TaxTMI 
TaxTMI 
2024 (1) TMI 1067
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....rs of the assessee company and their relatives when it issued 3896000 Equity shares to them for a total consideration of Rs. 42,85,00,000/- which consisted of share capital amounting to Rs. 3,89,60,000/- and share premium of Rs. 38,96,00,000/-. The Equity shares were allotted at a share price of Rs. 110/- per share including an amount of Rs. 100/- per share as share premium. The shares were issued as per the valuation certificate obtained under Rule 11UA as on 31st March 2015, according to which the book value of each share was certified at Rs. 110/- per share. The assessee company had furnished a return of income declaring a net taxable income of Rs. 36,82,070/-. The case was picked up for Limited Scrutiny to verify "whether the funds received in the form of share premium are from disclosed sources and have been correctly offered to tax". During the course of assessment proceedings, it was explained to the Assessing Officer that share premium was received from existing shareholder Shri Dinesh Gupta (HUF), his HUF Dinesh Gupta (HUF), HUF of the existing shareholder Shri Rajesh Gupta and also from wife of Shri Rajesh Gupta namely Smt. Renu Gupta. The entire share premium was receive....
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....he assessee company have duly confirmed the transaction with the assessee company and have also explained the nature and source of the investment made by them in the assessee company. As per the assessment order dated 29.12.2018, the instant case was selected for limited scrutiny by CASS: "Whether the funds received in the form of share premium are from disclosed sources and have been correctly offered for tax". The assessee was asked to submit explanations and evidences regarding the aforesaid single limited scrutiny point by the AO. It was found by him that during the instant year the assessee company issued 38,96,000 equity shares of face value of Rs. 10/- per share at a premium of Rs. 100/- per share. In this manner the assessee company received share premium of Rs. 38,96,00,000/- along with share capital of Rs. 3,89,60,000/- from four persons as per details here under: S. No. Name of Party PAN Share capital (Rs.) Share Premium (Rs.) Total amount Received (Rs.) 1. Dinesh Gupta HUF AACHD9271Q 1,40,50,000 14,05,00,000 15,45,50,000 2. Rajesh Gupta HUF AAGHR4685G 83,50,000 9,18,50,000 8,35,00,000 3. Renu Gupta ....
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....ransactions in the bank account of these two company. The AO could not point out any specific reason for not allowing the said submission considering the submission made by the appellant it appears that these companies are group companies and there was a reasonable cause which prevented the appellant filing the documents called for during the assessment. Therefore, the filing of additional document is allowed. 4.2 The findings of the AO in the assessment order and the submissions of the appellant have been carefully perused by the undersigned along with the documents filed in the paper book as well as the additional evidences filed u/R 46 A of the IT Rules, 1962. The additional evidences are admitted. A perusal of the assessment order shows that the adverse inference has been drawn by the AO against the appellant for the following reasons: I. The AO found that all the four persons from whom share capital and share premium was received are showing huge exempt income and meagre returned income in their individual returns of income. II. The examination of details of exempt income in the hands of Dinesh Gupta, Dinesh Gupta HUF and Rajesh Gupta HUF showed that....
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.... d)Copy of bank statement of the shareholder. e)Copy of income tax return of the shareholder. f)Copy of ROC return showing allotment of the shares to the shareholder. g) Copy of bank account of the assessee company showing receipt of share premium from the shareholder. Apart from the above the appellant also furnished the details of the source of source of each of the subscriber/shareholder where it had explained the nature and source of each of the amounts paid by each of such subscriber to the assessee company. It is also seen that a detailed chart was submitted before the AO by the assessee vide letter dated 04.12.2018 which shows the immediate source of funds in the hands of each of the shareholder which enabled them to make the investment in the assessee company. Documentary evidences in support of the availability of such funds in the hands of each of the shareholders were also filed by the assessee during assessment proceedings as well as the present appellate proceedings. 4.4 The copies of explanations and documentary evidences filed by the assessee have been carefully perused and examined by me. It is found as under: I....
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....d by the assessee is also not out of any exempt income and it is the claim of the assessee that Renu Gupta never owned any shares of SCTL and even the AO in the impugned has only assumed in para 4.13 of the impugned order that her exempt income is from selling of shares of SCTL. However, in my considered opinion this is not even relevant as Renu Gupta. She has not claimed to have made any investment in the assessee company out of exempt income. In the hands of Dinesh Gupta addition was made on account of sale of shares of SCTL by holding the same to be the penny stock vide assessment order passed u/s 143(3) of the Act on 30.12.2018 by the ACIT Central Circle 15, Delhi. However, the same was deleted vide appellate order passed u/s 250(6) of the Act by my learned Predecessor CIT Appeals - XXVI New Delhi vide order dated 16.08.2019 in appeal no. 10171/18-19 when it was held by him that no addition could be made in respect of the long term capital gains derived by the assessee on sale of SCTL shares as the same was exempt u/s 10(38) of the Act. The appeal filed by the revenue against such order of my learned predecessor was also dismissed by the ITAT Delhi bench 'G' in ITA no. ....
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....in the assessee company. X. The perusal of the findings of the AO shows that he has drawn adverse inference against the appellant mainly because according to him the four subscribers have earned income from long term capital gains from sale of SCTL shares and have claimed to be exempt. It is only on this basis that the AO has disbelieved the claim of the assessee without bringing any other specific contrary material on record. As found by me in earlier paragraphs the two subscribers namely Renu Gupta and Rajesh Gupta HUF have not claimed to have made any investment in assessee company out of any income claimed to be exempt by them in their return of income and therefore there was no basis for the AO to draw any adverse inference in respect of these two subscribers. As regards Dinesh Gupta HUF, no adverse inference was drawn in his case on sale of share of SCTL when assessment was framed u/s 143(3) of the Act for the instant year. In case of Dinesh Gupta the additions made in his hands on the sale of SCTL shares was deleted by the CIT Appeals and the order of CIT Appeal was upheld by the ITAT. Thus, there is no justification for the AO to draw any adverse inference regardin....
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....ppeal of the assessee is allowed." 4. The Revenue is now in appeal raising following grounds: "1. Whether on the facts and in law, the Ld. CTT(A) is correct in deleting the addition made u/s 68 of the 1.T. Act, 1961 amounting to Rs. 42,85,60,000/- by stating that the assessee has duly discharged the onus that lay upon it u / s 68 of the Act despite the fact that assessee has failed to prove the credit worthiness and genuineness of parties who have paid the loan amount to the share subscribers of assessee company. (ii) Whether on the facts and in law, the Ld.CIT (A) is correct in ignoring that the share subscribers had received refund of loan from M / s Rishi Infratech Pvt Ltd, M/s Renu Proptech Pvt Ltd, M / s SAP Compusoft Pvt Ltd and BDR Builders and Developers Pvt Ltd, wherein it is found that the funds are being circulated among same individuals and Gupta family members and fund which was credited in the bank account was debited on the same day in which it was received. (iii) Whether on the facts and in law, the Ld.CIT(A) is correct in ignoring the facts that the creditworthiness and genuineness of the share subscribers from whom share capital and s....
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....he extent of Rs. 2,24,08,286/- and concluded that money of assessee is being circulated, which is introduced as share capital/ premium. This at first looked as a substantive ground supporting the conclusion of the learned AO that source of source remained unexplained. However, when the order of learned CIT(A) is considered in clause VIII on page 18, it establishes that on account of exempt income declared from the sale of equity shares of the alleged penny stock of SCTL, no addition was made in the hands of Dinesh Gupta HUF in assessment u/s 143(3) or in the hands of Rajesh Gupta HUF. The addition was made in the hands of Dinesh Gupta in assessment u/s 143(3). However, the same was deleted by learned CIT(A)-26, New Delhi and the order stands sustained by the Tribunal in ITA no. 8571/Del/2019 order dated 6.4.2021. Lastly, there was no allegation of Renu Gupta having source arising out of disinvestment of alleged penny stock and primarily her source was refund of loan in certain companies or sale of equity shares of Mangal Kalas Services Pvt. Ltd. Thus, learned CIT(A) has not erred in not finding substance in the conclusion of learned AO that the source of source is tainted. 9. It....