2023 (7) TMI 1048

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....dated 12th October, 2020: "1. Whether, in the facts of the case, the impugned Order of the Tribunal is perverse in ignoring the relevant material evidence brought out in the Assessment Order and the Order of Commissioner (Appeals) to the effect that the investor companies have opened the bank accounts in particular bank for a brief period to carry out the transactions? 2. Whether, in the facts of the case, the ITAT is correct in holding that these investors are having creditworthiness even though their total income for these years is very meagre and no evidence is available to prove their capacity to make the said investment thereby leading to perversity? 3. Whether, under the facts and circumstances of the case, ....

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.... replies. On consideration of the said replies, the AO recorded his finding at paragraph 3.7 of the order and held that the share application money had remained unexplained. Accordingly, he added back the aforementioned sum in the hands of the assessee. On appeal by the assessee, the CIT(A) [Commissioner of Income Tax (Appeals)] enhanced the liability by Rs. 35,21,000/-. On further appeal, the Income Tax Appellate Tribunal has allowed assessee's appeal and deleted the additions made by the AO and the CIT(A). Feeling aggrieved, Revenue is before this Court. 4. Shri E.I. Sanmathi, for the Revenue urged following grounds: • The ITAT [Income Tax Appellate Tribunal, 'A' Bench, Bangalore] has deleted the additions without ....

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....r, submitted that the Directors of the said Company and the Directors of the Assessee are one and the same. In substance, Shri Shankar's argument is that in obedience to AO's directions, all nineteen Companies have submitted their papers before ADIT. The Revenue had all the material before it to call for further information, if any, required and to take action against the investors and in case of the nineteenth Investor, the Department has taken action and added income in the hands of that company. 8. Placing reliance on the judgment in Commissioner of Income Tax v. Gagandeep Infrastructure Private Limited (Bom) [2017 394 ITR 680 (BOM),] the contended that the Bombay High Court has placed reliance on Commissioner Income Tax v. Lovely....

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....with audited balance sheets, audited reports, etc., were also part of the records. After doing such exercise in respect of nineteen companies, only with regard the nineteenth Company (M/s. Matajawala Investment and Infrastructure Private Limited) the ITAT has noted that the Directors of that Company were the Directors of the Assessee Company and the additions were made in the assessment of M/s. Matajwala Investment and Infrastructure Private Limited as the said Company did not have any income for Assessment Year 2011-2012 and 2012-2013. It is further noticed that once addition is made in the hands of the investor Company, addition cannot be again made in the hands of the investee Company. 11. The undisputed facts narrated hereinabove cle....