2023 (3) TMI 258

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....y produced the books of account, audited annual accounts and other relevant information as called for which were examined and verified by the AO during the course of the assessment proceedings. The AO observed that during the year the assessee has raised 3,30,00,000/- by way of share capital and share premium. Accordingly AO issued notice to the assessee to furnish the details/evidences qua the said share subscribers. The AO also issued summons u/s 131 of the Act to the directors of the assessee company as well as the directors of the share subscribing companies. The assessee filed all the details as called for by the AO comprising names& addresses along with PANs of share subscribers, Form 20 and Form 2 filed with the ROC, copies of bank statement, ITR and annual report of the assessee besides filing the evidences in respect of share subscribers. The assessee also filed PAN nos., bank statements, board resolutions, copies of incorporation certificate, annual audited accounts, confirmations , share allotment confirmation certificates etc., in respect of all the share subscribers. However the directors of the assessee company did not appear before the AO nor did the share subscriber....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....tarland Vinimay pvt. Ltd. vs. ITO, in ITA No. 574/Kol/2020 dated 24.01.2023, decision of Hon'ble Calcutta High Court in the case of Crystal Networks Pvt. Ltd. vs. CIT 353 ITR 171 (Cal ) and the decision of the coordinate bench by ITO Vs M/s Cygnus Developers India Pvt. Ltd. (ITA No. 282/Kol/2012). The Ld. A.R. also referred to various other decisions to support his arguments that no addition can be made u/s 68 of the Act where identity and creditworthiness of the investors and genuineness of the transactions are established. In defense of his arguments the ld. Counsel for the assessee relied on the following decisions: i) PCIT vs. Ami Industries (India) Pvt. Ltd. in ITA 1231 of 2017 (Bom-HC) ii) CIT vs. Gangadeep Infrastructure Pvt. Ltd. in ITA 1613 of 2014 (Bom-HC) iii) CIT vs. Orchid Industries Pvt. Ltd. in 397 ITR 136 (Bom-HC) iv) Pr. CIT vs. Apeak Infotech in 397 ITR 148 (Bom-HC) v) Pr. CIT vs. Laxman Industrial Resources Ltd. in 397 ITR 106 (Del-HC) vi) CIT vs. Expo Globe India Ltd. in 361 ITR 147 (Del-HC) vii) CIT vs. Lovely Exports Ltd., in 216 ITR 195 (SC) viii) CIT vs. Steller Investment Ltd. in 251 IT....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....the assessee has filed all the necessary documents before the authorities below proving the identities , creditworthiness of the investors and genuineness of the transactions. The case of the assessee is squarely covered by the decisions of Hon'ble Calcutta High Court in the case of Crystal Networks Pvt. Ltd. vs. CIT 353 ITR 171 (Cal ) wherein it has held that where all the evidences were filed by the assessee proving the identity and creditworthiness of the loan transactions , the fact that summon issued were returned un-served or no body complied with them is of little significance to prove the genuineness of the transactions and identity and creditworthiness of the creditors. The relevant portion of the decision is extracted below: "We find considerable force of the submissions of the learned Counsel for the appellant that the Tribunal has merely noticed that since the summons issued before assessment returned unserved and no one came forward to prove. Therefore it shall be assumed that the assessee failed to prove the existence of the creditors or for that matter creditworthiness. As rightly pointed out by the learned counsel that the Ld. CIT(A) has taken the trouble o....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... CIT(A). The appeal is allowed." The case of is also covered by the decision of the coordinate bench by ITO Vs M/s Cygnus Developers India Pvt. Ltd. (ITA No. 282/Kol/2012) the operative part whereof is extracted below: "8. We have heard the submissions of the learned D.R, who relied on the order of AO. The learned counsel for the assessee relied on the order of Ld. CIT(A) and further drew our attention to the decision of Hon'ble Allahabad High Court in the case of CIT vs. Raj Kumar Agarwal vide ITA No. 179/2008 dated 17.11.2009 wherein the Hon'ble Allahabad High Court took a view that non-production of the director of a Public Limited Company which is regularly assessed to Income tax having PAN, on the ground that the identity of the investor is not proved cannot be sustained. Attention was also to the similar ruling of the ITAT Kolkata bench in the case of ITO vs. Devinder Singh Shant in ITA No. 208/Kol/2009 vide order dated 17.04.2009. 9. We have considered the rival submissions. We are of the view that order of Ld. CIT(A) does not call for any interference. It may be seen from the grounds of appeal raised by the revenue that the revenue disputed only the pr....