TaxTMI 
TaxTMI 
2024 (11) TMI 894
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....eared before the Assessing Officer and provided primary details including an explanation that the assessee company was engaged in the business of share trading. Upon verification of the records, the Assessing Officer noted that the assessee company had received share capital amounting to Rs. 2,62,00,000/-. However, the Assessing Officer questioned the genuineness of the transaction and issued summons u/s 131 of the Act to the director of the assessee company and to the share-subscribers. Although, the share-subscribers submitted various details in response to the summons, however, director of the assessee company did not appear before the Assessing Officer for personal deposition on a specified date. Consequently, the Assessing Officer deemed the responses as insufficient and, therefore, an addition of Rs. 2,62,00,000/- was made to the income of the assessee u/s 68 of the Act. 3. Dissatisfied with the above order, the assessee went in appeal before the ld. CIT(A) by making various submissions, however, the submissions made by the assessee before the ld. CIT(A) were turned down and the appeal of the assessee was dismissed without considering the submissions made by the assessee bef....
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....012-13 2. Bank statement of the assessee along with the reconciliation 3. Form 2 4. List of share allotees 5. ITR Acknowledgement, Final Accounts, Share Application Form, Bank Statement and Reply to summon u/s 131 of the following shareholders - a) Tuberose Pronmoters (P) Ltd. b) Gentle Commosales (P) Ltd. c) Harlalka Commercial (P) Ltd. d) Moonview Markfab (P) Ltd. e) Samarpan Merchants (P) Ltd. f) Oversure Niwas (P) Ltd. g) Satyalaxmi Plaza (P) Ltd. h) Avlokan Tie-up (P) Lid. 6. Assessment order of the following shareholders - a) Harlalka Commercial (P) Ltd. b) Samarpan Merchants (P) Ltd. 6.. Final Accounts, Share Application Form in connection with the following share applicants to whom the share application money refunded in the subsequent year - a) Kerbs Vyapaar (P) Ltd. b) Amit Stock & Commodities (P) Ltd. 7. Bank Statement of the assessee reflecting the money refunded 8. Table showing the investment vis-à-vis net worth of the share applicants 9. Reconciliation of addition of Rs. 2,62,00,000/- made by the A.O." 4.2 The ld. AR further submitted that moreover, in the case of share-subscriber company namely Harlalka Commercial (P....
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....ce and pointed out as to on what account further investigation was needed by way of recording of statement of the directors of the subscriber companies. Even if the directors of the subscriber companies have not come personally in response to the summons issued by the Assessing Officer, in our view, adverse inference cannot be taken against the assessee solely on this ground as it is not under control of the assessee to compel the personal presence of the directors of the shareholders before the Assessing Officer. The Ld. Counsel for the assessee has rightly placed reliance upon the decision of the Hon'ble Bombay High Court in the case of PCIT, Panji vs. Paradise Inland Shipping Pvt. Ltd. reported in (2017) 84 taxman.com 58 (Bom) wherein the Hon'ble High Court has 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 their case. Further the jurisdictional Calcutta High Court in the case of "Crystal networks (P) Ltd. vs CIT" (supra) has held as under: "We find considerable force of the submissions of the learned counsel for the appellant that the Tribunal has merely n....
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.... so as to discharge the primary onus. ii. The Assessing Officer is duty bound to investigate the creditworthiness of the creditor/subscriber, verify the identity of the subscribers, and ascertain whether the transaction is genuine, or these are bogus entries of name-lenders. iii. If the enquiries and investigations reveal that the identity of the creditors to be dubious or doubtful, or lack credit-worthiness, then the genuineness of the transaction would not be established. In such a case, the assessee would not have discharged the primary onus contemplated by Section 68 of the Act." The Hon'ble Supreme court, thus, has held that once the assessee has submitted the documents relating to identity, genuineness of the transaction, and credit-worthiness of the subscribers, then the AO is duty bound to conduct an independent enquiry to verify the same. However, as noted above, the Assessing Officer in this case has not made any independent enquiry to verify the genuineness of the transactions. The assessee having furnished all the details and documents before the Assessing Officer and the Assessing Officer has not pointed out any discrepancy or insufficiency in the said evidences....