2023 (9) TMI 593

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....crutiny and statutory notices were duly issued and served on the assessee. The AO during the assessment proceedings observed that during the year the assessee has raised share capital from two subscribers namely Pradeep K Dixit 66,750 equity shares and Bajrang Dealmark Pvt. Ltd. 68,750 equity share thereby raising an amount of Rs. 5,42,00,000/- as share capital/share premium. Accordingly the assessee was called upon by the AO to prove the identity, creditworthiness of the investors and genuineness of the transactions. Accordingly the assessee furnished its ITR, audited accounts, bank statement , details(names and addresses of subscribers) and return of allotment etc. Similarly the assessee filed the evidences in respect of shares subscribers also comprising their ITRs, audited accounts, share application forms ,share allotment letters and bank statements. The assessment order for 2011-12 and reply to 131 of the Act was also filed in case of Mr Pradeep kumar Dixit. In case of corporate subscriber the memorandum and articles of association was filed. However, there was no personal appearance of these share holders before the AO. Finally the AO added Rs. 5,42,00,000/- as unexplained c....

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....oved in AY 2012-13. The Ld. A.R by referring to the audited accounts and bank statements tried to prove that these investors have sufficient sources to invest in the assessee company and therefore adverse inference drawn by the authorities below is without any basis and just based on conjectures and surmises of the AO which has been affirmed by the Ld. CIT(A). The Ld. A.R submitted that mere non-production or non-appearance of the investors before the AO could not justify the addition when all the evidences are before the AO as well as Ld. CIT(A). In defense of argument the Ld. A.R relied on the following decisions: 1. CIT vs. Orissa Corporation Ltd. in [1986] 159 ITR 78 (SC) 2. Crystal Networks (P)Ltd vs CIT reported in 353 ITR 171 (C 3. ITO Vs M/s Cygnus Developers India Pvt. Ltd. (ITA No. 282/Kol/2012) 4. CIT Vs Orchid Industries (P) Ltd 397 ITR 136 (Bom) 6. The Ld. D.R on the other hand relied on the orders of authorities below by submitting that the assessee has failed to prove identity and creditworthiness of the investors and genuineness of the transactions and just filed certain papers to prove the investment received by the assessee w....

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.... instance of the respondent, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they were creditworthy. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the respondent could not do anything further. In the premises, if the Tribunal came to the conclusion that the respondent had discharged the burden that lay on it, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. I f the conclusion was based on some evidence on which a conclusion could be arrived at, no question of law as such arose. The High Court was right in refusing to state a case." 7.1 The case of the assessee is also squarely covered by the decisions of Hon'ble Calcutta High Court in the case of Crystal Networks Pvt. Ltd. vs. CIT (supra ) 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 a....

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....n we are constrained to hold in this matter that the Tribunal has not adjudicated upon the case of the assessee in the light of the evidence as found by the Ld. CIT(A). We also found no single word has been spared to up set the fact finding of the Ld. CIT(A) that there are materials to show the cash credit was received from various persons and supply as against cash credit also made. Hence, the judgment and order of the Tribunal is not sustainable. Accordingly, the same is set aside. We restore the judgment and order of the Ld. CIT(A). The appeal is allowed." 7.2. The case of is also covered by the decision of the coordinate bench by ITO Vs M/s Cygnus Developers India Pvt. Ltd. (supra) 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....