AI Drafter 
TaxTMI 
TaxTMI 
2025 (2) TMI 529
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....utiny under CASS to verify whether the funds received in the form of share premium are from disclosed sources and have been correctly offered for tax. During the course of assessment proceedings various notices u/s 143(2) and 142(1) were issued. In response, ld. AR of the assessee submitted relevant documents, such as, certificate of incorporation, MoA/AoA, auditor's report along with Balance Sheet and Profit & Loss account, valuation report of shares, bank statement and bank ledger accounts. He further submitted confirmations from the investor companies, share application form and certificate of incorporation, MoA/AoA, auditor's report along with Balance Sheet and Profit & Loss account of the investor companies. Further Assessing Officer issued notice u/s 133(6) of the Act to investor companies confirming the investment made in the assessee company. In response, most of the investor companies confirmed the investment made in the assessee company and filed relevant documents before the Assessing Officer. The Assessing Officer rejected the same and proceeded to make the addition of the entire share application received by the assessee. 4. Aggrieved assessee preferred an appeal be....
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....ance sheet, PAN, address and bank statement has been filed in the case of M/s Nu Ruchi Barter Pvt. Ltd. Against this observation, ld. AR submitted, it is necessary to state that all the requisite documents were filed/uploaded before Ld. AO on the E-filing portal during the course of assessment proceeding itself. However, the documents filed were not appreciated by the Ld. AO and therefore assessee was left with no other option except to re-file the evidences under Rule 46A of the Income Tax Rules. Subsequently during the course of appellate proceeding, Ld. CIT(A) at Page 16, Para 5.1 of the Order appreciated the documents filed before the Ld. AO and observed that "5.1. During the course of appellate proceedings, the appellant had requested for admission of additional evidence under rule 46A. Since it is observed that the evidences submitted are the same as submitted at the stage of assessment proceedings, the request for additional evidence is not accepted.". 7. He further submitted that for AY 2017-18, AO at Para 5 stated that assessee company has not even provided the complete address, PAN, ITR, bank account statements of M/s Acquatic Exim Pvt. Ltd. and confirmation of account....
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....rial contrary brought by the Ld.AO or by Ld. CIT(A). It may be appreciated that after perusing the documents placed on record in the Paperbook, there was nothing on the part of the assessee which was to be fulfilled. 9. He further submitted that it is necessary to note that the assessee company has furnished all the relevant documents before the lower authorities along with the valuation certificate as per the Rule 11UA(2) of the Income Tax Rules, 1962 and thus, the ingredients required u/s 68 of the Act i.e., identity, creditworthiness and genuineness of the transactions were fulfilled. It is also necessary to state that assessee has also filed the documents as additional evidences along with the application for admission of additional evidences before the Ld. CIT(A). Against the evidences filed before the Ld. CIT(A) for AY 2016-17 he himself at Para 5.1, Page 16 of the order observed that the evidences submitted are the same as submitted at the stage of assessment proceedings, and thus the request for additional evidences was not accepted. Further for AY 2017-18 Ld. CIT(A) appreciated the documents filed as stated at Para 5.2.1 of the order but still dismissed the appeal of as....
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.... regards the applicability of the Section 41(1), it was contended before the Tribunal that no addition can be made under that section unless it is shown that the liability had ceased to exist. The assessee relied upon the judgment of the Supreme Court in the case of CIT v. Sugauli Sugar Works (P) Ltd. (1999), 236 TR 518 and contended that the question whether the liability ceased to exist or not was not a matter to be decided by considering the assessee's conduct alone, but was a matter to be decided only if the creditor was also before the concerned authority and that in the absence of the creditor it is not possible for the concerned authority to come to the conclusion that the debt was barred by limitation and had become unenforceable. It was further pointed out on behalf of the assessee that the aforesaid view was reiterated by the Supreme Court in the case of Chief Commissioner of Income Tax v. Kesaria Tea Co. Ltd. (2002) 254 ITR- 434. It was pointed out that in this judgment the Supreme Court had considered its earlier decision in CIT v. T.V.Sundaram (Iyengar & Sons Ltd. (1996) 222 ITR 344 and distinguished the same on the ground that the factual matrix and the provision ....
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....stablished from the entries passed in the respective balance sheet of the investor companies as share capital and investments. Hence, the nature of receipt is proved by the assessee beyond doubt. The investors have furnished the bank statements through which money towards subscription of the share capital in the assessee company and Ld.AO is wrong to hold that these are not having any creditworthiness. All the companies are registered companies filing their ITR regularly, with running income and business activities. The relevant documents are being filed for your kind perusal in the PB. 13. He further submitted that in respect of source of credit, the assessee has to prove the three necessary ingredients i.e identity of share applicants, genuineness of transactions and creditworthiness of share applicants. The identity of the share applicants is very well proved beyond doubt by the assessee by furnishing the copies of balance sheets and income tax returns etc in the Paper Book. Apart from this, these companies are active in the MCA website i.e www.mca.gov.in.The creditworthiness of the share applicants, these companies are having sufficient capital and reserves to make the inves....
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....s. Hon'ble Supreme court expressed their view that addition made cannot be sustained even if bogus shareholders as revenue is free to proceed to reopen their individual assessment CIT vs. Lovely Exports 319 ITR 5 (St), 2. Do AO issued registered letters to the investing companies. Hon'ble Supreme Court expressed their view that AO failed to carry his suspicions to a logical conclusion by further investigations as he presumed that these companies did not exist at the given address i.e., they have only paper existence and assessee had not been able to disclose the source of the amount received but it has to be conclusively established that a company is non-existence. CIT vs. Kamdhenu Steel and Alloys 361 ITR 220 (PB II, Pg 57- 78) PCIT v Agson Global (P.) Ltd. (Delhi HC) [2022] 441 ITR 550 PCIT v Manoj Kumar Vipin Kumar (Rajasthan HC)/[2022] 441 ITR 632 PCIT V. Kautilya Monetary Services (P) Ltd. (ITA 602/2019 dated 10.07.2019) HC (Delhi) Pr. CIT vs M/s N.C. Cables Ltd. ITA No. 335/2015 (Del) 3. AO got information from the source such as investigation wing and in response to enquiry the assessee filed all the relevant documents as stated above. ....
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....rved that the investor companies i.e. M/s. Cee Aar Decors Pvt. Ltd., M/s. Rishikesh Buildcon Pvt. Ltd. and M/s. RSM Constructions Pvt. Ltd. having same registered/corporate office addresses. He submitted that even though these investors have confirmed the notices issued by the Assessing Officer still they do not satisfy the conditions prescribed u/s 68 of the Act. Accordingly, he relied on the orders of the lower authorities. 19. In the rejoinder, ld. AR of the assessee submitted that Assessing Officer has completely ignored the valuation report submitted by the assessee. With regard to submissions of the ld. DR that the companies are existing in the same address, he submitted that there is no bar on existence of several companies on the same address and they may have separate offices on the same address. He relied on the decision of coordinate Bench in the case of People Care Hospitals Private Ltd. vs. ITO & Ors. in ITA No.100/Del/2021 & ors. dated 06.11.20224. 20. With regard to AY 2017-18, he submitted that all the issues are similar except ld. CIT (A) has not accepted the additional evidences filed under Rule 46A of the Income-tax Rules, 1962. 21. Considered the rival ....