TaxTMI 
TaxTMI 
2023 (7) TMI 1077
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....utinizing the return of income, the Assessing Officer noticed that the assessee has received share premium as under: Sl. No. Name of the share applicant No. of shares Face Value per Premium Per share Total value of shares 1 Confiance Trading Pvt. Ltd. 59523 10 410 2,49,99,660 2 Monarch Infraprojects Pvt. Ltd. 59523 10 410 2,49,99,660 3 Khandelwal SRK Estate Pvt.Ltd. 19047 10 410 79,99,740 Total 1,38,093 5,79,99,060 5. After collecting the addresses of the share applicant companies, the Assessing Officer issued notices u/s 133(6) of the Act. Share applicants were asked to submit the following documents in support of the transactions: (a) Copy of the ledger amount of the assessee maintained by the share applicants. (b) Confirmation for any receipt/payment made to the assessee (c) Copies of letter/correspondence/communication made with the assessee (d) Copy of contract/agreement forming the basis for such deal (e) Whether any advertisement in any media was given by the assessee regarding issue of such shares at premium (f) How wa....
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....s immediately followed by transfer of same amount of fund to another set of companies. According to the Assessing Officer, bank accounts are merely a conduit to give entries to different companies. 11. The Assessing Officer was convinced that the share applicants failed to establish the credit worthiness and completed the assessment proceedings by making an addition of Rs. 5,79,99,060/- u/s 68 of the Act. 12. The assessee carried the matter before the ld. CIT(A) and reiterated its claim of genuineness of the transactions and supplied supporting documents once again. 13. After considering the facts and submissions and documentary evidences and after referring to various judicial decisions, the ld. CIT(A) was satisfied that the balance sheet of the share applicant companies revealed that they had sufficient source of funds to invest in the company and referred to the following chart: Sl.No. Name of the Share Applicant Share Capital as per Balance Sheet (Rs.) Reserves as per Balance sheet (Rs.) Total Investment (Rs.) Investment in the appellant company (Rs.) 1. M/s. Confiance 14,88,880/- 4,86,10,800/- 9,35,59,500/- 2,49,99,660/- 2. M/....
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....igh Court of Delhi in the case of CIT Vs. Kamadhenu Steel and Alloys Ltd 361 ITR 220 and same read as under: "6. What kind of proof is to be furnished by the assessee, is the question. It has come up for discussion in various judgments rendered by this Court, other Courts as well as the Supreme Court. The law was discussed by a Division Bench of this Court in the case of Commissioner of Income Tax Vs. Divine Leasing and Finance Ltd. [299 ITR 268]. Since the entire gamut of case law as on that date was visited in the said judgment, we may initiate our discussion by taking note of this case. In this case, the Court highlighted the menace of conversion of unaccounted money through the masquerade or such channels of investment in the share capital of a company and thus stressed upon the duty of the Revenue to firmly curb the same. It was also observed that, in the process, the innocent assessee should not be unnecessary harassed. A delicate balance must be maintained. It was, thus, stressed: "15. There cannot be two opinions on the aspect that the pernicious practice of conversion of unaccounted money through the masquerade or channel of investment in the share capita....
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....e Supreme Court in the case of Commissioner of Income Tax Vs. P. Mohanakala [(2007) 291 ITR 278 (SC)]. In that case, the assessee had received foreign gifts from one common donor. The payments were made to them by instruments issued by foreign banks and credited to the respective accounts of the assessees by negotiations through bank in India. The evidence indicated that the donor was to receive suitable compensation from the assessees. The AO held that the gifts though apparent were not real and accordingly treated all those amounts which were credited in the books of account of the assessee, as their income applying Section 68 of the Act. The assessee did not contend that even if their explanation was not satisfactory the amounts were not of the nature of income. The CIT (A) confirmed the assessment. On further appeal, there was a difference of opinion between the two Members of the Appellate Tribunal and the matter was referred to the Vice President who concurred with the findings and conclusions of the AO and the CIT (A). On appeal, the High Court reappreciated the evidence and substituted its own findings and came to the conclusion that the reasons assigned by the Tribunal wer....