TaxTMI 
TaxTMI 
2024 (8) TMI 1533
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....was never vested with the jurisdiction. 3 For that the Ld CIT (A) erred in confirming the addition of share capital and premium issued to 9 share applicants on the ground that the assessee denied to produce their documents when the assessee never denied and the documents were already on record and must have been submitted to CIT (A) by AO along with the remand report. 4 For that the Ld CII(A) erred in confirming the addition of share capital and premium issued to remaining 21 share applicants on the ground that their creditworthiness is not proved when they had sufficient amount of reserves & surplus. 5. For that the Ld CIT (A) erred in confirming the addition of share capital and premium issued to remaining 21 share applicants on the ground that the genuineness of the transaction due to high share premium is not proved when charging high share premium cannot be a ground to make the addition. 6. For that the Ld CIT (A) erred in confirming the addition of share capital and premium on the ground that the directors of the share applicants were not produced when it is not required as per law and various judicial decisions. 7. For that on the....
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....nd on the issue of jurisdictional point that the assessment having been completed by TRO and has no jurisdiction to frame the assessment. However, this plea taken by the assessee was rejected by Ld. CIT (A) observing that case of the assessee was covered under clause (a) of sub section (3) of Section 124 of the Act as the assessee did not challenge the jurisdiction of AO within the expiry of one month from the issuance of notice under section 142(1) of the Act on 31.10.2024 and claim of the assessee was rejected. 5. Dissatisfied with the above order, assessee is in appeal before this Tribunal raising multiple grounds on the jurisdictional issue as well as on the merits of the case. The Ld. Counsel for the assessee placed on record a paperbook containing 463 pages in support of corroborating the transaction of share capita including share premium raised during the year. The Ld. Counsel for the assessee has made detail and elaborate submissions on the jurisdictional issue. He placed before the bench on the merit of the case to demonstrate that onus discharge by the assessee in terms of section 68 of the Act. He categorically pointed out that the Ld. AO himself noted in the assessm....
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....igh Court was, therefore, right in refusing to refer the questions sought for. Decision of the High Court affirmed." 7. The Ld. Counsel for the assessee submitted that in order to establish the identity and creditworthiness of the shareholders and genuineness of the transactions, assessee has submitted all the relevant details and documents in the course of assessment as well as appellate proceeding, details of which are tabulated and is extracted below from the index of the paper book for ease of reference: SI No. Particulars Page No. Filed before 1 List of share application to whom shares issued during the year 1 C.I.T(A) & A.O. 2 Documents of M/s Lucky Prime Financial Consultants Pvt. Ltd. Audited financial statements for FY 2011-12 Present ROC Master Data (Active) 2-17 Do 3 Documents of M/s Subhalaxmi Vincom Pvt. Ltd. Audited financial statements for FY 2011-12 Present ROC Master Data (Active) 18-33 Do 4 Documents of M/s Subhshree Tradelink Pvt. Ltd. Audited financial statements for FY 2011-12 Present ROC Master Data (Active) 34-47 Do 5 Documents of M/s Navdurga Dealer Pvt. Ltd. ....
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....ster Data (Active) 233-243 Do 21 Documents of M/s Matashree Barter Pvt Audited financial statements for FY 2011-12 Present ROC Master Data (Active) 244-254 Do 22 Documents of M/s Mridang Commosales Pvt. Ltd. 255-265 Do 23 Documents of Mr Aditya Mundhra Notice u/s 133(6) and its reply filed before AO along with enclosures consisting: Voter ID (Identity Card) PAN Card Share Allotment Advice Bank Statement highlighting the payment made for purchase of shares ITR Acknowledgement for Asst yr 2012-13 Computation of Income Financial Statements for FY 2011-12 266-280 Do 24 Documents of Mrs Sonali Mundhra Notice u/s 133(6) and its reply filed before AO along with enclosures consisting: Voter ID (Identity Card) PAN Card Share Allotment Advice Bank Statement highlighting the payment made for purchase of shares ITR Acknowledgement for Asst yr 2012-13 Computation of Income Financial Statements for FY 2011-12 281-292 Do 25 Documents of M/s Accent Commosales Pvt Ltd Notice u/s 133(6) and its reply filed before AO along with enclosures consisting: Share Allotment Advice Voter ....
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....ighlighting the payment made for purchase of shares ITR Acknowledgement Computation of Income Audited Financial Statements Present ROC Master Data (Active) 419-440 Do 31 Documents of M/s Dhanvirdhi Investment Management Pvt Ltd Notice u/s 133(6) and its reply filed before AO along with enclosures consisting: Details of Source of Fund Share Application Form Share Allotment Advice PAN Card Bank Statement highlighting the payment made for purchase of shares ITR Acknowledgement Computation of Income 441-463 Do 8. Ld. Counsel reiterated that the share subscribers are body corporate, registered with ROC and are assessed to income tax. He further stated that these subscribers had confirmed the transactions, filed relevant papers and documents and also explained the source of funds in their hands for making investment in the assessee company. He thus, emphasized that assessee had discharged its primary onus casted upon its u/s. 68 of the Act. According to him, the onus thus shifted to the Ld. AO to disprove the material placed before him, without doing so, the addition made by the Ld. AO is based on conjectures and surmises and, ther....
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....ink Pvt. Ltd. 1,000 10,000 490,000 500,000 95,195,09 4 Navdurga Dealer Pvt. Ltd. 1,000 10,000 490,000 500,000 23,727,52 5 Shivganga Tradelink Pvt. Ltd. 1,000 10,000 490,000 500,000 23,495,66 6 Mansamata Vyapaar Pvt. Ltd. 1,000 10,000 490,000 500,000 79,186,33 7 Padmakar Marketing Pvt. Ltd. 1,000 10,000 490,000 500,000 25,379,69 8 Panghat Dealtrade Pvt. Ltd. 3,250 32,500 1,967,500 2,000,000 161,368,79 9 Sakambhari Financial Consultancy Pvt. Ltd. 2,000 20,000 980,000 1,000,000 90,663,70 10 Labhdhan Vanijya Pvt. Ltd. 2,000 20,000 980,000 1,000,000 79,310,18 11 Hemlata Holdings Pvt. Ltd. 1,000 10,000 490,000 500,000 9,330,15 12 Mangalkamna Suppliers Pvt. Ltd. 2,000 20,000 980,000 1,000,000 152,619,21 13 Lovely Tradelink Pvt. Ltd. 1,250 12,500 987,500 1,000,000 27,352,78 14 Manju Real Estate Consultants Pvt. Ltd. 1,250 12,500 987,500 1,000,000 50,846,02 15 Pitambari Tie Up Pvt. Ltd. 1,250 12,500 987,500 1,000,000 158,420,852....
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....ve heard the rival contentions and gone through the material placed on record. We note that Ld. AO without even going through and discussing the details submitted by the subscriber companies, insisted for personal appearance of the directors of the assessee to prove the identity, creditworthiness of the subscribers and the genuineness of the transactions. To our mind, Ld. AO could have taken an adverse view only if he could point out the discrepancies or insufficiency in the evidence and details furnished in his office and also as to what further investigation was needed by him by way of recording of statement of the directors of the assessee. We draw our force from the decision of the Hon'ble Bombay High court in the case of PCIT v. Paradise Inland Shipping Pvt. Ltd. [2017] 84 taxmann.com 58 (Pan) 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 their case. We also draw our force from the decision of Hon'ble Jurisdictional High Court of Calcutta in the case of Crystal Network Pvt. Ltd. v. CIT (supra) which held as under: "We find considera....
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.... 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, (viii) details relating to 'source of source' also placed on record by the subscribers. 18. Before concluding, to give our finding, we place reliance on the following judicial precedents to buttress our observations and conclusions : i) The decision of Hon'ble Jurisdictional High Court of Calcutta in the case of CIT v. Dataware Pvt. Ltd. in ITAT No. 263 of 2011 dated 21.09.2011 wherein Hon'ble jurisdictional High Court held that "After getting the PAN number and getting the information that the creditor is assessed under the Act, the Assessing officer should enquire from the Assessing Officer of the creditor as to the genuineness" of the transaction and whether such transaction has been accepted by the Assessing officer of the creditor but instead of adopting such course, the Assessing officer himself could not enter into the return of the creditor and brand the same as unworthy of credence." ii) Decision of Hon'ble jurisdiction High Court of Calcut....
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.... view of the fact that all the four parties, who are subscribers of the shares, are limited companies and enquiries were made and received from the four companies and all the companies accepted their investment. Thus, the assessee has categorically established the nature and source of the said sum and discharged the onus that lies on it in terms of section 68. When the nature and source of the amount so invested is known, it cannot be said to undisclosed income. Therefore, the addition of such subscriptions as unexplained credit under section 68 is unwarranted." 19. We note that authorities below have relied upon the decision in the case of M/s Bisakha Sales Pvt. Ltd. v CIT [2014] 52 taxmann.com 305 (Kolkata- Trib.). In this case, it was held that where assessee-company received share application money with huge and unjustified share premium from corporate entities, merely because said amount was received through banking channel, Assessing Officer was not justified in accepting said transactions as genuine without making proper enquiries. Apparently, the AO has not properly appreciated that decision of the Hon'ble ITAT. The Hon'ble ITAT has never held that share capital ....