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TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1488
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.... such immediately with condonation of delay. 03. Having considered the reasons attributable to the late filing the appeals, we are of the considered opinion that the delay is for bonafide and genuine reasons and therefore, the delay is condoned and appeals are admitted for adjudication. A.Y. 2012-13 ITA No. 1035/Kol/2025 04. At the time of hearing, the ld. Counsel for the assessee pressed the issue raised in ground no.5 to 7, 9 and 10, which are extracted as under: - "5. For that on the facts of the case, the A.O. has complied with the direction of Pr. CIT'S Order u/s. 263 dated 27.09.2016 by calling upon all the directors of the shareholders companies which is mentioned in the assessment order u/s. 263/143(3) dated 29.12.2017, therefore, the whole addition u/s. 68 amounting to Rs. 77,96,70,000/- is completely arbitrary, unjustified and illegal. 6. For that on the facts of the case, the Ld. CIT(A) was wrong in not considering the facts that the directors of allottee shareholders companies appeared on different dates against summons u/s. 131 and their statements have been recorded and all the evidences with paper books regard to the receipt of the s....
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....led upon the assessee to prove the identity, creditworthiness of the transactions and genuineness of the transactions by various details/ evidences. The A.O. also issued notices u/s 133(6) to share applicants contributing share capital including share premium of Rs. 77,96,70,000/-. All the shareholders subscriptions had submitted their replies along with evidences. Copies of the same are available in the paper book from page no. 1 to 3459 in the paper book. Thus, the 34 share applicants had filed the ITR acknowledgement, Final accounts and bank statement, along with other details at the time of assessment proceedings, which proves that the transactions are genuine and investor had creditworthiness to invest in the assessee company. The various documents viz. share application, ITR Acknowledgement, final accounts, bank statement, allotment advice, incorporation certificate, statement of source of fund Form 18 for address proof, copies of assessment orders of some applicants etc. relating to the share applicants were furnished. Notices u/s 133(6) of the Act were issued by Ld. AO to share subscribers during the course of assessment proceedings and the share subscribers have duly compl....
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....ion was nil, the subscribers were incurring losses on account of expenses incurred, EPS was Nil and cash flow was also meagre without there being any fixed assets in the subscriber company. In para no.6.2.5 discussed the assessment framed u/s 143(3) of the Act in the case of seven subscribers, wherein the addition in respect of bogus share capital was made in the hands of the subscribers. Finally, the ld. CIT(A) held that the funds credited in the books of the assessee were not proved to be genuine and thus, justified the addition made by the ld. AO. The ld. CIT(A) while dismissing the appeal of the assessee also relied on series of decision as discussed in para no.6.2.11 and finally, dismissed the appeal of the assessee by observing as under: - "6.2.12. In view of the aforesaid judicial pronouncements as well as the discussions held above, it can be inferred that the assessee has failed to discharge its initial burden to establish the creditworthiness and genuineness of the transaction in support of the said share capital of Rs. 77,96,70,000/-. It is a settled law that whether any sum credited in the accounts of the assessee through banking channel or not and whether any ....
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....g the reply along with evidences as called for by the ld. Assessing Officer. The ld. AR submitted that all these replies were available in the paper book from page no.1 to 3459. The ld. AR stated that the 34 share applicants had filed ITR acknowledgements, audited financial accounts, bank statement along with other details such as the assessment orders u/s 143(3) of the Act and thus, proved the three ingredients of Section 68 of the Act. The ld. AR therefore prayed that the assessee has proved the identity, creditworthiness of the investors and genuineness of the transactions. The ld. AR therefore submitted that once the assessee has furnished the details of the share transactions along with all the details /evidences qua the subscribers and the ld. AO has not pointed out any mistake / defects in the said evidences, then the addition u/s 68 cannot be made. In defense of his argument the ld. AR relied on the decision of Hon'ble Calcutta High Courtin case of Pr. CIT Vs. Sreeleathers 448 ITR 332. 09. The ld. AR also submitted that the summons u/s 131 of the Act were also issued during the assessment proceedings, which were duly served upon the share subscribers and the share su....
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.... on the decision of CIT Vs. Creative World Telefilms P. ltd. (2011) 333 ITR 100 (BOM), CIT vs. vs. Pranav Foundations Ltd. [2014] 51 taxmann.com 198 (Madras)/[2015] 229 Taxman 58 (Madras) vide order dated 12-08-2014. 011. The ld. AR also submitted that the assessee company has proved the source of funds of the subscribers and the theory of investigating the source to source is not applicable to the instant A.Y. 2012-13. The ld. AR submitted the provision of Section 68 of the Act prior to amendment by Finance Act, 2012, with effect from 01.04.2013 does not empower the ld. AO to make any enquiry into the source of source of funds. The ld. AR in defense of his argument relying on the decision of Hon'ble Bombay High Court in case of CIT vs. Gagandeep Infrastructure Private Ltd. (2017) 394 ITR 680 (Bom), wherein it has been held that the proviso to Section 68 of the Act was introduced by the Finance Act, 2012, w.e.f. 2013 and therefore, is effective from A.Y. 2013-14 onwards and not for the earlier assessment years prior to A.Y. 2013-14. The ld. AR also relied on the decision of Hon'ble Apex court in the case of Commissioner of Income-tax vs. Lovely Exports (P.) Ltd. [2008] 2....
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....d. CIT(A) in the appellate proceedings, Therefore, the order passed by ld. CIT(A) may kindly be upheld by dismissing the appeal of the assessee. 013. We have heard the rival contentions and perused the records carefully as placed before us. The Assessee was incorporated on 28/03/1996. The assessee had issued 71,15,670 equity shares, out of these 64,00,000 shares were issued as Right share to the existing shareholders while remaining 7,15,670 were issued by other parties during the year under consideration. Sl No. Name of the share applicants Amount (Rs) 1. Amarlaxmi Deal Trade pvt. ltd. 3,20,00,000 2. Baghbaan deal trade pvt. Ltd. 3,20,00,000 3. Accurate Shoppers Pvt. Ltd. 2,79,80,000 4. Active Dealmark Pvt. Ltd. 85,00,000 5. Anita Promoters Pvt. ltd. 5000000 6. Axon Mercantile Pvt. ltd. 4490000 7. Billion leasing & finance Pvt. ltd. 3000000 8. Burlington Barter Pvt. ltd. 33033333 9. Deercool Vinimay Pvt. ltd. 6000000 10. Dewdrops Mercantiles Pvt. ltd. 75800000 11. Eastwest Enclave Pvt. ltd. 51750000 12. Flowtop Merchandise Pvt. ltd. 3000000 13. Intimate com....
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....Hon'ble Court has held : 'In the absence of any such finding, it is held that the order passed by the Assessing Officer was utterly perverse and rightly interfered by the Commissioner (Appeals). The Tribunal re-appreciated the factual position and agreed with the Commissioner (Appeals). The Tribunal apart from taking into consideration, the legal effect of the statement of AKA also took note of the fact that the notices which were issued by the Assessing Officer under section 133(6) to the lenders where duly acknowledged and all the lenders confirmed the loan transactions by filing the documents which were placed before the tribunal in the form of a paper book. These materials were available on the file of the Assessing Officer and there is no discussion on this aspect. Thus, the tribunal rightly dismissed the appeal filed b y the revenue. [Para 5]' 016. We also note from perusal of assessment order that, the summons issued u/s 131 of the Act during assessment proceedings were also served upon the share subscribers. Thus, it is evident that the share subscribers were existing at their respective addresses. Thus, notices u/s 133(6) as well as summons u/s 131 of the Act w....
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....ld that when the basic evidences are on record the mere failure of the creditor to appear cannot be basis to make addition. Further reliance was placed in the case of Nemi Chand Kothari 136 Taxman 213, (supra), wherein the Hon'ble Guahati High Court has given a further twist to the issue of onus on assessee under section 68, by holding that the same should be decided by taking into consideration the provision of section 106 of the Evidence Act which says that a person can be required to prove only such facts which are in his knowledge. The Hon'ble Court in the said case held that, once it is found that an assessee has actually taken money from depositor/lender who has been fully identified, the assessee/borrower cannot be called upon to explain, much less prove the affairs of such third party, which he is not even supposed to know or about which he cannot be held to be accredited with any knowledge. In this view, the Hon'ble Court has laid down that section 68 of Income-tax Act, should be read along with section 106 of Evidence Act. 019. Similarly, the Hon'ble Calcutta High Court in the case of Crystal Networks (P.) Ltd. v. CIT [2013] 35 taxmann.com 432/353 ITR 1....
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....3(3) 2 BAGHBAAN DEALTRADE PVT LTD 3,20,00,000.00 278-445 Face Value 143(3) 3 ACCURATE SHOPPERS PVT LTD 2.79,80,000.00 446 to 642 3431 to 3433 143(3) 4. ACTIVE DEALMARK PVT LTD 85,00,000.00 643 to 710 3406 to 3408 143(3) 5. ANITA PROMOTERS PVT LTD 50,00,000.00 711-754 3411 to to 3413 143(1) 6 AXON MERCANTILE PVT LTD 44,90,000.00 755-825 3411 to to 3413 143(3) 7. BILLION LEASING FINANCE PVT LTD 30,00,000.00 826-863 3411 to to 3413 143(1) 8 BURLINGTON BARTER PVT LTD 3,30,00,000.00 864-1025 3426 to 3428 143(1) 9. DEERCOOL VINIMAY PVT LTD 60.00,000.00 1026-1070 3416 to 3418 143(3) 10 DEWDROPS MERCANTILES PVT LTD 7,58,00,000.00 1071-1258 3416 to 3418 143(3) 11 EASTWEST ENCLAVE PVT LTD 5.17,50,000.00 1259-1405 3431 to 3433 143(3) 12. FLOWTOP MERCHANDISE PVT LTD 30,00,000.00 1406-1470 3406 to 3408 143(3) 13 INTIMATE COMMOTRADE PVT LTD 95,00,000.00 1471-1531 3431 to 3433 143(3) 14 KINETIC FINANCIAL CONSULATNTS PVT LTD 92,00,000.00 1532-1576 3431 to 3433 143(3) ....
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....hen their own funds are several times the investment made in the assessee company. The case of the assessee find support from the decision of Hon'ble Delhi High court in the case of CIT Vs M/s Mayawati 338 ITR 563(Del). 023. Considering the fact of the assessee's case in the light of ratio laid down in the decisions as discussed above, we are inclined to set aside the order of the ld. CIT(A)and direct the Assessing Officer to delete the addition. Ground No.5-7 and 9 & 10 are allowed. 024. The other grounds raised by the assessee is not been adjudicated at this stage. 025. The appeal of the assessee in ITA No. 1035/Kol/2025 for A.Y. 2012-13 is allowed on legal issue. A.Y. 2014-15 ITA No. 1036/Kol/2025 026. At the time of hearing the ld. Counsel for the assessee pressed ground no.2,3 and 4 which are extracted as under- "2. For that on the facts of the case, the Ld CIT(A) erred in confirming the order of the A.O. when notice u/s. 148 dated 30.07.2022 was barred by limitation, notice u/s. 148A(b) having been initiated after 6 years from the assessment year, the assessment year in question was not covered by TOLA and as admitted by the Ld ASG in the case o....
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..... 030. After hearing the rival contentions and perusing the materials available on record, we find that the assessment in this case was framed u/s 143(3) of the Act vide order dated 31.12.2016. Thereafter, the notice u/s 148 of the Act was issued on 28.04.2021 and ITR was filed on 07.05.2021. Thereafter, the assessee filed the objection on the validity of notice issued u/s 148 of the Act, challenging the same on the various grounds. The assessee submitted that in Para no.2 that the new scheme of reassessment has come in place with effect from 01.04.2021, therefore was any reopening notice u/s 148 of the Act on or after 01.04.2021, has to be in accordance with the new provisions of Section 148 and 148A of the Act. The assessee requested the ld. AO to drop the proceedings immediately. Thereafter, the learned AO issued notice u/s 148A(b) of the Act on 31.12.2022, which were replied by the assessee by uploading the submission on online portal on 01.07.2021. The order u/s 148A(d) of the Act was passed on 30.07.2022 and the notice u/s 148 of the Act, was issued u/s 30.07.2022. We find that {Taxation and Other Laws [Relaxation and Amendment of Certain Provisions] Act} TOLA is not appli....
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.... of the Act as it is existed prior to 01.04.2021. Therefore, considering the facts of the assessee's case, we are inclined to hold that the assessment is barred by limitation and is quashed. Ground nos.2,3 and 4 in this appeal are allowed. 031. As we have already quashed the assessment, other grounds raised by the assessee is the memorandum of appeal are not being adjudicated at this stage. 032. The appeal of the assessee in ITA No. 1036/KOL/2025 for A.Y. 2014-15 is allowed on legal issue. A.Y. 2015-16 ITA No. 1037/Kol/2025 033. The issue raised in this appeal is similar to one as decided by us in ITA No. 1036/Kol/2025 for A.Y. 2014-15. Accordingly, our decision would, mutatis mutandis, apply to this appeal of assessee in ITA No. 1037/KOL/2025 for A.Y. 2015-16 as well. Hence, the appeal of the assessee is allowed. A.Y. 2016-17 ITA No. 1038/Kol/2025 034. At the time of hearing, the ld. Counsel for the assessee pressed ground no.2,3,4 which are extracted below: - "2. For that on the facts of the case, the Ld CIT(A) erred in confirming the order of the A.O. when notice u/s. 148 dated 29.07.2022 was barred by limitation, notice u/s. 148A(b) having been ....
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....see complied with the said notice by filing the return of income declaring the same income as was declared originally. Finally, the assessment was completed by the learned AO u/s 147 read with section 144B of the Act vide order dated 17.05.2023 by making addition of Rs. 1,13,91,344/- on account of bogus accommodation entries in respect of bogus loans. 036. The learned Authorized Representative vehemently submitted before us that the notice u/s 148 of the Act is hopelessly barred by limitation on the ground that in the order passed u/s 148A(d) of the Act dated 30.07.2022, the learned AO came to the conclusion that escapement is Rs. 21,78,610/- which is apparently below Rs. 50 lacs and therefore, barred by limitation in terms of provisions of section 149(1)(9) of the Act. Consequently, the notice issued u/s 148B and all other consequential proceedings are bad in law. In defence of his arguments the ld. Counsel for the assessee relied on the decision of Delhi High Court in case of Ganesh Dass Khanna vs. Income-tax Officer [2024] 460 ITR 546 (Delhi) dated 10-11-2023. The learned Authorized Representative also relied on the decision of Hon'ble Madrass High Court in case of Mrs. T....