TaxTMI 
TaxTMI 
2024 (9) TMI 959
X X X X Extracts X X X X
X X X X Extracts X X X X
....illegal and bad in law. 1.1. That on the facts and circumstances of the case and in law, the impugned assessment order having been passed not only in gross violation of principles of natural justice but also the mandatory procedure prescribed in section 144B of the Act is illegal, bad in law and liable to be quashed. 1.2. That on the facts and circumstances of the case and in law, the impugned assessment having been completed without passing and serving upon the appellant, the draft assessment order as per provisions of clause (xiv)(b) of sub-section (I) to section 144B of the Act, is non-est, illegal, bad in law and liable to be quashed. 1.3. That the impugned assessment order [including draft order passed by National Faceless Assessment Centre (NF AC) under section 144C] having been passed without allowing personal hearing (either physically or virtually), in gross violation of mandatory provisions of the Act and principles of natural justice, is without jurisdiction, illegal, bad in law and liable to be quashed. 1.4. That on the facts and circumstances of the case, the impugned final assessment order passed by the jurisdictional assessing officer, viz., Assistant Commiss....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ppellant from same non-resident shareholder in preceding year(s) which have been accepted as genuine after due examination in completed scrutiny assessments. Re: Disallowance of PF/ ESI Contribution 5. That the assessing officer erred on facts and in law in disallowing an amount of Rs. 54,031 under section 36( 1 )(va) of the Act, being employees' contribution to Employee State Insurance Fund ("ES),') and other welfare funds on the ground that the same was deposited beyond the time specified under relevant statute. 5.1. That the assessing officer erred on facts and in law not appreciating that employees' contribution had been deposited before the due date of filing return of income as prescribed under section 139(1) of the Act and the same is, therefore, allowable as deduction. 5.2. That the assessing officer erred on facts and in law in making the aforesaid disallowance without considering the legal position/ judicial pronouncements, and in gross violation of binding directions of the DRP. 5.3. That the assessing officer erred in making double adjustment of the aforesaid disallowance inasmuch - (i) income determined under section 143(1) of the Act is taken as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tification order passed u/s 154 of the Act and directed the Assessing Officer to consider the evidences and submissions filed by the assessee with regard to addition u/s 68 of the Act. 8. After considering the directions of the ld. DRP, final assessment order was passed by the jurisdictional Assessing Officer (JAO) on 29.04.2022 assessing the total income of the assessee at Rs. 146,19,11,543/-. 9. Aggrieved with the above order, assessee is in appeal before us. 10. At the time of hearing, the assessee first pressed the jurisdictional issues raised by the assessee in grounds no.1 to 2.1 and also made submissions alongwith filed a synopsis. The same is reproduced as under :- 11. It is respectfully submitted that the assessment completed under section 143(3)/ 144C of the Act is illegal and bad in law since the same has been passed in gross violation of provisions of sections 144B, 144C of the Act as also principles of natural justice inasmuch as: (a) the impugned assessment has been completed without passing and serving upon the appellant show cause notice- cum- draft order as mandated by provisions of clause (xvi)(b) of sub-section (1) to section 144B, prior to passing of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of clause (xvi) of sub-section (1) to section 144B of the Act, is, upon receipt of such draft order, mandated to examine the same in accordance with the risk management strategy and then, to either: a) finalise the assessment, in case no variation is proposed which is prejudicial to the interest of the assessee, by passing and serving such final assessment order accompanied with notice of demand specifying the amount payable along with notice for initiating of penalty proceedings, if any, to the assessee; or b) provide an opportunity to the assessee, in case any variation is proposed, by serving a notice directing the assessee to show-cause as to why the proposed variation should not be made; or c) assign the draft assessment order to the review unit. (c) That thereafter, it is only in cases where no response to the show-cause notice is received from the assessee, that the NaFAC is, on the basis of material available on record, permitted to finalise the assessment on the basis of draft assessment order [refer section 144B(1)(xxiii)(a) of the Act]. (d) In cases where inputs/ response is received from the assessee, NaFAC, in accordance with section 144B(1)(xxiii)(b) of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed at Rs. 75,79,980/- (rounded off). 3.3. In view of this, it is evident that variation was made to declared taxable income of the assessee which, as noticed above, was Nil, albeit, without issuance of a show cause notice-cum-draft assessment order. Admittedly, the assessee had no opportunity to respond to the additions made. 4. Given these admitted circumstances, the impugned assessment order as also the consequential notices, issued under Section 156 and 270A of the Act, dated 15.04.2021, would have to be set aside. It is ordered accordingly. 4.1. Liberty, however, is granted to the revenue to take next steps in the matter, in accordance with the law. 5. The writ petition and the pending applications are disposed of in the aforesaid terms." (emphasis supplied) * Reliance is also placed on the decision of the Bombay High Court in the case of Shreeji Investment & Advisory Services v. National Faceless Assessment Centre: (2021) 323 CTR 505/ WP No.13235 of 2021. In that case, the Petitioner challenged in assessment order passed under section 143(3) r.w.s section 144B of the Act for assessment year 2018-19 on the grounds that- a) no draft assessment order was issued as requi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....there is no denial of this fact. In the affidavit in reply, the affiant has gone on the merits of the two additions but does not deny the fact that neither the alleged draft assessment order or any of the notices have not even referred to this proposed additions under Section 68 of the Act. Issuance of show cause notice is the preliminary step which is required to be undertaken. The purpose of show cause notice is to enable a party to effectively deal with the case made out by respondent (Om Shri Jigar Association Vs. Union of India) 1 Therefore, on this ground also the impugned order is required to be set aside. 5 In our view, having heard Mr. Syal and Mr. Pinto and having considered the petition and the affidavit in reply, the prayer as prayed for in prayer clauses (a) and (c) of the petition has to be granted and is hereby granted. The same read as under: "(a) that this Hon'ble Court be pleased to issue a Writ of Certiorari or any other writ, order or direction under Article 226 of the Constitution of India calling for the records of the case leading to the passing of the impugned order dated 24 th May 2021 under Section 143(3) r.w.s. 144B of the Act for the assessment year ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot discretionary. 23. The Gujarat High Court in the case of Dr. K R Shroff Foundation v. ACIT: R/Special Civil Application No. 14779 of 2021 dated 11.03.2022 emphasized on the effective and real opportunity of hearing to be granted to the assessee before conclusion of assessment. The Court was pleased to quash the assessment order that resulted in demand of Rs. 633.50 crores over disrupted VC hearing provided prior to completion of assessment. 24. Attention is also invited to the observations Sanjay Aggarwal vs National Faceless Assessment Centre, Delhi: [2021] 436 ITR 180 (Del): "Conclusion: 12. Therefore, in our view, given the aforesaid facts and circumstances, it was incumbent upon the respondent/revenue to accord a personal hearing to the petitioner As noted above, several requests had been made for personal hearing by the petitioner none of which were dealt with by the respondent/revenue. 12.1 The net impact of this infraction would be that, the impugned orders will have to be set aside. It is ordered accordingly. 13. This brings us to Mr. Chandra's submission that; the respondent/revenue should be allowed to proceed afresh in the matter, in accordance with th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....07.2021] (Ori) 26. In view of the aforesaid, the impugned assessment completed without providing any opportunity, much less adequate opportunity, of being heard to the appellant calls for being quashed at the threshold. Re (c): Impugned assessment order passed by JAO instead of NFAC bad in law 27. In terms of mandatory provisions of section 144B of the Act, the assessment is required to be in a "faceless manner"; the notices are required to be issued by NFAC and also the assessment order(s) are required to be passed by NFAC. 28. In the facts of the present case, it may be noted that: (a) various notices from time to time during the course of assessment proceedings were issued by the National e-Assessment Centre/ NFAC; (b) the draft assessment order dated 21.09.2021 under section 144C of the Act was passed by NFAC; (c) pursuant to directions of the DRP, a notice dated 30.03.2022 requiring the appellant to file information was also issued by the NFAC [refer pages 155-156 of paperbook],which was duly complied with by the appellant vide reply dated 11.04.2022; (d) a notice dated 13.04.2022 was received from TPO which was replied to by the appellant vide letter dated 18.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rder to the National Faceless Assessment Centre; (xxxi) the National Faceless Assessment Centre shall, upon receipt of draft assessment order referred to in clause (xxx), finalise the assessment within the time allowed under sub-section (13) of section 144C and serve a copy of such order and notice for initiating penalty proceedings, if any, to the assessee, alongwith the demand notice, specifying the sum payable by, or refund of any amount due to, the assessee on the basis of such assessment;" 30. On perusal of the aforesaid, it will kindly be appreciated that section 144B clearly mandates that notwithstanding the provisions of section 143, NFAC shall pass the final assessment order. In fact, clause (xxx) of section 144B(1) mandates the NFAC to pass an order in conformity with the directions of the DRP, which is thereafter, to the finalized and served on the assessee. 31. In blatant violation of the aforesaid statutory mandate, to the utter shock of the appellant, the final assessment order dated 29.04.2022 impugned in the present appeal was passed by the jurisdictional assessing officer, viz., Asst. Commissioner of Income Tax, Circle 7(1) and not by NFAC. The said action is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f DRP order observed that ".....An order u/s 144C was issued subsequent to the aforesaid notice vide order dated 21.09.2021, breeching the provisions of section 144B of the Act. The Panel directs the AO to spell out the reasons in this regard, while passing the final order in this case. The Panel reiterates the need to pass a speaking order in this regard." (emphasis supplied) Despite the aforesaid specific direction of the DRP,the assessing officer has failed to record any reasons for violation of provisions of section 144B of the Act in the impugned order. In fact, the assessing authority continued to conduct assessment in violation of section 144B of the Act and passed the impugned order as explained supra in violation of the mandatory provisions. (b) In respect of addition under section 68 of the Act, the DRP had directed the assessing officer to consider the material/ evidence placed on record before passing the final order [refer para 3.2.3 of DRP order]. The assessing officer has without considering the said directions, proceeded to repeat the addition as made in the draft order. Most importantly, paras 6.1 to 6.8 of the final assessment order dated 29.04.2022 are verb....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted 11.12.2020 and 10.09.2021] however, no further requirement was raised, and the assessing officer proceeded to pass the final order straight away. That apart, additions have been made which are contrary to the principles/ law settled by the apex Court and various High Courts. Assessment conducted in such a manner ignoring the submissions of the appellant is illegal and bad in law [Refer: RKKR Foundation vs NFAC: W.P.(C) 5277/2021 (Del.), KBB Nuts Pvt Ltd vs NFAC: W.P.(C) 5234/2021 (Del.), DJ Surfactants vs NeAC: W.P.(C) 4814/2021 (Del.)]. 42. For the aforesaid cumulative reasons, it is patently clear that the impugned assessment order is beyond jurisdiction, illegal and bad in law and thus calls for being quashed at the threshold. (II) WITHOUT PREJUDICE- ON MERITS Re: Ground of Appeal No. 3: General Re: Grounds of Appeal Nos.4-4.5: Addition u/s 68 on account of share capital received from non-resident holding company 43. The appellant is a closely held company and was incorporated in March 2013.The shareholding pattern of the appellant as on 01.04.2017 [opening balance at beginning of relevant year] was as under: Name of shareholder Number of shares % Shareholding....
X X X X Extracts X X X X
X X X X Extracts X X X X
....other international transactions [refer pages 97-98 of paper-book]; and - in response thereto, the appellant vide reply dated 07.07.2021 submitted (as Annexure-11 to the reply), the details of fresh shares issued to the existing shareholder, without any change in the percentage shareholding [refer pages 99-101 of paper-book]. 48. The aforesaid transaction of issuance of shares was duly accepted by the TPO vide order dated 25.07.2021 read with rectification order dated 29.07.2021 without any adverse inference or adjustment therefor. 49. The NFAC, however, vide draft assessment order dated 21.09.2021 passed under section 144C(1) of the Act proceeded to treat the aforesaid sum of Rs. 134.99 crores as unexplained credit under section 68 of the Act. While making the said addition, the NFAC vaguely alleged that the assessee has not filed the requisite details/ documentary evidence to establish the nature and source of credit in the form of share capital, nor it is proved that the amount has been received from the non-resident. Re: Proceedings before DRP: 50. In the objections filed against the addition proposed in the draft order, during the course of proceedings before the DRP....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to section 68 of the Act would not apply. Accordingly, there is no requirement to prove source of source of the non-resident shareholder. Reference in this regard may be made on Ms. Vodafone India Limited v DCIT [ITA No. 1835/Mum/2018]. Date of judgement: 28.08.2020, Syntensia Network Security India Pvt. Ltd. v ITO (Mumbai ITAT) ITA No. 2927/Mum/2017. It is further stated that the assessee was not afforded reasonable opportunity of being heard as discussed in facts above. Therefore, assessee was not able to furnish the details as desired by the Assessing Officer vide notice dated 03.09.2021. The Panel finds that the AO has not considered the evidence stated above. The Panel, accordingly, directs the Assessing Officer to consider this evidence and pass a speaking order in this regard." (Emphasis supplied) Re: Final assessment order: 52. Pursuant to the order/ directions of the DRP, the assessee, in response to notice dated 30.03.2022 issued by NFAC filed reply dated 11.04.2022 whereby all the documents/ evidences alongwith justification as to why no addition in respect of share capital issued is called for, was furnished by the appellant. 53. Later the jurisdictional assessing....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m is found credited in the books43 of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year : Provided that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless- (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory ............." 61. In terms of the aforesaid provisions of section 68 of the Act, where any amount is found "credited" in the books of the assessee, the assessing officer is empowered to make e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....addition in the hands of a company for moneys received towards share capital. The Court held that, if necessary, the Revenue may reopen the assessment of the shareholders to bring to tax the alleged undisclosed amount. * CIT v. ARL Infratech Ltd.: [2017] 394 ITR 383 (Raj.): Where PAN of share applicants have been given and the mode of payment has been explained, in absence of any direct/ indirect relation between the assessee and the applicants, application money received cannot be doubted and added under section 68 of the Act. * Pr. CIT vs. Softline Creations (P) Ltd: 387 ITR 636 (Del): The Hon'ble Court held that where the assessee has provided sufficient indication(s) including by way of permanent account number, to highlight the identity of the share applicants and produced affidavits of directors of the companies along with bank details of share applicants, then it would be a valid discharge of the identity of the share applicants, genuineness of the transaction and their creditworthiness. * CIT v. Som Tobacco India Ltd.: 222 Taxman 58 (All.)(Mag.)- Where names, addresses and PAN of depositors were provided to assessing officer, which were sufficient to prove their ident....
X X X X Extracts X X X X
X X X X Extracts X X X X
....CIT vs Ami Industries India (P) Ltd: 424 ITR 219 (Bom.) * Orient Trading Co. Limited: 49 ITR 723 (Bom.) * CIT v. Gagandeep Infrastructure (P.) Ltd. - [2017] 80 taxmann.com 272 (Bombay) * CIT v. Vacmet Packaging India (P) Ltd.: 367 ITR 217 (All.) * CIT v. Arunanada Textiles P. Ltd: 333 ITR 116 (Kar) * CIT v. Metachem Industries: 245 ITR 160 (MP) * DCIT v. Rohini Builders: 256 ITR 360 (Guj) * CIT v. Shree Rama Multi Tech Ltd.: 215 Taxman 157 (Guj.)(Mag.) * Nemichand Kothari V. CIT: 264 ITR 254 (Gauhati) * CIT v. Talbros Engineering Ltd.: 386 ITR 454 (P&H) * CIT v. Pranav Foundations Ltd.: T. C. (A.) NO. 262 OF 2014 (Mad.) 66. The ratio decidendi emanating from the aforesaid decisions may be summarized as under: (i) The assessee has to provide documents to prove the identity and creditworthiness of the creditor as well as genuineness of the transaction; (ii) The identity stands established if any information regarding PAN or other identity/ document is provided; (iii) The creditworthiness of the investor needs to be proved by the assessee to establish that the creditor was having sufficient source wherefrom credit has been given. The assessee is, however, n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sactions are proved to be through banking channels; * Copy of Foreign Inward Remittance Certificate (FIRC) to justify/ prove the money received from non-resident shareholder is duly filed by the appellant; * The confirmations from the shareholders on their letter heads wherein the shareholders have categorically mentioned and clarified qua the number of shares and the amount invested in the assessee-company. iii. The money was received from the non-resident shareholder after compliances with all the norms of FDI Scheme governed by RBI. Necessary filings like Form FC-GRP, etc., before the RBI was duly done by the appellant. Thus, the money has been received after complying with the applicable RBI norms. iv. The receipt of share capital and premium have been duly disclosed in the audited financial statements. v. It is pertinent to note that the shareholder had in fact earlier invested in the assessee-company as under: Date Face Value-INR Issue price-INR Number of shares Total value received-INR 18.4.2013 10 10 8,59,50,121 85,95,01,210 23.10.2013 10 16.47 5,40,49,879 89,02,01,507 Total 174,97,02,717 vi. The aforesaid rec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ducts (P.) Ltd v. ACIT: 111 taxmann.com 89 (Del Trib.) * Flourish Builders and Developers Pvt. Ltd. v. DCIT: 176 ITD 409 (Del Trib.) * Axisline Investment Consultants (P.) Ltd. v. ITO: 178 ITD 402 (Kol Trib.) * Baba Bhootnath Trade & Commerce Ltd. v. ITO Kolkata: I.T.A. No.1494/Kol/2017 (Kol Trib.) * DCIT v. M/s. Gladiolus Property & Inv. Pvt. Ltd.: ITA No. 2924/Mum/2017 (Mum. Trib.) * DCIT v. Pali Fabrics P. Ltd.: 110 taxmann.com 310 (Mum Trib.) * DCIT v. Acro Exports Trade (P.) Ltd: 111 taxmann.com 51 (Mum Trib.) * Carmel Asia Holdings Pvt. Ltd. v. ACIT: ITA No.700 & 701/Bang/2018 (Bang. Trib.) ix. Additionally, it is incumbent upon Revenue to prove that the alleged money to be taxed under section 68 of the Act has, in fact, emanated from the coffers of the assessee which found its way back in the form of share capital (refer Delhi High Court decision in the case of CIT vs. Value Capital Services (P.) Ltd: 307 ITR 334). In the facts of the present case, no such allegation has been made in assessment order much less any evidence being brought on record to substantiate the same. 69. In view of the aforesaid, it would be appreciated that addition in respect of shar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y remitted by the non-resident accrued in India, it cannot be held to be taxable in India. Hence, moneys remitted by non-residents whose identity is not in question through their bank accounts outside India have to be held as capital receipts not exigible to tax. It therefore naturally follows that if the identity of the non-resident remitter is established and the money has come in through banking channels, it would constitute a capital receipt and ordinarily cannot be treated as deemed income under s. 68 or 69 of the Act. This is clarified by the CBDT circular itself. 11.7 Taking into consideration of all the above, we find merit in the argument of the learned counsel for the assessee that the primary burden cast on the assessee was duly discharged. The issue of primary onus is to be weighed on the scale of evidence available on the record and the discharge of burden by the assessee is also to be decided on the basis of documents filed by the assessee and facts and circumstances of each case and on that basis a reasonable view is to be taken as to whether the assessee has discharged the primary onus of establishing the identity of share applicant, its creditworthiness and genui....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e shareholder by submitting various documentary evidences which have not been refuted by the lower authorities, no addition can be made merely on the basis that 'source of source' of funds was not established. The Tribunal held that the amendment in Section 68 is applicable w.e.f 01.04.2013 and is applicable only where the shareholder is a resident in India and not when the shareholder is a non-resident. The relevant observation of the Court are as under: "2.31 We also observed that the increase in share capital was not on account of any new shareholders being brought in, rather it was a rights issue which was extended to the existing shareholders. The balance sheet of the Assessee and the Shareholders register evidence that these same parties were already subscribers to the share capital and hence already stood identified and accepted. Therefore, once in earlier year the AO has accepted such fact then there remains no question of any doubt on the same. 2.32 From the record, we found that the identity and genuineness of the said entities is clearly established from the following documents which has been conveniently ignored by the AO. 2.32 From the record, we found that the ide....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent. Hence, the creditworthiness of the shareholders, if he is a non-resident, does not have to be established by the assessee in respect of remittance received by him. For this purpose, reliance is placed on the judgment of the Hon'ble Delhi Tribunal in the case of M/s Russian Technology Center (P) Ltd Vs DCIT, New Delhi, (supra), wherein the Hon'ble tribunal observed that the provisions of Section 68 though inserted w.e.f. 01.04.2013 also reveals the legislative intent that if the shareholder is a non-resident and the money is by way of remittance from his account, the rigor of Section 68 would not be applicable. ............ 2.42 In the instant case, from the documents furnished before lower authorities it is abundantly clear that the assessee has not only furnished irrefutable documentary evidence to establish identity and genuineness of shareholders but has also established the source of funds of such shareholders. Therefore, since the assessee has fully discharged its onus in this regard, there is clearly no case of unexplained credit." (emphasis supplied) 73. Reference may also be made to the observation of the Mumbai Bench of the Tribunal in the case of Syntensia Netw....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... section 68 of the Act is unwarranted and the addition made calls for being deleted. Re: Ground of Appeal Nos.5-5.3:Disallowance u/s36(1)(va)- PF/ESI contribution 77. The undisputed facts relating to the issue are as under: (a) For the year under consideration, the appellant had deposited a sum aggregating to Rs. 54,031 [Rs.42321 under ESI Act and Rs. 11,710 under other welfare funds] towards employees' contribution in a delayed manner. (b) The aforesaid contributions have, however, been deposited mush before the due date of furnishing return under section 139(1) of the Act for the relevant year. 78. The assessing officer, in the draft order, disallowed the aforesaid delayed payment of employee contributions applying provisions of section 36(1)(va) of the Act. 79. The appellant filed objections before the DRP submitting that since the contributions were undisputedly deposited prior tot due date for filing return of income under section 139(1), the same calls for being allowed under section 36(1)(va) read with section 43B of the Act. The DRP directed the assessing officer to consider the judicial precedents referred by the appellant and pass a speaking order. 80. The a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....said settled legal position, it is respectfully submitted that employees' contribution undisputedly deposited by the appellant much before the due date of furnishing of return of income under section 139(1) was clearly allowable as deduction in terms of section 36(1)(va) read with section 43B of the Act and the action of the CPC in disallowing the same was erroneous and bad in law. 86. That apart, the assessing officer erred in making double adjustment of the aforesaid disallowance inasmuch - (i) income determined under section 143(1) of the Act is taken as the starting point for computing total income wherein the adjustment is already made; and (ii) the disallowance of Rs. 54,031 is again made while computing total income in impugned order. Re: Ground of Appeal No.6: Interest u/s 234B/D 87. The assessing officer erred on facts and in law in charging/ computing interest under sections 234B and 234D of the Act. Re: Ground of Appeal No.7:Penalty u/s 271AAC and 270A 88. The assessing officer grossly erred on facts and in law in initiating penalty under sections 271AAC and 270A of the Act." 11. On the other hand, ld. DR for the Revenue argued the matter and filed the written....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) Draft assessment order cum show cause notice u/s 144B(i)(xvi)(b) has not been served on the assessee (ii) Personal hearing has not been provided (iii) Order passed by the jurisdictional AO i.e. ACIT, Circle-7(1) instead by NeFC (iv) Evidence/documents have not been considered (v) AO passed the order in violation of DRP directions (D) The assessee objections are dealt as under: 1. On ground no. 1: Draft assessment order cum show cause notice u/s 144B(i)(xvi)(b) has not been served on the assessee The assessee argued that show cause notice has not been served. The assessee case is covered by the provision of section 144C of the IT Act and in line with the provisions U/s 144C, the draft order was duly served on 21.09.2021 which is evident from the order sheet notings. Before serving the draft assessment order, notice Vis 142(1) was duly served on the assessee on 03.09.2021, asking for various clarifications and the assessee also submitted its response on 10.09.2021 though e-proceedings module. Besides this, the TPO has also provided due opportunity to the assessee. In the draft assessment order, the assessee response dated 10.09.2021 has been duly considered, as evid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at was precisely done in the case. Also, without prejudice to the above, it is submitted that the intention behind issue of draft assessment order as per section 144 B of the I.T act is to provide an opportunity to the assessee to present his case before finalization of the assessment order or crystallization of demand. The intention of the legislature can never be to issue repeated show case notices/ opportunities to the assessee. The purpose of providing opportunity stems from the Principle of National Justice and the same get fulfilled when draft notice is issued to the assessee u/s 144 C (1) and providing assessee an opportunity to file objections before DRP, so that a proper opportunity is afforded before finalization of final assessment order or crystallization of demand by DRP also, which in this case has duly been provided. Thus, as assessee has been issued a draft assessment order u/s 144 B (1) (xxvii), it cannot take the stand that no draft assessment order I show cause notice was issued to the assessee. Though the opportunity was provided but still even if for a moment assessee's ground is accepted for speculative purposes, even then it is humbly submitted that t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....clearly held that because of the launch of the new scheme, the revenue has to be given some leverage to correct themselves and take corrective measures. (2) Even though prayer has been made in that case to quash the assessment proceedings, however the Supreme Court has rejected the prayer and instead remanded the matter back to the AO to pass further-order in accordance with law. It is absolutely clear that even though the Hon'ble Supreme Court found that the department is in breach of Provision of 144B, but considering the launch of new faceless scheme, allowed department to take corrective measure. Though the draft assessment order was duly issued to the assessee but still if the Hon'ble Bench accept the assessee plea of violation of u/s 144B provisions, then it is humbly submitted that the proceedings may be remitted back to the AO in line with the Hon'ble Supreme Court decisions. Even at the cost of repetition, it is submitted that the present case was also passed immediately after launch of faceless scheme and the directions of the Hon'ble Supreme Courts on identical issues I facts is fully binding on the Hon'ble Tribunal. [2] On ground no. 2: Persona....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rt decisions it is binding of the Hon'ble Bench. Thus though reasonable opportunity was provided to the assessee and no opportunity of personal hearing can be granted after DRP directions, in line with specific provision u/s 144C(13) but still if the Hon'ble Bench desires then atmax, the case can be remitted back to the AO for providing fresh opportunity and the assessee prayer for quashing the assessment proceedings cannot accepted by any stretch of imagination. [3] On ground no. 3: Order passed by the jurisdictional AO i.e. ACIT, Circle- 7(1) instead by NeFC. The assessee has taken the ground, that the order is passed by the ACIT, Circle-7(1) instead of passing the order by NeAC. The assessee's objection are baseless and made in complete ignorance of the provisions of the IT Act. As stated above also, till 31.03.2021, the national faceless scheme center NeAC was given the mandate to pass the order which has been duly demonstrated to the Hon'ble Bench by referring to the various provisions of section 144B as applicable before 31.03.2022. From 01.04.2022, the provision of section 144B(1) has been amended and after that the assessment order is passed by the respect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e share capital account. ii] Please furnish confirmation account of the shareholders along with the blank account statement of the shareholders for the year under consideration. iii] Please provide balance sheet of the shareholders for the year under consideration. iv) Please explain the source of money in the hands of the shareholders for the amount invested by them with you in the form of share capital. In response, the assessee could not submit the requisite details mainly bank statement of the investor company, sources of the money invested etc. and as the assessee has failed to prove the credit worthiness, additions were duly made in the draft assessment order. Further, the Hon'ble DRP gave the directions to the AO to consider evidence and pass a speaking order. Afterwards vide notice at 30/3/22 (Pg.1SS/1S6 of paper book), the NeAC AO had given an opportunity to the assessee to furnish the documents. However, as stated above, because of change in the provision of section 1448 of IT Act, the case was duly transferred to the jurisdiction AO, who has no previous idea about the assessment proceedings in the case. However it is pointed out, that, even during the DRP sta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er section 143 (1) of the I.T act. Thus, it is crystal clear that the AO has duly followed the direction of the DPR for both the additions and it is unfair and wrong on part of the assessee to claim that DRP direction are not followed. Though the DRP directions were fully followed by the AO but at the same time nobody can deny the right to assessee to question, in its wisdom, that the AO could have passed more speaking under, but that accusation can't change the fact that the AO duly considered, acknowledged and followed the DRP directions. Thus the assessee contention that the AO has not followed the DRP directions is not correct, though assessee can always argue and canvas the fact that the AO should have passed more detailed order. However, even for speculation purposes, it is accepted that the AO should have passed more detailed order but one must consider the fact that because of recent launch of faceless regime at that time and the departmental officer were also new to faceless regime, the AO had passed an order which was passed in full compliance of the DRP directions. The fact of recent launch of faceless regime, has been duly acknowledged by Hon'ble Supreme Court....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed below- 1) Anand NVH Products Pvt. Ltd. vs. National E Assessment Centre ANR dated 06.08.2021 WP(C) 7936/Del/ 2021 2) Fiber Home India Vs. National E Assessment Centre ANR 15.12.2021 WP(C) 11609/2021 3) SRF Ltd. Vs. National E Assessment Centre and ANR WP(C) 6484/2021 4) Marvel India Pvt. Ltd. vs. National faceless Assessment Centre, Delhi 138 taxmann.com145 (Karnataka) (2022) 5) TT Steel Service India Pvt. Ltd. 137 taxmann.com 151 (Karnataka) (2022) 6) Ford India Pvt. Ltd. Vs. National E Assessment Centre WP(C ) 12701/2021, Madras High Court All the above cases were duly considered by the Hon'ble Coordinate Bench in the case of Hitachi Astemo (some of them are mentioned in the order of the ITAT also) and only for the sake of brevity, the above cases are not discussed in detail. In fact, reference is made to the decision of_Hon'ble Karnataka High Court in the case of TT Steel Service India Pvt. Ltd. 137 taxmann.com 151 (Karnataka) (2022) wherein the Hon'ble High Court considered the order passed by the AO as arbitrary, illegal and without jurisdiction or authority of law. For ready reference the relevant extract of the order of Hon'ble High Court i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....roceedings to DRP to conclude in accordance with law and section 144C of the IT Act. Thus as the Hon'ble Delhi High Court, Hon'ble Karnataka High Court and the Madras High Court, on the same facts, did not quash the entire proceedings accordingly it is humbly prayed that in the instant case also, at worst, the proceedings may kindly be remitted back to the Assessing Officer for passing the assessment order after incorporating DRPs directions. (G) As the issues in both the cases are almost identical, reliance is placed on the decision of the Hon'ble Supreme Court is the case of Gammon India Ltd,. Vs. Commissioner of Customs Mumbai in Civil appeal no. 5166 of 2003 and it is prayed that the same should be followed. 24. Before parting, we wish to place on record our deep concern on the conduct of the two Benches of the Tribunal deciding appeals in the cases of IVRCL Infrastructures & Projects Ltd. (supra) & Techni Bharathi Ltd. (supra). After noticing the decision of a co-ordinate Bench in the present case, they still thought it fit to proceed to take a view totally contrary to the view taken in the earlier judgment, thereby creating a judicial uncertainty with regard....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efer it to a larger Bench if it disagrees with the earlier pronouncement. We respectfully concur with these observations and are confident that all the Courts and various Tribunals in the country shall follow these salutary observations in letter and spirit. Thus it is humbly prayed that in line with the above noted decision of the Hon'ble Supreme Court, the decision of the Hon'ble coordinate bench in the case of Hitachi Astemo (Cited Supra) on identical facts is binding on the Hon'ble bench. (H) Further the assessee counsel has also relied on certain decisions of the Hon'ble Courts/Tribunals which are clearly distinguishable. (1) Global one India Pvt. Ltd. Vs. DCIT in ITA No. 1980/Del/2004 (Delhi Tribunal) : this case was duly considered by Hon'ble Delhi Tribunal in recent decision of Hitachi Astemo case (cited supra) (para 4) and for the sake of brevity, the facts are not repeated. (2) ESPN Star Sports Mauritius SNCET Companies vs. UOI 388 ITR 383 (Delhi) : The facts of the case are clearly distinguishable as in this case the Assessing Officer disagreed with the binding order of the DRP. In fact, as mentioned in para 31 of the Hon'ble High Court or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Tribunals to desist from taking such steps as it results in a undue loss of revenue to the Government exchequer and at max, if the Tribunal finds any error in the order, then the same should be rectified. Some of the judgements of Hon'ble Apex Court are mentioned below for the reference of the Hon'ble Bench. (K) Tribunals duty does not end with merely cancelling the assessment orders: It is further prayed that the entire assessment proceedings should not be quashed because as held by Hon'ble apex court in the case of Kapur Chand Shrimal Vs CIT in 7 taxmann 6 (SC), 1981, it is held that duty of the Tribunal does not end by merely cancelling the assessment orders and not issuing any further direction of rectifications of the errors. Being pertinent the relevant extract of the decision is reproduced below: 13. From a fair reading of section 25A it appears that the ITO is bound to hold an inquiry into the claim of partition if it is made by or on behalf of any member of the HUF which is being assessed hitherto as such and record a finding thereon. If no such finding is recorded, sub-section (3) of section 25A becomes clearly attracted. When a claim is made in time a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en no reference was made by AO to TPO with regard to transfer pricing issues and decided the ALP on his own in complete violation of the instruction of the department. The relevant extract of the relevant portion is reproduced below: 7. In view of the guidelines issued by the CEDT in Instruction No.3/2003 the Tribunal was right in observing that by not making reference to the TPO, the Assessing Officer had breached the mandatory instructions issued by the CEDT. We do not find the conclusion so arrived at by the Tribunal to be incorrect. 8. However, the Tribunal ought to have accepted the submission made by the Department Representative as quoted in para 16.2 of its order and the matter ought to have been restored to the file of the Assessing Officer so that appropriate reference could be made to the TPO. It would there be upto the authorities and the Commissioner concerned to consider the matter in terms of Sub- Section (1) of Section 92CA of the Act. (M) Reliance is also placed on the decision of Hon'ble Supreme Court of India in the case of M. Pirai Choodi v. ITO (2012) 20 taxmann.com. 733 (SC) wherein the Hon'ble Supreme Court set aside the order of the Hon'ble....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ocedural Violation Does Not Seriously Cause Prejudice To The Adversary Party, Courts Must Lean Towards Doing Substantial justice Rather Than Relying Upon Procedural And Technical Violation. We Should Not Forget The Fact That Litigation Is Nothing But A journey Towards Truth Which Is The Foundation Of Justice And The Court Is Required To Take Appropriate Steps To Thrash Out The Underlying Truth In Every Dispute. Therefore, The Court Should Take A Lenient View When An Application Is Made For Production Of The Documents Under Sub-Rule (3)." Thus, in view of the above, it is respectfully submitted that the assessee's contentions on legal jurisdictional/ of AO not followed the DRP directions are without any basis, incorrect and misleading as the AD as duly followed the DRP directions. Also, it is submitted that the assessee cannot dictate the manner and the language used by the AD in passing the orders. Accordingly it is humbly prayed that the hearing on merits of the additions made, may kindly be fixed at the earliest." 12. In rejoinder, ld. AR for the assessee submitted his submissions which are as under :- "Final order passed in violation of directions of DRP u/s 144C- invalid....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of granting personal hearing, thereby, perpetuating the jurisdictional error committed by the NFAC while passing the draft order. 5. As per provisions of section 144C(10) read with section 144C(13) of the Act, it is mandatory for the assessing officer to pass the final order in conformity with the directions issued by the DRP. Not following the directions of the DRP renders the final assessment order as beyond jurisdiction, illegal and bad in law. 6. During the course of last hearing, the Ld. DR submitted that although the impugned order was passed in violation of DRP's directions, the same ought not be quashed but may be remanded back; the ld. CIT(DR) placed reliance on decision in the case of Hitachi Astemo Haryana Pvt. Ltd. vs. DCIT [ITA No.1005/Del/2022; decided on 23.11.2023]. 7. Reliance on the aforesaid decision is, it is submitted, completely misplaced inasmuch in that case the Tribunal remanded the matter to the assessing officer on peculiar facts. In that case, the assessing officer, in order to pass the assessment order within one month from DRP's direction, passed the assessment order without incorporating the TPO's order giving effect in pursuance to the DRP's d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3] 459 ITR 413 (Bom)held that failure on part of department to follow procedure under section 144C of the Act is not merely a procedural irregularity but is an illegality and vitiates entire proceeding. 13. To the similar effect is the case of Louis Dreyfus Co. India (P.) Ltd. vs. DCIT: [2024] 159 taxmann.com 244 (Del) dated 30.01.2024. 14. Attention is also invited to the following pertinent observations of the Delhi Bench of the Tribunal in the case of Oxbow Energy Solutions LLC v. DCIT: 2023] 199 ITD 770 dated 31.01.2023: "10. As could be seen on a perusal of the final assessment order under challenge in the present appeal, while implementing the directions of learned DRP, the Assessing Officer, though, deleted the addition made of Rs. 53,14,19,634/-, however, he made the addition of Rs. 26,56,35,337/-, accepted as explained in the draft assessment order. The aforesaid action of the Assessing Officer is totally unacceptable as he has exceeded his jurisdiction provided under the statute. As could be seen from the observations of learned DRP reproduced above, a clear direction was issued to the Assessing Officer to delete the addition of Rs. 53,14,19,634/- proposed in the dr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....akes the confidence of tax payers. Therefore, it goes against the Government's policy of adopting taxpayer friendly approach. In any case of the matter, the DRP is constituted by three senior Commissioner level officers of the department and is a dispute resolution mechanism set up by the Government under the statute. As per the Statute, the Assessing Officer is duty-bound to implement the directions of the DRP. The Assessing Officer, being a statutory authority, is bound to act in accordance with the procedure laid down in Statute and cannot deviate. Since, we have come across several instances of non-implementation of directions given by the DRP to the Assessing Officers, it is high time to take appropriate corrective measures to stem the deficiencies. Therefore, we direct the matter to be brought to the notice of the concerned higher Authorities so that necessary advisory/guidelines are issued to sensitize the Assessing Officers in the matter of implementation of directions of the DRP. We leave the matter at this. 14. In the result, the appeal is allowed, as indicated above." 15. Attention is also invited to the decision of the Mumbai Bench of the Tribunal in the case of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) of the Act. However, Assessing Officer has filed a note in support of his final Assessment Order in which he has made submissions that the order passed by him is analyzing the various issue which are without prejudice views which Ld. DRP has not rejected. He is of the view that the final Assessment Order passed by him is as per section 144C(13) of the Act. After considering the submissions of both the parties, we are of the view that Assessing Officer has not followed the directions of the Ld. DRP and the directions of the Ld. DRP are very clear and Assessing Officer has not bothered to atleast classify the income earned by the assessee under the head FTS as per the directions of the Ld. DRP and royalty. He proceeded to complete the final Assessment Order based on his own analysis made by him in draft Assessment Order which is clearly a violation of not following the directions of the higher authorities and also the provisions of section 144C(13) of the Act. At the time of hearing, Ld. DR heavily relied on the decision of the ITAT Bangalore in the case of Yokogawa India Ltd. (supra) in which the bench has remitted the issue back to the file of the Assessing Officer/TPO to redo th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to the file of the assessing officer. 19. In respect of the aforesaid, it is vehemently submitted that the impugned order deserves to be quashed (and not remanded), inter alia, for the following reasons: 20. It is submitted that provisions of section 144B of the Act provides for a mandatory procedure in law to be followed for completion of assessment, which is sacrosanct and cannot be done away with; any violation to the mandatory procedure results in the order so passed being invalid and non-est in eyes of law. 21. In this regard, it is pertinent to note as under: (a) There is distinction between procedure mandated by law vis-à-vis procedure requiring compliance on account of natural justice. In case of violation of mandatory procedure prescribed in law, the assessment framed is nullity. The option of remanding the matter to the file of the assessing officer could be relevant only in case of violation of principles of natural justice. (b) It is settled law that if law prescribes an action to be performed in a particular manner, then, the same can only be performed in that manner and not otherwise-if such mandatory procedure in law not followed, order is nullity a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... evil. A court has no power to ignore that provision to relieve what is considers a distress resulting from its operation." (See Martin Burn Ltd. V. Corpn. of Calcutta10, AIR p.535, para 14 and Rohitash Kumar v. Om Prakash Sharma11.) Emphatic reliance is placed on the decision of the apex Court in the case of Hope Textiles Ltd. v. UoI: [1994] 205 ITR 508 (SC). In that case, the assessee filed a return on the basis of which an order of assessment was made on 27.3.1974 and certain losses disclosed by the assessee were accepted. A notice under section 148 of the Act was issued to the assessee on 21.2.1976, pursuant to which the assessee-company filed a return on 27.3.1976 disclosing further losses. Till September 1981, no orders were passed in the reassessment proceedings. On writ, the High Court dismissed the writ petition filed by the assessee for the issuance of a mandamus to the ITO to pass orders in pursuance of the notice, observing that no such mandamus could be issued to ITO to make an order of assessment beyond the period of limitation prescribed by section 153(2)of the Act. On appeal to the Supreme Court, it was held that a writ of mandamus can be issued compelling a s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onal defects as pointed out supra(and in earlier synopsis). - the matter has been remanded merely because in view of the Court, the Revenue ought to have been given some leverage to correct themselves since the faceless assessment scheme was introduced recently. - the judgments were, most importantly, rendered by the Court pursuant to writ petitions filed before the High Courts under Article 226 of the Constitution of India, wherein the Courts have been vested with extraordinary jurisdiction and wide powers. The said directions rendered exercising such extraordinarily constitutional powers cannot be held to be available with the statutory appellate forums such as ITAT. The Hon'ble ITAT, in our submission, is a statutory body created under law and thus the provisions of the Act are binding on the statutory authorities including the ITAT. Any violation of provisions of law would result in quashing/ setting-aside of the order passed in violation of the statutory provision. - various Courts have, in identical circumstances, quashed the assessment order as detailed in synopsis dated 29.08.2022. 3. Expert Capital Services (P.) Ltd. vs. NFAC [2021] 129 taxmann.com 239 (Del.) In t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssing objections to the process adopted by the NFAC and JAO in completing the assessment in its case. The assessee has raised following issues: i. DAO was not passed as per sec.144B (1)(xiv)(b) ii. NFAC passed the DAO without allowing personal hearing in gross violation of mandatory provisions of the Act. iii. FAO passed by the JAO instead of NFAC is beyond jurisdiction as per section 144B of the Act. iv. JAO has not followed the directions of the DRP v. FAO passed without considering the submissions and evidences filed by the assessee. 14. After considering the issues under consideration, in our considered view, historically two types of assessee are assessed to tax, viz, regular assessee who are falling under the regular assessment proceedings viz., section 143(3), 144, 147 and another category falling under section 144C (eligible assessee - whose cases are referred to Transfer pricing officer and non-resident not being a company or any foreign company). The procedure for assessment for assessee falling u/s 144C are already coded in the section 144C itself prior to introduction of faceless assessment regime. When newly scheme of faceless assessment proceedings were an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....missions that not giving opportunity of being heard to the assessee before forwarding the DAO is bad in law and deserves to be quashed. We observed that all the case law relied by the assessee are relating to the assessments framed u/s 143(3), 144 and 147 of the Act. There is no case wherein the issue of 144C was adjudicated. This is the peculiar case and we already held that the procedure u/s 144C is different and outcome of the NFAC in this case is only the DAO not FAO. There is considerable difference in both the type of assessments. In the case of section 144C assessment, the assessee gets one more opportunity to represent his issues before DRP. Hence there is no prejudicial caused to the assessee. Therefore, the case law relied by the assessee are distinguishable hence not considered. 17. Coming to the issue of passing of FAO by the JAO beyond the jurisdiction of section 144B of the Act. We observed from the record that the assessment was initiated by the NFAC and after following the coded process u/s 144B, NFAC has passed the DAO. The assessee chose to refer the matter to DRP by raising objections on the DAO. After the direction of DRP, the FAO was passed by the JAO. In our ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... file of AO, we are inclined to adjudicate the issue on merit. 20. The relevant facts are, the assessee has issued share capital to its AE's during the current assessment year along with the share premium. The assessee has submitted all the details of the shareholders, complete address, PAN, number of shares issued, face value, details of share premium, total amount received. Further they have already filed the justification of issue of shares at the price issued by them by submitting the valuation report before the authorities. Further we observed that the shares were issued to its AE's outside India and they have also filed the relevant inward remittance certificates (FIRC) to justify the receipt of money from the non-resident shareholders. Further they have also filed the confirmations from them and also they have complied with the FDI norms and relevant documents were also filed before the authorities below. We observed that the same documents were submitted before TPO and also before AO. But the JAO has completed the assessment by making addition u/s 68 on the same reasons recorded in the DAO. Aggrieved, the assessee filed the objections before DRP and they have remitted the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ibunal in the cases of Finlay Corporation Ltd. (supra), Smt. Susila Ramasamy (supra) and Saraswati Holding Corpn. Inc. (supra) and the import of CBDT circular referred to above. Whenever remittances are made by the non-resident holding company for purchase of shares of its subsidiary in India, the money undoubtedly is capital in the nature and if documents like FIRC etc. are produced, it can safely be stated that the said money came in through banking channels. 11.6 In the absence of any evidence to show that the money remitted by the non-resident accrued in India, it cannot be held to be taxable in India. Hence, moneys remitted by non-residents whose identity is not in question through their bank accounts outside India have to be held as capital receipts not exigible to tax. It therefore naturally follows that if the identity of the non-resident remitter is established and the money has come in through banking channels, it would constitute a capital receipt and ordinarily cannot be treated as deemed income under s. 68 or 69 of the Act. This is clarified by the CBDT circular itself. 11.7 Taking into consideration of all the above, we find merit in the argument of the learned co....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... substantially interested, receives money by way of share capital, then the source of funds of resident shareholder has to be established by the assessee in order to get out of the kin of the deeming provision under s. 68. Hence, the proviso talks of the source being established only when the shareholder is a resident of India. There is no such requirement if shareholder is a non-resident. Therefore, the creditworthiness of the shareholders, if he is a non-resident, does not have to be established by the assessee in respect of remittance received by him." 24. In this case, the assessee has already proved the identity of the share holders since the same shareholders have invested in the previous assessment year and relevant documents submitted to prove the identity before the authorities. With regard to credit worthiness, the same was invested by the AE's of the same group and the same was also approved by the RBI as well as funds have come thru inward remittances. With regard to genuineness, we observed that the assessee has properly received the share capital alongwith the share premium and invested the same in the business. This is part of capital transactions, therefore, all th....