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TMI Blog2016 (11) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... aw. These additional evidences in our considered view goes to the root of the matter and needs to be admitted and adjudicated on merits in order to advance substantial justice and we admit these additional evidences filed by the assessee vide page 43-148/paper book-II . However, the contentions of the assessee and the additional evidences so filed by the assessee need verification by the authorities below and hence we are of the considered view that in order to identify and assess the real income of the assessee and to advance substantial justice, the matter/issue under this appeal need to be set aside and restored to the file of the ld. CIT(A) for de-novo determination of the issue on merits - Decided in favour of assessee for statistical purpose. X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.49 crores represents machinery, tools , equipments etc. transferred from Alvi Tech Services which stands represented in the capital balance of Shri Krishanand Trivedi, proprietor of M/s Alvi Tech Services. In nutshell, the A.O. observed that the assessee has claimed that what has been transferred is the accumulated capital balance of M/s Alvi Tech Services along with personal capital of Shri Krihnanand Trivedi. The assessee submitted the capital account of Shri Krishnannand Trivedi which is as under:- To drawing 375,000.00 By balance B/d 5,33,01,281.48 To balance c/d 5,37,21,502.84 By Net Profit 668,366.36 By FDR Interest 126,855.00 …………………. 54,096,502.84 ============ ……………….. 54,096,502.84 ============ The assessee claimed that the above is the personal capital balance of Shri Krishnanand Trivedi. The assessee has further stated that the capital 'balance of Shri Krishnanand Trivedi as on 31/03/2007, 31/03/2008, 31/03/03/2009 and 31/03/2010 after considering the income of respective years are as under: i) As on 31/03/2007 ₹ 5,38,21,502/- ii) As on 31/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed capital balance as on 31st March, 2006 of ₹ 5,37,21,502/-. The assessee was asked to file the details of capital balance of ₹ 5,37,21,502/- as on 31st March, 2006 along with the list of machineries, tools, equipments etc. transferred to the assessee company along with the bills, date of acquisition & bank statements to prove the source of acquisition of machineries. In response, the assessee filed an affidavit dated 12th October, 2012 whereby Sri Krishnanand Trivedi affirmed that he retired from Indian Navy on 31st March, 1994 whereby he got handsome amount of retirement benefits which he invested in his proprietary concern as a capital. He stated that he was holding a degree of Charter Engineer (India) and graduated in Electrical Engineering and had worked with various companies during the period from 1996 and he got a handsome salary plus perquisites and other benefits and also the Gratuity, PF amount which was considerably a good amount to start business of his proprietary concern M/s Alvi Tech Services in the field of erection, commissioning and consultancy in the field of oil and gas industries. He stated that the share application money of ₹ 3.15 cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee credited huge figures as professional receipts, and ₹ 2,63,73,430/- as family settlement in the year 1995, ₹ 25,00,000/- as gift from father in the year 1990, against which again no documentary evidences were submitted by the assessee before the AO. Thus, it was observed by the AO that the assessee cooked up the capital account to explain the capital balance . It was observed that the capital balance as at 31-02-2005 was ₹ 1,79,60,974/- whereas the opening capital as on 01-04-2005 was shown at ₹ 5,33,01,281.48 and thus the assessee has increased the capital by ₹ 3,53,40,307/- without any basis. The A.O. relied on the decision of Hon'ble Supreme Court in the case of Roshan D Hatti v. CIT 107 ITR 938 (SC) and Kale Khan Mohammad Hanif v. CIT, 50 ITR 1 (SC) wherein it was held that the onus of proving the source of a sum of money found to have been received by the assessee is on him. Thus, the A.O. held that the claim of the assessee for such huge capital balance is therefore not supported by any documentary evidence. Thus, the share subscribed of ₹ 70,00,000/- and share application money of ₹ 2,49,35,000/-, totaling to ₹ 3,19,35, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unexplained cash credit whereby an amount of ₹ 3,19,35,000/- was added to the income of the assessee as the assessee because the assessee was not able to explain the sources of the built up of the capital of Mr Krishnanand Trivedi, the promoter-director of the assessee company . The ld. Counsel filed additional evidences before the Tribunal wherein application dated 26.11.2015 was submitted requesting the Tribunal for admission of the additional evidences under Rule 29 of Income Tax (Appellate Tribunal) Rules, 1963 as these additional evidences are submitted for the first time before the Tribunal and they goes to the root of the matter and hence , it was prayed that these additional evidences should be admitted in the substantial interest of justice. The ld. Counsel submitted that the assessee has not received any money towards share capital of ₹ 3,19,35,000/- during the assessment year as is reflected in the books of account. It is the say of the ld. Counsel that these are fictitious entries made by the assessee in the books of account which does not exist and the same was undertaken with a view to avail bank loan from Bank of Baroda in order to be eligible to get the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of raising of share capital and share application made in the books of accounts to the tune of ₹ 3,15,00,000/- were bogus and fictitious entries and was made in order to raise more loans from the bank while the fact of the matter is that no such share capital was ever raised by the assessee company and these entries to the tune of ₹ 3.15 crores were bogus entries . It is further the say of the assessee's counsel that allotment of ₹ 70 lacs of share capital during the year is genuine which is supported by receipt of funds in immediately preceding year. It is further stated that the manipulations in the books of accounts as to introduction of fictitious share capital/share application money to the tune of ₹ 3.15 crores are now eliminated and the accounts/financial statements are recast and revised by the assessee now which are duly audited by the auditors of the assessee company who are qualified chartered accountants and who have also issued audit report dated 20-07-2015 which is part of additional evidences filed by the assessee for the first time before the Tribunal along with complete re-casted and revised financial statements for the impugned previous ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and receipted challans are enclosed in the paper book-II filed with the Tribunal containing additional evidences . It is settled position of law that only real income can be brought to tax and mandate is to bring income to tax as per authority of law. These additional evidences in our considered view goes to the root of the matter and needs to be admitted and adjudicated on merits in order to advance substantial justice and we admit these additional evidences filed by the assessee vide page 43-148/paper book-II . However, the contentions of the assessee and the additional evidences so filed by the assessee need verification by the authorities below and hence we are of the considered view that in order to identify and assess the real income of the assessee and to advance substantial justice, th matter/issue under this appeal need to be set aside and restored to the file of the ld. CIT(A) for de-novo determination of the issue on merits after considering and evaluating these evidences and explanations submitted by the assessee during the set aside proceedings . Needless to say that proper and adequate opportunity of being heard shall be granted to the assessee by the learned CIT( ..... 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