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TMI Blog2017 (5) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirming party but the assessee failed to show any initiative as it had not shown any willingness for crossverification and cross-examination of the said party. In view of the above mentioned facts and reasons, we uphold the order of the Ld. CIT(A) vide which penalty imposed u/s. 271(1)(c) of the act was sustained and justified. - Decided against assessee. - ITA No. 2647/Ahd/2015 - - - Dated:- 23-3-2017 - Shri S. S. Godara, Judicial Member And Shri Amarjit Singh, Accountant Member Revenue by : Shri Richa Rastogi, Sr. D.R. Assessee by : Shri Tushar P. Hemani, A.R. ORDER Per : Amarjit Singh, Accountant Member This assessee s appeal for A.Y. 2010-11, arises from order of the CIT(A), Gandhinagar, Ahmedabad dated 12-06-2015 in appeal no. CIT(A)/GNR/357/2014-15, in proceedings under section 271(1)(c) of the Income Tax Act, 1961; in short the Act . 2. The assessee has raised following grounds of appeal:- 1. The Id. CIT(A) has erred in law and on the facts of the case in confirming the action of Id. AO in levying penalty of ₹ 11,89,650/- u/s 271(1)(c) of the Act, on addition of 35,00,000/ - u/s 68 of the Act on account of alleged unexplained share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 35 lacs towards share value and premium had denied to have made any such transaction with the assessee company. The relevant portion of the reply received from the Dugar polymers Limited in response to the summons issued 131 of the act is reproduced hereunder:- ..with reference to your letter received on 12th January, 2013 having ref no: ITNS 25 dated 02.01.2013. I would like to inform you that we have no transaction history with referred company in your letter named M/s Akik Tiles Pvt. Ltd. I ensure you that we have not purchased or sold shares of M/s Akik Tiles Pvt. Ltd. at any point of time till date. Please find enclosed Audited Balance Sheet for F.Y. 2009-10 for your ready reference 4. During the course of assessment proceedings the statement of Dugar polymers Limited was brought to the notice of the assessee's. The assessing officer stated that no satisfactory explanation could be furnished by the assessee to prove the genuineness of amount of ₹ 35 lacs credited to the balance sheet as share capital and share premium. The assessing officer has also stated that to prove the genuineness of the transaction the assessee has not demanded any cross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Super Creative Spares Pvt. Ltd. 60000 3000000 6. Tripada Infrastructure Pvt. Ltd. 140000 7000000 During the assessment proceedings, the A.O. had obtained the necessary details, confirmations in this regard so as to establish the genuineness of the transaction. Summons were also issued by the A.O. to the above parties to cross verify and obtain required confirmation from the parties as regards the investment and allotment of shares by the assessee comply to them. The above parties had made submissions in compliance to the summons issued. On going through the submissions, it was noticed that one ofsuch person namely Dugar Polymers Ltd. from whom the assessee claimed to have received an amount of ₹ 35 lakhs towards share value and premium thereof, had denied to have made any such transaction with the assessee company. The relevant portion of the reply received from Dugar Polymers Ltd in response to the summons issued u/s 131 of the Act is reproduced hereunder:- . with reference to your letter rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidences are self speaking that he has purchased our shares and in the above circumstance investment made by me please.be accepted.... The submission of the assessee e was not found acceptable by the A.O. As discussed earlier the correctness and genuineness of share value along with the premium amounting to ₹ 35 lakhs allegedly claimed by the assessee to have received from Dugar Polymers Ltd could not be established in so far the very person had denied having made any transaction with the assessee and the assessee could not put forth any evidence contrary to the statement given by the so called share holder so as to prove the transaction genuine. Under the circumstances and considering the facts of the case and in the lights of the above observation it was held that the claim of the assessee ' that it had issued shares and received share amount of ₹ 35 lakhs was found false and non-genuine and hence, an addition of ₹ 35 lakhs was made to the total income considering the same as unexplained cash credits as per the provisions of section 68 of the I. T. Act. Penalty proceedings u/s 271(1)(c) were initiated for furnishing inaccurate particulars/ conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he part of share holders list and balance sheet was filed with the return of income and therefore there was no any concealment of particulars while filing the return and onus was discharge by the assessee company and merely his denial of the fact cannot be treated as concealment of particulars of income. In view of the above-facts and circumstances penalty initiated may please by dropped. 5. The above submission of the assessee has been carefully gone through. The same is not found to' be acceptable. The assessee's arguments are general in nature. Only after considering these arguments, the A.O. had made addition which has duly been confirmed by the Ld. CIT(A). 6. In the light of above discussion, it .is concluded that the assessee failed to discharge its onus to establish that the genuineness and creditworthiness of the credit entry found in the books of A/cs. Against this, in the present case, Dugar Polymers Ltd itself denied of making investment in the shares of assessee - Company. Accordingly, it is concluded that it is a clear case of concealment of income to the above extent. 7. Considering the above, I am satisfied that this is a fit case to impose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above noted evidences, and therefore, once three ingredients are proved by the Appellant, no addition u/s 68 of the Act can be made. In case of share capital only the identity of the share applicants is to be proved. Once identity is proved, burden of the Appellant can be said to have been duly discharged. In the entirety of facts and circumstances, as narrated above, I find that AO has imposed penalty relying on the deposition of Dugar Polymers Ltd who has denied to have applied for the shares and investment made. This issue has been discussed by the AO and the deposition made is also reproduced. Further, all the details and evidences made before the undersigned had already been considered by the AO before imposition of penalty u/s 271(1)(c). It is also a pointed noted that the undersigned had decided the quantum appeal vide order dated 23/7/2014 and the issue has been elaborately discussed. The issue has been decided in the following words: However, on-going through the assessment order, it is seen that in pursuant to notice issued u/s 131 of the Act, the respective person of the Dugar Polymers Ltd has denied to have made investment in the shares of the Appellant Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereby held justified and is confirmed. The relevant ground of appeal is rejected. 6. During the course of appellate proceedings before us, the learned counsel has filed paper book containing information relating to submission made before the ld. CIT(A), copy of assessment order and relevant order of Hon ble ITAT, Ahmedabad and contended that the Ld.CIT(A) has erred in sustaining the penalty. On the other hand the Ld. DR supported the order of the Ld. CIT(A). 7. We have heard both the parties and perused the material on record. We noticed that the assessee submitted the copy of bank statement, share allotment letters, resolution of Board of Directors passed by the said company to establish the identity, creditworthiness and genuineness of the transaction. We further noticed that the assessing officer has issued summons to the parties and one of the party Dugar polymers Limited, in the statement mentioned that they have neither purchased nor sold shares in the assessee company. We find that the assesseet has not shown any willingness to cross examine the party who have refused of making any investment in the share capital of the company. We have also noticed that in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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