TaxTMI 
TaxTMI 
2023 (2) TMI 698
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....ly appreciating and dealing with the submissions and contentions of the Appellant made during the appellate proceedings and reproduced in his order. 2. The Appellant prays that the order passed mechanically without application of mind be quashed/ set aside. GROUND 3: AGAINST ADDITION U/S 68 1. The learned CIT(A) erred in confirming the addition on account of unexplained share application money under Section 68 of the Act amounting to Rs.24,14,75,000. 2. He failed to appreciate and ought to have held that the same has already been taxed in the hands of Keti Constructions Limited and also in hands of its SPV companies. 3. Accordingly, the Appellant prays that the said addition be deleted. GROUND 4: AGAINST ADDITION U/S 69 1. The learned CIT(A) erred in confirming the addition on account of unexplained investment on account of alleged commission paid amounting to Rs.70,00,000. 2. The Appellant prays that the said addition be deleted. The Appellant craves leave to add to, alter and / or amend the above grounds of appeal. 3. The ld. Counsel of the assessee submitted that the assessee does not want to pre....
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....operly explained and discernible from the audited accounts of the said associate company, therefore, no addition is called for in the hands of the assessee u/s 68 of the Act. Further, drawing our attention to pages 26-50 of the assessee's paper book, the ld. Counsel submitted that the AO has not made any addition in the hands of the four companies in which M/s Keti Construction Ltd. made investment in the form of equity shares application money, therefore, no addition can be made in the hands of the assessee as the further use or investment is properly explained by way of documentary evidence from assessee to M/s Keti Construction Ltd. and M/s Keti Constructions Ltd. to the said four companies. The ld. Counsel further explained that the assessee was a special purpose vehicle (SPV) to procure funds in the form of investments as share application money and, after receiving share application money from 40 entities as listed at page 25 of the assessee's paper book, almost the entire amount was re-invested with M/s Keti Construction Ltd. and, furthermore, M/s Keti Construction Ltd. again invested the same to its four associate companies, therefore, the transaction of share application m....
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.... the case of PCIT vs. Vijay Conductors India Pvt. Ltd. and other appeals, order dated 29.09.2015, the ld. Counsel submitted that when it is not in dispute that the assessee is the conduit entity and not the beneficiary then the order of ITAT deleting the addition u/s 68 in their hands does not suffer from any legal infirmity. The ld. Counsel has also drawn our attention to the order of ITAT, Delhi in the case of AGM Holdings Limited vs. DCIT (supra). 9. On careful consideration of rival submissions, we note that the sole ground of the assessee, challenging the addition on account of unexplained share application money u/s 68 of the Act amounting to Rs.24,14,75,000/- is that the assessee is a conduit company and it received the said amount as share application money from 40 entities as listed at page 15 of the assessee's paper book and invested the same in the same form of share application money to M/s Keti Construction Ltd. In ground No.3.2, the assessee has also contended that the ld.CIT(A) has failed to appreciate and ought to have held that the impugned amount has already been taxed in the hands of Keti Construction Ltd. and also in the case of SPV companies. It was also con....
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.... neither before the authorities below nor before this Bench has furnished details and particulars showing the identity of 40 investor companies, their capacity and credit worthiness and genuineness of the transaction as listed at page 15 of the assessee's paper book. From the said list, we note that the assessee has submitted names of four parties, their addresses, PANs and respective amounts, but, has not furnished any documentary evidence in support of their capacity and credit worthiness to make investment and genuineness of the transaction to escape from the rigors of section 68 of the Act. The main contention of the assessee is that the assessee is a conduit company which received amount from 40 share applicants/investors and further invested the same to its associate/main group company M/s Keti Construction Ltd. and M/s Keti Construction Ltd. further invested the same in four group companies. Therefore, the addition has been made in the hands of Keti Construction Ltd., which is the ultimate beneficiary and which is sufficient and no addition is called for in the hands of the present assessee. 14. We may point out that for establishing a factum of conduit company the assess....