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TMI Blog2019 (7) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... he issues in dispute and reject the ground raised by the Revenue. - ITA No. 3940/Del/2015 - - - Dated:- 8-7-2019 - Shri H.S. Sidhu, Judicial Member And Shri B.R.R. Kumar, Accountant Member For the Assessee : None For the Department : Shri S.S. Rana, CIT(DR) ORDER PER H.S. SIDHU, JM This appeal by the Assessee is directed against the Order dated 06.10.2017 of the Ld. CIT(A)-2, New Delhi pertaining to assessment year 1997-98 on the following grounds:- On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of ₹ 5,23,42,500/- on account of share / equity capital without appreciating the fact that the assessee has failed to produce evidence. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of ₹ 21,80,11,355/- on account of unsecured loans without appreciating the fact that the assessee has failed to produce evidence. 3. On the facts and in the circumstances of the case, the Ld. ClT(A) has erred in deleting the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2002 alongwith notices u/s. 143(2) and 142(1) of the I.T. Act, were sent to the assessee company and also on various occasions and in response to the same a letter dated 7.2.2002 a letter received from Sh. Narinder Jit Singh through registered post wherein he has submitted that he has been in judicial custody in Tihar Jail in various cases of economic offences since 29.6.1998 and that all records pertaining to books of accounts, balance sheet, profit and loss account, bank account etc. were seized by the Crime Branch and are presently under the direct custody of the Hon ble Delhi High Court and hence he is unable to furnish any detail or evidence in support of his contention at this point of time. After perusing the same, the AO observed that out of three Directors of the Coy. the two Directors namely Sh. Inderjit Sahni and Sh. Jagdeep Singh Sahni had expired in March and August, 1998 respectively and the 3rd Director Sh. Narinder Singh Sahni is in judicial custody since June, 1998. In case Sh. Narinderjit Singh, Ex-Director of the Company is unable to attend the assessment proceedings, the company should depute an authorized representative on its behalf like Sh. Sanjeev Wadhera, C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of lower Authorities holding that where there was failure of assessee to establish credit worthiness of investor companies, Assessing Officer was justified in passing assessment order making additions under section 68 for share capital 1 premium received by assessee company. Merely because assessee company had filed all primary evidence, it could not be said that onus on assessee to establish credit worthiness of investor companies stood discharged 2. PCIT Vs NOR PROMOTERS PVT LTD (2019-TIOL-172-HCDEL- ITl where Hon'ble Delhi High Court held that a case involving make-believe paperwork to camouflage the bogus nature of the transactions is to be treated as unexplained credit u/s 68 3. ITO Vs Synergy Finlease Pvt. Ltd (ITA No.4778IDeI/2013) where Hon'ble ITAT Delhi held that where investor of share application money had nominal income and cheques ahd been received just before issue of cheques for share application money, creditworthiness was not proved and addition u/s. 68 was sustained. 4. CIT Vs MAF Academy (P.) Ltd (361 ITR 258) (Copy Enclosed) where Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d also the fact that as per the information and details collected by the Assessing Officer from the concerned bank, the Assessing Officer has observed that there were genuine concerns about identity, creditworthiness of shareholders as well as genuineness of the transactions. 21. In view of the aforesaid discussion, we feel that the matter requires an order of remit to the Tribunal for fresh adjudication keeping in view the aforesaid case law. Navodaya Castle Pvt Ltd Vs CIT (2015-TIOL-314-SC-IT) (Copy Enclosed) SLP of assessee dismissed by Hon'ble Supreme Court 6. Pratham Telecom India Pvt Ltd Vs DC IT (2018- TIOL-1983-HC-MUM-IT) (Copy Enclosed) where Hon'ble Bombay High Court held that mere production of PAN numbers bank statements is sufficient enough to discharge the burden on taxpayer to escape the realms of Section 68 7. CIT Vs Nipun Builders Developers (P.) Ltd (30 taxmann.com 292, 214 Taxman 429, 350 ITR 407, 256 CTR 34) (Copy Enclosed) where Hon'ble Delhi High Court held that where assessee failed to prove identity and capacit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information given by them to the investigation wing. 15 companies had provided the so-called share subscription monies to the assessee. There was thus specific involvement of the assessee-company in the modus operandi followed by Mukesh Gupta and Rajan Jassal. Thus, on crucial factual aspects the present case stands on a completely different footing from the case of Oasis Hospitalities (P) Ltd. (Supra). 42. In the light of the above discussion, we are unable to uphold the order of the confirming the deletion of the addition of ₹ 1,18,50,000 made under section 68 of the as well as the consequential addition of ₹ 2,96,250. We accordingly answer the substantial questions of law in the negative and in favour of the department. The assessee shall pay costs which we assess at ₹ 30,000/-. 9. CIT Vs Ultra Modern Exports (P.) Ltd (40 taxmann.com 458, 220 Taxman 165) (Copy Enclosed) where Hon'ble Delhi High Court held that where in order to ascertain genuineness of assessee's claim relating to receipt of share application money, Assessing Officer sent notices to share applicants which returned unserved, how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT (Appeals) and the ITA T fell into error in holding that AO could not have added back the said amount under Section 68. The question of law consequently is answered in favour of the Revenue and against the assessee. 10. CIT Vs N R Portfolio Pvt Ltd [2014] 42 taxmann.com 339 (Delhi)/[2014] 222 Taxman 157 (Delhi)(MAG)/[2014] 264 CTR 258 (Delhi) (Copy Enclosed) where Hon'ble Delhi High Court held that if AO doubts the documents produced by assessee, the onus shifts on assessee to further substantiate the facts or produce the share applicant in proceeding. It was held as follows: 30. What we perceive and regard as correct position of law is that the court or tribunal should be convinced about the identity, creditworthiness and genuineness of the transaction. The onus to prove the three factum is on the assessee as the facts are within the assessee's knowledge. Mere production of incorporation details, PAN Nos. or the fact that third persons or company had filed income tax details in case of a private limited company may not be sufficient when surrounding and attending facts predicate a cover up. These facts indicate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) as under:- 7.1. The 1st and 2nd addition is on account of addition to equity to unsecured loans sundry creditors amounting to ₹ 5,23,42,500/- ₹ 21,80,11,355/- ₹ 9,4525,367/-. The CIT on this issue in the order u/s. 264 had stated as under:- In the light of the status report of the Crime Branch Delhi Police the assessment framed for AY 1997-98 where substantially large additions have been made on account of additions to share equity capital, additions as unsecured loans, additions on account of non-confirmation of sundry creditors and also on account of addition to the fixed assets on account of no supporting evidence having been filed: appears to be erroneous. The assessment is also erroneous as both the credits and debits have been added simultaneously. This has resulted into double additions, even if merits of the addition is not considered It is erroneous to make addition in respect of both the debit and the side. In the light of the fact that 1500 investors have filed FIR's law suits claiming about ₹ 15 crores as paid by them. The additions made on account of cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ched against the earlier years demands of the assessee which are substantial and therefore, the interest of the revenue is not lost even when the assessment order and penalty orders for AY 1997-98 are cancelled with the direction to reframe the same as per law. AO to reframe the assessment after giving due opportunity to the assessee and after collecting full facts from crime branch authorities as also taking note of judicial pronouncement if received by then. 7.2. In view thereof the addition does not stand as there is no doubt that there were depositors. The facts are that the appellant had collected funds and had not repaid them. Further there were investors who had filed law suits against the appellant for recovery of their money. Therefore, the existence of the depositors cannot be doubted. The addition on all three accounts is therefore deleted. The grounds of appeal are ruled in favour of the appellant. 7.3 The AO has added the cost of all assets purchased stating lack of evidence. However, for business purposes assets would have been purchased. I don t find any basis to sustain this addition made by the AO. The additi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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