TaxTMI 
TaxTMI 
2025 (3) TMI 935
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....nt/revenue (hereinafter "revenue") that an information dated 30.03.2020 was received from DDIT, Investigation, Unit-7(2), Delhi wherein, it was informed that a survey action on 13.12.2018 under section 133A of the Income Tax Act, 1961 (hereinafter "the Act") was carried out on various companies of BDR groups. On examination of information available on records, it was found that the amount, which was received by the respondent/assessee (hereinafter "assessee") company during the relevant assessment year on account of share capital and security premium, has escaped assessment. Thereafter, a notice under section 148 dated 31.03.2021 was issued to the assessee and the case of assessee was assessed under section 147 read with section 143 (3) of the Act on 31.03.2022 at income of Rs. 56,10,46,945/- after making addition of Rs. 52,26,00,000/- on account of unexplained cash credits received as share capital/premium under section 68 of the Act. Aggrieved with the order under section 147/143 (3) of the Act, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) (hereinafter "the CIT (A)"), who, vide order dated 19.06.2023, deleted the addition of Rs. 52,26,00,000/- ....
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....pugned judgement of the ITAT while examining the reasons rendered by the AO in his order: "4...i. That the shareholder has neither produced the detailed ITR nor the net worth of the HUF. ii. Amount invested is Rs. 21,62,00,000/- whereas the returned income of the shareholder for the instant year is only Rs. 15,85,912/-. iii. That the bank statement of the shareholder shows a peculiar pattern of huge sums credited and debited throughout the year. iv. Subscriber has poor financial credentials, weak creditability and no creditworthiness and is therefore not a genuine source from which the assessee company has received funds..." 7. It is the contention of the revenue that the AO had minutely considered the fact that though an investment of Rs. 21,62,00,000/- is alleged to have been made, while the returned income of the shareholder for the relevant year was Rs. 15,85,912/- only. It was also noticed that the shareholder had neither produced the detailed Income Tax Return (hereinafter referred as "ITR") nor the net worth of the HUF. The AO also examined the financial status and concluded that the shareholder has poor financial credentials, weak cred....
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....s one of the directors of company M/s Verma Developers Private Limited, which create doubt in mind about genuineness of transactions. 5.6 Further for verification of identity and genuineness of the transactions involved, notice u/s 133 (6) of Income Tax Act, 1961 was issued on 16.03.2022 to all above four allottees to file relevant information regarding this transaction for verification purposes. In response of said notice one of the allottee Dinesh Gupta HUF has filed the necessary details vide reply dated 17.03.2022 but till date no reply has been filed by all other allottee namely M/s Nimit Builders Private Limited, M/s Verma Developers Private Limited and Ram Kumar Gupta HUF." 5.7 In the light of above discussion about taxability of share capital and security premium hereby we are verifying the claim of all four allottee one by one. 1. 1. 1. Dinesh Gupta HUF Mr. Dinesh Gupta, one of director and promotor of Assessee Company is Karta of Dinesh Gupta HUF. During the year under consideration HUF was allotted 13,51,250/- shares on which Rs. 21,62,00,000/- was received by company as share capital and security premium. During the assessmen....
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....2/- only for A.Y 2016-17. Further from the perusal of bank statement it was observed that a peculiar pattern of huge sums is credited and debited throughout the year. Thus, the subscriber to the share capital has poor financial credentials, weak creditability, and no credit worthiness and hence, cannot be considered as a genuine source from which the assessee company has received fund. Thus, the assessee was not able to prove onus that was placed on it by the provisions of Section 68 to prove the identity, genuineness and creditworthiness of share applicants. This onus was not completely discharged by the assessee. 10. Learned counsel also referred to various portions of the impugned judgement of the learned ITAT as well as the CIT (A). According to him, this re-examination and re-appreciation by both the authorities was perverse and against a well-founded fact. Thus, the impugned judgement and that of the CIT (A) ought to be set aside. He also relies upon the judgement of the Hon'ble Supreme Court in Principal Commissioner of Income-Tax vs. NRA Iron and Steel Pvt. Ltd.; 2019 (412) ITR 161 (SC) to submit that the AO is duty bound to investigate creditworthi....
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....ant paragraphs of the impugned judgement and that of the CIT (A) to submit that the shareholders had furnished their complete income tax particulars; confirmed that investments are duly accounted for and discernible from their bank accounts; nature and source of funds wherefrom the investments were made were also disclosed. According to him, the mandate of section 68 of the Act was fully and completely discharged by the assessee. Thus, the three tests having been fully complied with by the assessee, the AO could not have doubted the compliance with the mandate of section 68 of the Act. 15. Having heard Mr. Sanjay Kumar learned SSC for the revenue, Mr. Salil Aggarwal learned senior counsel for the assessee, examined the records of the case and perused the impugned judgement, we are unable to agree with the contentions of the revenue. The reasons are as follows. 16. Section 68 of the Act, mandates three tests before the AO can add the investment/transaction as sum chargeable to income-tax as income of the assessee for the relevant year. Those are, (i) the creditworthiness of the creditor/shareholder/subscriber; (ii) the identity of the creditor/shareholder/subscriber; and (iii)....
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....s in their kitty which could explain as a source for making investments in the hands of the investors. This has been proved in the instant case beyond reasonable doubt. The following tabulation would duly prove the immediate source of credit on each day of making investment by the investors in the assessee company:- Dinesh Gupta HUF Details of immediate source of payments made to assessee company during the AY 2016-17 S.No. AMOUNT PAID IMMEDIATE SOURCE OF AMOUNT PAID REMARKS DOCUMENTARY EVIDENCES AT PAGE NO. 776 to 905 DATE AMOUNT DATE AMOUNT 1. 29.09.2015 1,00,00,000.00 24.09.2015 69,00,000.00 REFUND OF LOAN DURING THE YEAR FROM M/S RISHI INFRATECH PVT LTD CONFIRMATION OF ACCOUNT AT PAGE NO.792 24.09.2015 25,00,000.00 REFUND OF LOAN DURING THE YEAR FROM M/S RENU PROPTECH PVT LTD CONFIRMATION OF ACCOUNT AT PAGE NO.793 28.09.2015 10,81,473.41 SALE OF LISTED SHARES BROKERS CONTRACT NOTE AT PAGE NO. 801 TO 852 29.09.2015 6,99,991.50 SALE OF LISTED SHARES BROKERS CONTRACT NOTE AT PAGE NO. 801 TO 852 Total 1,00,00,000.00 1,11,81,464.91 2 08.1....
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....sp; 801-852 26.10.2015 45,91,007.50 SALE OF LISTED SHARE 26.10.2015 nn non nn SALE OF UNLISTED SHARES CONFIRMATION OF ACCOUNT AT PAHP NO 97 Total 2,06,00,000.00 2,06,50,580.11 9. 28.10.2015 84,00,000.00 27.10.2015 15,63,020.00 SALE OF LISTED SHARE BROKERS CONTRACT NOTE AT PAGE NO. 801-852 28.10.2015 68,13,958.07 SALE OF LISTED SHARE BROKERS CONTRACT NOTE AT PAGE NO. 801-852 Total 84,00,000.00 83,76,978.07 10 16.11.2015 1,50,00,000.00 16.11.2015 1,50,00,000.00 REFUND OF LOAN DURING THE YEAR FROM M/S BDR FINVEST PVT LTD CONFIRMATION OF ACCOUNT AT PAGE NO. 794 11 23.12.2015 1,00,00,000.00 23.12.2015 1,00,00,000.00 REFUND OF LOAN DURING THE YEAR FROM M/S RENU PROPTECH PVT LTD CONFIRMATION OF ACCOUNT AT PAGE NO.793 12 25.1.2016 60,00,000.00 21.1.2016 60,00,000.00 LOAN RECEIVED FROM M/S RHEA DISTRIBUTI ON COMPANY (PROPRIET OR ROOP KISHORE MADAN) CONFIRMATION OF ACCOUNT, COPY OF ITR ACKNOWLED GMENT AND ASSESSMENT ORDER U/S 143 (3) OF TH....
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....S TO 31 CRORES AT THE START OF YEAR TO AT THE END OF THE YEAR AT PAGE NO. 909 24.09.2015 53,00,000.00 REFUND OF LOAN GIVEN DURING THE EARLIER YEAR TO M/S RENU PROPTECH PVT LTD CONFIRMATION OF INCOME ASSESSMENT FOR THE AY 15-16 OF M/S RENU PROPTECH PVT LTD WAS COMPLETED UNDER SECTION 143 (3) OF THE ACT, ASSESSMENT ORDER U/S 143 (3) AT PAGE NO. 929 to 935 Total 6,57,00,000.00 6,57,00,000.00 2 23.11.2015 1,32,00,000.00 16.11.2015 80,00,000.00 ADVANCE RECEIVED FOR SALE OF SHARES FROM M/S RAMPRASTHA PROMOTERS AND DEVELOPERS PVT LTD CONFIRMATIO N OF ACCOUNT AT PAGE NO. 936 16.11.2015 55,00,000.00 ADVANCE FOR PURCHASE OF SHARES FROM M/S RAMPRASTHA PROMOTERS AND DEVELOPERS PVT LTD CONFRIMATON OF ACCOUNT AT PAGE NO. 936 Total 1,32,00,000.00 1,35,00,000.00 3 30.11.2015 2,08,00,000.00 30.11.2015 2,13,00,000.00 REFUND OF LOAN GIVEN DURING THE EARLIER YEARS TO M/S RENU PROPTECH PVT LTD CONFIRMATIO N OF ACCOUNT, ASSESSMETFOR THE AY 15-16 OF M/S RENU PROPTECH PVT LTD WAS COMPLETED OF THE ACT ASSESSMENT ORDER U/S 143 (3) AT PAGE NO. ....
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....ROM M/S BDR FINVEST PVT LTD GIVEN ON 31.12.2015 COPY OF BANK STATEMENT AT PAGE NO. 947-950 TOTAL 5,10,00,000.00 5,54,48,800.00 VERMA DEVELOPERS PRIVATE LIMITED Details of immediate source of payments made to assessee company during the AY 2016-17 S.No. AMOUNT PAID IMMEDIATE SOURCE OF AMOUNT PAID REMARKS DOCUMENTARY EVIDENCES AT PAGE NO. 580 to 770 DATE AMOUNT DATE AMOUNT SHARE ALLOTMENT TO N1SHIT CAPINVEST PRIVATE LIMITED CONFIRMATION OF ACCOUNT ASSESSMENT FOR THE AY 16-17 OF M/S NISHIT CAPINVEST PVT LTD WAS COMPLETED UNDER SECTION 143 (3) OF THE ACT, ASSESSMENT ORDER U/S 143 (3) AT PAGE NO. 602 TO 619 1 22.09.2015 3,37,00,000.00 22.09.2015 3,37,00,000.00 2 24.09.2015 2,83,00,000.00 24.09.2015 4,25,00,000.00 3 23.11.2015 1,34,00,000.00 23.11.2015 1,34,00,000.00 SHARE ALLOTMENT TO RENU PROPTECH PRIVATE LIMITED CONFIRMATION OF ACCOUNT ASSESSMENT FOR THE AY 16-17 OF M/S RENU PROPTECH PVT LTD WAS COMPLETED UNDER SECTION 143 (3) OF THE ACT, ASSESSMENT ORDER U/S 143 (3), CIT APPEAL (7) DELHI ORDER, HON'BLE DELHI ITAT ORDER AT ....
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....ed the material available before him, yet, recorded findings without rendering any reasons in support thereof. This itself would render such findings perverse requiring hierarchical appellate authorities to scrutinise such findings. Both the Appellate Authorities have concurrently found that the shareholders, who were the investors in the relevant years were existing shareholders of the assessee and thus, not doubting their identities. The creditworthiness was tested on the anvil of some such shareholders having huge exempt income in their individual capacities to offer such investments. In fact it was found to be beyond doubt that such shareholders had sufficiency of funds available which satisfactorily explained the source. The appellate authorities had also taken into consideration the past transactions of the shareholders which were duly disclosed to the AO. The previous transactions furnished to the AO are as under: "Share capital and share premium for Financial Year 2015-16 Number of Shares Share capital Amount (in Rs.) Share Premium Amount (in Rs.) Fully paid shares of Rs.10/- each Opening as on 01.04.2015 1,61,05,....