TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 1422
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....roved the identity and creditworthiness of the subscribers and genuineness of the transactions. 3. For that the Ld. CIT erred in confirming the addition when notices u/s 133(6) issued by the AO to all the subscribers were duly served on them and replied back which has not been disputed or doubted by the Assessing Officer. 4. For that the Ld. CIT erred in confirming on the wrong facts stated by the AO that the summons issued u/s 131 by the AO remained unanswered by the director of the company when the Directors duly complied to the notices time to time when served on and even otherwise non-appearance of the directors cannot be a ground for making addition u/s 68. 5. For that on the facts and in the circumstances of the case the addition made u/s 68 is not justified." 3. Brief facts of the case are that the assessee is a Non-banking financial company engaged in the business of shares, investments and financing. Loss of Rs. 4,57,214/- declared in the e-return for Assessment Year 2012-13 e-filed on 29/09/2012. Subsequently case selected for scrutiny through CASS for the reason "to examine Large Share premium received", followed by valid service of notices ....
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....e needed to explain the identity and creditworthiness of the share applicants and genuineness of the transactions have been filed before the lower authorities. Assessee being a NBFC company has to report the financials to the Reserve Bank of India as well as Ministry of Corporate Affairs. All the share applicants are private limited companies duly assessed to tax, financial statements duly audited and transactions carried out through banking channel and relevant part of such bank statements stands filed. Even the source of source of the funds needed to carry out the alleged transactions have been submitted. He also stated that all the share allottee companies were issued notices u/s 133(6) of the Act to which necessary compliance was made and replies were given by the share applicant companies to the Assessing Officer. Reference was also made to paper book page 316 to 318 where the copy of order sheet has been filed to show that the director of the assessee company Shri Pramod Anchalia appeared in person before the ld. Assessing Officer and filed the details. He was also asked to provide the books of accounts and the same was duly complied to. He thus contended that both the lower ....
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....rth of the alleged share subscribers are tabulated below:- TABLE NET WORTH 1 Ancient Nirman Pvt Ltd Business AE-183, Rabindra Pally Bazar Kestopur Kolkata-700101 AAHCA2016L 17,500 3,500,000.00 14,54,24,867.66 2 Bright Star Tie-Up Pvt Ltd Business 80, Adyanath Saha Road Near Jaya Cinema, Lake Kolkata-700048 AAECB2314F 12,500 2,500,000.00 44,19,91,322.68 3 Evershine Vintrade Pvt ltd Business 7A, Bentinck Street Kolkata-700001 AACCE3035G 4,500 900,000.00 3,41,51,759.00 4 Gannet Vintrade Pvt Ltd - Business AE-183, Rabindra Pally Bazar Kestopur Kolkata-700101 AADCG4706H 12,500 2,500,000.00 6,15,37,347.56 5 Image Vintrade Pvt Ltd Business 7A, Bentinck Street 4th Floor Kolkata-700001 AACCI0876P 3,000 600,000.00 6,86,98,669.85 6 Zest Vanijya Pvt Ltd. Business 7A, Bentinck Street Kolkata-700001 AAACZ4008N 12,500 2,500,000.00 3,56,01,032.00 7 Mohan Infrarealty Pvt Ltd Business 33/1, N. S. Road 1st Floor Kolkata-700001 AABCB1363P 85,000 17,000,000.00 12,86,01,025=56 8 Astaroopa Dealcomm Pvt Lt Business 13, B. B. Ganguly Street ....
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....e Pvt Ltd showing payment made to Shipra Enclave Pvt Ltd PAN Card Notice of Annual General Meeting to be held on 28/09/2012 Audit Report as on 31.03.2012. Details and evidence for Gannet Vintrade Pvt Ltd (Subscriber) Copy of ITR Acknowledgement PAN Card Bank Statement of Gannet Vintrade Pvt Ltd showing payment made to Shipra Enclave Pvt Ltd Audit Report as on 31.03.2012. Details and evidence for Image (Subscriber) Copy of ITR Acknowledgement PAN Cards Bank Statement of Image Vintrade Pvt Ltd showing payment made to Shipra Enclave Pvt Ltd Audit Report as on 31.03.2012. Details and evidence for Zest Vanijya Pvt Ltd (Subscriber) Copy of ITR Acknowledgement PAN Card Bank Statement of Zest Vanijya Pvt Ltd showing payment made to Shipra Enclave Pvt Ltd Details of source of funds for payment made to Zest Vanijya Pvt Ltd Notice of Annual General Meeting to be held on 28/09/2012 Audit Report as on 31.03.2012. Details and evidence for Astaroopa Dealcomm Pvt Ltd (Subscriber) Copy of ITR Acknowledgement Audit Report as on 31.03.2012. PAN Card Bank Statement of Astaroopa Dealcomm Pvt Ltd showing payment made to ....
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....sum but in case the explanation offered by him is in the opinion of the Assessing Officer not satisfactory, the sum so credited may be charged to income tax as the income of the assessee. 9.1.1. In the case before us, the assessee provided complete details to explain the nature and source and has also explained the source of source of alleged share application money and thus has discharged the primary onus casted upon it and then the burden shifts over to the Assessing Officer who has to frame an opinion as to whether he is satisfied with these details or not. Such opinion cannot be merely a general observation but the same should be supported by in-depth examination of the details filed by the assessee and to find discrepancies in such details and to also place evidence to prove the contrary. To arrive at such contrary opinion either investigation has to be carried out, any other information to be brought on record which could show that the assessee has converted its unaccounted money in the garb of share application money or it is proved that it is assessee's own money which has been routed from the share applicants or any evidence to prove that such arrangements of funds is i....
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....ess. While drawing the inference, it cannot be assumed in the absence of any material that there have been some illegalities in the assessee's transaction. Held, dismissing the appeal, that the allegations against the assessee were in respect of thirteen transactions. The Assessing Officer issued a show-cause notice only in respect of one of the lenders. The assessee responded to the show cause notice and submitted the reply. The documents annexed to the reply were classified under three categories namely: to establish the identity of the lender, to prove the genuineness of the transactions and to establish the creditworthiness of the lender. The Assessing Officer had brushed aside these documents and in a very casual manner had stated that merely filing the permanent account number details, and balance sheet did not absolve the assessee from his responsibility of proving the nature of the transaction. There was no discussion by the Assessing Officer on the correctness of the stand taken by the assessee. Thus, going by the records placed by the assessee, it could be safely held that the assessee had discharged his initial burden and the burden shifted onto the Assessing Of....
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....f the subscriber companies. Even if the directors of the subscriber companies have not come personally in response to the summons issued by the AO, in our view, adverse inference cannot be taken against the assessee solely on this ground as it is not under control of the assessee to compel the personal presence of the directors of the shareholders before the AO. The Ld. Counsel for the assessee has rightly placed reliance upon the decision of the Hon'ble Bombay High Court in the case of PCIT, Panji vs. Paradise Inland Shipping Pvt. Ltd. reported in (2017) 84 taxman.com 58 (Bom) wherein the Hon'ble High Court has 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. Further the jurisdictional Calcutta High Court in the case of "Crystal networks (P) Ltd. vs CIT" (supra) has held as under: "We find considerable force of the submissions of the learned counsel for the appellant that the Tribunal has merely noticed that since the summons issued before assessment returned unserved and no one came forward to prove. Therefore it shall be assumed that the as....