9911796707
TMI Blog2015 (12) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... -XI, New Delhi dated 02.11.2011 for the assessment year 2007- 08. 2. The solitary ground taken by the revenue is against the deletion of addition of ₹ 20 lakhs made by the AO under section 68 of the Income-tax Act, 1961 (hereinafter 'the Act'). 3. Brief facts of the case are that the assessee is engaged in the business of trading of cloths including velvet. During the assessment proceedings, the AO noted that the assessee had received a sum of ₹ 20 lakhs (being ₹ 4 lakhs for share capital and ₹ 16 lakhs as share premium) from the following parties :- (i) M/s. Tajinder Fabrications P. Ltd. 301, Himalaya Place, 65, Vijay Block, Laxmi Nagar, Delhi. Rs.5,00,000/- (ii) M/s. Aurochem Estate Pvt. Ltd. U-75, Main Vikash Marg, Shakarpur, Delhi. Rs.5,00,000/- (iii) M/s. Indian Hosiery Pvt. Ltd. B-114, Shakarpur, Delhi. Rs.5,00,000/- (iv) M/s. Shaily Builders Pvt. Ltd. U-75, Shakarpur, Delhi. Rs.5,00,000/- In support of the evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant. The issue in this case is the share capital of ₹ 20,00,000/- received by the appellant company during the year. Admittedly this share capital has been received from M/s Tajinder Fabrications P. Ltd, M/s Aurochem Estate Pvt Ltd, M/s Indian Hosiery Pvt Ltd and M/s Shaily Builders Pvt Ltd. The appellant in this regard has filed confirmation, bank account, other details to prove the existence of the companies. Based on these documents and evidences it is established that M/s Tajinder Fabrications P. Ltd, M/s Aurochem Estate Pvt Ltd, M/s Indian Hosiery Pvt Ltd and Ms Shaily Builders Pvt Ltd are in existence. On going through the assessment order, I notice that the AO is relying on the three parameters of Section 68 i.e identity, creditworthiness and genuineness of the transaction. The Issue of share capital has been settled in various judicial pronouncements. In my opinion the latest judgement of the Hon'ble Delhi High Court in the case of CIT vs Oasis Hospitalities Pvt Ltd. dated 31st January, 2011 has dealt with the issue at length and after examining the various judgments has settled certain parameters to decide an issue like this. After analyzing the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO cannot burden the assessee merely on the ground that summons issued to the investors were returned, Thereafter the court referred to the judgment of Delhi High Court in the case of CIT vs Value Capital Services (P) Ltd. 307 ITR 334 (Delhi) whereby it was observed that additional burden was on the department to show that even if the applicants did not have the means to make the investment, the investment made by them actually emanated from the coffers of the assessee to enable it to be treated as the undisclosed income of the assessee. Now applying the above judgment to the facts of this case, it is an admitted fact that M/s Tajinder Fabrications P. Ltd, M/s Aurochem Estate Pvt Ltd, M/s Indian Hosiery Pvt Ltd and M/s Shaily Builders Pvt Ltd exist. The appellant has filed sufficient documents e.g copy of PAN Card, bonk statement, etc. to establish its identity. The copy of the bank statement of the share subscriber wherein the transaction is reflected as well as its balance sheet showing investment in the appellant company on its assets' side establish the creditworthiness of the party while the genuineness of the transaction is borne out by the fact that the transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of transaction by showing money/ his books either by account payee cheque or by draft or by any other mode, then the onus of proof would shift to the revenue. The appellant has by providing the details in respect of shareholders like PAN Nos., copies of audited balance sheet P L account, Copies of asstt orders, names and addresses of all four companies, bank statements, clearly established the identity of the shareholders, their credit worthiness and genuineness of the transactions. The addition of ₹ 20 lacs made by the AO u/s 68 is therefore deleted. 4. The revenue, being aggrieved, is in appeal before us. 5. Ld. DR relied on the order of the Assessing Officer and submitted that the identity, creditworthiness and genuineness of the transaction has to be proved for getting a credit in the books u/s 68 of the Act. He submitted that the ld. CIT (A) has not rightly appreciated the facts on which the AO based his decision for treating the receipt of ₹ 20 lakhs as deemed income of the assessee u/s 68 of the Act and underscored the fact that the creditworthiness of the creditors and genuineness of the transaction has not been proved. Therefore, he pleaded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were having same Auditor cannot lead to a conclusive conclusion that these companies were merely name lenders. According to the ld. AR, the adverse inference drawn by the AO due to the aforesaid reason alone was totally baseless. The ld. AR, relying on the decision of the ld. CIT (A), want us not to interfere with the order of the ld. CIT (A). 7. We have heard both the sides on the issue and perused the material. We find that the assessee in order to discharge the onus on it for proving the credit entry in its books of account, have claimed that the said amount of ₹ 20 lakhs was share-subscription money it has received from four companies i.e. M/s. Tajinder Fabrications P. Ltd., M/s. Aurochem Estate Pvt. Ltd., M/s. Indian Hosiery Pvt. Ltd. and M/s. Shaily Builders Pvt. Ltd. and when questioned by the AO to prove its identity, creditworthiness and genuineness of the transaction has provided the details in respect of the said shareholders with the PAN Nos., copies of audited balance sheet P L account, copies of assessment orders, names and addresses of all four companies, bank statements. However, the AO was not satisfied by the aforesaid documents produced by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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