd. vs. CIT (2005) 276 ITR 87 (Cal) where it has been held that the inbuilt safeguard provided in section 68 cannot be ignored by the assessing authority. The assessing authority can add the share capital as undisclosed income if no explanation is offered by the assessee. But since the details/explanations were offered, it was incumbent on the assessing authority to examine the same and arrive at a cogent conclusion. Reliance was further placed on the decision of H....
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....fast Infrastructure Pvt. Ltd. 10000 1,00,00,000/- 2 Fantastic Hirise Pvt. Ltd. 6300 63,00,000/- 3 Silverson Logistics Pvt. Ltd. 11300 1,13,00,000/- Total 27600 2,76,00,000/- 8. Further, we find that assessee filed complete details of Income Tax Return, audited balance sheet and Profit & Loss A/c and bank statement (relevant part of the three companies). As per the audited balance sheet as on 31.03.2012, it is noticed that against the share capital and share premium subscribed by these companies, they were having sufficient funds in the form of share capital, reserve & surplus and the details of the same is reproduced below: Name of share holder companies Share capital, reserves & surplus Application money Percentage (%) Everfast Infrastructure Pvt. Ltd. 38,99,18,347 1,00,00,000 2.56 Fantastic Hirise Pvt. Ltd. 52,21,58,319 63,00,000 1.21 Silverson Logistics Pvt. Ltd. 26,76,04,551 1,13,00,000 4.22 9. Further, we notice that apart from the various documents evidencing the identity, genuineness of the transaction and creditworthiness of the applicants, the assessee has also filed copy of assessment order framed in the....
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....d the sum so credited consists of share application money, share capital and share premium or any such amount by whatever name called any explanation offered by such assessee company shall be deemed to be not satisfactory unless: a) the person being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited and b) such explanation in the opinion of the Assessing Officer has been found to be satisfactory. Since the instant appeal pertains to assessment year 2012-13, and the said amendment brought in by Finance Act 2012 is effective from 01.04.2013 is not applicable on the case before us. Even otherwise it is not in dispute that the assessee has filed all the relevant documents of the share subscriber companies and further in order to prove the source of source, copies of bank statements, audited balance sheets of all the three subscriber companies are placed on records including extracts of meeting of Board of directors filed in the case of Silverson Logistics Pvt. Ltd., copy of assessment record for assessment year 2014-15 in the case of Fantastic Hirise Pvt. Ltd. and the assessment or....
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.... the relevant material details and particulars were given by the assessee to the assessing officer. In the above circumstances, the view taken by the Tribunal cannot be faulted. No substantial question of law is involved in the appeal. In the result, the appeal is dismissed in limini with no order as to costs." Hon'ble Bombay High Court in the case of CIT vs. Creative World Telefilms Ltd. (supra) wherein it was held as follows: "Wherein the matter concerns money receipts by way of share application from investors through banking channel, the assessee has to prove the existence of the person in whose name the share application is received. Once the existence of the investor is proved, it is not further the burden of the assessee to prove whether that person itself has invested the said money or some other person has made investment in the name of that person. The burden then shifts on to the department to establish that such investment has come from the assessee company itself." 11. As far as decision of Coordinate bench of Kolkata in the case of Bishakha Sales Pvt. Ltd. (supra) referred by the Assessing Officer in making the addition in our view cannot support the addition as....