TaxTMI 
TaxTMI 
TaxTMI 
2024 (1) TMI 1067
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....s 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 received by account payee cheques and all the share ....
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....n 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 AFUPG6910N 77,10,000 7,71,00,000 8, 48, 10,000 4. Dinesh Gupta AAAPG4180D ....
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....ion 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 the majority of the amount is on account of income claimed by them as exempt on selling shares of Shilpi Cables Technologies Ltd (herein after refer to as SCTL). III. According to....
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....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. All the four subscribers of the assessee company which is an unlisted closely held company are either the existing shareholders or directors or relatives of the directors. II. The entire amount of subscription has been received by account payee cheques or through RTGS from th....
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....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. 8571/DEL/2019 dated 06.04.2021/On these facts the adverse inference drawn by the AO regarding the creditworthiness of these four subscribers on the allegation of sham transactions on sale of shares of SCTL is wholly wrong and not borne out of any material on record. VIII. It is further observed that the appellant had filed all the requisit....
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....e 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 regarding the nature and source of funds available in the hands of four subscribers who have invested an amount of Rs. 42,85,60,000/- in the share capital and share premium of the appellant company. XI. I also agree with the contention of the appellant that the AO has erred in drawing the adverse inference against assessee and its shareholders only on the basis of sus....
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....ed 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 share premium was received is not proved since they were showing huge exempt income from sale of penny stock namely Shilpi Cables Technologies Ltd and also shown meager returned income in their individual returns of income. (iv) Whether on the facts and in law, the Ld.CIT(A) is correct in ignoring the facts that the major exit providers of M / s Shilpi Cables Technologies Ltd are M/s Touchstone Holdings ....