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TMI Blog2019 (3) TMI 1194X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee : Ms. Moni Jain, A.R. For the Revenue : Shri Chaitanya Anjaria, D.R. ORDER PER RAJESH KUMAR, ACCOUNTANT MEMBER: The above titled three appeals have been preferred by the Revenue against the common order dated 20.03.2017 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2012-13. ITA No.4123/M/2017 2. The grounds raised by the Revenue are as under: 1. The Id. CIT (A) has erred in deleting the addition of ₹ 2,00,00,000/- On account of share premium/share application money /Unexplained cash credit u/s 68 of Income-tax Act, 1961 and addition of ₹ 10,00,000/- being 5% of the unexplained cash credit value, as unexplained of expenditure u/s 69C of the l.T. Act. 2. The appellant prays that the order of the Id.CIT(A) on the grounds be set aside and that of the Assessing Officer be restored. 3. The Appellant craves leave to add, amend or alter all or any of the grounds of appeal which may be necessary. 3. The facts in brief are that a search/survey action under section 132/133A of the Act was conducted at the residential and business premises of Shri Pravin Kumar Jain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fic incriminating evidences, it is noted that the AO has not been able to pin point the specific evidences relating to appellant company which would clearly show that the share application money has been received in lieu of cash. In the assessment order the assessing officer has referred to the statement of Shri Pravin Jain recorded at the time of search but has not considered the retraction thereafter in which it was stated that statement recorded at the time of search was under undue pressure and that such statements had been retracted. 17. From the details filed at the time of assessment proceedings, it is noted that financials in respect of investors for FY 2011-12 have been filed and also explained by the appellant. 18. The fact remains that the investor companies are assessed to tax and have filed their returns of income. The parties have responded to the notices u/s 133(6). The appellant has explained that in case of M/s Duke Business Pvt. Ltd. and Vanguard Jewels Ltd. , the loss is on account of foreign exchange losses incurred during the year. The appellant has filed detailed explanation of source of funds of investor and contended that they have genuine business act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e only the initial burden. When the tax payer explains the credit by providing evidence of identity, confirmation and credit worthiness, the burden shifts on the revenue to show that the explanation is not satisfactory or incorrect. In the case of credit as share capital by corporate entity, whose existence is shown by its registration with Registrar of companies and its filing of tax returns, adverse conclusion is not justified merely because its directors are not produced personally before the assessing officer by the tax payer. 22. In the remand proceedings only the legal requirement was indicated that if any statements of third parties are to be relied upon, opportunity for cross examination must be provided. Further, instead of and other than generalities, the assessing officer was given an opportunity to put together appellant specific evidence justifying the addition. 23. It can be seen from the observation of the Assessing Officer that he has only referred to the information related to the outcome of search in the case of Shri Pravin Kumar Jain Group who were allegedly providing accommodation entries but the Ld. Assessing Officer has failed to demonstrate any such spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R numbers and had also given the cheque numbers, name of the bankers. The Assessing Officer ought to have found out their details through PAN cards, bank statements. Thus, the view taken by the Tribunal could not be faulted. (iii) The Hon'ble Supreme Court of India in the case of CJT vs. Orissa Corporation reported in 159 JTR 78 (SC) has held as under; That in this case the respondent had given the names and addresses of the alleged creditors. It was in the knowledge of the Revenue that the said creditors were income-tax assessee's. Their index numbers were in the file of the Revenue. The Revenue, apart from issuing notice under section 131 at the instance of the respondent, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they are creditworthy. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the respondent could not do anything further. In the premises, if the Tribunal came to the conclusion that the Respondent had discharged the burden that lay on it, then it could not be said that such a conclusion was unreasonable or perverse or bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation along with copies of share certificate, bank statement, memorandum of articles, copy of share application money, audited balance sheet and P L a/c of these parties were filed. These are similar details as were filed in case of three other companies for asst. yr. 2005-06. We have already disposed of the appeal for asst. yr. 2005-06 whereby we have held that the assessee has discharged its onus by filing necessary details and further have relied on the decisions of Hon'ble Supreme Court and Hon'ble Delhi High Court along with various other decisions of Tribunal and have held that addition cannot be made under S.68 in the hands of the assessee company. Therefore, in view of the same reasoning, we cancel the entire addition made and confirmed by the lower authorities here also. The above decision of JTAT also related to Mr.Mukesh Choksi's case of investment in share application money. On perusal of above case it is clear that if a bogus shareholder has invested the money and if appellant receives such money as share application money and appellant during assessment proceedings provides the details like name ^address of the corporate entity, PAN No., ROC No., then J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.5954/M/2016 ors. and the Bench has taken a view deciding that addition made under section 68 of the Act is wrong and thus decided the issue in favour of the assessee. The Ld. A.R. submitted that in the case of the assessee also the addition was made on the basis of same information and also related to the same search conducted on Shri Pravin Kumar Jain and his associates and the facts are quite identical to the facts of the above case as decided by the co-ordinate bench of the Tribunal, therefore, the same should be followed in the case of the assessee and the appeal of the Revenue should be dismissed. The Ld. A.R. further submitted that the Ld. CIT(A) while passing the order has gone into the facts in detail and after only considering all the facts on record and furnishing the evidences adduced before the Ld. CIT(A) decided the issue in favour of the assessee. 6. The Ld. D.R., on the other hand, relied heavily on the order of AO and prayed before the Bench that though the issue has been decided by the co-ordinate bench of the Tribunal with identical facts in favour of the assessee in ITA No.5954/M/2016 ors. but the facts remain that Shri Pravin Kumar Jain and his associ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he parties, but failed to establish genuineness of transactions and creditworthiness of parties in the backdrop of clear findings of Investigation Wing that those companies are hawala companies involved in providing accommodation entries. The AO has brought out facts in the light of statement of Shri Pravinkumar Jain deposed before the Investigation Wing to make addition. Except this, there is no contrary evidence in the possession of the AO to disprove the loan transactions from Josh Trading Company Pvt Ltd and Viraj Mercantile Pvt Ltd. On the other hand, the assessee has furished various details including confirmation letters from the parties, their bank statements alongwith their financial statements to prove identity, genuineness of transactions and creditworthiness of the parties. The assessee also furnished evidences to prove that the parties have responded to the notices issued u/s 133(6) by AO by filing various details. The assessee also filed bank statements to prove that the said unsecured loans have been repaid in the subsequent financial years. Therefore, we are of the view that there is no reason for the AO to doubt the genuineness of transactions despite furnishing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of information received from Investigation Wing, but not based on any evidence to disprove the loan transaction from above companies are ingenuine. Therefore, we are of the view that there is no reason for the AO to treat loans from above 2 companies as unexplained credits u/s 68 of the Act. 7. Coming to the case laws relied upon by the assessee, the assessee has relied upon the decision of Hon'ble Bombay High Court in the case of CIT vs Gagandeep Infrastructure Pvt Ltd (2017) 394 ITR 680 (Bom). We have gone through the case laws relied upon by the assessee in the light of the facts of the present case and find that the Hon'ble High Court categorically observed that the Proviso to section 68 has been inserted by the Finance Act, 2012 wef 01-04- 2013 is applicable from AY 2013-14 onwards. The Court further observed that the Parliament did not introduce the proviso to section 68 with retrospective effect nor does the Proviso introduced states that it was introduced for removal of doubts. Therefore, it is not open to give retrospective effect. The relevant portion of the order of High Court is extracted below:- The proviso to section 68 has been introduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of share application money. It was also observed by the Tribunal that the Assessee has also produced the entire record regarding issuance of share i.e. allotment of shares to these parties, their share application forms, allotment letters and share certificates, so also the books of account. The balance sheet and profit and loss account of these persons discloses that these persons had sufficient funds in their accounts for investing in the shares of the Assessee. In view of these voluminous documentary evidence, only because those persons had not appeared before the Assessing Officer would not negate the case of the Assessee. The judgment in case of Gagandeep Infrastructure (P) Ltd (supra) would be applicable in the facts and circumstances of the present case. 9. The assessee has also relied upo the decision of Hon'ble Supreme Court in the case of CIT vs Lovely Exports Pvt Ltd (2008) 216 CTR 195 (SC). The Hon'ble Apex Court while deleting the addition made u/s 68 observed that if the share application money is received by the assessee company from alleged bogus shareholders whose names are given to the AO, then the department is free to proceed to reopen their in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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