TaxTMI 
TaxTMI 
2023 (9) TMI 1747
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....2) and 142(1) of the Act. The ld. Assessing Officer noticed that during the year, the assessee has received share capital and share premium totalling to Rs. 2,13,50,000/-. For the purposes of proper verification and examination of the existence and creditworthiness of the share subscribers and the genuineness of the share subscription transactions, the ld. Assessing Officer issued summons u/s 131 of the Act. Though various details were filed by the assessee in support of its contentions that the alleged share application money is duly explained but there was not personal presence of the directors. The ld. Assessing Officer observed that the assessee has not been able to discharge its burden of proof and thus, made addition for unexplained cash credit u/s 68 of the Act at Rs. 2,13,50,000/- and assessed income at Rs. 2,14,24,460/-. 2.1. Aggrieved the assessee preferred appeal before the ld. CIT(A) and again filed all the details including financial statements, identity proofs, confirmations but again failed to succeed. 3. Aggrieved the assessee is now in appeal before this Tribunal. 4. The ld. Counsel for the assessee reiterated the submissions filed before the lower authori....
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.... Filed/ Available before 1. Copy of Audited Financial Statements of Abhay Minerals Pvt Ltd as on 31st March 2012 1-12 AO &CIT(A) 2. Details of Share application & Premium received during the year ended 31.03.2012 along with Networth of subscribers. 13 Do 3. Documents relating to Abhay Kumar Jain (Subscriber) Do ● Reply to notice u/s 133(6) 14 ● PAN Card 15 ● Copy of ITR Acknowledgement (Asst. Yr. 2012-13) 16 ● Balance Sheet as on 31.03.2012 17 ● Details of source of fund 18 ● Bank Statement 19-22 ● Share Allotment Advice 23 ● Reply to notice u/s 131 24 4. Documents relating to Abhay Commerce Pvt Ltd (Subscriber) Do ● Reply to notice u/s 133(6) 25 ● PAN Card 26 ● RBI Registration Certificate 27 ● Copy of ITR Acknowledgement (Asstt. Yr. 2012-13) 28 ● Copy of Auditor's Report & Audited Financial Statements as on 31st March 2012 29-41 ● Ledger account of Investment in Unquoted Shares 42 ● Details of source of fund 43 ● Bank Statement 44-45 ●....
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....; Bank Statement 149 ● Allotment Advice 150 ● Copy of Assessment Order u/s 143(3) for Asst Year 2012-13 151-152 ● Reply to notice u/s 131 153 7. Further we observe that the share subscriber companies are NBFCs duly registered with the RBI and have been assessed u/s 143(3) of the Act for the very same Assessment Year 2012-13. We also that all the share subscribers have replied to the notice u/s 133(6) of the Act directly to the Assessing Officer along with relevant documents called for in such notices. We also notice that share subscribers have sufficient funds in the form of share capital and reserve and surplus so as to justify the investment in the assessee company. Both the lower authorities have only focused on the point of non-appearance but no discrepancy has been observed in the documents filed by the assessee. We observe that under similar set of circumstances, this Tribunal in the case of Mahacol Tie Up (P) Ltd. (supra), which co-incidentally is one of the alleged share subscriber company, has dealt with the very same issue and under the similar set of facts and circumstances decided in favour of the assessee as follows :- ....
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.... 2.47 crores vide paper book page 47, Mahalaxmi Promotion Pvt. Ltd having networth of more than 7.98 crores vide paper book page 56, Niknar Commodities Pvt Ltd having networth of more than 5.09 crores Vide paper book page 68, R.R. Coal Agencies Pvt Ltd having networth of more than 12 crores vide paper book page 80, Rosemary Dealcom Pvt Ltd having networth of more than 1.87 crores vide paper book page 91 and Newtown Mercantile Pvt Ltd having networth of more than 12.79 crores vide paper book page 100. 4. Three share applicants assessed u/s 143(3) on substantive basis. Copies of their assessment orders annexed in paper book page 131-147. In case of Mahalaxmi Promotion and Nikhar Commodities Pvt Ltd the share capital being the source of funds invested in assessee company were already taxed u/s 68. Hence once any addition made in hands of share subscribers, there cannot be double addition in hand's of Appellant company. Judgement of Coordinate bench of Kolkata Tribunal in the case of Happy Structure in ITA No. 1977/Kol/2016 enclosed which has relied on another Kolkata ITAT in the case of MaaAmba and CP Rerollers. Recently ITAT Kolkata Bench in the case of Steelex India Pvt....
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....O instead of examining the relevant documents, insisted for the personal presence of the directors of the subscribers which was not in the hands of the assessee. He therefore, has submitted that the identity and creditworthiness of these companies was duly established. He has further submitted that the AO could not point out any defect or discrepancy in the evidences/documents submitted by the assessee to prove the identity and creditworthiness of the subscribers and genuineness of the transaction. He has further submitted that instead of pointing out any defect or discrepancy in the evidences and the details furnished by the assessee, the AO proceeded to take adverse inference only on the ground that the directors of the subscriber companies did not appear personally before the AO. The ld. Counsel for the assessee in this respect has relied upon the decision of the Jurisdictional Calcutta High Court in the case of Crystal networks (P) Ltd. vs CIT (supra). The ld. Counsel has also relied upon the decision of the Co-ordinate Kolkata Bench of the Tribunal in the case of 'M/s Satyam Smertex Pvt. Ltd. vs. DCIT', ITA No. 2445/Kol/2019 vide order dated 29.05.2020, wherein the coo....
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....he 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 assessee failed to prove the existence of the cr....
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...., share application forms and board's resolution(s) followed by their respective regular assessment orders pertaining to very assessment year u/s. 143(3) of the Act. Their Assessing Officer(s) made u/s 68 unexplained cash credits additions of share premium amounting to Rs. 67,03,00,000, Rs. 44,85,00,000/-, Rs. 24,42,00,000/- & Rs. 21,70,00,000/- in case of first four entities and accepted similar credits of Rs. 20,45,00,000/- to be genuine satisfying all parameters of identity, genuineness and creditworthiness. It can therefore be safely assumed that all these additions sums forming subject-matter of the impugned additions to be accepted as genuine in respective investors entities' end as the source of the amount(s) in issue totalling to Rs.3,01,00,000/-. Learned Departmental Representative fails to dispute that the same very amount cannot be added twice in payees and recipients' hands u/s 68 of the Act. We therefore see no reason to accept Revenue's instant former substantive ground. We affirm CIT(A)'s findings under challenge qua the instant former issue." 6.2. The aforesaid decision has been further relied upon by the coordinate Kolkata bench of the ....
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....worthiness of the parties, the source of funds invested, and the genuineness of the transactions. The field reports revealed that the share-holders were either non-existent, or lacked credit-worthiness. " There after the Hon'ble Supreme Court summed up the principles which emerged after deliberating upon various case laws as under: "11. The principles which emerge where sums of money are credited as Share Capital/Premium are: i. The assessee is under a legal obligation to prove the genuineness of the transaction, the identity of the creditors, and credit-worthiness of the investors who should have the financial capacity to make the investment in question, to the satisfaction of the AO, so as to discharge the primary onus. ii. The Assessing Officer is duty bound to investigate the credit- worthiness of the creditor/subscriber, verify the identity of the subscribers, and ascertain whether the transaction is genuine, or these are bogus entries of name-lenders. iii. If the enquiries and investigations reveal that the identity of the creditors to be dubious or doubtful, or lack credit-worthiness, then the genuineness of the transaction wo....