TaxTMI 
TaxTMI 
2024 (6) TMI 599
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....passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") dated 31.03.2015 by the Assessing Officer, ITO, Ward-7(1), New Delhi (hereinafter referred to as "ld. AO"). 3. Identical issues are involved in both the appeals and hence, they are taken up together and disposed off by this common order for the sake of convenience. 4. The revenue has raised the following grounds of appeal in ITA No. 6213/Del/2018 for AY 2012-13 before us:- "1. The Ld. Commissioner of Income Tax (Appeals) erred in law and on facts of the case in deleting the addition of Rs. 5,17,50,000/- made by the AO on account of share capital & share premium & Rs. 22,20,000/- on account of notional interest on interest free loan given to sister concern." 5. We have heard the rival submissions and perused the material available on record. The assessee company was incorporated on 17.02.2011. The year under consideration is the 2nd year of operation. The ld AO observed that no business activity was carried out by the assessee during the year under consideration or in the immediately preceding year. The only source of the income of the assessee company was interest received on fixed deposits. D....
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....produce the authorized persons of corporate investors who had made investment in the assessee company. This remained un-complied by the assessee. Accordingly, the ld AO concluded that the monies received from the corporate entities towards share capital and share premium are merely accommodation entries and that the assessee had failed to prove the identity and creditworthiness of the investor and genuineness of the transaction and proceeded to treat the sum of Rs. 5,17,50,000/- as unexplained cash credit u/s 68 of the Act. 6. Before the ld CIT(A), the assessee filed additional evidence with an application under Rule 46A of the Income Tax Rules and produced the following documents:- a. Share application forms b. PAN details c. Bank statements of investors d. Income tax returns of the investors e. Audited financial statement of the investors f. List of investments in its books of account g. Ledger confirmations h. Copy of PAN Cards i. Certificate of incorporation along with Memorandum and Articles of Association j. Copy of minutes of meeting of Board of Directors authorizing the fact of making investment in the assessee company k. Copy of confirmation in respe....
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....nd share premium amount from various parties. Thus it is the duty of the assessee to justify the identity and creditworthiness of the parties and to establish the genuineness of the transaction. In this case the AR of the appellant has filed various documents during the course of assessment proceedings and along with application under, Rule 46A application of all parties from whom share capital/premium money has been received, like Share Application Forms, PAN Details, Bank Statements, Income Tax Returns, Audited Balance Sheets and Profit and Loss Account, List of Investments in its books of accounts, Ledger Confirmations, Copy of PAN Cards, Certificate of Incorporation along with Memorandum and Articles of Association, Copy of Minutes of Meeting of Board of. Directors, Copy of Confirmation in Respect of Application of Shares etc. The appellant has given a specific investor wise list of documents filed by it in this respect which has been reproduced herein above in the portion of submissions of assessee. The AR also specifically highlighted Net Worth of each share applicant and compared the same with the amount invested by the said party. All these documents were forwarded to the....
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....ereby delete the addition made by the AO of Rs. 10,35,000/- on account of share capital and Rs 5,07,15,000/- on account of share premium received by the appellant from various parties. Grounds of appeal 1 to 4 are accordingly allowed and the addition is hereby deleted." 9. We find that the additional evidences submitted by the assessee before the ld CIT(A) were duly admitted by the ld CIT(A) vide para 2.5 of his order reproduced supra. It is a fact that the assessee had received share capital and share premium from certain investors during the year. Hence, primary onus cast on it is to establish the genuineness of the transaction together with identity and creditworthiness of the investors. On perusal of the order of the ld CIT(A), the assessee again in the rejoinder to the remand report had submitted the list of documents submitted before the ld CIT(A) investor wise. Each of the investors have sufficient net worth in its financial statements which clearly prove their creditworthiness and the investors are duly assessed to income tax and have been regularly filing their income tax returns and returns with Registrar of Companies. Hence, their identity is also proved beyond doubt. T....