AI Drafter 
TaxTMI 
TaxTMI 
2019 (4) TMI 2090
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....sioner of Income Tax (Appeal) erred in admitting additional evidence under Rule 46A. 4. (a)The order of the CIT(A) is erroneous and not tenable in law and on facts. (b)The appellant craves leave to add, alter or amend any/all the grounds of appeal before or during the course of the hearing of the appeal. 2. Briefly stated facts of the case are that consequent to search and seizure operation under section 132 of the Income-tax Act, 1961 (in short 'the Act') carried out at the premises of the assessee company on 30/06/2009, notice under section 153A of the Act was issued on 13/04/2010. In response the assessee submitted that return of income filed originally as per the provisions of section 139 of the Act for the year under consideration, might be treated as return filed in response to notice under section 153A of the Act. Subsequently, statutory notices were issued and assessment proceedings were commenced. The Assessing Officer observed receipt of share application money of Rs.2,65,00,000/- from nine (9) private limited companies other than the promoter's/ directors of the company. In the assessment completed under section 143(3) read with section 153A of the Act, the A....
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....t case, the assessee invited share applications from nine private limited companies. The share applicant companies invested/paid Rs.100 per share which included share premium of Rs.90 for each share. The list of share applicant companies along with their address and the amount invested is reproduced as under: SI. No. Name of the applicants Address Amount 1. Chintapumi Builders Pvt. Ltd. 103,Ph complex, 65A, Vijay Block, Laxmi Nagar, Delhi-92 40,00,000 2. Dhanvridhi Financial Services Ltd 301, Himalaya Palace, 65 A, Vijay Block, Nr. Child Junction L Nagar, Delhi-92 25,00,000 3. Indo Dynamic Freight Pvt. Ltd. 301, Himalaya Palace, 65 A, Vijay Block, Nr. Child Junction L Nagar, Delhi-92 25,00,000 4. Kela Devi Bulders Pvt Ltd. 103,Ph complex, 65A, Vijay Block, Laxmi Nagar, Delhi-92 40,00,000 5. Kay Buildwell Pvt. Ltd. 102,Ph complex, 65A, Vijay Block, Laxmi Nagar, Delhi-92 50,00,000 6. Sevbro Domestic Appliance Pt. Ltd. 59, Emco complex, Vijay Block, L Nagar, Delhi-92 40,00,000 7. IndLon Hosiery Pvt Ltd B-l 14, Shakarpur, Delhi 15,00,000 8. Multitech Semiconductor Pvt. Ltd. S No- 1,....
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....lock. Near Archies Gallery Laxmi Naqar. Delhi-92 were received by registered post. Immediately on receipt of the confirmatory letters the inspector of this circle was deputed to confirm about the existence of these companies at the address from where these confirmations were received. M/s. Dhanvridhi Finance Services Ltd. M/s. Indo Dynamic Fright (P) Ltd. & M/s. Oracle tables (P) Ltd. companies as per records put forth by the assessee in his submissions and from the confirmations received by post exist at 301, Himalaya Place, 65 Vijay Block, Near Archies Gallery Laxmi Nagar, Delhi- 92,whereas the company M/s. Multitech Semiconductor (P) Ltd. & M/s. Londlon Hosiery (P) Ltd. is situated at B-114. Post office Gali. Shakarpur. Delhi-92. The inspector in his report placed on record has submitted that no such company exists at 301, Himalaya Place, 65 Vijay BlocTeTNear Archies Gallery Laxmi Nagar, Delhi-92 as the premises are occupied by M/s. M S Jain & Associates who are dealing in finance & housing loans and on making further enquiry he was apprised that M/s. Jain & Associates were in no way connected with the above companies and The persons there had heard the name of these companies f....
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....the impugned order, deleted the addition made by the Assessing Officer. 10. We find that the Hon'ble Supreme Court in the case of NRA Iron and Steel Private Limited (supra) has laid down following principles in relation to verification of share capital/premium under section 68 of the Act: 11. The principles which emerge where sums of money are credited as Share Capital/Premium are: i. The assessee is under a legal obligation to prove the genuineness of the transaction, the identity of the creditors, and credit-worthiness of the investors who should have the financial capacity to make the investment in question, to the satisfaction of the AO, so as to discharge the primary onus. ii. The Assessing Officer is duty bound to investigate the creditworthiness of the creditor/ subscriber, verify the identity of the subscribers, and ascertain whether the transaction is genuine, or these are bogus entries of name-lenders. iii. If the enquiries and investigations reveal that the identity of the creditors to be dubious or doubtful, or lack creditworthiness, then the genuineness of the transaction would not be established. In such a case, the assessee w....
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....more, none of the so-called investor companies established the source of funds from which the high share premium was invested. v. The mere mention of the income tax file number of an investor was not sufficient to discharge the onus under Section 68 of the Act. 13. The lower appellate authorities appear to have ignored the detailed findings of the AO from the field enquiry and investigations carried out by his office. The authorities below have erroneously held that merely because the Respondent Company - Assessee had filed all the primary evidence, the onus on the Assessee stood discharged. The lower appellate authorities failed to appreciate that the investor companies which had filed income tax returns with a meagre or nil income had to explain how they had invested such huge sums of money in the Assessee Company - Respondent. Clearly the onus to establish the credit worthiness of the investor companies was not discharged. The entire transaction seemed bogus, and lacked credibility. The Court/Authorities below did not even advert to the field enquiry conducted by the AO which revealed that in several cases the investor companies were found to ....