TaxTMI 
TaxTMI 
2018 (2) TMI 2149
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....ht of Rule 18(6) of the ITAT Rules. 4. The appellant company was incorporated during the year under consideration with authorized capital of Rs. 10 lacs equity shares of Rs. 10 each amounting to Rs. 1 crore. The appellant company issued 338250 equity shares of Rs. 10 each at a premium of Rs. 30 per equity shares. The shares were allotted to the following persons :- S. No Date of Allotment Name of the Shareholder Address & Occuption of Allotee No. of Equity Shares of Rs. 10/- Total Share Capital (Rs.) 1 26/03/2010 Manoj Nemani 13/383 (3-A) Parmat Road 35750 357,500.00 Civil Line, Kanpur-208001 Occ. Business 2 26/03/2010 Prashant Nemani 13/383 (3-A) Parmat Road 27750 277,500.00 Civil Line, Kanpur-208001 Occ. Business 3 26/03/2010 Praveen Nemani 13/383 (3-A) Parmat Road 15375 153,750.00 Civil Line, Kanpur-208001 ....
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.... Limited Details of Share Holding Patterns, 5. During the course of the scrutiny assessment proceedings, the assessee was asked to furnish the complete details of the subscribers. We are pained to find that the Assessing Officer never questioned the appellant company how it could offer shares to complete strangers in violation of the specific provisions of the Companies Act by which a Private Limited Company is prohibited from inviting the public to subscribe for any securities of the company. Out of the 15 subscribers, 3 are from Kanpur, 3 are from Jodhpur, 6 are from Delhi, 1 from Kolkatta and 1 from Ahmedabad. The appellant company is based in Ahmedabad. There is nothing on record to show that the shares applicants are related to the promoters of the appellant company. Moreover, why would these persons (presumably strangers) purchase shares of a Private Limited Company which are not freely transferrable nor traded in the stock exchange. 6. We are further pained by the fact that the Assessing Officer in his wisdom has accepted the genuineness of the transaction in respect of 14 subscribers out of total 15 subscribers. The powers of the First Appellate Authority are co- t....
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....oss account of this company is as under :- GURUKUL VINIMAY PRIVATE LIMITED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 I. INCOME SCHEDULE AS AT 31.03.2010 AMOUNT (RS.) AS AT 31.03.2009 AMOUNT (RS.) Interest Income 0.00 33753.00 Service Charges 26000.00 0.00 26000.00 33753.00 II. EXPENDITURE Administrative Expenses Audit Fees 1500.00 1500.00 Bank Charges 1875.10 1994.39 Compliance Fees 1000.00 1000.00 Filing Fees 4000.00 4500.00 General Expenses 670.00 5210.00 Preliminary Expenses W/Off 14868.00 14868.00 Postage & Courier 175.00 210.00 Printing & Stationery 550.00 1240.00 24638.10 30522.39 Profit/(Loss) Before Taxation Less: Provision for Taxation 1361.90 3230.61 Provision for Income Tax 420.00 998.00 Profit/(Loss) A....
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....n a company jointly, they shall, for the purposes of this clause, be treated as a single member: Provided further that - (A) persons who are in the employment of the company; and (B) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; and (iii) prohibits any invitation to the public to subscribe for any securities of the company." (B) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; ● Prohibits any invitation to the public to subscribe for any securities of the company. 14. We fail to understand how a Kolkata based company come to know that one Ahmedabad based company is offering shares at a premium. It appears that the appellant company has allotted shares to a complete stranger and in our understanding shares offered to a complete stranger is as good as offering to general public. 15. Th....
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....n of surrounding circumstances treated as sufficiently disclosing the identity of the individual. 25. Following CIT v. Nova Promoters & Fin/ease (P.) Ltd. [2012] 342 ITR 169/206 Taxman 207/18 taxmann.com 217 (Delhi)) we have held that in view of the link between the entry providers and incriminating evidence, mere filing of PAN Number, acknowledgement of Income Tax Returns of the entry providers, bank account statement is not sufficient to discharge the onus on the Assessee. 26. We have further held that the Court or Tribunal should be convinced about the identity, creditworthiness and genuineness of the transactions. The onus to prove the three factum is on the Assessee as the facts arc within the personal knowledge of the Assessee. Mere production of incorporation details, PAN Numbers or income tax returns may not be sufficient when surrounding and attending facts predicate a cover up. The production of incorporation details, PAN numbers or income tax details may indicate towards completion of paper work or documentation but genuineness, creditworthiness and identity of investment and the investors are deeper and obtrusive than mere completion of paper work or d....