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TMI Blog2018 (8) TMI 866X X X X Extracts X X X X X X X X Extracts X X X X ..... - MS. INDIRA BANERJEE, CHIEF JUSTICE AND MR.JUSTICE ABDUL QUDDHOSE For the Appellant : Mr. R. Vijayaraghavan for M/s.Subbaraya Aiyar Padmanabhan For the Respondent : Mr. M. Swaminathan Standing Counsel JUDGMENT Ms.Indira Banerjee, Chief Justice This appeal is against an order dated 01.9.2016 passed by the Income Tax Appellate Tribunal C Bench, Chennai, dismissing the appeal being I.T.A.No.871/Mds/2016 filed by the appellant assessee, M/s.V.R.Global Energy Private Limited, against an order dated 25.02.2016 passed by the Commissioner of Income Tax (Appeals) 11, Chennai. 2. The appellant assessee is a Company carrying on business of manufacture of Wind Electric Generators and parts of Wind Electric Generators. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of M/s.Shriram Auto Finance as on 1.3.2012. 8. The above said companies assigned their liability payable to M/s.Shriram Auto Finance to the appellant assessee by an agreement dated 1.3.2012. Therefore, in the book of accounts, the appellant assessee had shown the amounts as due from the various companies and corresponding amount as payable to M/s.Shriram Auto Finance. 9. Smt. Vathsala Ranganathan retired from the partnership of M/s.Shriram Auto Finance. On retirement of Smt. Vathsala Ranganathan, M/s.Shriram Auto Finance assigned the said amount of ₹ 60.67 Crores payable by the appellant assessee to M/s.Shriram Auto Finance to Smt. Vathsala Ranganathan. Consequently, in the books of accounts of the appellant assessee, the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een confirmed by those companies and, therefore, the liability of the appellant assessee to the said companies was genuine and had accrued on transfer by the three persons of the assests by way of receivables/shares of equal value and, therefore, the conversion of these liabilities into share capital account cannot be assessed as unexplained credit. 14. The return filed by the appellant assessee was selected for scrutiny and notice was issued under Section 143(2) of the Income Tax Act, 1961, hereinafter referred to as the said Act . The scrutiny assessment was duly completed under Section 143(3) of the said Act on 31.3.2015 determining the total income of the appellant assessee for the assessment year 2012-13 at ₹ 91,06,12,134/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71/Mds/2016, held that by way of introducing cash credit in the name of share premium and share capital, the appellant assessee is making attempts to reduce the tax liability. The learned Tribunal further held that when the Assessing Officer found credit in the books of account and the appellant assessee could not offer any satisfactory explanation, then the entires found in the books have to be treated as income of the appellant assessee and, thus, dismissed the appeal by confirming the orders passed by the authorities below. 18. Assailing the said order, the appellant assessee has filed the present appeal raising, inter alia, the following questions of law: (i) Whether the learned Tribunal erred in confirming the valuation of shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of the company. 23. In Commissioner of Income Tax v. Steller Investment Ltd., reported in (2001) 251 ITR 263, also cited on behalf of the appellant, the Supreme Court held that even if the subscribers to the increased share capital of assessee-company were not genuine, the amount could not be regarded as undisclosed income of the company. 24. The question of whether the learned Tribunal erred in confirming the valuation of shares allotted in settlement of the pre-existing liability taxable as unexplained cash credit, does not involve any question of law, far less any substantial question of law. 25. However, the second question is answered in favour of the assessee and against the Revenue by the judgment of the Division Bench o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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