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TMI Blog2018 (7) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... the documents which was provided by the Assessing Officer as well as before the CIT(A). Therefore, it will be pertinent to remand back this matter to the file of the Assessing Officer to take congnizance of the documents filed by the Assessee. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. X X X X Extracts X X X X X X X X Extracts X X X X ..... companies amounting to ₹ 80,75,000/- through cheque for allotment of 80,750 shares of ₹ 10 each on share premium of ₹ 90 per share. There was search operation on premises of the respondent assessee on 30.06.2009. The assessee is a group company of Mahesh Mehta group of cases. During search proceedings no incriminating material with regard to share capital accepted by the assessee company were found. During the Assessment Proceedings, various documents were filed to prove identity and creditworthiness of the shareholders and also to prove genuineness of the transactions. During appeal proceedings, the assessee also submitted that the balance sheet of the share applicant companies and copy of ITR for latest A.Y. 2011-12 before the CIT(A) and also the mater data downloaded from MCA portal of government of India. All these evidences submitted during the appeal proceedings were routine documents which are public documents therefore there is no reason, the same may be treated as additional evidences. During Assessment Proceedings, the Assessing Officer issued summons u/s 131 notices u/s 133(6) to the new share holders on 13.12.2011 for compliance on 19.12.2011. The summ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments. The Assessing Officer in the remand report did not dispute the factual position of lack of reasonable opportunity. In the rejoinder to the remand report, the assessee contended that in the remand report the Assessing Officer has not controverted the facts stated. The CIT(A) after giving opportunity to the Assessing Officer in appeal order for A.Y. 2006-07 which is base order for adjudicating appeal for A.Y. 2008-09 accepted the request of the assessee to admit fresh evidences as the assessment was completed by the Assessing Officer in hurried manner in period just 16 days and total time made available by the Assessing Officer to himself was last two months. The CIT(A) while adjudicating the admissibility of the additional evidences took into account the fact that inspector report was never confronted to the assessee during assessment proceedings nor during remand proceedings. The CIT(A) has made a special mention that the need for filing fresh evidences to highlight the existence of shareholders at the given address, arose because the inspector report was not confronted by the Assessing Officer during assessment proceedings also. The additional evidences therefore were acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the initial onus lay upon the assessee u/s 68 of the Act. The credit worthiness has sought to be established as the parties were assessed to tax and they have sufficient sources available with them as per balance sheet to finance investment in the share capital. To support the above view, the reliance was placed on CIT vs. Winstral Petrochemicals Ltd. 330 ITR 603 (Del). On the non compliance of the summons to the share applicant companies, it was submitted that the summons were issues by the AO himself on his own and in that situation non compliance of summons cannot lead to burden being placed on the assessee to produce those person. On the non compliance of the summons taken ground to take adverse view, the assessee relied on judgment of Anis Ahmed & Sons vs. CIT 297 ITR 441 (SC). Further reliance were also placed on CIT vs. WinstralPetrochemicals Ltd. (supra). The assessee dealt with the objection of the Assessing Officer that assessee failed to produce the directors of the share applicant companies. Special reference was made by the Assessing Officer that in case of private limited companies the onus to produce the directors is higher. To support the contention of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no fresh evidence submitted by the Assessee. This fact was not denied by the Revenue. Therefore, Ground No. 3 of the Revenue's appeal is dismissed. On merit of the appeal filed by the Revenue, it is pertinent to take note about the order passed by the CIT(A) in Assessment Year 2006-07 which was handed over by the Ld. AR during the hearing. The CIT(A) for A.Y. 2006-07 held as under:- "I have considered the assessment order, the submissions made and the documents filed. I have already held that the appellant was prevented from discharging its onus on account of insufficient opportunity and was also prejudiced and, accordingly, I have admitted the additional evidence filed by the appellant. At present, the appeals involved in respect of the appellant on the issue of share application / share capital are for AY 2006-07 (A.No.361/13-14), AY 2007-08 (A.No.360/13-14), AY 2008-09 (A.No.359/13- 14), AY 2009-10 (A.No.358/13-14) and AY 2010-11 (A.No.357/13-14). The share capital raised from different companies in these years is summarized in the table given hereunder: Sl No. Applicant Companies ASSESSMENT YEAR s 2006-07 2007-08 2008-09 2009-10 1010-11 1 Oracle Cables Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of audited balance sheet for the year ending 31.03.2006 has been filed. IT records could not be produced 6 Tejender Fabrication Pvt. Ltd. The ITR for AY 2010-11 was electronically filed on 27.09.2010 vide acknowledgment No. 161381151270910. Therefore, the question of nonexistence of this co. does not arise. 7 Kaiser Marketing Pvt. Ltd. The case was assessed for AY 2006-07 u/s 143(3) by the Department itself on 26.12.2008. The ITR for AY 2010-11 was electronically filed on 25.09.2010 vide acknowledgment No. 159633301250910. Therefore, the question of non-existence of this co. does not arise. 8 Indolon Hosiery P Ltd. ITR for AY 2011-12 was filed on 29.03.2012 vide acknowledgment No.370700291290312. Copies of MCA filings and confirmations from the Directors were also filed. Therefore, the question of nonexistence of this co. does not arise. 9 Brainsoft Info Consultants Pvt. Ltd. ITR for AY 2011-12 was filed on 31.03.2012 vide acknowledgment No.381694521310312. Copies of audited balance sheet and confirmations from the Directors were also filed. Therefore, the question of non-existence of this co. does not arise. 10 Chintapurni Builders Pvt. Ltd. ITR for AY 2008-09 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. 18 Dhanvridhi Financial Services Pvt. Ltd. ITR for AY 2011-12 was filed on 05.03.2012 vide acknowledgment No.346599241030312. Copy of the audited balance sheet as on 31.03.2009 was also filed. Therefore, the question of non-existence of this co. does not arise. Co. appears to have source for the investment 19 Intelife Marketing Pvt. Ltd. ITR for AY 2011-12 was filed on 31.03.2012 vide acknowledgment No.382068051310312. Copy of the audited balance sheet as on 31.03.2009 was also filed. MCA master data shows the co. active and having filed the balance sheet as on 31.03.2010. Therefore, the question of nonexistence of this co. does not arise. 20 Kay Buildwell Pvt. Ltd. ITR for AY 2011-12 was filed on 30.03.2012 vide acknowledgment No.374037341300312. Copy of the audited balance sheet as on 31.03.2009 was also filed. Therefore, the question of non-existence of this co. does not arise. Co. appears to have the source for investment. 21 Kela Devi Builders Pvt. Ltd. ITR for AY 2011-12 was filed on 20.03.2012 vide acknowledgment No.356042621200312. Copy of the audited balance sheet as on 31.03.2009 was also filed. Therefore, the question of non-existence of this co. does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue but no such evidence was found. Public functionaries must act in a transparent and non-partisan manner. This does not appear to be the case. 5.5. In view of the above, the additions made in various years, i.e. ₹ 83,00,000/- for AY 2006-07 (A.No.361/13-14), ₹ 12,00,000/- for AY 2007-08 (A.No.360/13- 14), ₹ 80,75,000/- for AY 2008-09 (A.No.359/13- 14), Rs,2,58,00,000/- for AY 2009-10 (A.No.358/13-14), and ₹ 75,00,000/- for AY 2010-11 (A.No.357/13-14), on account of share applications / capital received cannot be held to be unexplained. The conclusion is not tenable in view of the evidence produced and must be deleted. I hold so accordingly for all these assessment years. The respective additions made for these AYs are deleted." In the present Assessment Year 2008-09, the facts are identical and the CIT(A) has rightly followed the order of A.Y. 2006-07 passed by the same CIT(A). There is no need to interfere with the findings of the CIT(A). Therefore, appeal filed by the Revenue is dismissed. 9. In result, ITA No. 54/Del/2014 filed by the Revenue is dismissed. 10. Grounds for ITA No. 55/DEL/2014 (2009-10) are as under: 1. The Commissioner of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocurement of accommodation entries through share application money from non-descript companies. 3. The Commissioner of Income Tax (Appeal) erred in admitting additional evidence under Rule 46A. 4. (a)The order of the CIT(A) is erroneous and not tenable in law and on facts. (b)The appellant craves leave to add, alter or amend any/all the grounds of appeal before or during the course of the hearing of the appeal." 15. The Ld. DR submitted that the Companies were not existed as per the Inspector Report. The Ld. DR relied upon the Assessment Order for A.Y. 2010- 11. The Ld. AR submitted that the issue is identical with the A.Y. 2008-09. 16. We have heard both the parties and perused all the relevant records. For Assessment Year 2010-11, the assessee has filed all the required documents before the Assessing Officer. Therefore, the submission of the Ld. DR that the Companies were not existed as per the Inspector Report is not proper. Therefore, the appeal filed by the Revenue for the Assessment Year 2010-11 is dismissed. 17. In result, ITA No. 56/Del/2014 filed by the Revenue is dismissed. 18. Grounds of Appeal for ITA No. 403/DEL/2015 (2011-12) are as under: 1. The Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice on the ground that in normal days the share applicant company has nominal balance and it did not have own funds to make investment of ₹ 3,00,000/-. In reply to show cause notice the assessee explained that the share applicant company was assessed u/s 143(3) for A.Y. 2007-08 vide order dated 10.12.2009. The applicant is a registered company under Companies Act with valid CIN number. The company has been operating bank account with nationalized bank with KYC documents and due compliance of banking regulations, the details of the said company was submitted before the Assessing Officer. To prove creditworthiness, the assessee submitted that the said company has net worth of ₹ 300.69 lakhs on 31.03.2010 and ₹ 345.95 lakh on 31.03.2011. So said company has sufficient funds accumulated out of past inflow of funds. The Assessing Officer rejected the explanation of the assessee by relying on CIT vs. Globus Securities and Finance P Ltd. to hold that criteria of identity, creditworthiness and genuineness of transaction has not been satisfied. The CIT(A) also confirmed the action of the Assessing Officer by relying on CIT vs. Focus Exports P Ltd., CIT vs. O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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