TaxTMI 
TaxTMI 
TaxTMI 
2023 (10) TMI 1452
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.... of Income Tax (Appeal) is unjustified and unlawful in confirming the order of the ld. Assessing Officer without verifying our submission. 3. The addition made by AO and confirming by the ld. CIT(A) are not based on the facts and on the true appreciation of evidences. 4. That the addition made by AO is based on a pre-determined and biased mindset and based on pure quess, surprises and conjecture which does not hold good in law. 5. That the entire addition by the AO and confirming by the ld. CIT(A) are based on mere suspicious and without any material evidence on record and hence liable to be deleted. 6. That the assumption of jurisdiction by the ld. CIT u/s 263 is bad in law in view of fact neither any prejudicial to the revenue was caused nor any loss to revenue accrued. 7. That the addition is based on mere change of opinion which is bad in law. 8. That the ld. Assessing Officer was not justified in making addition on account of share capital as same was verified & certified by him in earlier years in detailed assessment. 9. That the addition made by ld. Assessing Officer and uphold by ld. the Commissioner of Income Tax (Appeal) are liable to be set aside. 10. Tha....
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....and contentions/materials on record submitted in response to Notice u/s 142(1), U/s 133(6) and Summon u/s 131, hence, is vitiated and nullity in the eye of law. 3.2. The ld. AR further contended that in the case of Kranti Associates Put. Ltd, Vs. Masood Ahmed Khand and Others reported in (2010) 9 SCC 496 it is held by the Hon'ble Supreme Court inter alia that a quasi judicial authority must record reasons in support of its conclusions to demonstrate by reasons that the relevant factors have been objectively considered. 3.3. He further stated that the addition of share capital/premium u/s 68 is based on assumption and without any evidence or enquiry/investigations and without dealing and discussing the overwhelming material placed on record by the assessee and subscribed in response to notice u/s 142(1), 133(6) and summon u/s 131 and due to mere non appearance of the directors of the subscriber companies before the ld.AO cannot be a ground for making addition u/s 68 of the Act. 3.4. He further submitted that the ld. CIT, Kolkata in order u/s 263 dated 05-03-2014 had specifically directed the AO to conduct independent enquiry not through the assessee therefore, the question of....
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....held by the Hon'ble Tribunal following the judgment of the Supreme Court in the case of CIT vs. Lovely Exports Pvt. Ltd., reported in 2010 (14) SCC 761 and in the case of CIT Vs. Goa Sponge and Power Ltd., reported in Tax Appeal No. 16 of 2012 passed by the Hon'ble Bombay High Court has held that once the authorities have got all the details including the name and address and PAN of the share holder, name of the bank from which investors received money as share application then it cannot be termed as bogus. Once the initial burden was discharged by filing necessary evidences then the addition cannot be made section 68 merely for the reasons that the parties have not responded to notices issued by the AO. 3.7. The ld. AR further submitted before the bench by stating that in the instant case the onus to prove the identity, genuineness of transactions and credit-worthiness of the creditors has sufficiently been discharged by the assessee. The burden of proof shifts on the Revenue and also in the case of M/s BST Infra-tech Ltd., Vs. DCIT reported in 2022-VILL1525-1TAT-Kol, it is held by the Kolkata Bench of the Hon'ble Tribunal that when the assessee furnished the required....
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....nd the onus was on revenue to controvert the evidences furnished by the assessee. However, nothing has been brought on record by the revenue to substantiate that the assessee's unaccounted money was routed in the books, in the garb of share capital. The Sixteen investor's entities have sufficient net worth (share capital + reserve and surplus) to make investment. 3.11. That, in the case of CIT Vs. Ranchhod Jivabhai Nakhava reported in 2012 (5) TMI 186- Gujarat High Court it is held by the Hon'ble Gujarat High Court that once the assessee has established that he has taken money by way of accounts payee cheques from the lenders who are income tax assessee and whose PAN have been disclosed, the initial burden under Section 68 of the Act is discharged. Similar views have been held in the case of DCIT Vs. Merrygo ld Gems Put. Ltd. reported in 2023 (1) TMI 617-ITAT SURAT. 3.12. That, under Para 28 of the assessment order dated 17-03-2015 u/s 144/263/ 143(3)/147 the AO has held that the credit of Rs. 15,51,00,000/- in the books of the assessee was nothing but own money of the assessee company in the garb of share capital including share premiums. 4. However, the ld. AR stat....
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.... to what further investigation was needed by him by way of recording of statement of the directors of the assessee and the subscriber companies. We draw our force from the decision of the Hon'ble Bombay High Court in the case of PCIT vs. Paradise Inland Shipping Pvt. Ltd. [2017] 84 taxmann.com 58 (Bom) wherein it was held that once the assessee has produced documentary evidence to establish the existence of the subscriber companies, the burden would shift on the revenue to establish its case. 7.2. We also draw our force from the decision of Hon'ble Jurisdictional High Court of Calcutta in the case of Crystal Network Pvt. Ltd. vs. CIT (supra) which held as under: "We find considerable force from the submissions of the learned counsel for the appellant that the Tribunal has merely noticed that since the summons issued before assessment returned unserved and no one came forward to prove. Therefore, it shall be assumed that the assessee failed to prove the existence of the creditors or for that matter creditworthiness. As rightly pointed out by the learned counsel that the CIT(Appeals) has taken the trouble of examining of all other materials and documents viz., confirmatory stateme....
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....the investing companies have substantial own funds available with them to make investment in the assessee. In this respect, all the investing companies have also explained their source of funds in their reply to notices issued u/s. 133(6) of the Act. 8.2. From the perusal of the paper book and the replies filed by share subscribing companies in response to notice u/s. 133(6) of the Act, it is vivid that all the share applicants are (i) income tax assessees, (ii) they are filing their income tax returns, (iii) share application form and allotment letter is available on record, (iv) share application money was paid by account payee cheques, (v) details of the bank accounts belonging to share applicants and their bank statements are on record, (vi) in none of the transactions, there are any deposit of cash before issuing cheques to the assessee, (vii) all the share applicants are having substantial creditworthiness represented by their capital and reserves. 8.3. For expressing our views as aforesaid, we draw our force also from the decision of Hon'ble jurisdictional High Court of Calcutta in the case of PCIT vs. Shree Leathers in ITAT/18/2022 (IA No. GA/02/2022) dated 14.07.2022 whe....
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.... could not have been the basis for making allegations. The assessing officer ignored the settled legal principle and in spite of the assessee having offered the explanation with regard to the loan transaction, no finding has been recorded as regards the satisfaction on the explanation offered by the assessee. Therefore, the assessing officer ignored the basic tenets of law before invoking his power under Section 68 of the Act. Fortunately, for the assessee, CIT(A) has done an elaborate factual exercise, took into consideration, the creditworthiness of the 13 companies the details of which were furnished by the assessee. More importantly, the CIT noted that all these companies responded to the notices issued under Section 133 (6) of the Act which fact has not been denied by the assessing officer. On going through the records and the net worth of the lender companies, the CIT has recorded the factual findings that the net worth of those companies is in crores of rupees and they have declared income to the tune of Rs. 45,00,000/- and 75,00,000/-. Therefore, the assessing officer if in his opinion found the explanation offered by the assessee to be not satisfactory, he should have reco....
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.... 31/[1994] 208 ITR 465 (Cal.): Proof of Identity of the creditors; Capacity of creditors to advance money; and Genuineness of transaction This Court in 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 creditworthiness, 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 of the assessee, and there would be no further burden on the revenue to show that the income is from any particular source." 9.1. Further, in para 9 of the said decision, Hon'ble Supreme Court has observed as under: "9. The Judgments cited hold that the Assessing Officer ought to conduct an independent enquiry to verify the genuineness of the credit entries. In the present case, the Assessi....