TaxTMI 
TaxTMI 
2023 (5) TMI 1325
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....of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') by Tax Recovery Officer - 4, Kolkata, dated 23/03/2015. 2. Grounds of appeal raised by the assessee are reproduced as under:- "1. For that in the facts and circumstances of the case, the Ld. CIT(Appeals)-15 erred in violating the principles of natural justice. As such, the order passed u/s 250 is void ab-initio. The action of the Ld. CIT(Appeals)-15 was wholly unreasonable, uncalled for and bad in law. 2. For that the Ld. CIT(Appeal)-15, erred in making addition of entire Share Capital & Share Premium of Rs. 3,65,95,490/- as unexplained cash credit u/s 68 of the Income Tax Act. 3. For that the Appellant craves to adduce additional ground and/or ....
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....remium to two companies as explained earlier only Capital Part) Rs. 71,000/- 2nd Allotment on 31.03.2012 (With Security Premium to two companies as explained earlier only Premium Part) Rs. 3,54,29,000/- Total of Above Rs. 3,66,00,000/- 4. From the above table, it is noted that there are two classes of share subscribers comprising of five individuals to whom shares were issued at face value of Rs. 10/- each without any premium, totaling to Rs. 10,00,000/-. The details of the above five share subscribers is tabulated as under:- 5. The second class of share subscribers comprises of two companies to whom shares were issued at face value of Rs. 10/- each and share premium of Rs. 4,990/- per share was charged. Details in this....
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....,000/- to five individuals. All these individuals were engaged in dealing of land and the capital was, therefore, proportionately divided between them. Assessee made investment in land by raising share capital for which cost of land was very low and would fetch good sale price at high profits after its development, claimed ld. Counsel. It was also stated that assessee is having investment activities in land and has reported loss because it is the first year of its operation and no activities have been noted for generating income. 7.1. On these submissions made by ld. Counsel for assessee, reference was made to object clause contained in Memorandum of Association of assessee company which is reproduced as under:- "(A) THE MAIN OB....
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....ns made by ld. Counsel in this respect was in reference to land claimed to have been procured during the year for which nothing except some tabulated details were placed on record. From those details, it was submitted that assessee had acquired 690.51 decimals of land area. There is nothing on record to demonstrate as to how these lands were acquired in terms of their conveyance deeds. In the written submissions furnished by assessee it is submitted that investment of assessee is in land and at the time of transactions and in view of huge quantity of land, cost of lands was very low but after the development of same, price of the same would be very high and profitable. It is also stated that "assessee is valuing investments at books value, ....
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....so important to note in this case that none appeared before ld. Assessing Officer to discharge the onus casted u/s 68 of the Act so as to enable the Assessing Officer to make the necessary enquiries for establishing the identity and creditworthiness of share subscribers as well as genuineness of transactions. 8.1. It is also observed that the main object clause contained in the Memorandum of Association does not fall in line with the activity of land dealing claimed to have been undertaken by assessee during the year. Also, from perusal of financial statements of two share subscribing companies, it is observed that source of investment by these two companies are also from the share capital and share premium raised by them while issuing t....