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TMI Blog2019 (2) TMI 991X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer of that company and therefore, there is no valid reason to doubt the investment made by M/s. Hi-Fi Infotech into the assessee company. Assessee has produced copy of order passed u/s. 143(3) in the case of this investor company, which was also stated to have been submitted before the AO. In presence of these facts, once the investment in the said company stands accepted by the Revenue authorities, it is not justified to doubt the investment made by the same company into the assessee company on the basis of suspicion and presumption of bogus share capital. The contentions of the assessee could not be controverted on behalf of the Revenue. We, therefore, are of the opinion, that the CIT(A) has rightly deleted the addition made u/s. 68 with respect to this company. - Decided against revenue - ITA No. 5120/Del/2016 - - - Dated:- 15-2-2019 - Shri Bhavnesh Saini, Judicial Member And Shri L.P. Sahu, Accountant Member For the Appellant : Sh. Amit Katoch, Sr. DR For the Respondent : S/Sh. D.C. Agarwal, R.N. Poonia, AR Sh. Sudesh Garg, Advocate ORDER PER L.P. SAHU, A.M.: This appeal by the Revenue is directed against the order of ld. CIT(A)-2, N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re as under : S. No. Name Address of investors Amount (in Rs.) 1. Geemad promoters Pvt. Ltd. F-6, Vijay Chowk, Laxmi Nagar, New Delhi-110092 5,00,000 2. Hari Realtech Pvt. Ltd. F-6, Vijay Chowk, Laxmi Nagar, New Delhi-110092 5,00,000 3. Edward Impex Pvt. Ltd. F-6, Vijay Chowk, Laxmi Nagar, New Delhi-110092 15,00,000 4. Sara Fun and Show Biz Pvt. Ltd. F-6, Vijay Chowk, Laxmi Nagar, New Delhi-110092 5,00,000 5. Dwarka Fabrics Pvt. Ltd. F-6, Vijay Chowk, Laxmi Nagar, New Delhi-110092 15,00,000 6. Hightech Valuation Consultants Pvt. Ltd. C-62, Basement South Extn. Part-1, New Delhi 10,00,000 7. Rudra Avtar Steel Pvt. Ltd. 15,00,000 31/10, Bhikam Singh Colony, Vishwas Nagar, Shahdara, New Delhi-110032 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. In the factual matrix of the present case, as narrated above and arguments of both the parties, we find that the only dispute which needs adjudication is whether the ld. CIT(A) was justified to delete the addition made u/s. 68 of the Act on merits thereof. 6. Before we proceed to adjudicate upon the issue on merits, we feel it appropriate to mention that as per section 68 of the Act, where any sum is found credited in the books of the assessee maintained for any previous year, and the assessee offers no explanation about the nature and source of the same or the explanation offered by him is not satisfactory in the opinion of the Assessing Officer, the sum so credited may be charged to income tax as the income of the assessee of that previous year. A bare perusal of above section makes it clear that the basic precondition for invocation of section 68 is that there should be absence of explanation of assessee as to the source and nature of credit and the dissatisfaction of the Assessing Officer as to the credibility of assessee s explanation, if furnished by him. The factual matrix of the present case, if examined on the anvil of above section, we find that the assessee, in ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt account numbers and the income tax returns of all the investors had been furnished by the assessee, the Assessing Officer could have easily verified the same. He, however, placed reliance upon the fact that the summons issued to the parties under section 131 of the Act could not be served and hence, did not accept the genuineness of the transactions. In the opinion of this court, taking into account the concurrent findings of fact recorded by the Commissioner (Appeals) and the Tribunal, it cannot be said that the conclusion arrived at by the Tribunal is, in any manner, contrary to the record or that the same suffers from any legal infirmity so as to give rise to any question of law, much less a substantial question of law warranting interference. In such view of the matter, in our considered opinion, the dissatisfaction of the Assessing Officer cannot be sustained only on the basis of suspicion. 8. The Assessing Officer has laid much emphasis on the non-service/non compliance of notices u/s. 133(6) of the Act. The contention of the assessee has been that the Assessing Officer ignored that the notices were returned due to change in addresses of the company, which were sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istence of investor companies is based on the Inspector s report who on spot enquiry reported about non-existence of the investor companies. The contention of the ld. AR has been that the building where the inspector visited is a big commercial complex having several offices and shops; that he enquired from unknown persons and not from the office of M/s. Ashok Tyagi and Company, a CA firm who and his relatives were directors in these companies; that enquiry done from unknown persons lacks credibility as one cannot be sure as to the extent, numbers, names of the concerns, which were working in that premises; that no Assessing Officer of any investor company was approached to enquire the existence of such companies, particularly when their certificates of incorporation prove the existence of directors and their DIN issued by Ministry of Corporate Affairs and the their assessments being made by Revenue authorities. Neither ld. DR nor the Assessing Officer could be able to controvert the aforesaid documentary evidences submitted by the assessee so as to prove the existence of investor companies, especially when the inquiry report of the inspector has been challenged by the assessee as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the certificate of incorporation etc. It was observed by the ITAT that the AO had not undertaken any investigation of the veracity of the above documents submitted to him. It has been rightly commented by the ITAT that without doubting the documents, the AO completed the assessment only on the presumption that low return of income was sufficient to doubt the creditworthiness of the share holders. Similar view has been taken by Hon ble jurisdictional High Court in another decision in the case of PCIT vs. M/s. Goodview Trading Pvt. Ltd. dated 21 November, 2016 reported in 2016 (12) TMI 617 Delhi High Court, observing 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. 12. The ld. counsel for the assessee has also relied on the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (P.) Ltd. [2018] 95 taxmann.com 163 (Raipur - Trib.) (x) ACIT v. Venkateshwar Ispat (P.) Ltd. [2009] 319 ITR 393 (Chhattisgarh) (xi) CIT v. Misra Preservers (P.) Ltd. [2013] 31 taxmann.com 214 (Allahabad) (xii) Agrawal Coal Corporation (P.) Ltd. v. Addl. CIT [2012] 19 taxmann.com 209 (Indore) (xiii) ACIT v. AMR Hospitality Services Ltd [2013] 40 taxmann.com 96 (Hyderabad - Trib.) (xiv) CIT v. Peoples General Hospital Ltd. [2013] 35 taxmann.com 444 (Madhya Pradesh) (xv) CIT v. Peoples General Hospital Ltd. [2013] 35 taxmann.com 444 (Madhya Pradesh) (xvi) CIT vs Down Town Hospitals (P) Ltd. (2004) 267 ITR 439 (Gau) (xvii) CIT vs Creative World Telefilms Ltd. (2011) 333 ITR 100 (Bom.) 15. As far as the contention of the Assessing Officer, which have been supported by ld. DR, regarding non-production of directors is concerned, we find substantial force in the contention of the assessee on this score that the assessee could at the most request the directors of investor companies to appear before the Assessing Officer, but has no power to compel them to do so. Thus, it was for the department to enforce their attendance and on failure to take ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m. Both the facts were found incorrect Facts are not even remotely similar in the present case. 2 CIT v. Durga Prasad More [1971] 82 ITR 540 (SC) In this case the assessee was receiving some income. He says that it is not his income but his wife's income. His wife is supposed to have had two lakhs of rupees neither deposited in banks nor advanced to others but safely kept in her father's safe. Assessee is unable to say from what source she built up that amount. Held that the Income Tax authorities were entitled to look into the surrounding circumstances to find out the reality of the recitals made in those documents. Facts are not even remotely similar in the present case. 3 CIT v. Daulat Ram Rawatmull [1973] 87 ITR 349 (SC) In this case assessee firm obtained overdraft upon security of fixed deposit receipt issued in name of son of partner. Held that when department could not prove that respondent was owner of amount, despite fact that receipt was in name of son of partner, amount in question could not be treated as concealed income of res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case Id. AO accepts that the details about address and PAN were provided. Further there is no finding that there was immediate 8 Sumati withdrawal of money. Dayal v. CIT 214 ITR 801 (Cal.) In this case explanation furnished by the assessee is considered practically improbable to happen like purchasing three winning tickets consequently for earning jackpot No such improbable circumstances or happening is pointed by Ld. AO 9 CIT v. L.N. Dalmia 207 ITR 89 (Cal.) In this case assessee having acquired controlling interest in a company, sold shares of that company at lower rate to a company formed by himself - Transaction of sale was made on credit and there was no positive proof that purchasing company had sufficient funds to acquire said shares - For money borrowed for acquisition of shares, assessee was paying huge interest without any earning therefrom and asset itself would be disposed of without getting any payment for alleged sale of shares from purchasing company was held that it was merely a paper transfer Facts are not even remotely similar in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter on any other document, it is not obligatory on the authorities to accept these documents without any inquiry. The authorities are bound to go into the question as to whether they should open the document produced before them. This would necessarily imply an inquiry into the genuineness or otherwise of the document, if necessary. Facts are not even remotely similar in the present case. 15 CIT v. Neelkanth Ispat Udyog Pvt. Ltd. ITA No. 427/2012 (Delhi) In this case the amounts were given by Mukesh Gupta and his Associates, a group of entry operators. These notices were either not complied with or returned with the remark left . Mukesh Gupta, Ranjan Jassal etc stated that they were accommodation entry providers. The amount is deposited in cash and then routed through the multiple accounts. Facts are different, there is no evidence of any entry operator in the present case. All the summons and notices have been complied and replies submitted. No cash is deposited in the account of investors. The case law is not applicable. 16 Bisakha Sales (P.) Ltd. v. CIT [ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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