TaxTMI 
TaxTMI 
2025 (11) TMI 1613
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....4. Thereafter, notices u/s 142(1) of the Act alongwith questionnaire were issued time to time and in compliance to the notices issued, requisite details/information were furnished and books of accounts were produced and examined by AO. Thereafter, the AO computed the income of the assessee company at INR 3,23,99,877/- by making following additions / disallowances vide order dated 30.03.2016 passed u/s 143(3) of the Act: (i) addition u/s 68 on account of unexplained cash credit in the books of assessee company of INR 2,10,20,000/-; (ii) disallowance on account of personal expenses of INR 5,13,453/-; and (iii) disallowance u/s 14A of the Act of INR 5,014/- 3. Against the said order, assessee filed an appeal before Ld. CIT(A) who vide impugned order dated 31.07.2024, partly allowed the appeal of the assessee. 4. Aggrieved by the order of Ld.CIT(A), assessee is in appeal before the Tribunal by taking following grounds of appeal:- 1. "The Ld. CIT(A) has erred in confirming the addition of Rs. 2.10,20,000 u/s 68 ignoring the submissions that the statement of third party Mr. Vivek Jain mainly relied upon by AO 10 make the above addition was neithe....
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....r and he further observed that the statements were sought from the Investigation Wing however, till date no such statements were provided. Ld. AR submits that AO though had reproduced certain extracts of the statements in the assessment order however, the copies of the said statements were neither available in the assessment folder nor were provided to the assessee and since no opportunity of cross-examination was given to the assessee reliance on such statements cannot be placed. For this, he placed reliance on the following judgements :- (i) Krishna Chand Chela Ram vs CIT 125 ITR 713 (SC); (ii) Andaman Timber Industries vs Commissioner of Central Excise Appeal No.4228 of 2006 dated 02.09.2015; (iii) CIT vs Odean Builder Pvt. Ltd. 418 ITR 315 (SC); (iv) PCIT vs Ace Technologies Ltd. [2023] 154 taxmann.com 45 (SC); (v) Pr. CIT, Central-2 vs JPM Tools Ltd. [2023] 154 taxmann.com 44 (Delhi); and (vi) Pr. CIT vs Kishore Kumar Mohapatra [2024] 162 taxmaann.com 5 (SC). 7. Ld.AR further submits that during the course of assessment proceedings, assessee has filed all the relevant details to prove the identity of the shareholders and....
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....ires and investigation and Remand Report was called for by Ld. CIT(A) and thus, it cannot be held that the sole basis of treating the call money received during the year as in genuine on the basis is the statements of Shri Vivek Kumar Jain. He further submits that in the remand proceedings, the assessee has failed to submit the relevant details and further AO has issued notice u/s 133(6) of the Act however, in respect of 04 companies, no replies were submitted. He thus, submits that subscriber companies are non-existent entities and therefore, lower authorities had rightly made the addition which deserves to be upheld. Reliance is placed on the judgement of Hon'ble Delhi High Court in the case of CIT vs NR Portfolio (P.) Ltd. [2014] 42 taxmann.com 339 (Del.). 10. Heard the contentions of both parties and perused the material available on record. In the instant case, assessee has received total sum of INR 2,10,20,000/- from 08 companies towards call money of the shares allotted in preceding years at a premium. A sum of INR 28 Lakhs was received from M/s AGR Forex Holdings Pvt. Ltd. and no doubts were raised about the existence or creditworthiness of this company by the AO. It is ....
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....e application money, allotment money and other call money were received in preceding/succeeding assessment years where the said payments were never doubted by the AO. Thus, by following the principle of consistency also in the year under appeal, it cannot be said that the subscriber companies are not having sufficient creditworthiness to subscribe the shares of the assessee company in the instant year and in preceding year or succeeding years when remaining amount of share capital including premium were received no such allegation was made. The Hon'ble Delhi High Court in the case of PCIT vs. Agson Global Pvt. Ltd reported in [2022]134 Taxmann.com 256 (Delhi) while allowing the appeal in favour of the assessee towards the additions made u/s 68 of the Act has held as under : "Section 68 of the Income-tax Act, 1961 - Cash credits (Share capital money) - Assessment years 2012-13 to 2017-18 - Assessee-company received share capital and share premium money from several investors - Assessing Officer made addition in respect of same on account of unaccounted income under section 68 on basis of recorded statement of managing director of assessee-company - Whether since assesse....
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.... lt was observed by the ITAT that the Assessing Officer had not undertaken any investigation of the veracity of the documents submitted by the assessee, the departmental appeal was dismissed by the Hon'ble High court." 14. In view of the above discussion and further looking at the fact that all the relevant details and documentary evidences were filed by the assessee to establish the identity, creditworthiness and genuineness of the transactions, the said evidences cannot be rejected without any contrary documentary evidence brought on record. It is seen all the call money was received through banking channels and the subscriber companies are having sufficient worth int eh shape of their reserves and surpluses which proves the creditworthiness and genuineness of the transactions. 15. It is trite law that suspicion, howsoever strong, cannot take the place of proof as held in Umacharan Shaw & Bros. vs. CIT (1959) 37 ITR 271 (SC). The Hon'ble Supreme Court in the case of Dhakeswari Cotton Mills Ltd v. Commissioner of Income Tax (1954) 26 ITR 775 (SC) has observed that powers given to the Revenue authority, howsoever, wide, do not entitle him to make the assessment on pure gu....