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TMI Blog2019 (3) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... he ratio that the assessee has to be merely identified as the share holder and the initial onus u/s 68 of the Act stands discharged on mere identification. CIT Vs. Sophia Finance Ltd [1993 (8) TMI 62 - DELHI HIGH COURT] has laid down the ratio that if the share holders are identified and it is established that they have invested in the purchase of shares, then the amount received by the company would be regarded as capital received. The assessee has no further onus. Exhibits 123 to 139 of the paper book reveal the proportion of investment made by the share applicant companies in the share capital of the appellant company. The percentage of their investment ranges from 5% to 40%, which means that the share applicant company portfolios include investment in other companies also. There is nothing on record to suggest that the other investments made by the share applicant companies have been treated as bogus in the hands of other companies. The applicant company has successfully discharged the initial onus cast upon it by the provisions of section 68 and, therefore, no addition is called for u/s 68 as unexplained cash credit. - Decided in favour of assessee. - ITA No. 3342/DE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of ₹ 250300/-. Security premium account has Rs/-95376480/- 2 M/s Basic Portfolio Management Pvt. Ltd. (earlier known as Urvashl Transport Co. Pvt. Ltd), A-19, 202 Akshay House 2nd Floor Guru Nanak Pura, Laxmi Nagar, Delhi-110092 ₹ 50,00,000/- ₹ 40,00,000/- The gross receipt of the companies of ₹ 508356/-. Security premium account has Rs/-95666800/- 3 M/s 1-Tech Insurance Brokers Pvt. Ltd 1/119, Khichri Pur Delhi-110091 ₹ 1,30,00,000/- The gross receipt of the companies of ₹ 745426/-. Security premium account has Rs/-147576000/- 4 M/s New international Stainless. Pipe Co. Ltd D-3/100, Sector-6, New Delhi-110085 Rs.65,00,000/- The gross receipt of the companies of ₹ 643697/-. Security premium account has ₹ 143202750/- 5 M/s Prayog (India) Pvt. Ltd RZ-74-A, Ravi Nagar Extension Vishnu Garden Near Kesho Pur Depot Delhi-110018 ₹ 1,03,50,000/- The gross rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies of Nil security premium account has Rs/- 1,75,00,000/- 14 M/s Remote Equity Pvt. Ltd (Earlier known as Vardhan Retails Pvt. Ltd) 208, Aggarwal Chamber Veer Sarvarkar Block, Shakarpur Delhi-110092 ₹ 20,00,000/- The gross receipt of the companies of ₹ 5,70,398/-. Security Premium account has s/-I 10064000/- 15 M/s Silversmith Marketing Pvt. Ltd 204, IV, Aggarwal Chamber Savarkar Block, Shakurpur Delhi-110092 ₹ 20,00,000 The gross receipt of the companies of ₹ 5,51,327/-. Security premium account has ₹ 10,64,16,000/- 16 M/s S3 Infradevelopers Pvt. Ltd J-221, Sarita Vihar New Delhi-110076 ₹ 20,00,000/- The gross receipt of the companies of ₹ 5,51,327/-. Security premium account has ₹ 10,64,16,000/- 17 M/s United Equity Pvt Ltd Earlier known as Garg Brothers Woodcraft Pvt. Ltd, F-103, Plot No. 10, 1st Floor Chetan Complex, Central Market Suraj mal ₹ 20,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s ₹ 101568000/ 25 M/s Subhra Plantations (India) Ltd 7A/AC Block, Shalimar Bagh New Delhi-110088 ₹ 30,00,000/- 7. Analysing the pattern of the share applicants, the Assessing Officer deputed an Income tax Inspector for making further enquiry. The Inspector submitted his report stating that the above said subscriber companies addresses are fake and they do not exist at the given addresses. 8. On 25.03.2018, the Assessing Officer asked the assessee to produce the people from whom the share application money has been received. On receiving no plausible reply and on the strength of the Inspector s report, the Assessing Officer came to the conclusion that the assessee grossly failed to identify the share applicants and, drawing support from the provisions of section 68 of the Act, the Assessing Officer made the addition of ₹ 31.56 crores. 21 |M/s SKY Equity Pvt Ltd (lEarlier Known as Achievers Technologies Pvt Ltd), 12,2nd Floor, Club Road Market, Punjabi Bagh companies ofRs.. 3568000/-. Security premium account has ₹ 101568000/ 25 M/s Subhra Plantations (India) Ltd 7A/AC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany has purchased cheques from the subscriber company in lieu of cash. All the transactions have been done through banking channel. 15. While delivering the judgment in the case of Kamadhenu Steel Alloys [supra], the Hon'ble High Court observed as under: 36. The AO did not bother to find out from the office of the Registrar of Companies the address of those companies from where the registered letter received back undelivered. If the address was same at which the letter was sent or the Inspector visited and no change in address was communicated, perhaps it may have been one factor. In support of the conclusion which the AO wanted to arrive at, that by itself cannot be treated as the conclusive factor. As pointed out above, these applicant companies have PAN and assessed income tax. No effort was made to examine as to whether these companies were filing the income tax return and if they were filing the same, then what kind of returns these companies were filing. If there was no return, this could be another factor leading towards the suspicion nurtured by the AO. Further, if the returns were filed and scrutiny thereof reveals that such returns were for namesake, this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pertaining to the identity as well as financial worth of each of its subscribers. The company must, however, maintain and made available to the Assessing Officer for his perusal, all the information contained in the statutory share application documents. In the case of private placement the legal regime would not be the same. A delicate balance must be maintained while walking the tightrope of Sections 68 and 69 of the Income Tax Act. The burden of proof can seldom be discharged to the hilt by the assessee; if the Assessing Officer harbours doubts of the legitimacy of any subscription he is empowered, nay duty bound. But if the Assessing Officer fails to unearth any wrong or illegal dealings, he cannot obdurately adhere to his suspicions and treat the subscribed capital as the undisclosed income of the company. (Emphasis supplied) 38. Even in the instant case, it is projected by the Revenue that the Directorate of Income Tax (Investigation) had purportedly found such a racket of floating bogus companies with sole purpose of landing entries. But, it is unfortunate that all this exercise is going in vain as few more steps which should have been taken by the Revenue in o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee company has been discharged to prove the identity of the investor. The appellant company has provided the balance sheet of the investor companys alongwith with their company profiles and details with the Registrar of Companies. The subscriber companies themselves have provided the bank statements and their respective PAN details. It is not the case of the Revenue that the subscriber companies are name lenders or entry providers. Their details are available on public domain on the website of the Registrar of Companies. 17. The Hon'ble Supreme Court in the case of Lovely Exports Pvt Ltd 216 CTR 195 has laid down the ratio that the assessee has to be merely identified as the share holder and the initial onus u/s 68 of the Act stands discharged on mere identification. 18. The Hon'ble High Court of Delhi in the case of CIT Vs. Sophia Finance Ltd 205 ITR 98 has laid down the ratio that if the share holders are identified and it is established that they have invested in the purchase of shares, then the amount received by the company would be regarded as capital received. The assessee has no further onus. 19. Exhibits 123 to 139 of the paper book reveal the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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