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TMI Blog2011 (11) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... & 2088 OF 2009 - - - Dated:- 14-11-2011 - AKIL KURESHI AND SONIA GOKANI, JJ. M.R. Bhatt and Mrs. Mauna M. Bhatt for the Appellant. Tej Shah for the Respondent. JUDGMENT Sonia Gokani, J. Both the Tax Appeals have arisen out of the common order of the Income Tax Appellate Tribunal ("the Tribunal" for short) passed on dated 8.5.2009. As the issues raised are identical, they are being disposed of by this common judgment. 2. The Revenue has challenged the impugned order of the Tribunal formulating following questions of law:- "[A] Whether the Appellate Tribunal has correctly appreciated the facts on record in restoring the issue relating to addition made on account of share capital, to the file of the Assessing Officer, when the assessee was not able to prove even the identity of share holders and where notices issued to the share holders were returned unserved? [B] Whether the Appellate Tribunal has correctly appreciated the facts on record in restoring the issue relating to addition of Rs. 6,79,020/- to the file of the Assessing Officer when the assessee failed to provide even the PAN No?" 3. To briefly summarize the facts, for the assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hiness of transaction in public issue is not required to be proved. 8. Before examining sustainability of the question of total restoration of the issue, relating to the addition made on account of the share capital, to the file of the Assessing Officer by the Tribunal and which is challenged fervently here, approach of CIT (Appeals) needs a close look as CIT (Appeals) has discussed this issue at length. It also discussed various decisions of the High Courts with regard to the additions made under Section 68 of the Act. CIT (Appeals) noticed that the Assessing Officer, instead of adding the investment made in the share capital of the company only to the extent where there was no disclosure of identity, added the entire share capital of Rs. 8,20,16,000/-, which included contributions by promoters, NRI, large investors and small investors without gathering sufficient evidence and, therefore, did not uphold such an addition. It found such a situation improbable where the entire capital of the company could be bogus and unexplained. It also noticed that when 68 notices were issued under Section 133(6) of the Act, 12 persons confirmed their investments which was to the tune of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, it is for the Department to take action as thereafter no onus lies on the assessee. In those cases where notices are not served and returned back to the A.O., opportunity will be given to assessee to prove the identity of the shareholders." 10. What all the Tribunal has done is to remand the matter to the file of the Assessing Officer by specifically directing the assessee respondent to furnish the addresses of all the shareholders as initial burden is required to be discharged by the assessee to the extent of establishing the identity of the shareholders. The rest as held by Tribunal needs to be taken care of by the department as the Tribunal followed the decision of the Delhi High Court. 11. On adverting to the contentions of both the sides and on examination of material on record, a mention needs to be made of the fact that on a test check basis, if only 68 notices were sent, out of which, 12 persons responded and when the applications had been made through the channel of banks and, as noted by CIT (Appeals) and the Tribunal both, three banks have confirmed the collections made by them through their branches towards contribution to share capital by investors, this Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the creditors have been filed, Inspector of the Ward could not locate those creditors at the given addresses. But consequent upon the Remand Report of the Assessing Officer, the officer had accepted the fact that the parties had produced PAN cards and parties to the loan might have changed the addresses. The amount was drawn through the bank channel and CIT (Appeals), after going through the Remand Report and the submissions, upheld the addition to the extent of Rs. 36,79,020/- only by holding that the assessee had discharged its onus by giving Permanent Account Numbers of the rest of the persons but only with regard to the Rajendra Finance the assessee could not give the Permanent Account Numbers and such creditor since was not traceable, the addition to that extent was held justified following ratio laid down in the case of Dy. CIT v. Rohini Builders [2002] 256 ITR 360/[2003] 127 Taxman 523 (Guj.). 13. The Tribunal restored the matter to the file of the Assessing Officer to decide the issue afresh on the ground that the assessee had to prove the creditworthiness and the genuineness of the transaction for availing an opportunity to the respondent assessee to provide PAN. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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