TaxTMI 
TaxTMI 
TaxTMI 
2023 (7) TMI 1203
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....tal of Rs. 17,00,000/- and Share Premium of Rs. 90/- share amounting to Rs. 1,53,00,000/- during the Financial Year 2009-10. The assessee was asked to furnish the details of the Investors. The assessee furnished the details of the five investors as follows: Sr. No. Name and Address of the share holder & address PAN No. of share Total value of Share Application & Premium 1 Enkay Trafin Pvt. Ltd. 16, N S Road, Kotkata-700001 AAACE5682P 10000 10,00,000 2 Balram Vinimay Pvt. Ltd.23/1, Chhatawala gully, Kolkata-7000012 AACCB7057R 100000 1,00,00,000 3 Subhlabh Fiscal Services Pvt. Ltd., 16, N S Road, 2nd Floor, Kolkata AADCS8846A 25000 25,00,000 4 Compact Advertising & Credit Pvt. Ltd., 32/C/l, MLB Road, Howrah-711201 AABCC8465H 15000 15,00,000 5 J P Engineering Corporation Pvt. Ltd., AE-326, Salt Lake City, Ground Floor, Kolkata- 70064. AABCJ2340L 20000 20,00,000 Total 170000 1,70,00,000 2.1. On verification of the same, the A.O. found that the Return of Income filed by the investors as under: Sr. No. Name of the share holder Return of Income Reserve and Surplus 1 Balram Vinimay Pvt. Ltd. 1038 1323....
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....fact of depositing share application money with the appellant, the shares of the appellant company to these companies had also been issued during this financial year. The appellant has also submitted the copies of audited accounts and bank statements of these companies before the AO. Thus, once the share applicants were found to be existing companies and they also confirm the fact of making the share application and their audited accounts and bank statement were also submitted before the AO and DDIT Investigation 1(2), Kolkata, then no such addition of such share application money can be made in the hands of the appellant as per the ratio laid down by the Hon'ble Supreme Court of India in the case of Lovely Exports Pvt. Ltd. (supra) and decision of Hon'ble Gujarat High Court in the case of CIT vs. Namaste Chemicals Pvt. Ltd. (supra). Hence, the additions made on these amounts are directed to be deleted. 4.3.1. Now coming to the share application made by M/s. Balaram Vinimay Pvt. Ltd., the appellant had submitted acknowledgement of its return of income which included PAN and address of this company, copy of audited annual accounts for FY 2010-11 in which the investments ma....
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....company was not found to be existing on the given address should not be adversely looked into, particularly in view of the fact that the appellant had now submitted the evidence that this company had changed its address to New Delhi, is acceptable. Hence, the additional evidence filed by the appellant in regard to address of this share applicant is admitted. 4.3.1.1. Now coming to the addition made of the share application money provided by M/s. Balaram Vinimay Pvt.Ltd., the appellant has proved the existence of this company on the basis of documents. The appellant has also submitted a copy of the order of the Hon'ble High Court of Delhi dated 16.09.2013 vide which M/s. Balaram Vinimay Pvt. Ltd. has been amalgamated with M/s. Minda Capital Ltd. The appellant has also submitted the copies of audited accounts of this appellant company and copies of bank statement of this appellant company which shows that share application money has been transferred to the appellant through banking channels. All these documents have been examined by the AO also. Under such circumstances, as per the ratios laid down by the Hon'ble Supreme Court of India in its decision in the case of Lovely ....
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....rthiness of the creditor is concerned, the AO has stated that it is not having sufficient income during the AY 2010-11. The other submission of the AO is that as per the schedule of loans and advances, it is not established that the loan of 1 crore was advanced to the appellant. In this regard, the appellant has submitted that it has also submitted the ledger account of the appellant in the books of M/s. Jeenma Business Pvt. Ltd. and also the confirmation of the loan to the appellant from this creditor. The appellant's claim in this regard is correct. The confirmation given by this creditor clearly establishes that it has advanced this loan to the appellant. So far as creditworthiness of this creditor is concerned, the appellant has submitted that the net wealth of this creditor as per audited balance sheet as on 31.03.2010 was 13.71 crores which demonstrates its capacity to make the loan of the appellant. Besides this, the fact is that the return of income for AY 2010-11 of this creditor was scrutinized by its AO and the order u/s 143(3) has been passed. From the copy of this order, it is seen that very small additions has been made in this order and the return of income has b....
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....rasad More, 82 ITR 540 and A Govindraj Mudaliar, 34 ITR 807, Devi Prasad Vishwanath Prasad, 72 ITR 19. 5. The appellant craves leave to add to, amend or alter the above grounds as may be deemed necessary. 5. Ld. Sr. D.R. Shri Rakesh Jha appearing for the Revenue supported the order passed by the Assessing Officer and also submitted that the order of Ld. CIT(A) is not acceptable for the reason that as per the inquiries carried out by DDIT, Investigation Wing, Kolkatta that the subscribers of shares either available on the address given by the assessee nor failed to explain the transaction and also failed to produce the directors of the company for recording statement u/s. 132 of the Act. Thus the creditworthiness and genuineness of the transaction could not be established and the addition made by the Assessing Officer is to be sustained. 5.1. Similarly on the unsecured loan received from M/s. Jeenma Business Pvt. Ltd. which does not have sufficient income during the assessment year 2010-11 and also could not establish the loan of Rs. 1 crore was advanced to the assessee company. Therefore the addition made on that account is liable to be upheld. 6. Per contra, Ld. A.R. Shri Ani....
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.... by ITO ward 8(4), Kolkatta 185 to 187 4) Copy of Balance Sheet and P & L A/c. for A.Y.2010-11 with detailed copy of Share Application of various Shares. 188 to 208 5) Copy of Return of Income for A.Y.2010-11. 209 6) Copy of order u/s.143(1) for A.Y.2010-11 by ACIT (CPC) of 15-3-2011. 210 to 216 Subhlabh Fiscal Services Pvt. Ltd. PAN-AADCS8846A 1) Certificate of Registration of RBI for doing Non- Banking Financial Institution of 23-4-2001. 217 2) Copy of Bank Statement of Indian Over Seas Bank period April 2009 to January 2010 showing purchase of Share. 218 & 219 3) Certificate of Establishment of Kolkatta Municipal Corporation doing Business of Investment of 29-8-2011. 220 4)Copy of Balance Sheet & P & L A/c. for A.Y.2010-11 221 to 243 Jeenma Business Pvt. Ltd PAN AAACJ7851K 1) Copy of Certificate of Account to True Form Techno Products Ltd. confirming deposit of Rs. 1 crore. 244 2) Copy of Bank statement in proof of Amount by cheque between 21-1-2010 to 17-3-2010 with receipt of Interest. 245 7. In the compilation of case laws filed by the assessee, we have dealt only with the judgments rendered by the Hon'ble Supreme Court bein....
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.... to some of investors - However, bank statements were produced before appellate authority authenticity of which was not in question or doubt and, therefore, appellate authority set aside order of Assessing Officer - Tribunal as well as High Court upheld order passed by Commissioner (Appeals) - Whether, on facts, SLP filed against High Court's order was to be dismissed - Held, yes [Para 2] [In favour of assessee]" 7.4. The judgment of Hon'ble Supreme Court of India in the case of Pr.CIT Vs. Rohtak Chain Co. (P.) Ltd. Vs. ACIT reported in [2019] 266 Taxmann.com 459 (SC) held as follows: "Section 68 of the Income-tax Act, 1961 Cash credit (Shares) - Assessment years 2012-13 to 2013-14 High Court by impugned order held that issuing share at a premium is a commercial decision and it is prerogative of Board of Directors of a company to decide premium amount and it is wisdom of shareholder whether they want to subscribe shares at such a premium or not and, ultimately, this is a mutual decision between both companies and their shareholders; thus, once genuineness, creditworthiness and identity of investors are established, revenue should not justifiably put itself in armchair of a b....