TaxTMI 
TaxTMI 
2023 (1) TMI 954
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....luding the premium amounting to Rs. 1,40,00,000/- as unexplained cash credit as provided in Section 68 of Income Tax Act, 1961. 2. That the appellant craves leave to add, alter, adduce or amend and ground or grounds on or before the date on hearing of the appeal." 3. Brief facts of the case as culled out from the records are that the assessee is a private limited company engaged in the business. Income of Rs. 1,79,701/- declared in the e-return filed for AY 2012-13 on 22.09.2012. Case selected for scrutiny through CASS followed by serving of notices u/s 143(2) & 142(1) of the Act. During the course of assessment proceedings ld. AO noticed that during the year the assessee has issued share capital of Rs. 5,60,000/- and also received share premium of Rs. 1,34,40,000/-. The assessee was asked to explain the source of alleged sum. Complete details were filed by the assessee. Thereafter, ld. AO issued summons to the Directors u/s 131 of the Act to which the Directors duly complied and filed their replies in the office of ld. AO. Ld. AO was still not satisfied and without pointing out any defect in the details filed by the assessee only stressed upon the personal appearance o....
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.... out u/s 143(3) of the Act wherein complete details were filed and proper enquiries were conducted. Therefore, the decision of this Tribunal in the case of Bisakha Sales Pvt. Ltd. (supra) is not applicable. 6. Reliance was, however, placed on the judgment of Hon'ble Supreme Court of India in the case of CIT vs. Orissa Corporation Pvt. Ltd. (1986) 159 ITR 0078 (SC) in support of the contention that before discrediting the documents filed by the share applicant companies, the Department ought to have exercised its plenary powers and conduct independent enquiries with these share applicant companies and collect material evidences against the assessee and such outright rejection of the evidences by the Revenue is totally contrary to the law. Reliance was also placed on the judgment of Hon'ble Gujarat High Court in the case of Dy. CIT vs. Rohini Builders [2002] 256 ITR 360 wherein Hon'ble Court held that merely because the summons issued to some of the creditors could not be served or they failed to attend before ld. AO, cannot be a ground to treat the loans taken by the assessee from these creditors as non-genuine. 7. Reliance was further placed on the following decis....
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....e company, vii. Audited accounts for the year, viii. Relevant Bank Statement for the year, ix. Form 18 in support of registered office address of these companies. 11. Thereafter, summons were issued to the Directors of the share subscriber companies as well as the Directors of the assessee company which were duly served upon the respective persons and the details as called for were filed which included the following: i. Photo Identity and Address Proof, ii. Narration of all debit and credit entries in relevant Bank statements, iii. Copies of all relevant ROC returns, iv. Sources of funds and utilisation of funds, v. Evidence of creditworthiness along with Income Tax Returns filed and vi. Copies of Audited Accounts and Tax Audit Report for the relevant AY. 12. We further, notice that ld. AO has not pointed out any defect and not questioned the correctness of any of the documents filed by the assessee company, share subscriber companies as well as the Directors. The only ground for making the addition is that the Directors of the assessee company as well as the investor companies have not appeared ....
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....mmons issued to some of the creditors could not be served or they failed to attend before the Assessing Officer, cannot be a ground to treat the loans taken by the assessee from those creditors as non-genuine in view of the principles laid down by the Supreme Court in the case of Orissa Corporation (1986) 159 ITR 78. In the said decision the Supreme Court has observed that when the assessee furnishes names and addresses of the alleged creditors and the GIR numbers, the burden shifts to the Department to establish the Revenue's case and in order to sustain the addition the Revenue has to pursue the enquiry and to establish the lack of creditworthiness and mere non- compliance of summons issued by the Assessing Officer under section 131, by the alleged creditors will not be sufficient to draw and adverse inference against the assessee. in the case of six creditors who appeared before the Assessing Officer and whose statements were recorded by the Assessing Officer, they have admitted having advanced loans to the assessee by account payee cheques and in case the Assessing Officer was not satisfied with the cash amount deposited by those creditors in their bank accounts, the proper....
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....d on 29-05-2020 where the Hon'ble jurisdictional ITAT held that: "30. To sum up section 68 of the Act provides that if any sum found credited in the year in respect of which the assessee fails to explain the nature and source, it shall be assessed as its undisclosed income. In the facts of the present case, both the nature & source of the share application received was fully explained by the assessee. The assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants. the PAN details, bank account statements, audited financial statements and Income Tax acknowledgments were placed on AO's record, including that of the directors and share holders of share subscribing entities as discussed supra. Accordingly all the three conditions as required u/s. 68 of the Act i.e. the identity, creditworthiness and genuineness of the transaction was placed before the AO and the onus shifted to AO to disprove the materials placed before him. Without doing so, the addition made by the AO and confirmed by Ld. CIT(A) are based on conjectures and surmises, so their impugned action cannot be justified. In the facts and circumstances of the c....
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....d for giving share application money. Even otherwise ld. AO has not made the addition for charging of higher share premium and has made the addition of unexplained cash credit but still charging of share premium is a commercial decision and the same can be challenged only with sufficient documentary evidence. It thus brings to a conclusion that since the assessee filed complete details of identity and creditworthiness of the share subscribers and genuineness of the transaction before ld. AO, the onus shifted to ld. AO to disprove the material placed before him and without doing so the additions made by ld. AO are based on conjectures and surmises and the impugned additions cannot be justified and therefore, the impugned action of ld. AO cannot be held to be justified. 19. Our view is further supported by following judicial pronouncements: "i) CIT vs. Gagandeep Infrastructure (P) Ltd. 80 taxmann.com 272 (Bombay) wherein it was held by High Court that the proviso to section 68 of the Act has been introduced by the Finance Act 2012 with effect from 1st April, 2013. Thus it would be effective only from the Assessment Year 2013-14 onwards and not for the subject Assessment Y....