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TMI Blog2017 (9) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... nue : Shri T. Vasanthan, Sr. D.R. ORDER Both the appeals by assessee are directed against the different orders of Ld. CIT(A)-9, New Delhi, dated 16th September, 2016 for A.Ys. 2005-2006 and 2006-2007. 2. I have heard Learned Representatives of both the parties and perused the material on record. Learned Representatives of both the parties mainly argued in A.Y. 2005- 2006 and have submitted that the issues are identical in both the appeals. For the purpose of disposal of both the appeals, I take- up the appeal for A.Y. 2005-2006 as under. ITA.No.6010/Del./2016 A.Y. 2005-2006 : 3. In this appeal, the assessee challenged the reopening of the assessment under section 147 of the I.T. Act and addition of ₹ 6 lakhs under section 68 of the I.T. Act. The return of income was filed at ₹ 1,41,160 on 26th October, 2005. The A.O. recorded reasons that assessee s income has escaped to the tune of ₹ 6 lakhs. Therefore, notice under section 148 was issued. The assessee was provided copy of the reasons. The assessee in response to the notice submitted that the return originally filed may be treated as return as having been filed in response to the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation money were reported to ROC. M/s. Moderate Credit Corporation Pvt. Ltd., is a listed company with Delhi Stock Exchange. The Company is registered with Registrar of Companies and also registered as non-banking finance Company with Reserve Bank of India ( RBI ). All the transactions were routed through banking channel. Paper Book page No.26 is reply filed by M/s. Moderate Credit Corporation Pvt. Ltd., directly to the A.O. in response to the notice issued under section 133(6)/131 of the I.T. Act in which the subscriber company reiterated the same facts as explained above and also filed their audited accounts, share certificate, bank statements and confirmation and confirming the transactions with the assessee. All the documents are filed in the paper book. Paper Book page No.45 is the balance-sheet of the Company to show that their share capital was at ₹ 9,90,14,800 which is sufficient to make investment in assessee-company. Paper Book Page No.32 is the List of Directors in M/s. Moderate Credit Corporation Pvy. Ltd., in which Shri Shri Asheem Gupta has no connection whatsoever and he was also not connected with the subscriber company. He has also filed copy of the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the complete particulars of the share applicants are furnished to the AO and the AO fails to conduct an inquiry. The Court has observed that in that event no addition can be made in the hands of the Assessee under Section 68 of the Act and it will be open to the Revenue to move against the share applicants in accordance with law. 5. In the facts and circumstances of the present appeals, the Court is satisfied that no substantial question of law arises. The appeals are dismissed . 4.1 Decision of the Hon ble Delhi High Court in the case of Pr. CIT vs. M/s. Goodview Trading Pvt. Ltd., (2016) (12) TMI 617 in which paras 8 to 10 reads as under : 8. It is quite evident from the CIT (A) s reasoning in paragraph 4.3, that the materials clearly pointed to the share applicants possessing substantial means to invest in the assessee s company. The AO seized certain material to say that minimal or insubstantial amounts was paid as tax by such share applicants and did not carry out a deeper analysis or rather chose to ignore it. In these circumstances, the inferences drawn by the CIT (A) are not only factual but facially accurate. 9. Having regard to these circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of the share application companies. Therefore, order of the Ld. CIT(A) in deleting the addition was vacated and departmental appeal is allowed . He has also relied upon the decision of Delhi High Court in the case of CIT vs. Jansampark Advertising Marketing P. Ltd., 375 ITR 372 (Del.) in which it was held that it is an obligation of the A.O. to conduct proper scrutiny of the material, in the event of A.O. failing to discharge his function property, the obligation to conduct proper enquiry shifts to Commissioner (Appeals) and Tribunal and they cannot simply delete addition made by A.O. on ground of lack of enquiry. He has also relied upon the Delhi High Court decision in the case of CIT vs. Empire Buildtech P. Ltd., (2014) 366 ITR 310 (Del.) in which investors have not submitted confirmations and reported far less income than the amounts invested. It was, therefore, held that assessee has not discharged the burden. Therefore, addition is justified. He has relied upon the decision of Delhi High Court in the case of CIT vs. Navodya Castles Pvt. Ltd., (2014) 367 ITR 306 (Del.) in which assessee was unable to produce the Directors and Principal Officers of six share holder companie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re sufficient to prove the identity of the share applicant company, their creditworthiness and genuineness of the transaction. The A.O. did not make any investigation into the documents filed by assessee. The A.O. issued letter under section 133(6)/131 of the I.T. Act directly to M/s. Moderate Credit Corporation Pvt. Ltd., who have filed their reply before A.O. confirming the investment made in assessee- company through banking channel, supported by all the documentary evidences. The A.O. thereafter, did not make any enquiry from the share applicant and did not doubt its identity and creditworthiness. The A.O. however, without explaining any reasons noted in the assessment order that genuineness of the transaction could not be verified. The A.O. has not given any reason why the genuineness of the transactions could not be verified on the basis of the documents and material produced on record. The A.O. never asked the assessee to produce the Director or Principal Officer of the share applicant company for examination before him. It is not clear from where Ld. CIT(A) has noted that assessee did not produce the Director/Principal Officer of the Company before A.O. It is well settled l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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