2025 (9) TMI 1746

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....case, the Ld. CIT(A) erred in law in upholding the addition of Rs. 35 crores u/s. 68 of the Act on account of share application money received from four promoter group companies and two non-promoter group companies solely on the ground of the appellant's alleged failure to establish the genuineness of transaction, although he did not dispute the identity and creditworthiness of those share investors. 2. That, the Ld. CIT(A) purely on suspicion has upheld the treatment of share application money of Rs. 35 crores as unexplained cash credit u/s 68 of the Act on the alleged ground that the assessee could not establish with evidence the unreasonable action on the part of the A.O. when he himself admitted that issue of 1.75 crores equity shares on preferential basis approved by the Board's Resolution was supported by postal ballot notice, Forms-2 & 5 filed with ROC and the names, address, PAN, networth of each of the investors were filed. 3. That, the Ld. CIT(A) while upholding the addition u/s. 68 of the Act erred in not having admitted the evidences filed before him in support of the allotment of shares for want of any rationale in spite of the fact that as pe....

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....ers, bank statements, invoices etc. and the transactions were also recorded in the assessee's audited books, leaving no scope of escapement of income. 3. That, the Ld. C.I.T.(A) further erred in not holding that the reassessment order passed u/s 147/143(3) of the Act without meeting the valid objections raised against the reasons recorded was contrary to binding principle of law as decided in the case of GKN Driveshafts (India) Ltd., 259 ITR 19 (SC) and that being so the arbitrary and uncalled for additions of Rs. 56,86,08,759/- and Rs. 32,85,37,970/- respectively u/s 68 and 69A of the Act made in such an invalid assessment are liable to be deleted. 4. That, the Ld. CIT(A) further erred in having upheld the addition of Rs. 56,86,08,759/- as unexplained cash credit u/s 68 of the Act alleging bogus sales made to Pahadi Steel P. Ltd. (Rs. 1,91,83,840), Baykuntha Sales Corpn. (Rs. 53,15,63,350) and Baba Steel Corpn. (Rs. 1,78,61,569) in spite of the fact that the appellant-company being a manufacturer of ferro alloys, iron & steel products had sold various items in its normal course of business to those parties and the same were duly supported by proper bills/vouc....

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....owings: Sr. No. Name of the applicants Amount received in Rs. 1. M/s AparajitaVanijya Pvt Ltd. 4,00,00,000/- 2. M/s Cube Fintex Pvt Ltd. 3,00,00,000/- 3. M/s Invesco Finance Pvt Ltd. 8,05,00,000/- 4. M/s Poddar Mech tech services Pvt ltd. 10,00,00,000/- 5. M/s Suanvi trading and investment Co Pvt Ltd. 5,40,00,000/- 6. M/s Vasupujya Enterprises Pvt Ltd. 4,55,00,000/-   Total- 35,00,00,000/- 4. The Ld. AO found that the assessee company had entered into a sham transaction with the investors to introduce its unaccounted income in form of share application/allotment and did not have any regular business transaction or regular acquaintance with the investor. The investor had no reason to invest such huge amount in the business of the assessee. Moreover, the investor had no business transaction with the assessee company in the past except this one-time entry and also, the assessee was unable to prove that the investor company was a group company with proper evidence. Hence, the Ld. AO added the entire share application/allotment money to the total income of the assessee as undisclosed cash credits u/s 68 of t....

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....LT. In view of this and drawing further force from the order of co-ordinate bench of Tribunal in the case of Palogix Infrastructure (P.) Ltd. v. Asstt. CIT [2022] 135 taxmann.com 73/193 ITD 329 (Kol. - Trib.) 2021 (10) TMI 1255- ITAT - KOLKATA, dated 27-10-2021 all the appeals before the Tribunal filed by the assessee is to be dismissed as infructuous. [Para 9] ● It is pertinent to note that as per the provisions of section 14 of the IBC Code institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority shall be prohibited during the moratorium period. [Para 9.1] ● Further, it is found that section 31 of the IBC relates to approval of the resolution plan and in terms of section 31(1) of the IBC on approval, the resolution plan becomes binding on corporate debtor and its employees, members, creditors including the Central Government, any State Government or any local authority to whom a debt in respect of payment of dues arising under any law for the time being in force. The Supreme Court in the mat....

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....fect of any order. It is well settled now that IBC has an overriding effect on all the acts including Income-tax Act which has been specifically provided under section 178(6) as amended with effect from 1-11- 2016. [Para 9.8] ● A reading of the provisions under sections 13 and 14 of the Code along with the decision in Ghanashyam Mishra & Sons (supra), clearly shows that once the proceedings have commenced by institution of application under section 7 or 9 or 10 of the Code, the continuance of the pending proceedings is prohibited and when once they reach the logical conclusion with due approval of the resolution plan by the Adjudicating Authority under subsection (1) of section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. At any rate, for the time being, this appeal cannot be proceeded with during the continuation of the proceedings under the Code. [Para 9.9] ● However, depending upon the result of such proceedings before the adjudicat....