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TMI Blog2013 (5) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals). Case law of Nipun Builders and Developers Pvt. Ltd. [2013 (1) TMI 238 - DELHI HIGH COURT] as relied upon by revenue in making the addition is different and is distinguishable from the present case as assessee in the present case been able to discharge the initial burden to establish the identity, creditworthiness and genuineness as regards the transactions concerning the allotment of shares. In favour of assessee. - ITA 225/2013 - - - Dated:- 30-4-2013 - Badar Durrez Ahmed And Vibhu Bakhru,JJ. For the Appellant : Mr Sanjeev Rajpal, Advocate. For the Respondent : None. JUDGMENT Badar Durrez Ahmed, J (Oral) 1. This appeal by the revenue is directed against the order dated 28.12.2012 passed by the Income Tax Appellate Tribunal, New Delhi in ITA No. 1493/2012 pertaining to the assessment year 2006-07. 2. The Assessing Officer had made the additions of Rs. 37,75,465/- and Rs. 30,41,000/- under Section 68 of the Income Tax Act, 1961 on account of alleged unexplained investment and alleged unexplained cash credits which were shown as share application money received by the assessee, respectively. 3. The assessee went up in appeal before the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 37,75,465/- by your assessee. You may also call for the I.T. Returns of these persons along with their bank statements and agreements to sell the land so that the loan transaction can be verified to the hilt. 6. The Commissioner of Income-tax (Appeals), noted that the Assessing Officer, by virtue of his report dated 18.09.2010, had indicated that initially the said Mr Alok Aggarwal and Smt Sadhna Aggarwal who were Directors of the Assessee Company did not respond to the notices issued by him. However, subsequently the Directors appeared and filed details including copies of their income-tax returns for the assessment years 2005-06 and 2006-07. In so far as Mr Alok Aggarwal was concerned, in his income-tax return for the assessment year 2005-06 he had disclosed capital gains to the extent of Rs. 65,480/- and in respect of the assessment year 2006-07, the said Mr Alok Aggarwal had disclosed a capital loss to the extent of Rs. 5,87,940/- but, at the same time he disclosed sale proceeds of land to the extent of Rs. 48,16,742/-. 7. From the above, the Commissioner of Income-tax (Appeals) concluded that Mr Alok Aggarwal had ample availability of funds from which he could have advan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted before the AO. The AO has not referred to them in the assessment order but it is not in dispute that the copies of the bank statements were furnished before him. Even assuming that the bank statements were filed before the AO, that by itself may not be sufficient to prove the creditworthiness without any explanation for the deposits in the accounts and their source. The usual argument in all such cases, including the present case, is that it is not for the assessee to prove the source of source and origin of origin of the receipts. We are alive to the difficulty that may be faced by an assessee to unimpeachably establish the creditworthiness of the share subscribers but at the same time we are of the opinion that mere furnishing of the copies of the bank accounts of the subscribers is not sufficient to prove their creditworthiness. There must be, in our opinion, some positive evidence to show the nature and source of the resources of the share subscriber himself and therefore it is necessary for him to come before the AO and confirm his sources from which he subscribed to the capital. In the present case the assessee did not produce the principal officer of the companies who s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right up to the Tribunal. Commenting on the order of the Tribunal, a Division Bench of the Madras High Court observed as under:- The Tribunal however has not chosen to accept the assessee s case on grounds which we are unable to appreciate. The Tribunal commenting upon the fact that the books of account of the assessee were kept only at Phalodi, that pakka and katcha roker of the assessee at Phalodi had not been produced, and that the necessary link between the borrowing of Vijayaram and the money brought to Coonoor had not been established. As stated already, with regard to the sum of Rs. 15,000, the assessee produced indisputable documentary evidence to show that the amount came out of his borrowing at Jodhpur whether it was from Vijayaram Ganeshdas or from Gowri Shankar Bagdy. The assessee has been able to point out a source for this sum of Rs. 15,000 and this cannot be refuted by a mere steady disability on the part of the department or the Tribunal. After the lapse of ten years the assessee should not be placed upon the rack and called upon to explain not merely the origin and source of his capital contribution but the origin of origin and the source of source as well. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. 10. From a reading of the above extract, it is apparent that the case of Nipun Builders and Developers Pvt. Ltd. (supra) was different and is distinguishable from the present case. In that case, the summons sent by the Assessing Officer to the Companies who had applied for shares had been returned with the remarks no such company . Whereas in the present case, the identity of the two companies which are sister companies stood established. Furthermore, this is not a case of mere furnishing of copies of bank accounts of the subscribers. But, in the present case, as noted by the Commissioner of Income-tax (Appeals) the assessee had filed the income-tax returns of the subscriber companies as also their bank statements and balance sheets in addition to the confirmation letters from the said two companies. A copy of the Form No. 2 filed by the assessee with the Registrar of Companies regarding the allotment of shares to the said two companies had also been furnished. It is in this backdrop that the Commissioner of Income-tax (Appeals) had concluded that the assessee had been able to prove its case and that the Assessing Officer could not shift the burden back onto the Assessee Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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