TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 1355
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....e the entire proceeding was bad in law and thus the assessment order be cancelled / quashed. 3) For that the order passed by the learned CIT (Appeals) is bad in law and therefore the same be reversed. 4) For that the learned CIT (Appeals) erred in confirming the interest u/s 234 A/B/C the same was unjustified and hence the same be deleted. 5) The appellant craves leave to produce additional evidences in terms of Rule 29 of the Income Tax (Appellate Tribunal) Rules 1963. 6) The appellant craves leave to press new, additional grounds of appeal or modify, withdraw any of the above grounds at the time of hearing of the appeal." 3. A perusal of the above grounds of appeal would reveal that the assessee has agitated against the addition of Rs. 3,58,00,000/- made by the Assessing Officer treating share capital and share premium received by the assessee as unexplained income of the assessee u/s 68 of the Act. 4. At the outset, the ld. counsel for the assessee has invited our attention to the impugned assessment order to submit that the only observation made by the Assessing Officer in the impugned order is that the assessee during the year had received share capital/share premium....
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....ine a single document furnished by the assessee. He, without examining and pointing out any error or infirmity in the said documents for forming the belief that the assessee had introduced unaccounted money in the form of share capital, simply by way of a cryptic order, made the impugned additions. The relevant part of the order of the Assessing Officer is reproduced as under: "The assessee company is a closely held company in which public are not substantially interested. Keeping this in consideration, notice under section 131 were issued and sent to the assessee requiring it to appear personally along with all the Principal Officers, Directors of all the investor companies and/or individual investors as the case may be for the purpose to primarily verify the identity and credit worthiness of the shareholders and genuineness of the transaction made by them in the assessee company, as well as analysis of various entries in bank statements, cash book, ledger etc. for ascertainment of primary sources reasons for raising capital , rationality of reasons for investment by the investors procedure and certifications involved in respect of -calculation and determination of such a high p....
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....the Assessing Officer that there was very high premium received by the assessee as compared to the market value of the shares was wrong. He has submitted that the book value on the date of issue of shares was Rs. 191/- per each share and the shares were sold at Rs. 200/- each and therefore, the observation of the Assessing Officer simply on the basis of assumptions and presumptions was not justified. He has further explained that the share capital was raised by the assessee for its business requirements for further investing the said amount in the group company of the assessee i.e. CNG Agrocare Pvt. Ltd which was engaged in the business of manufacturing of organic fertilizers. That the assessee continues to hold shares of CNG Agrocare Pvt. Ltd. even on date. That the share capital was raised from 9 corporate entitites and 27 individual shareholders, details of which were duly furnished before the Assessing Officer. The Assessing Officer has not pointed out any specific doubt about the identity and creditworthiness of any of the share subscribers. The ld. counsel has further submitted that the assessee was having share subscription from the said subscribers for the last 10 years and....
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.... was received as against the future sale of the produce of the assessee or not. When it was found by the CIT(Appeal) on fact having examined the documents that the advance given by the creditors have been established the Tribunal should not have ignored this fact finding." 7. So far as the reliance of the Ld. DR on the decision of the hon'ble Supreme Court in the case of "PCIT v/s NRA Iron & Steel (P) Ltd." (supra) is concerned, we note that the Hon'ble Supreme Court in the said case has taken note of the observations made by the Supreme Court in the "the land mark case of Kale Khan Mohammed Hanif v. CIT [1963] 50 ITR 1 (SC) and Roshan Di Hatti v. CIT [1977] 107 ITR 938 (SC) laid down that the onus of proving the source of a sum of money found to have been received by an assessee, is on the assessee. Once the assessee has submitted the documents relating to identity, genuineness of the transaction, and credit-worthiness, then the AO must conduct an inquiry, and call for more details before invoking Section 68. If the Assessee is not able to provide a satisfactory explanation of the nature and source, of the investments made, it is open to the Revenue to hold that it is the income ....