TaxTMI 
TaxTMI 
2023 (2) TMI 1292
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....Rs. 10/- per share on a premium of Rs. 190/- per share totalling to Rs. 4,78,50,000/- to the following six companies, details of which is tabulated as under: 3.1. In the course of assessment proceeding, Ld. AO noted from the audited accounts of the assessee that it has received share application money and premium thereon amounting to Rs. 4,78,50,000/-, during the year in question.Ld. AO called for details and explanation on the above transaction to which assessee furnished its replies as noted in the assessment order.Ld. AO also issued notice u/s. 133(6) of the Act to the above six companies. He also issued summon u/s. 131 to the director of the assessee for his personal attendance and also directed to produce the directors of the six allottee companies along with relevant documentary evidence and details. Out of six directors of the allottee companies, directors of two companies namely, UP Account Law Services Pvt. Ltd. and UP Agro Farm & Export Pvt. Ltd. did not appear in person in response to notice u/s. 133(6) of the Act and summon issued u/s. 131 of the Act. All the six subscriber companies furnished their replies along with required documentary evidence in response to notice....
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.... entire share application money along with share premium, totalling to Rs. 4,78,50,000/-, on the sole ground that full compliance u/s. 131& 133(6) of the Act by the directors of the assessee and share applicant companies was not done by way of their personal appearance. To this effect, he reiterated the vital fact of attendance of a common director from four out of six share subscriber companies before the ld. AO. 6.1. He also referred to the copies of bank accounts to demonstrate the genuineness of the transaction so also their audited financial statements wherein these investment transactions have been duly recorded and reflected. He thus, strongly submitted that Ld. AO had not brought anything contrary to undisputable facts and has merely acted on whims and fancies. 6.2. To buttress his submissions, Ld. Counsel placed reliance on the decision of Hon'ble Jurisdictional High Court of Calcutta in the case of CIT v. Dataware Pvt. Ltd.in ITAT No. 263 of 2011 dated 21.09.2011 wherein Hon'ble jurisdictional High Court held that "After getting the PAN number and getting the information that the creditor is assessed under the Act, the Assessing officer should enquire from the Assessi....
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....details and particulars were given by the assessee to the Assessing Officer. In the above circumstances, the view taken by the Tribunal could not be faulted. No substantial question of law was involved in the appeal.'' 6.5. Decision of Hon'ble Madras High Court in the case of Pranav foundations Ltd. (2015) 229 Taxman 58 (Mad)is also referred wherein it was held as under: "In view of the fact that all the four parties, who are subscribers of the shares, are limited companies and enquiries were made and received from the four companies and all the companies accepted their investment. Thus, the assessee has categorically established the nature and source of the said sum and discharged the onus that lies on it in terms of section 68. When the nature and source of the amount so invested is known, it cannot be said to undisclosed income. Therefore, the addition of such subscriptions as unexplained credit under section 68 is unwarranted." 7. It was also submitted that audited Balance Sheet of each of the share applicant companies reflected the amount of investment made by them in the assessee as against their respective net worth for which he also referred to the respective fi....
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....h of the tribunal, while further relying upon the decision of the Hon'ble Allahabad High Court in the case of CIT Vs. Raj Kumar Agarwal vide ITA No. 179/2008 dated 17.11.2009 has held that non production of the director of the company, which is regularly assessed to income Tax having PAN, on ground that the identity of the subscriber is not proved, cannot be sustained. 9. Per contra, ld. Sr. DR placed reliance on the order of the authorities below and submitted addition made towards share capital and share premium has been rightfully done since assessee's own income has been infused in the guise of share capital through the allottee companies by layering the transactions to make appear a non-genuine transaction as a genuine one. 10. We have heard the rival contentions and gone through the material placed on record. We note that Ld. AO without even going through and discussing the details submitted by the subscriber companies, insisted for personal appearance to prove the identity, creditworthiness of the subscribers and the genuineness of the transactions. Admittedly, it is a fact on record that director representing four share subscriber companies attended before the ld. AO ....
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....shareholders. Thus, going by the records placed by the assessee of all the share subscribing companies, it can be safely held that the assessee has discharged its initial burden and the burden shifted on the Ld. AO to enquire further into the matter which he failed to do so. It is also noted from their audited financial statement that all the investing companies have sufficient own funds available with them to make investment in the assessee. 10.2. A perusal of the impugned order of the Ld. CIT(A) shows that the Ld. CIT(A) has not discussed anything about the material facts of the case. He has not pointed out any defect and discrepancy in the evidences and details furnished by the assessee but simply cited certain case laws even without pointing out as to how these case laws were applicable to the facts and circumstances of this case. By simply reproducing the contents of the case laws without discussing about their application on the facts of the case, in our view, would not make the order of the Ld. CIT(A) justifiable speaking order and hence, the same is not sustainable as per law. 11. From the perusal of the paper book and the documents placed therein, it is vivid that all th....