TaxTMI 
TaxTMI 
2024 (2) TMI 1679
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.... unexplained share capital without appreciating that no meaningful/ objective enquiry at any stage is made by Ld AO on details made available at asst stage and merely on basis of extraneous and irrelevant reasons addition is sustained by Ld CIT-A. 3. That in the given facts order of Ld AO and Ld CIT-A are incorrect in so far as addition made / sustained u/s 68 of the Act amounting to Rs 147,50,000 on account alleged unexplained unsecured loan without appreciating that no meaningful/ objective enquiry at any stage is made by Ld. AO on details made available at asst stage and merely on basis of extraneous and irrelevant reasons addition is sustained by Ld. CIT(A). 4. That in the given facts order of Ld AO and Ld CIT-A are incorrect in so far as addition made / sustained of Rs 100,000 on account of buyback related expenses. 5. That in the given facts order of Ld. AO and Ld. CIT-A are incorrect in so far as addition made/ sustained u/s 68 of the Act amounting to Rs. 203,50,000 without issuing any valid show cause notice at end of Ld. AO, which is mandatory as per CBDT instructions. 6. That the appellant craves leave to add add/ alter any/all grounds ....
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....ow cause notice has been issued to the assessee before making the addition, therefore, the additions made by the A.O. is liable to be quashed. The Ld. Counsel for the assessee vehemently submitted that the addition made by the A.O. without issuing show cause notice is erroneous therefore, the same is liable to be set aside. 5. Per contra, the Ld. Departmental Representative submitted that there is no requirement under law to issue show cause notice before passing the order u/s 143(3) of the Act. The assessee who has participated in the assessment proceedings, produced the documents on service of notice and questionnaires issued by the A.O. regarding the receipt of share application money and also the unsecured loans availed by the Assessee. The Ld. A.O. made additions only on the subject matter of the questionnaires and the notice issued to the Assessee, therefore, it cannot be called that assessment order passed against the principles of natural justice. 6. We have heard both the parties and perused the material available on record. The Assessee Company has shown contract receipt of Rs. 31,76,030/- rental income of Rs. 1,22,850/- and other income of Rs. 1,62,000/-. During th....
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.... Rules. The A.O. examined the documents produced by the Assessee and filed the Remand Report supporting the additions. The Ld. CIT(A) has considered the contention of the assessee along with the Remand Report and the rejoinder filed by the assessee and ultimately confirmed the addition. It is to be noted that there is no requirement under law to issue show cause notice before passing the order u/s 143(3) of the Act. The assessee has participated in the assessment proceedings and specific questionnaires have been issued on specific issues and addition has been made only on the issues involved in the Notice and the questionnaires. Apart from the same, the assessee has also filed additional documents before the CIT(A) which being a first fact authority and after calling for the Remand Report, the documents produced by the Assessee has been taken into consideration and the contention of the assessee has been negated by the Ld. CIT(A). Thus, considering the above facts and circumstances, we find no merit in the argument of the Ld. Assessee's Representative that the additions have been made in violation of the principles of natural justice. The issuance of show cause notice is not ma....
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....on Pvt. Ltd. for Assessment Year 2012-13 and Raj Rani Securities for Assessment Year 2009-10, the assessee has not filed any bank account statement of the Companies or any financial for the relevant year and also not filed confirmation from the parties. The Ld. A.O. accordingly made addition of Rs. 18,31,16,000/-, the assessee filed an application u/s 151 of the Act and vide order dated 09/05/2014, considering the fact the assessee has received an amount of Rs. 25 lacs and 30 lacs respectively from two parties, the addition has been restricted to 55,00,000/- instead of Rs. 18,13,16,000/-. Aggrieved by the addition of Rs. 55,00,000/- made u/s 68 of the Act, the assessee preferred an Appeal before the CIT(A). During the first appellate proceedings, the assessee filed an application for admission of additional evidence by producing the balance sheet of the share applicants from 2007-08 to 2012-13, share application form, Form 2, Challan, bank statement, ITR for FY 2008-09, list of Directors, master data and copy of PAN card in respect of M/s Accord Sales and Tradex Pvt. Ltd. and M/s Raj Rani Securities Ltd. whereas appellant has received share application money from M/s BID Buildcon P....
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....010 to 2014-15) During the assessment proceedings admittedly the assessee has produced the ITR, acknowledgement and during the appellate proceedings the assessee has produced detailed documents mentioned above in respect of share application and the loan by providing PAN Card and Address of the parties, balance sheet, confirmation etc. The A.O. neither during the assessment proceedings nor during the remand proceedings made any enquiry u/s 133(6)/133(1) of the Act. The application filed by the assessee along with additional documents have been allowed by the Ld. CIT(A). Thus, in our opinion, the assessee has discharged the onus cast upon him u/s 68 of the Act. It is seen that all the transactions have been made through banking channel though the assessee has produced the documents in support of its claim, the Ld. A.O. has not made any enquiry after the assessee discharged its initial burden cast upon u/s 68 of the Act. The Hon'ble Bombay High Court in the case of Gaurav Triyogi Singh Vs. ITO (22) 423 ITR 531 held that once the assessee discharges its onus to prove the creditworthiness of the investor companies and the genuineness of the transaction, the onus will shift on th....
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....Board of Directors of a company to decide the premium amount and it is the wisdom of shareholder whether they want to subscribe the shares at such a premium or not. This was a mutual decision between both the companies. In day to day market, unless and until, the rates is fixed by any Govt. Authority or unless there is any restriction on the amount of share premium under any law, the price of the shares is decided on the mutual understanding of the parties concerned. 53. Once the genuineness, creditworthiness and identity are established, the revenue should not justifiably claim to put itself in the armchair of a businessman or in the position of the Board of Directors and assume the role of ascertaining how much is a reasonable premium having regard to the circumstances of the case." 13. In the case of CIT Vs. Kamdhenu Steel and Alloys Ltd. reported in 361 ITR 220 the Jurisdictional High Court held that no addition can be made in respect of share capital received from shareholders when the evidence has been placed on record and the Ld. AO has not led any material to the contrary. The relevant portion of the same are as under :- "35. The important question whic....
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....f ITR, duly establishing the identity of the parties and genuineness of the transactions and the bank statements of the parties, establishing the creditworthiness of the parties to invest in the share capital of or advance loans to the Assessee Companies, in our opinion, the Assessee effectively discharged the initial burden cast upon them u/s 68 of proving identity of the investors/lenders, the genuineness of the transactions and the creditworthiness of the parties with respect to the transactions that took place between the Assessee and the investors/lenders. Since the Assesses filed the bank statements of the parties conclusively proving that the impugned sums were received through normal banking channels from the bank accounts of the parties, the burden of proving the genuineness of the transactions between the Assessee and the parties and the creditworthiness of the parties to invest in the share capital of the Assessee Companies stood discharged. 16. We find from the record that the Assessee has duly produced all the documents to prove the identity, genuineness and creditworthiness for the share applicants and loan parties. Thus, the Assessee can be said to have discharged....
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....statement. As per the A.O., the assessee has not filed any bank account statement in some cases. The A.O. observed that out of 22 unsecured loans the transactions entered with and creditworthiness of M/s All Time Data Pvt. Ltd., M/s G-Trading India Pvt. Ltd., M/s ASV Garments Pvt. Ltd., M/s KD Trend Wear Pvt. Ltd., M/s Kirti Advertisement Pvt. Ltd., M/s Porter Buildcon Pvt. Ltd., M/s Saggi Traexin Pvt. Ltd., M/s Shakti Builders, M/s SLB Finlease Pvt. Ltd., M/s Sunstar Infrabuild Pvt. Ltd., M/s Sunvision Advertising & Marketing Pvt. Ltd., M/s Synergy Info Data Pvt. Ltd., M/s Visit India Voyages Pvt. Ltd., M/s Jaipuria Buildcon Pvt. Ltd., M/s Mediatech International Pvt. Ltd. and M/s Shiv Shakti Infra Developers Pvt. Ltd. has not been satisfactorily explained by the assessee in terms of Section 68 of the Income Tax Act, 1961. Therefore, disallowed an amount of Rs. 3,07,21,000/- u/s 68 of the Act which was credited in the books of account of the assessee as unsecured loan. Aggrieved by the assessment order dated 15/07/2019, the assessee preferred an Appeal before the CIT(A), the Ld. CIT(A) dismissed the Appeal filed by the assessee on the ground that the assessee failed to establish c....
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.... relevant to Assessment Year 2012-13. The assessee filed five replies before the A.O. on 04/03/2015, 26/02/2015, 10/02/2015, 02/02/2015 and 05/01/2015 by providing the requisite details the evidence to discharge the burden cast upon on the assessee u/s 68 of the Act. The assessee also submitted complete set of audited financial account with ITR etc of the assessee for the subject period. The Ld. Assessee's Representative has filed paper book by reproducing those documents in following manners in the paper book :- Sl No. Description of document in brief Page No. 1 Reply dated 04.03.2015 submitted before Ld. A.O. 25 to 35 2 Reply dated 26.02.2015 submitted before the Ld. A.O. 36 to 49 3 Reply dated 10.02.2015 submitted before ld. A.O. 50 to 171 4 Reply dated 02.02.2015 submitted before Ld. A.O. 02.02.2015 some misc documents 172 to 257 258 to 262 5 Reply to Ld. A.O. dated 05.01.2015 263 to 280 6 Full complete set of audited final accounts with ITR etc of appellant for subject period. 281 to 304 24. It is evident from the assessment order that after receipt of the voluminous documents produced by the assessee, the L....