TaxTMI 
TaxTMI 
TaxTMI 
2019 (2) TMI 2072
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....pliance from the assessee. At page 2 of the assessment order he held that the identity, genuineness and the creditworthiness of the share applicant companies have not been established and the reasons for investment in this company that has no track record and that too with huge premium is not clarified. He relied on the preponderance of probabilities and made the addition. 2.1. On appeal, the ld. First Appellate Authority deleted the addition by holding that:- a) The assessee has responded to the notice of the Assessing Officer and filed documents giving full details of each of the 16 share applicant companies who had subscribed to the share capital as well as share premium money raised by the assessee. b) The addition was made just because the assessee could not ensure the physical attendance of the directors of the share applicant companies. He held that the assessee had no power to compel the directors of the share applicant companies to appear before the Assessing Officer. c) The share capital reserves and surplus of each of the share applicant companies is far higher than the miniscule investment made by them in the assessee company. As a percentage of the share capital....
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....set base. 7.1. We now consider the documentation placed on record by share applicant companies. The ld. CIT(A) at page 11 & 12 of his order has given the following chart reflecting that the share capital & reserves appearing in the balance sheet of respective share holders. This works to negligible percentage:- Name of Share holder Companies Share Capital, Reserves & Surplus Application Money Percentage (%) Jai Tara Rice Mills Pvt. Ltd. 1,01,19,325 20,00,000 0.20 Utsav Distributors Pvt. Ltd. 2,51,09,804 5,00,000 0.02 Linkup Wintrade Pvt Ltd 31,91,03,635 12,00,000 0.01 Turtle Commercial Pvt. Ltd. 12,81,63,994 10,00,000 0.01 Sanskar Commodeal Pvt Ltd 43,51,10,402 25,00,000 0.01 Carwin T racom Pvt Ltd 6,39,35,337 15,00,000 0.02 Rose Commodities Pvt Ltd 5,91,80,109 15,00,000 0.03 Vatsalya Steels Pvt Ltd 4,12,02,466 5,00,00 0.01 Bhagwat Kripa Trading Pvt Ltd 12,63,04,443 6,00,000 0.01 Pushpanjali Carriers Pvt Ltd 31,43,95,270 17,00,000 0.01 Khushboo Complex Pvt. Ltd. 96,60,85,930 20,00,000 0.01 Top Class Logistics Pvt.Ltd. 12,31,03,460 5,00,000 0.01 Esquire Enclave Pvt. Ltd. 1,00,03,07,030 7,00,000 0.01 Rootstar Merchandise Pvt. ....
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....ed or the explanation offered by the assessee is not. in the opinion of the Assessing Officer, satisfactory, the sum credited may be charged to income-tax as income of the assessee of that previous year. It is observed that the addition was made with the predetermined mindset that share application monies received by the appellant is not genuine as identity and creditworthiness of the shareholders were bogus in nature as they did not exist and the transactions were an eyewash only for bringing its black money into circulation without paying any tax to the revenue. Each of the share subscribers are regularly assessed to income tax; and the investments made by each of them are duly and fully reflected in their audited books of accounts as well as their income tax return. The appellant had duly filed its return of total income u/s 139(1) of the Act in respect of the AY 2012-13. In the course of assessment proceedings, the appellant in response to the requisitions made by the AO, from time to time, produced its audited books of accounts, filed copies of its audited annual accounts including various details and other documents as desired by the.AO. The details and documents so produced ....
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....plus Application Money Percentage (%) Jai Tara Rice Mills Pvt. Ltd. 1,01,19,325 20,00,000 0.20 Utsav Distributors Pvt. Ltd. 2,51,09,804 5,00,000 0.02 Linkup Wintrade Pvt Ltd 31,91,03,635 12,00,000 0.01 Turtle Commercial Pvt. Ltd. 12,81,63,994 10,00,000 0.01 Sanskar Commodeal Pvt Ltd 43,51,10,402 25,00,000 0.01 Carwin T racom Pvt Ltd 6,39,35,337 15,00,000 0.02 Rose Commodities Pvt Ltd 5,91,80,109 15,00,000 0.03 Vatsalya Steels Pvt Ltd 4,12,02,466 5,00,00 0.01 Bhagwat Kripa Trading Pvt Ltd 12,63,04,443 6,00,000 0.01 Pushpanjali Carriers Pvt Ltd 31,43,95,270 17,00,000 0.01 Khushboo Complex Pvt. Ltd. 96,60,85,930 20,00,000 0.01 Top Class Logistics Pvt.Ltd. 12,31,03,460 5,00,000 0.01 Esquire Enclave Pvt. Ltd. 1,00,03,07,030 7,00,000 0.01 Rootstar Merchandise Pvt. Ltd. 40,36,11,376 14,00,000 0.01 Sampark Advisory Services Pvt. Ltd. 50,61,95,580 5,00,000 0.01 Truthful Suppliers Pvt. Ltd. 18,31,02,852 5,00,000 0.01 It is accordingly observed that it adequately prove their creditworthiness to make investment in the share capital of the appellant. The aforesaid facts underlined by evidences clearly prove the ....
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....cision of jurisdictional High Court in the case of CIT vs. Sagun Commercial (P) Ltd. (ITA No. 54 of 2001 dated 17.02.2011) wherein it was held as under: "After hearing the learned advocate for the appellant and after going through the materials on record, we are at one with the Tribunal below as well as the Commissioner of Income-tax (Appeals) that the approach of the Assessing Officer cannot be supported. Merely because those applicants were not placed before the Assessing Officer, such fact could not justify disbelief of the explanation offered by the assessee when details of Permanent Account Nos. payment details of shareholding and other bank transactions relating to those payments were placed before the Assessing Officer. It appears that the Tribunal below has recorded specifically that the Assessing Officer totally failed to consider those documentary evidence produced by the assessee in arriving at such conclusion. We, therefore, find no reason to interfere with the decision passed by the Commissioner of Income-tax (Appeals) and the Tribunal below and answer the questions formulated by the Division Bench in the affirmative and against the Revenue. The appeal is dismiss....
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....essee company inviting share application and no Registrar was engaged for such raising of share capital. Being dissatisfied the assessee preferred an appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals), however, set aside the said order of assessment and came to the conclusion that all the share applicant /companies were assessed to the tax and their PAN and acknowledgement of I. T. Returns along with their audited balance sheets, bank statements showing transactions etc. were made available to the Assessing Officer. It was pointed out that there was no legal bar of more than one company being registered at the same address and, thus, according to the Commissioner of Income-tax (Appeals), the doubt raised by the Assessing Officer about all those companies at the same address did not hold good. Being dissatisfied, the Revenue preferred an appeal before the Tribunal below and by the order impugned herein, the said Tribunal has affirmed the order passed by the Commissioner of Income-tax (Appeals). After hearing Mr. Nizamuddin, learned advocate appearing on behalf of the appellant and after going through the aforesaid materials, we ....