9911796707
TMI Blog2015 (4) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... the findings of Ld. CIT(A) resulting into confirmation of addition of 38,75,000/- in respect of five parties mentioned at para 3 of this order. - Decided against the assessee. Share application money received outside India - In respect of share application money received from Smt. Nirmala Barmecha, we found that Smt. Nirmala Barmecha is a none resident Indian, residing in Israel. The assessee has filed a bank statement to substantiate remittance of money to assessee company. Sources of money was also substantiated by filing the Joint Bank Account of Smt. Nirmala Barmecha with her husband. The Bank statement which is a copy of ‘foreign Currency Account Statement’, reveals withdrawal of US Dollar 2,50,000/- on 15/2/2007 and a further withdrawal of US Dollar 2,00,000/- on 26.2.2007. The certificate of bank for remittance from the Israeli Accountant dated November 25, 2001 was also filed certifying that source of money was deposits/ savings in her joint account with her husband. We also find that as per the income tax return filed by the Smt. Nirmala Barmecha at India, she was having capital exceeding 3.4 crores, with investments mainly, in shares and debentures and income arising the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money has been received through proper banking channels, as evidenced by copy of Forward Inward Remittance certificates dated 1.3.2007 and 21.3.2007 issued by Bank of India. Thus Identity of the investor and genuineness of the transaction stand established beyond doubt. The only question is regarding the creditworthiness of the investor. The A. O. has not accepted the copy of Bank Statement of the investor, as provided by the appellant for the reason that it is in Israeli language. I have perused the said Bank Statement, copy of which is found at page 18 of the compilation on record. Though the printed matter under the head 'Type of Transaction' is in Israeli language, dates and amount debited/credited are mentioned in English. It is also mentioned in English that the statement is for the period from 6.2.2007 to 26.2.2007. The statements have columns for 'Date', 'Ref', 'Type of Transaction', 'Value', 'Credit', 'Debit', and 'Balance', which are mentioned in English at the top. Apart from description of 'Type of Transaction' which is in Israeli language, all other details are in the English language. In fact the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , written in Israeli tongue, dates and amounts transacted in are written in English. These entries in fact, match and corroborate with the entries as found in the Foreing Inward Remittance Certificates filed. Thus the appellant has been able to explain the source of investment in the Indian company as having been made out of her bank account held jointly with her husband in Mizrahi Ifahot (Israel). The fact that it is a joint account has been certified by her Accountant and copy of said certificate is on record. It has been certified that "sources of the funding is from deposits and savings in her joint account with her husband Mr. Barmecha 8. During. the course of hearing of the appeal, details were sought of income accruing or arising to the said investor in India or account of such huge investments being made .. In response to the said query, the appellant company, has produced, copy of Income Tax Return filed for A.Y. 2007-08, along with Balance Sheet and Profit & Loss account. As per the Balance Sheet as at 31st March 2007, Smt. Nirmala Barmecha has capital exceeding ₹ 3.45. crores, with investments mainly, in shares and debentures and income arising therefrom of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nctioned from common premises; all had opened accounts in the same bank, all had received share application money and either on the same day or the next paid sums to the appellant, and all had filed income tax return disclosing meager sums as income, all below ₹ 5000/-. Thus a number of peculiar features have been brought on record which does not accord with normal features of a transaction but are simply out of the ordinary and which render the transactions as suspect and lacking in transparency. Ordinarily all entities will not function from same premises, will not have the same modus operandi to generate & transfer money and will not have more or less the same return on investment. Under the circumstances in respect of money brought in as investment towards share capital from the said five companies, the AO is certainly right in holding that the creditworthiness and genuineness has not been established. The submission of PAN, confirmation letter alone cannot be themselves vouch for the genuineness of a transition. The AO has looked beyond the apparent and found that the apparent is not real, as per the facts brought on record. Thus the AO is correct in stating that as rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders passed by learned Assessing Officer & Commissioner of Income-tax (Appeals) is against equity and justice. 2. The learned Assessing Officer erred in making addition of ₹ 38,75,000/- u/s.68, being 10% of total money receive by appellant towards share capital." Revenue's ground; 1. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate the fact that the investor who has subscribed to the share capital of the company (Smt. Nirmala Barmecha) is an NRI and resides in Israel, and her credit-worthiness is not established by the assessee and the assessee was unable to prove the sources of deposit in the account from which share capital and share premium money has been received. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate the fact noted at para 3.1 of the assessment order that the income-tax structure in Israel is similar to that in India and that the assessee has failed to submit the documentary evidence in support of source of income, balance sheet and other details in respect of income stated to have been generated in Israel by the creditor, from where the share capital a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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